Transcription
Hello, I heard there are exchange students, right? How much Thai can you understand?
I can understand it a bit. Ah, evening. [Laughter] No, [Laughter] we're thinking that we only know 2 languages, Thai or English. Which probably won't work. Both. Let's just say I'll speak Thai then. At least for the students, Thai students, who are Thai? Ah, who are exchange students? Ah, okay. Mostly, mostly, you can understand. Definitely, you can understand. Are there any men? [Clears throat] None at all. What happened? What faculty is this? What faculty are we studying in? What major? >> Thai. Okay, then we can speak Thai fast and rapidly. Since you're not Thai anyway. [Laughter] Okay, I'll try to speak clearly. I hope everyone can follow along. Today, let me introduce myself a little. I'm Preeya Sampantarak. I'm a teacher. I have a YouTube channel teaching about economics, about money, about investment, about Bitcoin. Today, we'll talk about these things. Actually, the topic came from the organizer, J.L. Ah, the topic, wait a moment, let me have the topic again. The topic is very interesting. >> I sat and looked at this topic for about 2 weeks. The topic is written as "Survive: Survival in the Modern Capitalist World, Enhance Financial Literacy for Youth, Understand the Global Economy, Keep Up with Global Financial Dangers in the Digital Age, and Plan Personal Finances to Reduce Economic Risks and Debt Problems." It's like a report of 1 chapter. [Clears throat] I sat and thought, what should I say? How much time do I have? >> An hour and a half. What should I say? I tried to grasp the main points of this topic, what it's really about. I found 2-3 keywords: modern capitalism, global economy, digital money, personal finance, debt problems. So, that's the origin of what we'll discuss today. I just noticed a bit that there's also digital danger. Let's skip that for now. I didn't have time to read it. Today, we'll talk about what's called survival, especially in the modern capitalist world. What does capitalism mean? We're speaking Thai. Capitalism. Is it? Capitalism. Uh. Does anyone dislike capitalism? I will destroy the capitalist system. No, this is good. Actually, when you're at university, many university students tend to think that capitalism is unfair. Actually, I think there's only one country with this view, which is China. Because you've learned the lesson. And it makes us have a better world, really. And many Thai students grow up being told that we must destroy capitalism, we must be anti-big businessmen who are rich while we are not rich. We must have the government enact laws to control these people. We must collect taxes from the rich to give to the poor so they can stand up. Actually, I just want to say that, from the perspective of capitalism in society in general, especially in Thailand, it might be a misunderstanding. Actually, the problems many people face today, after graduation, what problems will you face? What will you work as? AI is coming, what jobs will be left for us? How much income will you generate? Will you be able to save money? In the end, will you be rich? Everyone wants to be rich, but actually, what everyone truly fears is not richness, but no one wants to be poor because poverty is very scary. So, we have to find a way to survive. The only way we can succeed, or even become rich, for the general public, I think the only way is capitalism. But capitalism often becomes the villain in university, the villain in education, from the perspective of government officials, people working in large organizations, because sometimes we associate these images with businesses that might not look very good, businesses where big people exploit small people, businesses where the bigger you are, the faster you grow, but the smaller you are, the harder it is to do business and live. But those systems, we'll talk about them today because actually, while these things are happening in the world, and many people try to teach youth that capitalism is an evil beast, in reality, capitalism is the only answer, the only way out for people. Actually, I didn't prepare slides. I just made these now. So, I haven't read what the slides say. What do they say? Ah, nothing. I've already spoken. Actually, what is capitalism? Capitalism is a system where if anyone has capital, they can do anything. "Anything" is a very big word. Some people think "anything" means doing whatever you want, but it doesn't mean doing whatever you want. It means within the scope of our abilities, no one can stop us from starting a business, from doing business, from earning a living. In other economic systems before we had what's called capitalism, it might have been socialism, or a system of rule under a caste system, or something else. It's not that everyone can rise up, start a business, build themselves up, save, and improve their quality of life. But under capitalism, this is the system where if you have capital, you can rise up and do anything that is beneficial to create benefits for yourself. What is capital? The system favors those with capital, it favors capitalists. So, we have to ask, what is capital? Capital. Capital is what we have within ourselves. Every human is born with capital. Not equally, I must say, not equally. But we all have capital within us. We have limited time in this world. You are on Earth for only 4,000 weeks. Beyond that, you'll likely be old and die. Many don't even reach that. But that's the capital we have. Can we use this time as capital to build ourselves up? In a capitalist system, it opens opportunities for basic capital to be used to create benefits, to create value. And these values can be exchanged for returns, whether in the form of money, property, or even goodwill. We have time, but we also have brains. When I was a student, I sat and thought, I was afraid of being poor. I was afraid of being poor because I didn't know what I was good at. I didn't know where I would apply for a job. I didn't know how much salary I would earn. But I sat and thought to myself, do I have any poverty? What I know is I have skills. I have many skills. When I was a student like you, I had many skills that the market wanted, whether in computer graphics, programming, design, architecture licenses. I have it all. These are our capital. What is this capital built from? It's built from choosing to use time wisely, meaning using time to increase skills, increase knowledge, increase abilities to convert this time into value. Therefore, I am confident in one thing: if one day I have no job, I lose my job, my salary disappears, I'm in trouble at home, my property is seized, if I start from zero, can I earn money? I can. Even just language skills are good. I've spoken 2 languages since childhood. So, at least anywhere that needs an English-speaking employee, I can get a salary. These skills become capital. This is one type of capital: brain, time, body, strength to exert effort. These are capital. Our duty in a capitalist system is to convert this capital into benefits. If this capital is just idle, it benefits no one. If you can lift more weight than others, no one benefits from that. But if your lifting can help others, you create benefits for others. In the human economic system, we grow by creating benefits for each other. We do what others cannot do, but we do it better because we might have skills they don't have. These things allow us to receive returns, profits, more than we spend to produce those benefits, because we might do it with higher efficiency than others. We might be better at fishing than others. We might be better at producing furniture than others. We will have what we specialize in, what we are good at, and use it to create benefits for others, and others will reciprocate with wages, money, or even goodwill, as I mentioned, which can be used as benefits one day. And these things, in the end, lead to capital accumulation. The more benefits we create, the more capital we will have. And the more capital we have, the more we can expand our capital base beyond just the time we have, beyond just the strength we have. We start to have assets, time that we can hire others, expand our business, expand our enterprise, and eventually grow in today's economic world. We can become rich, we can have a good life by accumulating capital. That's all capitalism is. Whoever can accumulate capital will succeed. But capital accumulation can only happen when you make yourself valuable to society. If you are useless, no one will give you anything. If you just breathe day by day, creating no benefit for anyone, no one will help you, right? It's a fair system that allows everyone to grow. But at the same time, it's a system that judges people by the value they can create. The problem is here. In a capitalist system, we are talking about creating value, exchanging value for increased value, accumulating increased value as capital to invest in creating new value and growing continuously. The Western world in the 18th and 19th centuries grew by leaps and bounds with capitalism. Everyone created benefits for each other. Many countries, when they entered the capitalist system, saw economic growth, right? Why? Because to get money, to get returns, we have to create benefits for society. We have to create products that improve people's lives. We create better cars, better phones, new technologies, invent new things. Everything makes people's lives better, and everyone competes to make others' lives better. Society will be better and easier to live in. But the problem. The problem is that today, many children might be instilled with values that make them hate capitalism. This is because currently, this mechanism has changed. This mechanism in the world today is not like it was 100 years ago. It has gradually transformed and changed. Today's economic system looks like the economic system of 100 years ago in terms of mechanism. Many people can still do business. Private companies can still grow. 73% of the world's economy is still run by family businesses today. But what's different is that only a few families run the world now. It's not that every family business helps build the world, but it's the businesses of a few families that have been passed down. Meanwhile, most people cannot have their own businesses. Meanwhile, most people, after graduation, have to become employees and work for a salary. And in the end, as time passes, we get returns, but we don't increase our capital, and we cannot grow further. This kind of economy is very similar to capitalism, but it's not. And what's different is just a little bit. It's only different in one point. In a capitalist system, what is used to count capital, goodwill, value, is money. But money is something that is scarce, cannot be created out of thin air. It comes from gold, from land, from truly valuable assets. In the past, we used it as a unit of exchange. So, if anyone wants money, the only way to get money is to create value for others so they give us money. This is the original capitalist system. But today, what has changed is that money is created out of thin air. The money we use today, the money in our mobile phones, in our smartphones, we open an account and we have money. We pay with QR. QR payment, instantly. We think that's our money. But it's not. That money is not ours. That money is created out of thin air, created from promises that will never be fulfilled. The result of a system where money can be easily created is that some people with the power to create money out of thin air can become employers, payers to others endlessly. This makes the life path of many people, instead of building their own capital, expanding their own business, growing through their own efforts, become that we have to work as employees for others who can create money to pay us. The problem here is not much. How we get money, we can have capital, right? Because we can save the money we get. But the problem is that the time we spend working, which we might not want to do, we might not gain skills, we might not gain what's called knowledge and abilities that allow us to progress. We might not build our own business that we can pass down to our children. We might not have the opportunity to build what's called our capital base. When it's time to retire, we're out of work, we have no salary, we have no capital to expand further. The capital at age 60 and the capital at age 20 might be almost the same if we never did anything ourselves. But at age 60, you only have a few weeks left in your life. Who will want to hire you then? So, that's one cruel reality. And what's worse is that the money we get from working for them is not money earned with difficulty. It's money created out of thin air. And when it's in our hands, it evaporates into thin air as well. We work and save money, thinking that money will make us comfortable in old age. We think that money will allow us to start our own business when we save it. But we can't. Because everything in the world is getting more expensive. The world changed in 1971. In 1971, the financial system changed drastically. Everything started in 1913, or you could say it started even earlier, since the 15th century. But in 1913, a new financial structure was built: the Federal Reserve, or the US central bank. The Federal Reserve would become the key pillar of the global financial system later on. From 1913 to 1971, through two World Wars. Wars are wars where many countries in the world fight. There are winners and losers. But according to many history books, it was a very strange war because the winners took nothing. The undeniable winner at that time was the United States. But they won and didn't colonize any country. They didn't take anyone's resources. They just wanted peace for the world, the hero. But in reality, no. When there's a winner, the winner gets everything. And that day, after World War II, in 1945, America effectively colonized most countries on Earth. There were only a few countries that survived. Some European countries were allies. China survived. Japan might be considered to have survived, but not initially. Major economic powers might not have been directly colonized, but they had to become allies by necessity. "Allies by necessity" means if you're not an ally, I'll kill you, right? Because they won the war, they had nuclear bombs, everything. Anyone who argued with them, they smiled at everyone and said this is a peaceful world. But if anyone disagreed with them, prepare to die. What happened was they said conflicts arise because each country has its own money, assets, capital, and people fight to seize the gold in the vaults, seize the assets in the vaults. They would bring peace to the world by having the world not hoard any assets, by giving all the gold to them. Gold was the true money in that era. The money issued, whether it was banknotes from various countries, Yuan, or Dollars, was just a gold exchange ticket. It was just a document that you could take and exchange for gold at the central bank of each country. But they said that each country having gold caused wars. So, bring all the gold to them, and hold the dollar, backed by gold, instead. In 1945, under the Bretton Woods agreement, the US dollar became the international reserve asset for all countries in the world. This was the installation of a new financial system, the first time a foreign currency became an official global reserve asset for other countries. For one country to hold [clears throat] money issued by another country in its vault is submission. Is Thai too difficult? It's surrender, it's surrender and becoming a colony. What's worse is that the Federal Reserve system was designed with fractional reserves, allowing the dollar to be produced more without America needing more gold. After giving dollars to all countries, what America did was produce more dollars to use domestically. But every time they produced dollars without having more gold, without having more assets, without creating more benefits, but producing more paper with no value, and calling it money, it caused the value of every dollar unit in the world to decrease, decrease, decrease. And who holds dollars? All countries in the world. So, every time they print money, every country becomes poorer bit by bit, bit by bit. The money of every country depreciates bit by bit. The money of various countries is backed by either dollars or US government bonds. When they print money, the money of each country also depreciates. The modern financial system does not have fixed exchange rates. Instead, it allows exchange rates to fluctuate together in each country. We see exchange rates that seem stable between countries, but in reality, the value of money in every country is decreasing simultaneously every time a superpower prints money. The superpower at that time was not just America. What do the treasuries of various countries hold? That's who the superpower is. The problem is that the depreciating money is reflected in everything becoming more expensive. Rice is more expensive, food is more expensive, houses are more expensive, but income doesn't increase. The salary of a new graduate in Thailand today is no different from when I was a student 20 years ago. But when I was a student 20 years ago, a full meal of rice cost about 30 baht. Today, it's about 60, 80, 100 baht. If I want to eat a full meal like I used to, it would probably be over 100 baht. Everything is harder. Income doesn't grow. Why doesn't it grow? Because the newly produced money is not produced and given equally to everyone. It's produced and kept within a small group, and it's not circulated. So, we get the picture that these people produce money, keep money, and don't spend it. So, we become poor. So, this is the devil of capitalism. This is the evil of capitalism. We must take the money from these people and distribute it. This is the idea that makes many people in countries that have never tasted socialism yearn for socialism without realizing it. Many countries that have tasted socialism understand well that it's not like that, right? It's not good. An economic system where we take everyone's assets and distribute them equally means everyone is poor. And in the end, we will have nothing to eat and starve to death as a whole country. All countries that have experimented with socialist economic systems have gone through that period. But that's the reality today. It makes us feel like we have to blame someone, hate someone, because why is the world like this? Why is the world getting harder every day? It's like we're playing a game, but our leveling up is locked, while every day the monsters get higher level, every day, every day. And how can we win? The longer we play, the more tired, the more we lose, right? And when it's like this, it forces people to give up. People who give up will say they don't want to play anymore and might look for state power, asking the state to take care of them, help them. Welfare, cash handouts, free education, free medical expenses. These are not just bonuses, but necessities for survival for many who give up. Those who give up will look for shortcuts to survive, fall into gambling, take excessive risks, get involved in the world of investment without knowledge, and invest like gamblers, hoping to get rich quickly and solve their life problems in a short time. They overlook saving, overlook accumulating capital, overlook building a stable foundation for themselves, and just hope that today, if I buy this stock, I'll be rich tomorrow. And in the end, it ends in disaster, bankruptcy. Let's go back to what I said: the money in our accounts is not money. What is it? Money is debt. What has changed from the original capitalist system to today is not the economic system, but money itself. And money is the unit we use for all economic calculations. In the past, money was something valuable, difficult to produce, limited in quantity. The only way to get money was to create value for each other. But today, money has changed. The money that is said to be produced from thin air, how is it produced? It's produced from debt. This is the origin of the saying "money is debt." Today, when you open your smartphone, it says you have money in the bank. The balance you see is not even money. It's debt. It's debt that the bank owes you, not your debt. When you open it and say, "Oh, I have 100,000," it means you can claim 100,000 from the bank. "Claim" means withdraw money or have the bank pay you. In any case, it means you can claim this debt from the bank as yours. That means the number in the bank account, called a deposit, is not you depositing your money. It's a type of money called a deposit. And the meaning of deposit from the bank's perspective is a debt liability they have to their user. Of course, from the bank's perspective, they need to balance. You understand the principle of a balance sheet, right? Two sides: liability and asset. They must be equal. Assets = Liabilities + Equity. Liabilities + Equity must equal Assets, otherwise the accounting won't work. And on the bank's side, if the people's deposits are not assets, but liabilities, what are their assets? A bank's assets have two parts. Part 1 is what we call cash, banknotes, plus another type of money we call reserves. Cash and Reserves. These are the first part of assets. The second part of assets is [inhales] loans. What kind of loans? Customer loans. When a customer borrows money from the bank, we sign a contract with the bank. We borrow money. Let's say we borrow 1 million baht. This contract is a promise that the bank will receive 1 million baht in 10 years, for example. This contract is a piece of paper that becomes a valuable piece of paper. Whoever has it can receive 1 million baht in 10 years. So, they convert the contract, which is a debt, into an asset. When you borrow money from the bank, the bank doesn't lend you money they have. When we borrow money from the bank, the bank puts the debt we owe to the bank as an asset and creates money out of thin air, called a deposit, for us to make it equal. They can create money because they have increased assets. But that increased asset is the promise we have to the bank. So, this money is newly created money. It comes from thin air. It comes from promises. But there's no problem if we keep our promises. On the day we repay the debt, this asset disappears, this liability disappears, and the money returns to normal. When we repay the debt. So, if you borrow from the bank and repay it fully, you don't create any problem for the system. But the problem is deeper. Another part of the money the bank holds, Cash and Reserves. What is Cash and Reserves? Reserves are also a type of money. When we say a commercial bank holds reserves, we think they have leftover money for reserves. But actually, it's not. Reserves are a type of money. Reserves are a name for a type of money produced by the central bank. In accounting terms, for the central bank, reserves are a debt the central bank owes to commercial banks. You start to see the cycle. So, what the bank holds as assets are customer debts, and they have balances where they are creditors, with the central bank as the debtor. And the central bank has money called reserves and cash, which are liabilities. So, they have to balance this liability with something. What are the assets of the central bank? Now we are in Thailand. Thailand's central bank assets are mainly US dollars, US government bonds, Chinese yuan, gold. These are the assets they have a little bit of. These assets allow them to produce reserves. There's another part: Thai government bonds. So, let's look at the asset side of the Bank of Thailand's assets. What do we have? We have Thai government bonds, US government bonds, US dollars, other countries' money. What is a government bond? A bond is a name that sounds like something. It sounds like you don't know what it means. Its meaning is this: the government wants money. The government wants to build schools, build roads, provide free healthcare to the public. The government needs money. Where does the government get money? Taxes? Taxes only bring a little. Borrowing. But from whom? The government's borrowing method is to issue loan agreements to the public to give them money, an indirect method. But instead of the public giving, there's a law that allows the central bank to buy these debts. The central bank holds the government's loan agreements as assets and creates baht figures. As cash and reserves, similar to deposits, but at a higher level. Cash and reserves are for the government to spend, to build roads, hospitals, schools. So, government spending comes from borrowing and creating debt. That's the part of debt that the government creates. But another part they hold is stable assets, right? That's not debt. It's US dollars. What is a US dollar? A US dollar is a debt of the US Federal Reserve. For the US Federal Reserve, every dollar produced, whether cash or reserve, is a debt they owe to the US public and the people of the whole world. So, what are the assets of the Federal Reserve that they use to balance these debts? Their assets are mainly one thing: Treasury Bills. What are Treasury Bills? It's an attempt to name them confusingly, but they are just government bonds. This means every dollar today is produced from what? Not from the gold they hold, not from assets, not from land they own, but every dollar today is produced from debt. And I apologize, PPOC also produces money from debt. Large banks produce money from debt. But debt is a promise from the government. Earlier, I said when we borrow from a bank, we owe the bank. The bank takes our debt as an asset and creates money for us to use. We use the money, then we repay it, and the economy is balanced. There's no problem. The problem arises when we cannot repay the debt. We borrow money, start a business, and go bankrupt. When we go bankrupt, we cannot repay the debt. It becomes a non-performing loan. A non-performing loan becomes a loss for the bank that created the money for us. But since the bank used the method of creating money that doesn't exist, the ones who lose are all the bank's users. Because the bank's assets disappear, but no money flows in. Every time there's a non-performing loan, a problem arises. It causes money to depreciate. That's at the commercial bank level. At the highest level, the Federal Reserve, government bonds are even more so, because governments never repay debt. When governments borrow money to spend domestically, it's issuing a promise that they will develop the country and collect taxes, and these taxes will be used to repay the debt. But if we look at history, we see that governments never collect taxes equal to the amount they borrow. The public debt of the US government, or even the Thai government, or any government, only increases. Currently, the US public debt is 37 trillion US dollars, or 37 trillion dollars. It's an amount we can't even imagine how large it is. It's so large that the interest alone to repay these debts is more than the US GDP. This means that everyone's work, everyone's creation of benefits and value in the country, the income earned, all the income earned is not enough to even pay the interest on this debt. If we were in this much debt, we would work our fingers to the bone and still not be able to pay the interest. We would be bankrupt, right? But what the banks, what the government can do is, they don't need to repay the debt. They have the military, they have the army, they have nuclear weapons. Who will demand repayment? Demanding repayment means you have power over the debtor. But this is a case where the debtor has power over the creditor. The debtor doesn't repay the debt. What does the debtor do? The debtor talks to the creditor. The debtor tells the central bank, "Oh, this year we have to repay the debt, so let's borrow more to use the new loan to pay off the old debt." And since we're borrowing, let's borrow more than before. Become more indebted, and roll it over and over and over. The debt keeps piling up, getting bigger and bigger. So, the current economic system, instead of money reflecting value, money reflects debt, or reflects promises. And most importantly, it's a promise that will never be fulfilled, a promise that we know the person making it will only lie. This debt will only become bad debt. This difference causes what? It causes money to fail to function as money. Earlier, we said in a capitalist system, everyone can work, create value, get money, save money, use this money as capital to develop, reinvest, and grow. What allows this is that money must maintain its value. Money must not depreciate, right? We save money, and money should have value in the future at least equal to today. But what happens today is that since the base money is actually created from debt, the money that is the unit in our pockets loses value every second. The debt increases every second, our money in our pockets decreases every second. This is reflected in what's called inflation. But the inflation the government says is 1%, 2%, 3% sounds not scary. But in reality, it's not. If we look around, we'll see it's not just 3% inflation. In the past 5 years, things have doubled in price, right? And what's the inflation rate? Clothes have become more expensive, living costs have become more expensive. Everything has doubled, tripled in price in just a few years. But they say inflation is only 1%. If it were only 1% inflation, after 5 years, it should have increased by only 5% or at least 6% compounded. But it's not compounding, and it's not. What we see is that the real inflation is around 6-7%. Where does 6-7% come from? From the increase in money supply, from the amount of money produced by each country in the world. And we know that this money is not produced from value, not produced from value, but produced from debt. They say inflation is 2%, but the real inflation is much higher. So, why do they say that? Is the government lying? The government is not lying, but the government has created a measure of inflation to deceive everyone. This is called CPI, Consumer Price Index. It measures the average price increase of goods. But what's the problem? If you follow the news for the past 3-4 years, you'll see that the price of eggs in the US has skyrocketed 3-4 times in a few months. What did the US government announce to combat inflation? The US government removed eggs from the CPI calculation, with the reason that when eggs become more expensive, people stop eating eggs. Therefore, eggs are not included in the CPI calculation. The increase in egg prices is not reflected in the inflation measurement. All countries do the same. The unit of measurement for food expenses in Thailand, a large portion of it comes from the price of instant noodles, which is set not to increase so that the inflation figure doesn't rise. The numbers don't rise, the government is popular, everything is good. But in reality, the hidden numbers are much larger. This makes the system we are in today. I will say our problem is not with capitalism, because we have not been in a capitalist system since 1971 until now. Capitalism has been stripped bare, and a new devil has entered it, disguised as capitalism in almost every way. The only difference is at its heart. Its soul has changed. Because in capitalism, money is valuable. But today, money is created from debt. We are not in capitalism. We are in debtism. How do we know we are in debtism? The word "ism" means liking. What does the system like? In capitalism, whoever accumulates capital succeeds. Whoever has capital succeeds, and everyone has capital. In debtism, whoever can create debt will succeed. That's why, if you look at today's economic system, the biggest businessmen in the world have only debt. Huge debt. The richest tycoons in Thailand, even with assets worth billions, have even more debt. For many reasons. Mainly, debt doesn't incur taxes. But that's another reason. Creating debt is creating money. Creating money is not distributed equally to everyone at the same time. The money creator can use that money before others, buy things before prices go up, and let the increased prices affect others who didn't create debt. Therefore, in today's system, it favors whoever can create the most debt at the lowest interest rate, the most, the fastest. And the most successful people are those with the most debt and no intention of repaying it. Those who repay debt are still pawns in this game. Those who create the most debt will never think of repaying it. They use their shares as collateral, take out loans, and when their shares rise in price because they used their loans to buy more shares, driving up the price, they can create more money by using the increased value of their shares as collateral for more loans, and use that to pay off old debts, and so on. In this system, creating money out of thin air, or creating money from debt, if we understand its concept, we will see that it is theft. It is taking money from the future to use in the present. Which sounds good. We take money from the future to invest in the present for greater growth. But no one ever asks whose money from the future it is. Money that is in the future, that has not yet happened, is not ownerless. It belongs to future generations. It belongs to our children and grandchildren. Since the 1970s, people of that era have reached out and taken money from the future to use in the past to build their empires, enjoy comfort, and become rich. But they took our money today to use. That's why the world after 1971, with technological advancements, everything looks luxurious and extravagant, but people are getting poorer and poorer because our money has been stolen. People from the past reached out and took it. And people today are also reaching out and taking the money of their children and grandchildren. And whoever can reach out further, whoever incurs more debt, will be successful in the debtist system. In a capitalist system, capital is time, labor, knowledge. In a debtist system, capital is inflation, or government money that can be created by law. In the capitalist system, money is created by creating value. But in a debtist system, money is created by reaching out and taking money from the future, by stealing. What drives technological development, life, and economy in a capitalist system is people creating benefits for each other and developing together. But in a debtist system, it arises from someone being able to create the most money out of thin air and distribute it the most. That person will become richer. Who gets rewarded in this system? In a capitalist system, those who are rewarded are hard workers, disciplined people, diligent people, and savers, because that's the only way you can have capital. But in a debtist system, whoever incurs the most debt, whoever is closest to the money printing machine, gets the most benefits. This leads to centralization of power, because ultimately, the biggest money printing machine is the government. In a debtist system, it attracts people to get closer to the government more and more, to gain state power to create money for themselves. Ultimately, this makes politics full of thieves, because the system attracts the most greedy, the most wicked, the most immoral people to gain power. Governing a country used to be a sacrifice, but today it has become an opportunity to get rich. It always attracts the most unworthy people to power. So, let's get to today's topic. Within this debtist system, how can we survive? How can we move forward? And how can we have a future? The answer is very simple. When we understand that the system is like this, we must understand that holding money in a bank account is convenient, easy to spend, can be scanned anywhere, but it is constantly being stolen. You must understand that in the current system, everyone has a thief at home, a thief in their pocket, a thief in the smartphone we are using. Thieves steal not just money, but all information, everything. And life cannot prosper if we don't get rid of the thieves first. Working and saving money, but the money we save is the government's money, no matter which country you are in. Holding the government's money is like trying to stand and grow in a quicksand pit. You will be sucked down, down, down. And you have to struggle in every way to get yourself out. And worse, the more you struggle, the more you get sucked in, right? But the problem is, most people don't know this is the cause. Everyone thinks they just aren't struggling hard enough, so they have to struggle more, work more, be more diligent, find more jobs. One job isn't enough, so they have to drive for Grab, deliver food, sell online, answer chats. In summary, one person does 4, 5, 6 jobs, has no time to sleep, their health is ruined, and in the end, they have to pay the hospital with all the money they earn. We think we have to struggle harder, but in reality, you're just standing in the wrong place. If the sand is sucking here, if it's a pit, why stand there foolishly? Walk to the side. There's flat ground to stand on. When you get money, don't save it as fiat money. Fiat money is government money. That's it. This is a simple cheat code that has worked for 100 years. Rich people, investors, we look at them and think they are very accurate, very skilled, they choose the right stocks, they buy the right assets, they buy land in the right places. They are skilled investors, they take risks, and they receive returns. The truth is, successful people are those who take the returns they get from creating value for others and save them as assets that thieves cannot steal. Assets that thieves can steal are money, because money can be printed, it can be created. So, go and save it as what? Buy land, buy stocks, buy index funds, buy gold. These are things the government cannot create. And people who have done this for 10 years, 50 years, 100 years, are rich today. Actually, they are not rich, they just preserved what they earned. My father, when he was young, didn't understand the economic system. He just had intuition. He earned money, and he only bought land and gold. Land, gold, land, gold, land, gold. Today, we have a lot of land, a lot of gold. It's immense value accumulated from gradually saving bit by bit, bit by bit, bit by bit. Working, tutoring, finding jobs, doing this and that, saving it as gold, land. It's just his money wasn't stolen. If he had saved it as money back then, working in England, if he had saved it as pounds, it would be worthless today, because the money earned in the past is worth very little today. But he converted it into assets that the government cannot print. That's all. But there are problems. Because those who print money know that people are fleeing. The mechanism of printing money is stealing other people's money without them knowing. Every time you create money out of thin air, you are making everyone in the world a little bit poorer, without anyone knowing. Therefore, the mechanism of printing money brings wealth to the money printers, those in power, only when people in the system are unaware. Unaware means they still hold that money, thinking it will preserve its value. But as time passes, people flee the system more and more, people buy more land. What does the government do? Enact land tax laws. Holding land is not allowed. It's unfair to people. You don't release land. Enact land tax laws. Thailand recently enacted a land tax law. The land tax law is designed to do what? To reduce inequality, because sometimes there are rich people who own a lot of land, and people who need to make a living don't have land. Therefore, those who own land and don't use it will pay more tax, which will incentivize them to sell the land so that those who truly need land have land to cultivate. It sounds very good. But in reality, what happens is that in a world that forces everyone to give up and run for higher income, many people in rural areas might have had family land, but they can no longer use it for farming because farming doesn't earn enough money for their needs. They have to come to work in the city, come to Bangkok, and leave their land as the only asset they have left in their lives. But suddenly, the land tax law comes. A letter arrives saying you have about 100 rai of unused land, maybe in Korat. You have to pay land tax, maybe 10 million baht. Do you think they can afford to pay? That land might be worth about 100 million baht, but you have to pay land tax, maybe about 6 million baht. They can't afford to pay. What happens? People who own a lot of land, billionaires who want to sell land, will say, "Hey, 6 million is a small amount. I'll pay 8 million. You don't have to pay this tax anymore. I'll help, but give me the land." It turns out that people with more land buy more land at lower prices, and those with less land but some assets are forced to sell their land at low prices to those who can borrow more money. So, land is being crippled. And the cost of land maintenance is now high. Buying land is expensive. Gold. Gold is another escape route that people try to use. Of course, the government sees this problem and has laws prohibiting the transport of gold across borders. Because if people save in gold, and one day the government does something the public dislikes, prints too much money, causing inflation, the economy deteriorates, people flee the system and save assets in gold, they might be able to move their gold abroad, right? This prevents the government from robbing these people. So, they enacted laws prohibiting the transport of gold out of the country. So, we see people trying to transport gold out of the country everywhere, and they get caught and told it's money laundering, when in reality it's their money that they are trying to escape from thieves, but the thieves catch them and say you're laundering money. So, there's a way out. We might escape to something else. Can we escape to stocks? Stocks are also good because they grow along with the money printing rate. The more the country prints money, the higher stocks go. Stocks rise, sometimes not because the economy is growing, but because there's more money. Look at US stocks, the S&P 500. The stock market has risen exponentially over the past 50 years. But if you divide the stock graph by the money printing rate, what you'll find is that the stock market has been flat for the past 50 years. Because actually, what has risen is not stocks, but depreciating money. So, buying stocks is also a good way to protect yourself, but not for speculation, but for buying the entire market as a place to park money. These things become tools for parking money: real estate, commodities, stocks, gold, land. People use these to park their wealth. But stocks also cannot be moved abroad if there's a problem. And in the current situation, we are starting to see attempts to force people to release these assets as much as possible. So, this is the origin of Bitcoin. Bitcoin was created to be unprintable money, that's all. Its concept is very simple. We don't need to worry about modern technology, blockchain industry, or all that nonsense. We need to understand first why Bitcoin was created. On October 31, 2008, someone, whose identity is unknown, using the pseudonym Satoshi Nakamoto, submitted a research paper on a mailing list of a group called cypherpunks, or hackers who want to preserve people's freedom. In the email, he said he had solved the problem of the monetary system. In the past, we have tried to solve this problem many times by creating digital money systems, many times, and they have all failed. He solved the problem that caused those money systems to fail. He solved the double-spending problem. Why did it fail? My computer just died for a moment. Ah, he solved the double-spending problem. Let's go back to what double-spending is. It's very technical. Double-spending is when we can use money twice, or simply put, create money out of thin air. Creating digital money has an obstacle. And why digital money? I'll go back to the reason. The only way to escape the debtist system. In 1984, economist F.A. Hayek said the only way to escape this debtist system is to take away the power of producing money from debt from the government. As long as the government can create money, this system will not die. We must take this power away from the government, and the government will use this power constantly because people will demand it. People want the government to give them money, right? So, they will demand the government use this power often. How can we take this power away from the government? He said there's no way, because the government has a monopoly on the use of force, the use of law. Anyone who opposes this power will be met with force and law, arrested, shot, killed, and so on. So, how can we do it? He said we need an indirect method that the government cannot stop, a method using some technology that the government cannot stop. And that was in 1984. Fast forward to 2008. There have been many attempts to create this indirect technology, but all have failed. The problem with the failures was that their goal was to create digital money. Why digital money? Because this problem arose from gold not being digital. When the world's economy has become a digital economy today, gold cannot be transmitted over the internet, cannot be transmitted over telephone lines. So, we have to deposit gold with banks, deposit it with central banks, so they can issue monetary units that can be transmitted over the internet, telephone, or telegraph. But ultimately, in 1971, this system betrayed everyone by removing gold and replacing it with this. So, the problem with gold is that it's physical. The solution is we need to create something like gold, which cannot be created out of thin air, is stable, scarce, difficult to produce, but is digital. But creating digital money has a problem, because digital information is easily copied. What will prevent people from copying their own money? Ctrl+Ctrl+V, and they're rich. What will prevent us from deceiving each other, saying we've paid this money, but actually saying we haven't paid? The solution for previous digital money systems was a central authority to verify which money has been used and which has not. That's the bank. So, a decentralized money system couldn't be created because digital information cannot prevent copying. Satoshi said he solved this problem. He solved the double-spending problem. In this class, I won't go into detail. Otherwise, I'll need another 5 hours. He solved it. He used cryptography, proof-of-work, so that the production of Bitcoin cannot be created out of thin air, and no Bitcoin can be used twice. Reusing is borrowing money from the future to use today and using it again, which is printing money. Therefore, Bitcoin is a technology designed to resist money printing. No matter how much you want to produce, to create it, you cannot. The only way you can produce more Bitcoin is if you help protect the system by mining Bitcoin, using electricity. This means you have production costs. You cannot create it out of thin air like government money. He also said the reason he created it was because the problem of the global financial system in the past arose from the need for trust, because money cannot be sent online, cannot be sent over long distances. So, we have to trust intermediaries to conduct transactions for us, and ultimately, these intermediaries betray us. We have to trust the central bank, the national central bank, that they will not devalue our money. But central banks have never done anything but devalue their country's money. Inflation occurs worldwide. In Thailand, a while ago, someone posted a newspaper clipping, I don't remember the year, a house cost 50,000 baht, probably about 70-80 years ago. Today, it starts at about 5 million baht. >> Ah, it's a lot. This is inflation. But actually, the cute thing is, if you understand, a house about 80 years ago used about 1 kg of gold. Today, a house uses about 1 kg of gold. In history, about 700 years ago, it was recorded in ancient kingdoms that a house used about 1 kg of gold. The price hasn't changed, but the price in government currency units has changed constantly. This shows that gold is still a good store of value. Back to our topic. We have to trust the central bank, we have to trust commercial banks that they will not issue loans as credit bubbles and cause economic crises. But that's what they've always done. We have to trust financial institutions and payment processors not to sell our personal information. But they always sell it. Suddenly, insurance companies call. Suddenly, credit card companies call. Suddenly, scammers call. This information is sold everywhere. We are betrayed by trust all the time. The problem is not selecting good people to trust in these positions, because that's expecting people to be all good. A better solution is to solve the root cause: create a system that doesn't require trust. Bitcoin is designed as a trustless financial system. This means no one trusts each other. Its accounting system is distributed among all users. Everyone checks every line of the accounts all the time. Everyone checks everyone else's spending all the time. Everyone checks if anyone is tampering with the accounts all the time. Every time we record an account, we need to use real-world electricity to prevent creation and cheating of money into the money system. Every Satoshi, or every baht, every unit in the system, can be traced to where it is right now. No creation beyond what the system has. No hiddenness. 100% transparency to eliminate trust completely. And this has become a technology that allows us to have digital money, the first time we can send and receive digital money without intermediaries. Today, I send Bitcoin to someone in Venezuela. I can do it without intermediaries, without banks, without any government needing to know. Only I write a signature and announce it on the Bitcoin blockchain, and I verify it myself. This money will gradually spread as data throughout the network, and they will receive the money. People on different sides of the world can send money to each other without intermediaries, for the first time, in fractions of a second, and it's money that the government cannot control, change policies, or produce more of. That's the concept. Whether it will succeed, survive, or die is a matter of the market, of people, of time. But what Satoshi created is this: money that is real, money that is truth, money that cannot be cheated, money that you cannot steal from your children and grandchildren to use today. Money that, when many people say Bitcoin has no value, "Oh, give it to me." When people say Bitcoin has no value, "Really? It's imaginary. Then find me one Bitcoin. I'll wait. If it has no value, you must be able to find it. Bitcoin is created out of thin air. It's intangible digital money. Show me how to create it. No one has been able to do it for me yet, because to produce it, you need millions of dollars in electricity. You need tens of thousands of dollars in electricity to produce one Bitcoin. To get Bitcoin as yours, no one will give it to you for free. You have to buy it, or you have to work for it. You have to create value to get it. This is the heart of money. It's hard to create. You can never get it except by creating value for others. It's like gold. Because you can't create gold out of thin air. You have to mine, process, invest. Similarly, to produce Bitcoin, you have to mine, use electricity. You can't create it out of thin air. You can't copy it. You can't use accounting strategies to borrow Bitcoin out of thin air. No. You can't create credit from non-existent money. With money that is truth, with money that is real. And Satoshi said, "This is my answer." And then he disappeared. His disappearance is also a key factor, because if he had a physical presence, it would mean Bitcoin would have a controller. And when there's a controller, even a spiritual controller, it's control of money that is trustless and works decentrally. It must be truly decentralized. No one can control it. Everyone who uses it together protects the rules without any single person being able to force others. This is the heart of it. Everyone who runs Bitcoin software acts to protect the rules so that no one can change them. And not only that, we cannot change other people's minds. So, really, when we understand today's world system, when we understand debtism, there are two main ways out. 1. You accept this system and understand that inflation constantly depreciates money, and you benefit from it. How to benefit? You become a money printer. How to become a money printer is very easy. You borrow. You borrow money, but don't use the borrowed money for frivolous spending. Use the borrowed money to buy assets that cannot be printed. You borrow money to buy a house. You borrow money to buy gold. You borrow money to buy various assets, and you wait, because inflation will cause money to lose value.
Your debt will decrease in value over time, while your assets retain their value. Then you increase your assets' value, borrow more to buy more, and borrow more to buy more. This is the solution for those who understand the game and play by its rules. But this solution causes us suffering. The state of being in debt all the time is like having a fire in the house. It's suffering. You can't sleep. This is one thing. The second is that you will become a thief. Because creating debt without thinking about repaying it and just rolling it over is like stealing from the future to use now. If you believe in the law of karma, you create wealth by being a thief, your life will definitely not end well, right? This is why this method might be suitable for some people, I'm not sure. Some people say, "To hell with morality, I want to be rich." This is one way. This is how [clears throat] successful businessmen, millionaires, tycoons all over the world do it. Borrow as much as possible, then burn and die together. Or, we have a peaceful solution. We say, whatever the world becomes, we don't need to change it. We just need to protect ourselves. We will walk away from the game where money is controlled and printed by intermediaries. We will walk away to find a system where we can save our wealth. The second way is to opt out. We opt out by, when we have money, we earn money, we save it for expenses like food and other things, but the remaining money is converted into assets that the government cannot print. It doesn't have to be converted into Bitcoin. It can be converted into anything. It can be land, it can be gold, it can be the S&P 500 Index, it can be the Hang Seng Index, it can be anything that grows along with inflation. But for youth, for the new generation, what is most accessible is Bitcoin. If you want to buy the S&P 500 now, one unit is about over a hundred thousand baht. Where will you get the money to buy it? If you want to buy land, it's millions. Where will you get the money to buy it? If you want to buy gold now, it's 60,000 to 80,000 baht per baht. Before you can buy one baht, you save it, it's like a small stamp, a gust of wind blows and it's gone. Who will buy it, right? But you can buy Bitcoin for 10 baht a day. That's its specialty. Of course, we must first understand that all these assets have prices that go up and down. There is something called volatility. This makes many people think that these things are investment tools, speculative tools. We will get rich by buying these things. We will buy when it's low, we will sell when it's high, and we will be rich. That is one way. But that is not a sustainable way. The sustainable way is to read the game. To understand that what we lack is not investment tools, what we lack is not speculative tools, but what we lack is that today we have no tools for saving, no tools to preserve wealth for the future. How will we preserve it? How will we save wealth? Hold these assets. And when we save, the ups and downs, the price swings, have no effect. Warren Buffett has gone through 17 recessions in his life. Stocks dropped 77%. He never sold. He bought more. Why? Because he didn't buy hoping to speculate and get rich from those short-term ups and downs. He chose to buy good businesses, good companies, good indexes at a low price. Volatility became a reward for him. Every time the market crashed, he bought more. Every time the market went very high, he would give credit to others, those stocks would come back to him at a low price when the market crashed. And as time went by, his wealth grew because he didn't call it smart investing, but he saved. He saved in assets that don't depreciate. Similarly, the price of Bitcoin sometimes goes up 1000 times and crashes 90%. If we hope to play that game, to buy here, sell there, buy here, sell there, in a moment we will lose our minds and die. Worse, you will get lost in the market's greed and fear, and then you will be tempted by "Oh, there's this coin, that coin, worth buying." You will enter a casino. You will become a gambler, and you are not investing. And gambling always leads to disaster, right? Therefore, look at it again. All assets may have price fluctuations, but these fluctuations are not the problem. These fluctuations are a feature. Think about it, there are many assets in the world that are useful for saving, and all these assets have their cycles. There will be periods when you can buy them at a sale price. And if you are a patient person, you will wait to buy when it's on sale, right? When we buy things, we have our eye on this bag. Do we have to buy it when it's just released? If we want to be impulsive, if we want to cover our insecurity, we might need to. But if you are a patient person, you might buy it at half price. And when the price goes back up, you might even make a profit. Similarly, Bitcoin is now rewarding many people with its cycles of dropping 80-90%. That's a good time. Now the price has dropped 50% from its peak. It's a 50% sale, right? If we look long-term, gold. Gold is not on sale now. Gold is at a premium now. It's down a bit. I'll save it. Land. Land will be on sale in a while. The bubble is starting to appear. But when it's on sale, don't rush to sell. Those who fail in the world of investing are those who panic and sell everything they have when the price is at its lowest, and then rush to buy with everyone else when the price goes very high. Since we cannot know the future, we use it for saving. Just hold it. And when you get old, you will thank yourself. It's not sexy, it's not easy, but it's the foundation of capitalism. The foundation of capitalism is saving, working hard, being diligent, doing a lot, spending less, and saving the rest. Save a little more of what's left to survive in the new capitalist system, or what I call debt-ism. Don't save in money that they can create. Save in anything that they cannot create. And keep doing it. Today, you might not see the results. Next year, you might not see the results. Keep doing it. Believe me, 10 years is very short. 20 years is very short. And you will understand this when 10 years have passed and you haven't started doing anything. When another 20 years have passed, you will look back and think, "Someone once told me to start. Why didn't I start?" Time passes very quickly. Don't forget, we are only on this earth for about 4,000 weeks. You have a limited time to accumulate capital and pass it on. So, that concludes today's topic on how to survive in the world of debt-ism. Thank you. >> Uh, uh, Any, can you hear? >> Yes, I can hear you, but I see one thing. The exchange students have [clears throat] translation apps on their phones. Uh, Any questions? Are there any questions? Uh, no. You speak Thai very clearly. Uh, thank you, Professor Phiriya Sampantarat. Thank you.