Video - Bitcoin vs. Paper Fiat
On a long enough timeline the value of all fiat drops to zero. Joining us today for a quick tour of the history of monetary devaluation and how it can be avoided is Ken Shishido of the Tokyo Bitcoin Meetup Group.
SHISHIDO: Money itself doesn't have a value, right, but it's like a blood. So today we have a cancer in our blood system and this is destroying our economy and society.
FEMALE: You're listening to the Corbett Report.
CORBETT: Welcome, everyone. James Corbett here in the sunny climes of western Japan in August 2016. It is sunny so it's Japanese hat day today on the Corbett Report. If you're not watching the video version of this interview you should be. If only for the funky Japanese hats because I'm not here by myself. I am joined by a real live, flesh and blood human being for a change rather than a Skype entity. Today we're talking to Ken Shishido, Ken.
SHISHIDO: Hi, thank you for having me on, James.
CORBETT: It's great to have you on. And it's great to have you on because if you're watching the Corbett Report I'd like to think it's because you don't just want to hear people talk about problems, you want to hear about solutions. And well, we're going to talk about one solution in the monetary realm today. We are going to be talking about the subject of this T-shirt. I'm sure many in the audience will recognize the Bitcoin symbol but let's talk a little bit about Bitcoin and Tokyo and Tokyo Bitcoin. Ken Shishido is the founder of the Tokyo Bitcoin meetup?
SHISHIDO: Organizer for Tokyo Bitcoin meetup group and I have -- we just had 200 meetup which is the longest streak of meetups in the world.
CORBETT: And it's the weekly meetup, is that right?
SHISHIDO: Weekly meetup. And we, originally founded by one and only Roger Ver Bitcoin evangelist. He is based in Tokyo and was founded July 2011 which is second oldest meetup group after Silicon Valley Group.
CORBETT: The second oldest meetup group ever or Bitcoin meetup group?
SHISHIDO: Second oldest Bitcoin meetup group, right.
CORBETT: So what kind of things do you do on a weekly basis?
SHISHIDO: It's a casual gathering so we were just, you know, talk about exchange information about Bitcoin and some of us founded Bitcoin companies. But basically, casual gathering.
CORBETT: Well, I will share with some of the footage from some of our gatherings on the screen, some interesting ones involving burlesque dancers even. It's an interesting group. And I hope I can come out and join you guys some time when I actually get out of my home city and over to Tokyo.
CORBETT: Increasingly difficult for a stay-at-home dad. But let's talk a little bit about your story. Why bitcoin?
SHISHIDO: Okay. How I got Bitcoin goes back to actually around about 2004 and '05. I was working at a phone company responsible for corporate accounts. And my customers are Lehman Brothers, Goldman Sachs, all that kind of mega financial institutions. Then I was visiting their Tokyo Headquarters in premier locations, right. Now, at that time I started wondering how come this wealth is so flowing into financial institutions like them, where they don't actually produce anything, they don't create anything and yet their C.E.O makes like 100 times more than Toyota C.E.O. So I started studying about monetary history and following Robert Kiyosaki, Mike Maloney, Jim Rogers, you know, thinking about what money is. Then at the same time start learning Austrian economics that kind of things. Then I realized the root cause of this craziness in the world is to do with the monetary system. Money itself doesn't have a value right but it's like a blood so today we have a cancer in our blood system. And this is destroying our economy and society. So that kind of background then I started following Trace Mayer, Jeff Berwick. As some of you know, you know that some of the very early Bitcoin lovers come from what we call as gold camp or silver camp, honest money camp, right. So I started buying some physical gold, then silver then I came to some of us came to learn about, I learn about Bitcoin in 2011.
Then I met Roger Ver. I think, in early 2014 and Roger is travelling around the world by then, so I took over domestic group activity from 2014. So that is how I got into Bitcoin. But, before that in 2012 I tried to run for lower house congress advocating sounds money. Then representing either District 3 Hiroshima or District 5 Tokyo, representing those areas but down I preach the sound money, importance of sound money to the party leaders. But they didn't get it so I didn't get the official nomination. So, I thought that you know changing things, making the world a better place from politics is not possible. So rather than that, Bitcoin is more fun and there are things that are great things you can do with Bitcoin. So, I started focusing on Bitcoin full time now.
CORBETT: It's interesting. We all have to go through our political period and then grow up and realize, no, it's involve things we can actually do for ourselves. Bitcoin being an example of that so you brought some interesting things to show the audience today, about monetary history. Why don't you talk us through what you've got in your little bag here?
SHISHIDO: Okay. So, one example, I carried this to Bitcoin meetups and I show these silver coins one is $1 silver coin and ¥1 silver coins.
CORBETT: They look almost identical. Why is that?
SHISHIDO: Because it was equal weight and size and in early 1900. When Japan started trading with the western powers. After Edo period the Shogun, the Samurai period. In order to do the fair trade the currency must be the same right. I mean --
CORBETT: A standard weight and measure.
SHISHIDO: Right. A standard weight to measure it. So therefore, we made ¥1 equal to $1.
CORBETT: Yeah. Imagine there are people in the audience who don't know what a silver dollar looks like or why it was called the Silver dollar but an ounce of silver used to be a dollar and an ounce silver used to be ¥1. Now, today how much is one ounce of silver worth?
SHISHIDO: It's around about $20 but this ¥1 due to Antique value of ¥1 Silver this is going sitting at ¥8000 which is about $80.
CORBETT: Right. So, if you are holding a ¥1 in you know 100 years ago that would be worth 18,000 of what it is today?
SHISHIDO: That’s right. So that’s the 18,000 devaluation of the purchasing power, right. So, it's kind of telling.
CORBETT: Its very telling and this is not the only example you have some other example of pieces of paper. These are actual coins which actually retain their value even after the devaluation but there are some other things you got in your bag or goodies.
SHISHIDO: Yeah, so the other thing that the audience could be familiar is this is 1924 $20 gold coin which is going for at around $1500 today. Then I have early 1900 ¥10 in gold which is sitting at around about $800 today. With ¥10 is like ¢10 you cannot buy anything with ¥10 but with $800 you can, it’s a lot more purchasing powers than ¥10.
CORBETT: So considerable more, yes. So once again devaluation creates a situation where if you are holding on to these tokens given out by the government and just holding onto them. They are going to be very worthless in 30, 50, 100 years, whatever the timeframe is on that devaluation.
SHISHIDO: Uh-huh. So gold and silver coins are a good investment or it holds the purchasing power for a long, long time. But when you look at Bitcoin, Satoshi said, quote -- in his introduction of Bitcoin paper Satoshi said "the central bank must be trusted not to debase the currency but the history fiat currencies is full of breaches of that trust." So, this is what Satoshi Nakamoto, Bitcoin creator wrote in his introduction paper. So, Bitcoin does have the similar property to silver and gold.
CORBETT: Now something that the audience might not realize is that you are an exceptionally incredibly rich man that you have $100 trillion. And in fact, you brought $100 trillion to show us today. Didn’t you?
SHISHIDO: What do you mean? A $100?
CORBETT: No, no, no. Don't you have a trillion?
CORBETT: Yes. Show us what $100 trillion looks like. Here it is.
SHISHIDO: So, this is infamous Zimbabwe $100 trillion note. And I'm sure many of the audience are familiar and actually the print quality is pretty good because it's printed by a German factory.
CORBETT: For a $100 trillion I would expect to pretty nicely printed note.
SHISHIDO: But not many people have seen is this $10 Zimbabwe silver coins. This is going at like, you know, at least monetary silver value is $20 but the premium would be much more but it keeps its purchasing power.
SHISHIDO: Although it's Zimbabwe $10.
CORBETT: Right, right. Which I don't know what that/s worth now. How much is a $100 trillion note worth note now?
SHISHIDO: This has been completely -- there is denomination so this paper does not have any value at all.
CORBETT: So, there you go. Going from a 100 trillion to nothing just like that. Well, it is basically toilet paper and it's not worth the money that is printed on which is I mean that's a sign of something. So, what is the answer to this? If we keep getting these tokens this meaningless pieces of paper or tokens from government that are constantly being devalued because governments love to print more and more and more and more until they're worth nothing. What's the answer?
SHISHIDO: Well, ultimately, we are seeing hyperinflation in places like Venezuela or other places. But the history of fiat money has all the money -- paper money has gone to zero. So, it is inevitable that, you know, that our current paper system is going to end, come to an end.
CORBETT: That's right. Every single paper currency ever has gone to zero at some point. It's just a matter of when and one can envision that happening fairly, rapidly given the state that we are in today. So how does Bitcoin circumvent this problem?
SHISHIDO: Bitcoin is still development phase. So, it is not so easy to securely hold Bitcoin for average investors, but you know, buying some Bitcoins and understand you know play with it would be a good start. Then, if you feel comfortable then maybe you buy few $100 for Bitcoins or a $1000 worth of Bitcoin whatever you afford to lose and that would be the good way to start.
CORBETT: I would agree. I mean, you start out with the small amount so you figured out how to use it and what you can use for and then you increase from there as you feel comfortable. And as you start to learn about it and I assume when you go to a meetup group like the Tokyo Bitcoin meetup. If are new you can start to find out about paper wallets and ways to secure your Bitcoin.
SHISHIDO: Correct. So yeah, opportunities are always in front of us and it's up to you to take your action. And I have come to conclude after all these years that I cannot change anybody, only I can change myself. So yeah, just learn a bit more about Bitcoin and if you start playing with it.
CORBETT: I think that’s the point. And I'm certainly don't sit here saying this is the answer that everyone must get into and put their entire life savings in it. But I say it is an answer, it is a way forward and it is something that people can be doing rather than twiddling their thumbs waiting for their paper money to turn into toilet paper. So, a lot we could be talking about, a lot more to talk about and there is a lot happening in Japan on the Bitcoin front. A lot of interesting work and people here but just tell people again where they can go to find out more about Tokyo Bitcoin meetup or Bitcoin in general?
SHISHIDO: Okay. If you are in Tokyo, if you have had the chance to come to Tokyo search Tokyo Bitcoin meetup group then you'll find our weekly meetup on Thursday night.
CORBETT: And how about for you personally? Do you have a Twitter or ways people can connect?
SHISHIDO: If you, Ken Shishido at twitter and yeah, I don't have a website.
CORBETT: All right, we'll leave it there. Of course, all the links will be in the show notice always. So, you can find out more. And I think we are going to leave at there, the sun is probably going to burn me alive anyway so we better get out of here before I turn into a Pumpkin. That's going to do it for today. Thank you, guys, for watching. Links in the show notes, talk to you again soon.
SHISHIDO: Thank you, James.
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