Episode notes
“If your system can’t survive without inflation, the problem isn’t deflation.”
Allen Farrington and Sacha Meyers return to the show to break down one of the most misunderstood ideas in economics: deflation.
Allen & Sacha are the authors of Bitcoin is Venice, in this episode they get into their latest essay, Number Go Down, where they challenge the core assumptions behind modern macroeconomics. They argue that the idea inflation is necessary for a healthy economy is not grounded in reality, but in flawed models, bad incentives, and a fundamental misunderstanding of how growth actually happens.
We get into why the 2% inflation target is arbitrary, how Keynesian economics confuses credit collapse with true deflation, and why falling prices driven by innovation might actually be the most important signal of a functioning economy. We also explore the paradox of thrift, malinvestment, and why distorted price signals lead to systemic fragility.
Allen and Sacha explain why saving is the foundation of real growth, how deflation can drive investment rather than kill it, and why trying to “manage” the economy through measurement and intervention is fundamentally misguided. We also get into debt, why inflation acts as a hidden bailout mechanism, and what a world built on sound money might actually look like.
FOLLOW:
Danny Knowles: https://x.com/_DannyKnowles or https://primal.net/danny
Allen Farrington: https://x.com/allenf32
Sacha Meyers: https://x.com/sacha_meyers
THANKS TO OUR SPONSORS:
LEDN: https://learn.ledn.io/wbd
BITKEY: https://bitkey.world/
ANCHORWATCH: https://www.anchorwatch.com/
BLOCKWARE: https://mining.blockwaresolutions.com/wbd
SWAN: https://www.swan.com/wbd
CLUB ORANGE: https://www.cluborange.org/
CAPE: https://www.cape.co/wbd
SUBSCRIBE TO THE PODCAST:
FOUNTAIN: https://fountain.fm/show/gpascDml6iI0sM8aTOCT
SPOTIFY: https://open.spotify.com/show/18Pixm6jNMATYXSO6cUnTH
APPLE PODCASTS: https://podcasts.apple.com/gb/podcast/defiance/id1482455669
WEBSITE: https://www.whatbitcoindid.com/
CHAPTERS:
00:00:00 - Introduction
00:03:48 - The Myth Of Inflation
00:07:14 - The 2% Target Was Completely Made Up
00:13:03 - The Keynesian Case For Inflation
00:19:08 - Two Types Of Deflation
00:20:24 - How Deflation Unlocks Innovation
00:25:02 - Investment Vs Malinvestment
00:35:48 - Deflation And Debt: The Mortgage Problem
00:41:25 - You Cannot Have Deflation Unless Labour Is Worth More
00:47:34 - How Far Does Bitcoin Have To Go?
What Bitcoin Did with Danny Knowles
#Bitcoin #Finance #Money #Economics
Allen Farrington and Sacha Meyers return to the show to break down one of the most misunderstood ideas in economics: deflation.
Allen & Sacha are the authors of Bitcoin is Venice, in this episode they get into their latest essay, Number Go Down, where they challenge the core assumptions behind modern macroeconomics. They argue that the idea inflation is necessary for a healthy economy is not grounded in reality, but in flawed models, bad incentives, and a fundamental misunderstanding of how growth actually happens.
We get into why the 2% inflation target is arbitrary, how Keynesian economics confuses credit collapse with true deflation, and why falling prices driven by innovation might actually be the most important signal of a functioning economy. We also explore the paradox of thrift, malinvestment, and why distorted price signals lead to systemic fragility.
Allen and Sacha explain why saving is the foundation of real growth, how deflation can drive investment rather than kill it, and why trying to “manage” the economy through measurement and intervention is fundamentally misguided. We also get into debt, why inflation acts as a hidden bailout mechanism, and what a world built on sound money might actually look like.
FOLLOW:
Danny Knowles: https://x.com/_DannyKnowles or https://primal.net/danny
Allen Farrington: https://x.com/allenf32
Sacha Meyers: https://x.com/sacha_meyers
THANKS TO OUR SPONSORS:
LEDN: https://learn.ledn.io/wbd
BITKEY: https://bitkey.world/
ANCHORWATCH: https://www.anchorwatch.com/
BLOCKWARE: https://mining.blockwaresolutions.com/wbd
SWAN: https://www.swan.com/wbd
CLUB ORANGE: https://www.cluborange.org/
CAPE: https://www.cape.co/wbd
SUBSCRIBE TO THE PODCAST:
FOUNTAIN: https://fountain.fm/show/gpascDml6iI0sM8aTOCT
SPOTIFY: https://open.spotify.com/show/18Pixm6jNMATYXSO6cUnTH
APPLE PODCASTS: https://podcasts.apple.com/gb/podcast/defiance/id1482455669
WEBSITE: https://www.whatbitcoindid.com/
CHAPTERS:
00:00:00 - Introduction
00:03:48 - The Myth Of Inflation
00:07:14 - The 2% Target Was Completely Made Up
00:13:03 - The Keynesian Case For Inflation
00:19:08 - Two Types Of Deflation
00:20:24 - How Deflation Unlocks Innovation
00:25:02 - Investment Vs Malinvestment
00:35:48 - Deflation And Debt: The Mortgage Problem
00:41:25 - You Cannot Have Deflation Unless Labour Is Worth More
00:47:34 - How Far Does Bitcoin Have To Go?
What Bitcoin Did with Danny Knowles
#Bitcoin #Finance #Money #Economics
