Billionaire: “Sell Your Home. Buy Bitcoin.” — Ricardo Salinas

This article explores a conversation with billionaire Ricardo Salinas, who shares his unique perspective on freedom, money, and the future. He discusses the importance of personal responsibility, the problems with central banking, and why he believes Bitcoin is a crucial tool for individual liberty. Salinas also touches on the concept of inflation as a hidden tax and the surprising benefits of deflation.

The Fight for Freedom and Liberty

Ricardo Salinas believes that true freedom comes with responsibility. He points out that while many people think freedom means doing whatever you want, it actually requires a strong moral foundation. He suggests that basic principles like not stealing and not harming others are key to a free society. Salinas argues that when people are accountable for their actions, they can truly be free.

He also talks about how modern society often pushes adults to be controlled by the government, similar to how children are controlled by their parents. Salinas, a long-time libertarian, believes that the bigger the government, the worse things get for regular people. He supports decentralization and thinks that smaller governments lead to fewer problems.

Bitcoin and Individual Freedom

Salinas sees Bitcoin as a way to achieve individual freedom. He explains that traditional money systems, controlled by central banks, allow governments to print money, which leads to inflation. He calls inflation a "tax that nobody understands" and a way for the government to grow too big. Bitcoin, on the other hand, is a "hard money" that protects individuals from government theft through inflation.

• Key Takeaways:
  • Bitcoin offers protection from government-caused inflation.
  • It allows individuals to control their own money, making it harder for governments to seize assets.
  • Bitcoin promotes individual empowerment and financial independence.

Salinas notes that the early internet had a "do no harm" policy, letting the market figure things out. He hopes Bitcoin will be treated similarly, allowing it to grow without too much government interference. He mentions that thinkers like Hayek predicted the need for a new money separate from the state, and he sees Bitcoin as that invention.

The Problem with Central Banking and Inflation

Salinas is very critical of central banking and the idea that inflation is good. He argues that the current system, based on Keynesian economics, is a "fraud." He believes that money printing is used to steal from savers, and the money gained from this theft is then used to spread propaganda that makes people believe inflation is good for them.

He points out that governments often manipulate inflation numbers, like the Consumer Price Index (CPI), to make it seem like inflation is low. However, real-world prices for things like cars show a much different story. Salinas also highlights that technological advancements should lead to lower prices (deflation), but instead, this benefit is often taken by the government through inflation.

• Why Deflation is Good:
  • Technology naturally drives prices down, making goods and services more affordable for everyone.
  • The idea that "price stability" or 2% inflation is necessary is a myth perpetuated by central banks.
  • Deflation means that your money buys more over time, increasing your purchasing power.

Salinas gives the example of TV sets: a 14-inch color TV cost $400 forty years ago, but today, an 80-inch screen with much better quality costs the same amount. This shows how much prices should have dropped due to technology. He argues that the government’s actions prevent people from enjoying these benefits.

The Future of Money and Personal Finance

Salinas warns that the current financial system will eventually lead to a lot of hardship, especially for those on fixed incomes, like pensioners. He experienced this firsthand in Mexico in the 1980s when the value of their currency crashed. He believes that debt will be "liquidated" through inflation, meaning people’s savings will become worthless.

He encourages people to "orange pill" others, a term from the movie The Matrix, meaning to help them wake up to the realities of the financial system. He says that many people don’t realize they are trapped in a system that makes them "slaves to the big government."

Salinas also challenges the common belief that money in the bank is safe. He explains that banks don’t just hold your money; they lend it out. He calls fractional reserve banking "fraudulent" because banks have more liabilities than assets. He argues that the government benefits most from this system, which is why they issue banking licenses.

Finally, Salinas offers a bold piece of advice for most people: "Sell the house and buy Bitcoin or and rent or keep the house, take a mortgage, buy Bitcoin and then use the Bitcoin to to cover your spending needs as they show up." He acknowledges that a house can be a good investment for living, but as an investment compared to Bitcoin, it "doesn’t stand a chance." He points out that you can always build more houses, but you can’t make more Bitcoin. He concludes by saying, "Long Bitcoin, short fiat, fifth rate, as good as it gets."