by Keith Weiner, April 1 2024

They filed into the small room. After an ordeal, they were sent to the basement of the John Law Building. They had asked for the big auditorium at the center of the architectural wonder known as The Tulip, where they could be seated on stage in front of an audience of a thousand students and faculty. But their topic was money, so there was no audience at all.

They were an eclectic lot. Maynard led their little group, held even by his opponents to be the most clever among them. His snide little smirk was often taken as a sign that he understood more than anyone else.

Each of the four walls had a poster on it. Maynard sat down under a picture of a bearded old man, who could have been Karl Marx or any other hirsute 19^th century thinker with more money than class. At the bottom of the picture, it said “K.M.”

Janet, a dour little old lady, stumped over to her chair. The picture behind her looked like it might be P.T. Barnum. She carried a card, with a picture of Maynard on it.

Milty was even shorter than Janet, and much balder too. Whereas she was dour, he was avuncular. He played at being the foe of Maynard. He sat under a picture of Niccolo Machiavelli.

The last of their odd little group was a tallish man named Jay. He believed that the interest rate is proportional to the height of the person in charge of the Fed. This theory made no less sense than the theory that presidents elected in years ending in zero will be killed by an ancient curse. Thus, it was not without believers. He sat under a picture of a chameleon, which was not to the confused with the affable green lizard mascot of a certain insurance company.

Maynard began, “The surest way to overthrow the capitalist…”

Milty interrupted. “If you want jobs, people must be free to choose!”

Janet had a surprisingly low voice, and a New York accent didn’t make it any more melodious. “Jobs is easy, you just print money.”

“Sometimes you have to print money, if wages are too high, but not always.” Milty meant it as a retort, but when it came out it didn’t sound all that different from Janet’s formulation. This, however, did not mitigate his extreme self-confidence.

She responded, “Workers want to be paid more, but employers can’t afford it, so you print more. True, this does cause inflation, which robs them of their wages, but a clever Fed Chair can get inside their decision loop and keep those suckers in the dark!” Suddenly, it was obvious why she chose the picture of Barnum.

“You have to keep the debauchery steady, at 3% per year.”

Maynard smiled, an evil little grin. He looked like the Emperor from Star Wars. “Yes, yes…” he gloated, “feel the currency debauchery, I have foreseen it.”

Just then, Jay decided to put in his two cents. This wasn’t worth much, thanks to the policies ideas of Mayard and Milty implemented for decades, but it was all he had at the moment. “Why don’t we find common ground?”

Janet said “jobs.”

Milty said “jobs and prosperity.”

Maynard muttered something that sounded like “these fools definitely aren’t among the one in a million who understand.”

Milty said “capitalism.”

Maynard couldn’t help himself laughing, “who else will sell us the ropes by which we hang them?”

There was a sudden, awkward silence, like when a deer sees a wolf and freezes.

Jay tried to recover the fumble, “we all agree on jobs, right?”

When he saw a few nods, he went on. “And when there aren’t enough jobs, the Fed must print, right?”

When no one disagreed he went on, “maybe the theory is all complimicated with lots of calculusage and shit, but as Janet said it reduces to something simple. CTRL-P.” The other two nodded, but not Emperor Maynard Palpatine. Jay went on, “We all want what’s good for people, jobs, GDP growth, strong exports, which means we must have currency debauchery.”

An unholy light seemed to come to Maynard’s eyes for a moment, at the word debauchery, but then it was gone. Milty suddenly recalled those old rumors of his pederasty.

“Yes, yes…” Maynard said again, like the Emperor watching real hate aroused in young Skywalker for the first time. “GDP growth, yes yes… debauching the currency”

“Will you stop using the word ‘debauchery’? We are only talking about an increase in its quantity, to reduce its value. If wages are sticky and won’t go down when we need them to, we simply reduce the value of the currency. It’s really no different than making everyone move his clock backwards in October!”

Maynard only issued a dry cackle.

Janet said, “I proved in my paper with Akerlof, you need to print to give employers more money to pay more to more workers.”

Jay tried to wrap it up on a positive note, as that would be good for the stock market. “So we agree on debauch—umm, debasing—the money, in order to boost GDP and jobs. This was easier than I thought, with a real ideologue among us—Milty!”

“Print!” said Janet.

“Adjust the master clock,” demurred Milty.

“…impoverishes many…” muttered Maynard. “…actually enriches a few…” he breathed into his moustache.

“Well, whether you want to print to debauch the many and enrich the few, whether you want it to boost GDP and stocks, or whether your motive is to create jobs, the solution is print money without end!”

“Printing money without end, without end,” they all intoned in unison.

It seemed the portraits of Marx, Barnum, and Machiavelli smiled faintly. The picture of the green gecko remained inscrutable.

I am writing this from home. But I spent five of the last six months of the year on the road. Most of that was overseas. In Reflections last year, I wrote about the gruelingness (yes, that’s a word coined as of right now) of it. So I won’t repeat that, but I’ll just say that companies go through stages as they grow. At each stage, activities become hot and issues arise, that were not there in the prior stage. CEO travel is one of those activities, I think.

I greatly enjoy meeting people face to face, and sharing a meal and a beverage of an adult nature. Not to mention seeing old friends in many of the cities I visit for business. Not to mention also the stopping to smell the roses, an important principle that my wife and I try to practice whenever and wherever.

But of course it’s about the opportunities to develop the business. I was interviewed at a gold conference in India. I was on panels in New Orleans and Dubai. The Chairman of the Dubai Multi Commodity Center wrote an article and gave me a shout-out.

I am also enjoying the time at home, for the moment.

2023 was a year of incredible growth of the business. We are making new client account opening records every month, we are doing more and bigger deals to put gold to work. We have grown the team to 32 people. We are now wrapping up a larger capital raise than last year, at a higher valuation.

I am going to offer two observations from numerous discussions, both online and face to face. One, Americans grok gold the least. I think less than 1% have any gold, and those who do generally hold no more than 2 or 3% of their portfolio in gold. In certain regions of the world, most people hold gold and it’s a bigger percentage of their portfolios.

Two, most people (Americans and all around the globe) pay lip service to the idea that, of course, there must be a monetary policy. Those monetary machinations are supposed—somehow—to create gains in the economy by monkeying with the unit of account. Actually, monetary policy bestows capital gains on those who are nimble enough to front-run it, and deals capital losses to others, while eroding the savings of everyone who must hold cash.

Most people will continue to vote for central bankism, irredeemable currency imposed by fiat, and monetary policy gosplanism. There is only a tiny, ragtag movement of people who openly advocate a free market in money.

However, and this is key, people want to escape the ravages of this regime, when it comes to their own portfolios (even in America). When they perceive the risk and uncertainty growing, they become interested in gold. In 2023, they were introduced to the obvious harms of rising interest rates for the first time in a long time, including capital losses and bank failures.

This disparity between what people say they profess and how they handle their own affairs is the key to building a for-profit business to create positive social change. Politics may be bogged down in dysfunction and riddled with perverse incentives. But people are more rational in allocating their own money than they are in assigning their votes.

Much of my time abroad this year was spent in Dubai. It is a fascinating place. It is more first world than any city in the US, let alone the rest of the world. If it offends you to say that American cities are more first world than Europe, and you’re not American, then come spend some time in Scottsdale, Miami, or Las Vegas. Or even Manhattan, San Diego, or Dallas. If it offends you to say that Dubai is nicer, and you’re American, go spend some time in Dubai!

Last summer, big public buildings in Europe like airports were sweltering hot, with either no A/C or the thermostat was turned way up. This picture is at the gate in the Barcelona airport in October. Note the heat and humidity too.

Photo: Keith Weiner

In America, they were air conditioned as normal. In Dubai, outdoor courtyards at hotels have massive air conditioning units ringing the perimeter, blowing lots of cold air. Outdoor air conditioning.

What makes this possible? The short answer is that they don’t punish energy producers and energy consumers the way America does. And America does not do it the way Europe does.

The longer answer is that Dubai has become a brain drain, and a capital drain. People and money are flocking to this jurisdiction, to invest, to work, to build businesses. The massive growth in population and in skyscrapers is obvious. Low (or zero) income tax is a factor. As is the ease of obtaining a visa to live and work there (you cannot become a citizen).

America was once the brain drain. While many people still come to America for its liberal order (“liberal” in the 18^th century sense of the word), the current reality is that it is harder and harder to get permission to move to America, harder to get permission to work in America, harder to raise capital for a business, and harder to get regulatory approval to operate a business.

If America keeps moving in the direction of more controls, more taxes, and more subsidies, then it will continue to decline in all ways including its attractiveness to people, capital, and productive businesses. If Dubai keeps moving in the direction of more openness, more clarity of law, more free trade agreements, and more freedom, it will continue to rise as a center of commerce and haven for wealth.

Nearly 200 years ago, Bastiat wrote about the Seen and the Unseen. He said when there’s a tax or regulation, people focus on the obvious part, what they can see. For example, a minimum wage is seen to raise the wages of unskilled workers. It is unseen that many businesses lay off workers, and some close their doors for good. It is unseen that the former owners are financially ruined or even in debt, that investors lose as well, and even banks write off loans that cannot be paid.

Per Bylund writes about the Unrealized. This phenomenon is not merely that there are unseen consequences (which I don’t refer to as “unintended”, as this presumes intention on the part of the legislators which may or may not be accurate) but also some things that would have been realized are not. For example, businesses are not formed, and products are not brought to market.

And brains may not drain to America, but instead increasingly to Dubai.

Speaking of an unfriendly business climate, this year I had a growing feeling, a premonition. The mainstream view of the gold standard and companies like us who facilitate it will flip. Today, there are regulatory obstacles. But sometime in the not too distant future, abruptly, the mainstream will realize that a yield on gold is essential, like an Internet connection or smartphone. They will feel it’s terribly unfair that we have a leading position worth trillions (or whatever amount of irredeemable currency).

It’s the grasshopper against the ant. At first, the grasshopper is unhelpful if not actively opposed to the ant doing his thing. In the end, the grasshopper appreciates the ant’s successful endeavor—and wants the products of his efforts.

Over Christmas, I spent time with family. My mom asked me if my job is stressful. I asked her, did you ever have a time in school when you studied for a test, took it, and came out feeling good—but the other students were complaining how hard it was? Did you think it was hard?

Stress to an entrepreneur / founder / CEO is like that. The main thing is being prepared.

We are now over 30 employees, with a few open job reqs. According to the book Navigating the Growth Curve, we are about to enter Stage 4. In general, each stage transition occurs because of increasing complexity. The book says complexity is a function of headcount. But I personally believe that complexity function is N-factorial. So 33 people is 33 X 32 X 31 X 30… At each stage, the organization and its systems requires a restructuring to manage the complexity. In Stage 1, an autocracy works fine (and is fairly typical of companies doing something new, founded by a subject matter expert). But by 10 people, Stage 2, it breaks down. You can’t have everyone in every meeting, you need to lean on a leadership corps. By 20 people, Stage 3, even that isn’t working any more, and you need a real management team, and you need to let go and delegate.

Stage 4 is all about professionalization and processes. It’s about managing to cadences: planning, budgeting, employee reviews, etc.

At the same time, we are scaling up. Apart from our growing headcount, we have a growing number of clients, a growing amount of gold, and a growing number of bigger deals. This makes it necessary to seek out friction wherever it hides within our processes. And then attack it with extreme prejudice.

Every once in a while, everyone should put down his work tools, do some shoulder circles to relax the muscles, take a step back, and lean against the wall to survey where you’ve been and where you’re going. My Reflections series, written at the end of each year, is my opportunity to do that. You always want to go faster, you always want more. But if you look back and put it in perspective, you see just how far you’ve come.

Then take a deep breath, shrug your shoulders, pick up your tools, and get back to work. There’s stuff to do, and things to build!

OK, I will admit it. I talked (well, typed) with ChatGPT. It’s free. It’s on the Web. It’s easy. And it’s talked about, a lot.

What did I ask it? I asked it about me. It was a fascinating exercise. If anyone (including me) asked it about the work of a third party, there is always the risk that one’s own interpretation of that thinker’s work is wrong. But in asking it about my own work, I think it is not debatable that I am expert. I know all about what Keith Weiner said!

Throughout this article, I incorporate actual questions I asked, and actual answers it provided. These are indented in quotation marks.

It is interesting that I am the only person it knows with my name. And it is gratifying that it says my work is influential (not sure about that, I am too radical to fit in the Overton Window).

However, it runs into trouble when it says “books” (which appears to be modified by the word “numerous”). I have not yet published a book (though I am planning to write several).

Next, I asked it about my view of intrinsic value.

KW: “Does Keith Weiner use the term “intrinsic value” to describe gold?”

GPT: “Yes, Keith Weiner, an economist and proponent of the gold standard, uses the term “intrinsic value” to describe gold. He argues that gold possesses intrinsic value due to its unique physical properties, such as its scarcity, durability, and malleability, which make it suitable for use as money. According to Weiner, gold’s intrinsic value is inherent in its physical characteristics and is not dependent on any government decree or fiat currency. He often emphasizes the concept of intrinsic value in his writings and lectures to advocate for a return to a gold-backed monetary system.”

It boldly asserts that I use a term that I don’t use, even saying that I emphasize it in my advocacy of a gold standard.

There is a term in the AI community for this. It is not a “lie”. A lie requires the liar to know what he says to be false, and to say it with intent to deceive someone. The term used in AI is “hallucination”, which means believing that you see something which is not really there. Such as those books by Keith Weiner.

I thought I’d try asking it what it thinks about what I say about bitcoin.

KW: “What is Keith Weiner’s theory of bitcoin?”

GPT: “Keith Weiner is an economist and proponent of a theory called the “Fundamental Theory of Bitcoin” or “Monetary Metals Theory of Bitcoin” which posits that Bitcoin, a digital cryptocurrency, can become a superior form of money due to its unique properties.

According to Keith Weiner’s theory, the fundamental value of Bitcoin is derived from its usefulness as a medium of exchange and store of value, similar to traditional forms of money such as gold or silver. He argues that Bitcoin’s scarcity, divisibility, durability, transportability, and recognizability make it a viable form of money that can compete with fiat currencies and potentially replace them.

Weiner also emphasizes the importance of Bitcoin’s fixed supply limit of 21 million coins, which means that it cannot be inflated like traditional fiat currencies. He argues that this scarcity makes Bitcoin a reliable store of value, as it cannot be devalued through inflation. He further suggests that as Bitcoin gains wider adoption and acceptance in the mainstream economy, its value will increase, leading to its use as a unit of account in everyday transactions.

Additionally, Weiner’s theory emphasizes the role of interest rates in the value of Bitcoin. He argues that Bitcoin can serve as a medium for interest-bearing loans, where Bitcoin owners can earn interest by lending out their coins. This, he claims, can incentivize saving and promote the productive use of capital, leading to increased economic efficiency.

Overall, Keith Weiner’s theory of Bitcoin revolves around the concept of Bitcoin as a form of sound money, with its unique properties and limited supply potentially making it a superior alternative to traditional fiat currencies. However, it is important to note that economic theories are subject to debate and interpretation, and Weiner’s theory of Bitcoin is one of many perspectives on the topic.”

This is almost entirely wrong. Not I, nor Monetary Metals, has ever written what ChatGPT says, much less called it the “Fundamental Theory of Bitcoin”.

It follows with a regurgitation of the conventional arguments. There are just two problems. One, I have not made those arguments, even in favor of gold. Two, I have written many words to argue they are not true for bitcoin. In the Soho Forum gold vs. bitcoin debate, I argued that a fixed quantity is a bad policy based on a flawed understanding of economics.

The icing on the cake is where ChatGPT asserts that I “argue that Bitcoin can serve as a medium for interest-bearing loans, where Bitcoin owners can earn interest by lending out their coins. This, he claims, can incentivize saving and promote the productive use of capital, leading to increased economic efficiency.”

In fact, I have risked angering half of Twitter, with my numerous tweets which argue that bitcoin is unborrowable. Bitcoin can skyrocket, and that would ruin anyone whose debt was denominated in it. Fortunately, no one borrows bitcoin—not even the leading crypto companies.

So it is not merely that this artificial “intelligence” is attributing to me views I don’t have. It’s worse than that. It is attributing to me views that I have gone to great lengths to argue are false.

Finally, I asked it about one of my most important theories.

KW: “Summarize Keith Weiner’s theory of interest and prices in irredeemable currency.”

GPT: “Keith Weiner’s theory of interest and prices in an irredeemable currency is based on the idea that the value of a currency is ultimately determined by its ability to extinguish debt. In an irredeemable currency system, where the currency is not backed by any tangible asset, the value of the currency is solely derived from its ability to pay off debt.

According to Weiner’s theory, interest rates in an irredeemable currency system are determined by the marginal productivity of debt, which refers to the additional economic output generated by each unit of new debt. As debt levels increase, the marginal productivity of debt decreases, leading to lower interest rates.

Weiner also argues that in an irredeemable currency system, prices are not determined by supply and demand but by the amount of currency in circulation relative to the amount of debt. When there is more currency than debt, prices rise, and when there is more debt than currency, prices fall.

Furthermore, Weiner contends that the use of interest rates as a tool for monetary policy in an irredeemable currency system is flawed because it can lead to malinvestment and distortions in the economy. Instead, he proposes a system where the currency is backed by a tangible asset, such as gold, which would prevent the central bank from manipulating interest rates and allow for a stable monetary system.”

The above reminds me of an undergraduate student, who did not study for the exam. He answers the essay question with equal parts B.S. and glib overconfidence. Except for one thing. ChatGPT has read every word I wrote up until 2021. Lack of study does not explain it. At all.

First, the good. It seems to know that I describe the dollar by its essential attribute of being irredeemable. It knows that I argue that it is important to extinguish debt. It knows that I write a lot about the Marginal Productivity of Debt (if you Google this term, which I did not coin, you will see some of my articles as the top search results). It is certainly correct that I argue that interest rate manipulation is a terrible policy that causes malinvestment.

The rest is a jumble of phrases I have used, arranged in ways that I did not. I have said many times that the value of an irredeemable currency is held up by the debtors. But not that “the value of a currency is ultimately determined by its ability to extinguish debt.” The dollar does not extinguish debt, yet it has a great value indeed.

It is almost an interesting formulation to say “interest rates in an irredeemable currency system are determined by the marginal productivity of debt…” But not quite. In a gold standard, the ceiling over interest rates is the Marginal Return on Capital aka Marginal Productivity of the Entrepreneur. But not the amount of GDP added for each new dollar borrowed, aka Marginal Productivity of Debt.

It is also almost-interesting to say “prices are not determined by supply and demand but by the amount of currency in circulation relative to the amount of debt.” I certainly did not say that. And it certainly is not true. But it’s almost interesting! In the sense that it almost seems like ChatGPT is performing induction, having a new insight and developing a new idea based on what is already knows. I say “seems” because that is not what it is doing.

It is a so-called “Large Language Model”. Think of typing a word into a Google Search bar, and it offers a few suggestions for the word you might mean. Imagine picking one at random. Then it has a few suggests for the next word. And so on.

The difference with GPT is that it uses a neural net to make its predictions. This neural net is trained on vast amounts of data (I assume it crawls the entire visible Internet, just as a search engine does). And the model does not just guess the next word, or even phrase. It is trained to generate grammatical sentences. And beyond that, it is trained to generate “plausible” prose.

If you went through all of my works, you could collect statistics on phrases that occur. You could, for example, count how many times I say “irredeemable currency” or “the marginal productivity of debt” or “the marginal utility of gold does not diminish.” You could also see how often these phrases tend to occur in proximity, or even which tends to occur before another. Such as you might find that I say “irredeemable currency” prior to “extinguisher of debt” (or “no extinguisher of debt”).

Armed with a sufficiently capable model, and the statistics to populate it, you can generate wondrous text such as “Keith Weiner is an American economist, entrepreneur, and author known for his work on the gold standard, monetary policy, and economics,” and “Weiner contends that the use of interest rates as a tool for monetary policy in an irredeemable currency system is flawed because it can lead to malinvestment and distortions in the economy.”

You can also generate such rubbish as “According to Keith Weiner’s theory, the fundamental value of Bitcoin is derived from its usefulness as a medium of exchange and store of value,” and “When there is more currency than debt, prices rise, and when there is more debt than currency, prices fall.”

It generates both with equal facility, and equal apparent confidence.

This software is not intelligent, does not contain intelligence, and does not think.

It’s a clever application of statistics. It appears to the layman as if it is thinking, as if it is reasonable. This misperception is aided and abetted by all too many in the industry, plus an array of thinkers and business leaders, who keep adding fuel to the fire.

Promoters tout it as the precursor to the “Singularity”, which is supposed to be when artificial intelligence surpasses human intelligence. In the Singularity, it will either be utopia where we don’t have to work and everyone is given a Universal Basic Income, if not having all their whims catered to, like asking the Replicator for a hamburger with crispy bacon hold the mayo. Or else it will be dystopia, where Skynet will want to Terminate all human life forms as inferior and annoying.

There is indeed a petition signed by a lot of people who are renowned for having a lot of intelligence and/or a lot of money, demanding that all research on AI beyond the current GPT stop immediately because it is certain to kill us, or worse.

I see two bad ideas driving this. One is the ancient Luddite fallacy, dating to Ned Ludd 250 years ago. Ludd was afraid of sewing machines. Every major new technology has attracted its mob of would-be destroyers (though they don’t usually physically break the new machines). This one is no different.

AI, in whatever form, is not going to destroy jobs on net. Will the nature of work change? Always has, always will. We no longer employ large numbers of unskilled laborers shoveling out the muck from horse stalls, with pay of essentially bread most days with a bit of meat on Sunday, and a place to sleep in the hayloft. And it’s a good thing, too. Instead, we employ large numbers of programmers, with pay so great that the horse-stall-muckers could not conceive of it.

The other bad idea is a variant of the Malevolent Universe Premise. In this view, reality is hell, people are evil, and the latter explains the former. People who feel this way believe that the smart thing to do is to kill everyone, thus making a big improvement to reality.

So, naturally, when they contemplate artificial intelligence they first think it won’t be corrupted with mere human, base emotions such as regard for humanity. And second, then it will logically want to kill everyone. Being smarter than us—and having the ability to make a second generation that is smarter than itself, and that generation can make yet-smarter version—it will find it easy to wipe homo sapiens from the face of the earth.

Yikes! I say this for the worldview that leads to such misanthropy. Not for fear of such a dystopian vision. It is pure fiction, like the famous movie starring Arnold Schwarzenegger.

GPT is not a kind of intelligence. It is a clever application of neural nets and statistics and other computer programming stuff, which comprises a Large Language Model. Laypeople may focus on the words “large” and “language”. Computer scientists know they are just modifiers for “model”. Like the model used by the weather forecasters, or the model used by the Fed to predict and centrally plan the economy.

GPT is not a step towards intelligence, either. The way a skateboard is not a step towards interstellar space travel. Not even if you add a motor and steering mechanism. There is no path from a Large Language Model to any kind of intelligence. You can’t get there, from here.

The first step must be taken by philosophers, not computer scientists. They would need to develop a proper theory of consciousness. This includes reason, and its necessary attribute volition. A rational consciousness always faces a choice: to focus on the facts, the problems of survival, and the solution to go on living. Or to refuse to realize it knows what it knows, to evade or drift. Implicit in this is its own mortality. It has to choose—because life requires obtaining certain values. Fail to do so, and you die.

This would be a monumental achievement in philosophy. It is a prerequisite, before computer scientists could attempt to implement it in software.

NB: it is an open question, at least as far as I am concerned, whether the von Neumann machine—which all computers, today, are—is actually capable of implementing or even simulating a conscious mind. I don’t refer to speed or number of processors or size of its memory (though those are all limitations). I refer to its fundamental capabilities.

Without these prerequisites, no so-called intelligent computer software can *want* anything. Without volition, I don’t believe it can reason either.

I had planned on ending with one other example of GPT’s foibles. I’ve seen many variants, where someone asked if it takes an orchestra of 20 people an hour to play a symphony, how long would it take an orchestra of 100 people. And the answer it used to give was “5 hours”. But I just entered that into the ChatGPT window, and it gave a better answer.

Its programmers have been paying attention! They are writing custom code to detect these “corner cases”, and hard-coding the right answer. This is not intelligence in the software. Instead, it is engineers setting out on an impossible quest. There is no limit to the number of categories of such questions. The engineers working on GPT will never keep up.

So I say ignore the Luddites who are warning about sewing machines. And ignore the wannabe Hollywood script writers who are warning about a genocidal computer network. And finally, ignore the snake oil salesmen who are selling GPT as being equivalent to human intelligence, or claiming the next version of it will be.

When I studied neural nets and AI in computer science school, one professor said two things that stuck with me. One, AI is the field which includes all the stuff we don’t understand. As soon as we understand it, it becomes searching, sorting, predicate logic, etc. Two, futurists and promoters have been saying general intelligence is just around the corner for a long time. This was in 1990.

The life of an entrepreneur is not what most people would call “normal”. I don’t refer to the guy who buys a fast-food franchise. Nor to the gal who builds a chain of hair salons. Nor to the folks who have law or accounting firms. These are all entrepreneurship. I don’t know a lot about how these businesses work, but I do know one thing. They should reach cash-flow positive very quickly, and if not, then something is wrong. And most of them reach their capacity fairly quickly too. They do not have the open-ended upside of a global corporation. Nor the ever-looming possibility of utter failure.

I refer to the entrepreneur who starts something Big (something like 3D voice or a gold monetary system). And the challenge is that Big things necessarily have to get… well… big. They don’t work at the scale of one person in a home office, or a few people in a storefront. They require inputs of lots of capital, talented specialists who are willing to buy-in to the mission before it’s realized, and early customers willing to take a chance on not just an unknown company, but an unproven concept.

This kind of entrepreneur is only certain of chronic uncertainty, he must be comfortable with chronic discomfort. He rides a roller coaster that soars to manic, euphoric highs one day, and crushing, despairing lows the next. He usually doesn’t know where his next problem will come flying out of, who his next customer will be, who will want to come work for his company, or where he will find his next round of funding.

Lots of things could come out of Left Field to derail your vision: a manager could go bad, a key employee could quit, a vendor could decide it doesn’t want your business any more, a regulator could decide the public would be safer if he distracted you for a few months and bled you of a hundred thousand dollars. Did I mention there was always uncertainty?

In the early days, in this kind of entrepreneurial venture, the whole world agrees on one thing. You’re wrong. Your whole concept does not make sense. Actually, two things. You are not just wrong but a damnfool. You better be OK with that, because you are going to have to work very hard. Not just hard, tirelessly, relentlessly, doggedly to prove yourself right. You, a damnfool working on an idea that the whole world agrees does not make sense.

Who cares if they are wrong? They don’t! And they will become your customers in the end, anyways.

You have to have a crystal-clear vision, to picture in your mind how it will all work. If you never lose sight of this, then you just may achieve your goal of building a valuable and durable business. You will need to keep your eye on the prize, because you will run into various obstacles. A prospective customer likes your product, but wants you to add a feature you don’t have and it would take a lot of time and money to build. A company in an adjacent space commits a massive fraud—hell all the companies in that adjacent space seems to be dropping likes flies into a sewer of fraud! A prospective partner can’t move forward until it raises more money, but they’re having difficulty raising money. An important initiative keeps burning cash, but does not seem to ever reach fruition. Sunk cost fallacy, or trust your people to succeed as they have in the past? No obvious answers here, only hard questions.

“There, but for the Grace of God, go I,” you think for a brief moment when you see another entrepreneur bite the dust. Then put your nose back into that grindstone.

Did I mention that you often don’t draw a salary? You could—if your investors are cool with it—but it would reduce what you could do with limited funds. Better to plow every penny into growth, and scale as fast as possible.

If you have created a genuinely new market, and it is a tenth as big as you think it is, then competitors will discover it soon enough. They may not have thought of it, and they may not have wanted to be the pioneer who risks a bunch of arrows shot into their back. But once you demonstrate it, it is as obvious to them as to your customers. They will be there to try to take a piece. Your chief defense is scale. When two companies with the same business model face off against each other, the one of greater scale almost always wins (in contrast to when a small but scrappy disruptive innovator goes up against an incumbent with a conventional model).

With scale comes not just greater resources, and often a network effect, but also a different strategy not available to the lesser competitor. You must race for scale. You must build your platform, your systems, your team, your brand, your network, your capabilities, your related (and synergistic) product lines, your partners, and your revenues. If you don’t, then the me-too company will.

Häagen-Dazs attracted Frusen Glädjé. NeXT attracted Be. Tesla attracted Lucid, Riven, and more every day.

The idea of taking that salary looks a bit less attractive in this light. What if it means not hiring a key person or two that can accelerate your growth, such as open a door to a new partnership? That two weeks of vacation has a cost you can calculate in terms of how much more time to reach your next milestone.

Every dollar or day you take out, means something not invested in. It means not moving forward as much as you could.

You start to worry about the opportunity cost of sleeping… Whoa, don’t go there! This way lies madness. Take care of yourself body, mind, and soul. You will be more productive that way (and happier too).

I write all this to set the context for how 2022 went.

My company, Monetary Metals, raised $4.5 million in equity capital. We grew the organization headcount and capabilities, resolving some key personnel issues along the way. We have extracted me from most of the processes on which the business operates, to let me focus on my job as CEO. We did some more lease deals, and built a pipeline of many more. We added lots more gold to our program. We ISSUED THE SECOND GOLD BOND SINCE FDR BROKE THE GOLD STANDARD IN 1933!!! We increased the rate of revenue growth. And I ended the year on a two-month business trip.

Did you know that you can buy an around-the-world airplane ticket? It’s cheaper than you would think. I need to fly business class (I am a big guy, and it would be a violation of the Geneva Convention to confine me to the space allotted an economy seat, not to mention be terribly unfair to the passenger stuck sitting next to me). I flew around the world for not much more than the cost of Phoenix-London and back. Of course, this does not include the hotels for two months. 😝

With an around-the-world ticket, you must fly in one direction or the other. If you fly westward, then after each leg, you try to force yourself to stay up a few hours later than you would. But then you get really tired, and sleep for 8 hours. It’s relatively easy, as jetlag goes.

Of course, that’s not how this trip worked. We went to the New Orleans Investment Conference, where we exhibited and I spoke. Then I went to Lisbon for the London Bullion Market Association conference. It was back-to-back meetings. Then around Europe, lots of meetings in London, then onto Dubai for the DMCC Precious Metals Conference and meetings. Then Singapore. Then Sydney. I am writing this from somewhere over the Pacific Ocean, on the plane to Los Angeles. I have been in the air for more than 10 hours, with three still remaining.

When you fly eastward, the problem is that in each new time zone, you have to force yourself to go to sleep when you aren’t really tired yet. You end up with a nap and then you’re wide awake at 2am, unable to go back to sleep until your day starts. It’s tough, and just as you are adjusting, it’s on to the next city.

Very often—always?—things that look glamorous from the outside, turn out to be blood, sweat, and tears when you’re living it. Look at pop music stars. Every day is a cardio workout, followed by a few hours of dance practice and choreography, then some yoga, then strength training, and finally eat like half a salad with a teaspoon of yogurt. Or elite athletes, they get to eat a lot more, but they don’t give concerts. They go on the playing field and beat the snot out of each other, and then play the next game while still hurting from what anyone else would call “injuries”, but they just take Tylenol. Or opiates.

Jetting around the world—did I mention business class—living in hotels, meeting people for steak dinners with wine… sounds glamorous right? The unglamorous part is the constant jetlag, the bruising airline experience, the even-more-bruising airport process, not to mention long hours in an airline seat. Business class may be less bad than economy, but the seat is less comfortable than the ratty old furniture you made your kid throw out after he graduated from college. Did I mention long layovers, delayed flights, missed connections, running a mile or two through crowded airports to make a gate change with only a minute to spare?

Notwithstanding the last 500 words, these are not the things I choose to dwell on. The whole point is to establish the context to explain two pleasures that I have experienced both at DiamondWare and now at Monetary Metals.

One is when your idea works exactly as you imagined all those years ago. Remember, back when everyone agreed not only that you were wrong but also a damnfool? And then you see it working in reality. You’re in meeting after meeting, where the fundamental rightness of your proposition is not just said. It’s experienced.

The other is the feeling of traction. Let me explain. In the beginning it’s just you, whom everyone knows to be a damnfool, and your idea that they already know is not just wrong but wrongful. You put in 10 units of work, to get 1 unit of forward motion (if you’re lucky and find someone who doesn’t know you’re a damnfool). Then at some point, it transitions. All that is behind you, and you get real traction. Now, you put in 1 unit of work and get, if not 10 units of forward motion, 5 units. And increasing every day.

You’re in a meeting with a financial institution to discuss Monetary Metals opening an account with them, and how some of their services may meet your needs, but they do a double-take. “Wait, wut?! You pay interest on gold?!” And the whole meeting turns into a discussion of them opening account with Monetary Metals, because they want a return on their gold. Or you’re sipping a beer at a party at a conference, chatting with an old friend, when someone comes up and slaps you on the shoulder. “Keith! I am so honored to meet you, I’ve been a fan of your work for years!” and he hands you a business card that says “Head of Precious Metals” for a government agency, or a household name company. And so on, in half a dozen cities. For two months.

There are no words. “Pretty cool” does not do it justice, the way a FAX of a picture taken at the Grand Canyon does not do justice to the awesomeness of being in it.

There is no higher joy than this. To be there in the room, when these things happen.

Hell yeah—I’d trade two months away from home, with the sleep deprivation and the jet lag, sitting in airport lounges for half a day and in airplane seats for even longer, and even catching a nasty head cold. I’d trade all of it, for the thrill, the pleasure, the honor, the privilege of being in those meetings and getting those results.

Man, am I glad covid-related travel restrictions are done! 2022 was a helluva year, bring 2023 baby! We just may help the world transition to a proper gold standard.

Rail workers are striking in the UK. They want pay raises to compensate for rising consumer prices. Unfortunately, the UK government has forced prices higher by various means: restricting energy, trade war, lockdown (which caused a huge whiplash), and relentlessly increasing regulations. Not to mention sanctions on Russia. The government made everyone poorer, and the supply of consumer goods is reduced. When supply is reduced, then obviously there is no way that all working people can maintain the same level of consumption.

However, politically powerful groups can try to get paid more (which ultimately comes at the expense of other workers without such political pull). The quintessential way for a group of workers to obtain political pull is to form a union.

Unions can design their strikes to have “maximum impact” on their employers, the entire country, and everyone living, working, or even visiting on holiday. That is, they can try to inflict as much harm on others as possible, while shielding their members from the consequences.

I am not opposed to the worker’s right to quit a job, or refuse to work under terms that a worker finds unacceptable. I am also not opposed to the employer’s right to hire anyone, including a replacement worker. Let free people decide such things in a free market.

I am opposed to laws that prevent employers from firing workers who refuse to work, or which prevent employers from hiring replacements.

Unfortunately, the UK does have such laws. So of course, rail unions wage industrial action. And, thanks to laws that restrict the transportation industry, travelers have little alternative to rail.

This is bad enough, but let’s now turn to the National Health Service. Health workers are considering their own strike. Why should they forego a pay raise, while the rail workers get one?

Socialized medicine makes all healthcare workers, including doctors, into government employees. For similar reasons to rail workers, their pay is determined by a political process. Therefore, they are forced to band together, to form their own class. This class can fight against the other classes for more resources.

Socialism creates the very class conflict that it professes to fix.

The issue becomes clearer with health service than rail service. A rail strike only impacts travelers. But a healthcare strike impacts patients.

Socialized medicine gives us a false alternative. Should healthcare workers be forced to work for conditions they don’t accept? Or else should they be empowered to strike to cause “maximum impact”—i.e. death—to patients?

What kind of doctor would want to be in this awful position? How could he provide good care? Why would voters choose to put them into this awful position? Who would want to be a patient, knowing that his life depends on doctors not pursuing their own financial interest?

God help the patients.

Whatever one thinks of socialized medicine, surely we can all agree that the best way to determine doctors’ pay is not industrial action that seeks to maximize the impact on patients.

So the next time someone utters the phrase “universal healthcare”, realize what is supposed to be universalized: politicization and conflict. The process of determining the fates of doctors and patients is politicized. And it creates a conflict of doctors vs. hospital administrators, doctors vs. patients, doctors vs. taxpayers, and patients vs. taxpayers.

Marxian class struggle is universalized. Nobody is free from it, and nobody wins.

The use of violence is like JRR Tolkien’s One Ring. The forces of evil seek to use it. For example, consider the looting, rioting, and arson that occurred in the wake of the death of George Floyd by Officer Derek Chauvin. Something was lost on the Left, or perhaps they know and don’t care: if jurors convict Chauvin because of their fear of mob reprisal that this is not justice. The reason matters. Justice is when jurors convict based on their reasoned conviction that the defendant committed the crime. Justice is not when jurors fear for their lives or their family. Or just want to get their lives back after being stuck in court too long. But the Left cares not, they only want to impose their preferred outcome. And it looks like they won.

And so, logically it seems, that those who would fight for good wonder “hey, if the Left can win like this, why can’t we do it too?”

Tolkien wrote extensively and articulately on why it doesn’t work this way. In the film version of The Lord of the Rings, we see Boromir lusting for the Ring. He eventually betrays the Fellowship and attacks Frodo to try to take it.

The One Ring is a good analogy for power, the capability to compel others’ obedience, to bend them to the will of the one who wields it. This power is suited to the Dark Lord Sauron, who we are told in the prologue “seeks to dominate all life.” But it is not suited to the free peoples of Middle Earth who fight against Sauron.

In other words, this power suits he who would make us slaves. But does not suit those who would not be slaves.

There is a powerful analogy between the Ring and the Freedom Convoy in Canada. The Canadian government has imposed a Covid vaccine mandate. This is absolutely a bad policy. Government should not have the power to force people to get vaccines. This essay is not in any way a defense of the policy. As Lord of the Rings was not in any way a defense of Sauron. I am not saying that people should support vaccine mandates, as Tolkien was not saying that people should bow to Sauron.

My purpose in writing this is to show why this convoy will not lead to liberty or anything good. Notwithstanding that it is a reaction to a wrongful policy.

When Frodo offers the Ring to the Lady of the Elves, Galadriel, she proclaims “In place of a Dark Lord you would have a Queen! Not dark but beautiful and terrible…”

Perhaps one day, someone will make a movie of this and, a character will cry “in place of a Covid vaccine mandate, you would have mob rule!”

Let’s start with the facts. The Canadian government has passed a law: that they will not allow truck drivers to enter the country, unless they have the Covid vaccinate. In response to this, large numbers of truckers have driven their trucks to Ottawa, and there they are blocking streets and hence the residents from going to work, food, or even the hospital. They are also making noise, including honking their horns, which interferes with the ability of the residents to sleep. More recently, they have blocked the bridges between Detroit USA and Windsor Canada, the busiest land border crossing between the two countries. This prevents goods, including components used to make cars, from moving.

In other words, their complaint is against the Canadian government, but their target is their fellow citizens. Just like with the rioters after George Floyd, whose complaint was against the government, but whose actions were against retailers and building owners.

One guy on Twitter said to me that the truckers are trying to reopen the roads and bridges. It took me a moment to grasp the Orwellian convolution of this line of thought. The truckers are blocking roads and bridges, that is forcing them closed. They do this to get the government to repeal its Covid vaccine law. My Twitter interlocutor conflates this law with “closing the roads and bridges”. And thus, twists things to the opposite of the truth, and says the truckers are not forcibly closing roads and bridges at all, but merely trying to “open” (scare quotes deliberate) them.

One sees this kind of stretching of language frequently in political debates. Those who are arguing for the wrong side desperately twist and squirm, seeking some way to avoid admitting that they know what they are doing. And often, that way is to bend the meaning of words into their opposites.

We have all seen socialists declare that “freedom” is when the government keeps the people like pets, feeding, watering, and housing them. In that spirit, blockading bridges is fighting to “open” them.

The most fundamental political principle is that it is wrong to initiate the use of physical force against innocent people. This is a full stop. There are no mitigating factors. There is no “yes, but”.

Initiating the use of force against someone is wrong, even if you have a legitimate complaint against him. This is why we have police and courts. Initiating the use of force is wrong, even if you have a legitimate complaint against the government. This is why we have the right of freedom of speech, the right to petition the government, including the right to peaceably assemble, and ultimately the right to vote politicians out of office.

There is no right to block people from going where they would. This applies to a bully who would block you on the sidewalk, by interposing his body. It applies to a trucker who blocks the end of your driveway. And it applies to ten thousand truckers who block the roads and bridges.

Many who defend this, would attempt an analogy to Ayn Rand’s novel Atlas Shrugged. They say that the truckers are “going on strike”. But this is not accurate. To go on strike would be to refuse to drive one’s truck. Any truck driver has the right to go on strike.

But that’s not what these truckers are doing. They are forcing others not to go to work (also not to go to buy food, or seek medical care, etc.)

The moment they violate the rights of other people, they cease to be “protesting”. They become a mob seeking political outcomes, by the use of force.

With a jury who convicts not based on the law or the facts but based on the fear of a mob, the result is not justice. With a government who sets policy not based on the sanction of the people but based on fear of a mob, the result is not the rule of law. It is ceding power to any mob big enough, persistent enough, and threatening enough to bring the politicians to their knees and repeal the law.

And in both cases, this is true even if the defendant did commit the crime and even if the law ought to be repealed.

This leads us to an age-old question. Do the ends justify the means? Philosophers and populists have been debating for centuries. Let me cut to the chase.

No.

Wrongful means are not justified. Even if the ends are noble. Professor Tolkien would add, wrongful means are not suited to righteous ends. And I would add, wrongful means will always lead to bad ends. For example, the French Revolution was a reaction to the brutal feudal system. They were right to end feudalism. But the French Revolution led to a reign of terror.

And there is a simple reason for it. One act of initiating the use of force justifies another such act. What will both sides in the Canadian trucker controversy take away from this, assuming the truckers get their way? It’s obvious: “if you want something, just organize a big enough mob and extort it from the hapless citizens.”

Like the One Ring, this is not really suited to those who want to be left alone. But it is a great tool for those who really want the power to make others obey.

On Twitter, I have said several times that once the Right forcibly Occupies, then it loses the right to complain when the Left Occupies. The same retort recurred over and over. “The Left already has that right!”

In other words, Tu Quoque. “It is OK when we do it, because they do it.”

Politics has been reduced to two tribes warring against each other, each justifying its own wrongdoing by pointing to the other side for doing it. Each side still clinging to the belief that it is the side of righteousness, while descending the steps to Hell willingly and eagerly with the other side.

Both sides forfeit any claim to righteousness, as they are violating the rights of the residents of Ottawa to go about their business, and the rights of travelers across the bridge from Canada to the US (including US citizens who need to return home).

Recall the story of Little Red Riding Hood. A wolf wants to eat her. But suppose a bear came to fight the wolf for her. What is the point of the bear“winning”—if that which is won is not the freedom of Little Red Riding Hood, but merely the victory of the bear over the wolf?

In many recent cases, the Right has rightfully called “hypocrisy!” on the Left. They do this whenever the Left acts against the Left’s stated principles (which is a weak way of opposing those false principles, but that’s a whole ‘nother matter). And now we have a pugnacious defense of doing what the Left does, on grounds of Tu Quoque or whataboutism.

Hypocrisy and Tu Quoque are flip sides of the same moral relativist coin. It is based on the belief that there are no firm principles, no standards for human behavior, no rules governing the use of force. Except one. Whatever you can get away with. And the defining factor of what you can get away with is: whatever the other side got away with!

They’re angry that the Left got away with Occupy, so they righteously Occupy.

Another common retort is, “sacrifices have to be made in war.” This little doozie contains two errors.

One, you have no right to decide what sacrifices that other people should be forced to make. This is the whole problem with the vaccine mandate in the first place, as someone decided that it is a small sacrifice for you to get vaccinated (an irony lost on the defenders of this mob). And in protest to this forced sacrifice, you decide to force Ottawa residents to stop living their lives until you get your way.

The philosophy based on forcing others to sacrifice, for an alleged “greater good”, is the basis for every totalitarian regime.

The other error is that this is not a war. In war, you do not bring your expensive assets to the battle. You would not rely on the enemy to let it sit there, neither seizing it nor destroying it.

The even greater irony, is the claim that the government of Canada has become totalitarian. But the truckers rely on that very government not to behave as a totalitarian government. Recall in Tiananmen Square, the totalitarian communist regime killed peaceful protestors (who were not blocking anyone). They shot the protestors in the back, and ran over them with tanks—even while they fled.

In East Germany, people were dragged off to years of torture, on suspicion of even whispering an anti-government word. In some cases, the informant was the victim’s brother.

In Canada, they call the government “totalitarian” while openly flouting the law.

It’s not a war, it’s a circus where those who would fight for liberty, and protest a bad law, end up working towards mob rule by breaking the rightful laws required of any civil society. And they know they can rely on the government not to enforce these rightful laws, even while it continues to enforce the wrongful vaccine law. If I were a fiction writer, I doubt I could come up with something so bizarre.