” If they can pass the debt on to future voters, they can win the votes of current voters. So the government’s incentive is to create inflation because it lowers the cost of borrowing.” “You have to protect yourself in this inflationary environment. But if you are already super rich and you already have all these assets, then you win by default.” “In 2020, Forbes reported that the wealth increase for the Forbes 400 (richest) rose higher in 2020 than in any year since they started recording. The reason it rose higher is because they printed money” “What is the incentive for a politician? The incentive for a politician is to gain power and stay in power… how are they going to try to get votes? By spending a lot of money without taking taxpayer money…they pass the baton on.” That was funny. There are bigger things in the world than cryptocurrencies; most important issues. Michael Kong, CEO of Fantom, understands this. It’s also what cryptocurrency is trying to solve, although we’re not there yet – something he acknowledged and we discussed at length, weighing whether it’s reasonable to compare to the growth of the internet or other benchmarks you often encounter. Personally, I’m pessimistic about the state of the economy right now. The cost-of-living crisis has hit ordinary people hard. Homes are becoming increasingly inaccessible – part of the reason I left my native Ireland and moved to Colombia. Politicians went from calling inflation “transient” to blaming Putin’s war, before last month shifting to “it’s a problem but it has peaked and will be under control by the end of 2022”. Michael is CEO of Fantom, which is one of the biggest cryptocurrencies on the market. The episode came just hours after the June CPI reading revealed that inflation had risen again to 9.1%. Michael is a deep thinker and has many fascinating insights into where he sees financial asset prices going forward, why the economy is in trouble, the political environment and the inequality gap. We also discussed Fantom (obviously!). We investigated what sets it apart from rival cryptocurrencies in terms of the validation mechanism, and he was downright candid about the exchanges he made by prioritizing attractive features such as low fees and high transaction speeds. The podcast was actually in two sections: Fantom / Blockchain and Macro Techniques / Today’s Society and Economy, which I’ve bookmarked in the description below.
competitors
I believe cryptocurrency often suffers from tribalism, an argumentative and competitive landscape where investors sometimes jump on each other for liking certain currencies and not liking others. I really liked Michael declaring that Fantom was “on the shoulders of the Ethereum giants”, big enough to give a rival currency credit for laying a lot of groundwork in the industry. Of course, he believes that Fantom has improved certain aspects of their technology, which we’ve discussed in depth, but it was nice to hear from him an objective and balanced opinion.
macro
My favorite part was when Michael showed how he was in touch with the economic realities that so many are facing. He lamented the fact that the money printer took money from the poor and put it in the hands of the rich so harshly during COVID, and the fact that pay-to-pay workers are paying the price. “This leads to a huge transfer of wealth from the poor to the rich. This is one of the reasons why I started to enter the world of cryptocurrencies… I cannot change the political system; I am a single voter among 20 million 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, asset prices rise, and generally makes life more difficult. And why, unfortunately, everything is stacked in favor of the rich. “You have to protect yourself in this inflationary environment. But if you are already super rich and you already have all these assets, then you win by default. That’s why in 2020, Forbes reported that the wealth increase for the Forbes 400 (richest) rose higher in 2020 than in any year since they started recording. The reason it went up higher is because they printed money.” For me, it’s the widening inequality gap that’s the harrowing part of it all. We saw this play out during COVID, when those lucky enough to be able to work from home (including myself, for the record) were relatively immunized (pardon the pun) from the economic carnage that lockdowns caused. On the other hand, those working in personal jobs such as bar staff, retail, artists and many others have been hit mercilessly. Those living paycheck to paycheck suddenly had no paycheck, while those at home simply had to put on a pair of sweatpants and make sure their bed wasn’t too messy in the background of their Zoom call. The government’s response essentially shifted wealth from the poor to the rich. Huge stimulus packages served to trigger this full-blown inflation crisis, further exacerbating the struggles these same pay-to-pay workers had during the pandemic itself. Michael Kong realizes all of this. He’s a CEO and obviously very smart, but he understands how the world works. He’s also trying to make a difference. If you listen to a CoinJournal podcast, I think it should be this one – covering important issues with an intelligent and sincere guest was really enjoyable, educational and thought provoking. Timestamps are provided in Spotify’s description if you prefer to listen to certain sectors on Fantom/crypto/inflation/politics/future etc. Happy Friday. Link to podcast here. YouTube to follow soon.
