Podcast appearances and mentions of jeff i'd

Special Presentation on Agile Methodology Joshua: I am Joshua from Dorks Delivered. So, cool stuff I've done in the past are columns for an online entrepreneur magazine so that's something that's happened more recently. Published a book, a couple ago which I'm pretty excited about. Some of the different stuff and ways that we do business has been featured on news.com.au I've got a YouTube channel and a podcast as I already sort of pointed out there. Which you guys will all be podcast famous in a few weeks so, it's pretty exciting. Woo! In one way or another I've been a business owner for 19 years, with Dorks Delivered for 12 years. And I'm pretty keen on automating things. So my home, my lifestyle, and everything is automated wherever possible. Learn more about Agile Methodology at dorksdelivered.com.au A business owner needs to be able to automate everything. Not just when they're in their business and trying to get their processes and their staff all accounted and right, they need to make sure they're doing that in their home lifestyle as well, because if you're sitting at home and you're vacuuming, well you're not vacuuming if you're sitting are you? But if you're at home and you're vacuuming then you're wasting time a lot of the time. You need make sure that you're looking at every single process. That's the fish pond that I've automated, which goes through, uses the fertiliser coming from the, or the excrement from the fish is fertiliser across all the gardens, and does it all automatically. Looks at the amount of evaporation and goes nuts. Any questions? I can see a few confused faces. Speaker 5: It looks like a spa. Joshua: It does look like a spa! It's actually a dual tank fish, so you can have two different breeds of fish, sit out there in a little pond and have a look and they've got a little putt putt area up the top there. That I build around, so, just, fun stuff. You've got to automate your life. So with Dorks Delivered as I said, I'm an automation specialist through south-east Queensland. And what we do for business is remove poor time, time-poor, we bring time back to business owners by improving efficiencies and removing repetitious tasks. So I also help with sales and marketing to an extent through some of their social media aspects, but mostly all just as a holistic view, and point you in the right direction of how to get to the right person. So, what is agile development? As we sort of discussed, there's a waterfall methodology which is where you're producing something and then you're saying "okay now it's working, but it might have broken", and then you're going through a very, very, a process that's in series. There's a clear start and there's a clear end, but there's nothing in the, necessarily in the middle that isn't defined. It has a start, has an end and then the product is created. The problem with that is it's incredibly, tell me if I'm talking to quickly, because I say it and I just get excited. But the problem with it is, agile development, has a start, has an end, but costs a lot of money and doesn't make money most of the time throughout the process. And so the whole process of agile development costs a lot of money, needs a lot of capital and there's no money coming in from it. So, as I said, in a nutshell, it's creating the smallest most basic item that's scalable, that you can have sent off to your clients or sent out to market. So a good example would be Uber. Whoop I've gone too far. So Uber created their app on their phone so that you can rideshare and so on and so forth. Their intention is, and was, was and still is, to create autonomous vehicles but they needed to have acceleration, data and any other points of black spots and what-not... Of what's going around the area. So, Uber's intention is to create an autonomous vehicle, but they created an app that allowed for ridesharing, and used people, the meat in a seat, to achieve their objectives until they were able to have AI to a spot where they were able to then have it work. Because AI was going to be way too expensive, so they created a small product and then continued to develop the product, but had a known ending, but had a profitable product to start off with. So, any questions on how that all works? Any participation you get a prize. Speaker 4: Josh, it's just a, yes a question. So you said like, with agile development, there's like, you'd don't really get any sort of like, the potential return on investment until the end. So what you're saying now is with Uber, if you look at their agile development, you know, the intention was at the end was to have the AI intelligence that will make them, you know, self-automated. But what, so, they have got a return now, by implementing the first basic part of it. Joshua: So agile development gives you a return straight away. Or very, very close to straight away. Traditional models, or the waterfall model, means that you, they would have said, "we're going to make an autonomous vehicle" and they're going to say "okay, it's going to cost us billions of dollars but we have a clear defined outcome". Instead they've said "let's break this down into profitable steps, where we can then, use that". So although Uber appears as if they're in competition with DiDi and Ola and Lyft overseas, they're not really in competition with them and that's why Uber's balance sheets look like they're running at a loss. Joshua: Significantly. That's right. And then you look at others and you go "wow they're doing exactly the same thing, how are they running at such a loss?". So, and that's where their money is going, is- Speaker 4: But you generally find that people who are first, are the ones who end up losing all the money and then the others jump on it and like, like the DiDis and the Olas, et cetera, now they're using the same, but Uber paved it. Joshua: It depends, like McDonald's and Hungry Jack's could have the same argument. McDonald's and Hungry Jack's are pretty much exactly the same, but you've got McDonald's and it's definitely first, and it's still out there and I'd, it's definitely larger. It all depends. Uber's definitely got the name. No one says "I'm going to catch an Ola", they're going to go catch an Uber. They've changed the market. They've made it a level playing ground. From my house into Brisbane, it was a 20 dollar Uber, now it's a 46 dollar Uber, to get to the airport was 28 dollars and now it's something like 55 dollars. So all DiDi's done is they've just levelled the playing field. What Uber did is they said "let's crush", they did what Netflix did to Blockbuster, "let's crush the taxi drivers, once we've crushed taxi drivers, increase our profits". But you have the early adopters, and then you have the latecomers, and the early adopters and their... I'm not sure if I'm, that makes sense? The curve of where everyone sits in the adoption cycle. They would've known that someone was going to come along and copy the idea. But they would have had such a deep footing and grounding in what they've done, that it wouldn't have mattered, it doesn't matter a whole bunch because their end goal isn't to be competing with DiDi or Ola, it's just to be using their, the points of data. So for us, it looks like the same app, but what they're actually gaining, and the intelligence they're gaining from the app is far greater than what DiDi or Ola has does that make sense? For the questions, I'm going to give, you get a pair of fun, where is it? Green glasses! All right we can match. So has anyone heard of Beyond Meat? So Beyond Meat is this meat that has more protein than steak, more protein than most hamburgers, takes up 99 percent less landmass, has nearly all the health benefits of consuming meat, burns and cooks like meat, has haem in it the same as you have haemoglobin in meat, and to anyone that has not tried one of these, it tastes exactly like you've had meat. Has anyone tried any of these before? Grill'd, yeah they have them at Grill'd. They've only just recently come in there. And they're absolutely amazing. I tried when I went, you can't tell, if I gave that to a vegetarian, they would have sent it back to the kitchen they said "oh no this is terrible, this is meat". It, yeah, it flame grills a whole lot exactly the same. Anyway so, they created one product. Which is the Beyond Meat patty. And the Beyond Meat patty is absolutely revolutionary with the way that it works, and it means that it'll be a sustainable product that still gives you all the same benefits as meat into the future. Regardless of health and life choices and stuff, their intention was to have a huge range of products. But they obviously can't do that and be profitable if they're working on all these products at once. So they developed the easiest product that was able to sneak into the market as easy as possible. So, if you have a look at the predominant meat eaters, it'd definitely be America ever ever else, obviously India and Asia are significantly more vegetarian than they are anything else, even though they have a huge population. Jeff: So why does agile make a difference? Surely [crosstalk 00:11:24] the traditional project methodology, your goal was to produce the simplest product into the market as quickly as possible, why does agile make a difference? Joshua: It's about improving upon the original product, with a bigger end goal than just the initial project. Joshua: So the idea is testing the waters without getting your feet wet. You can use the agile methodology for anything, even marketing. So, as I said here, you can slowly develop your business without having huge cost outlay, is one of the big things. So from a marketing perspective, there are different ways that people use the agile methodology. So Dad and I, we've started a craft brewery. We've got ten different products that we've got on tap. We haven't got the licensing to sell it or anything like that, and the licensing to sell it and what not is quite expensive, when you don't know if it's going to work and people are actually going to enjoy the taste of your brew. So what we've done is we've created a survey, where when people fill out the survey, because we can give the beers away for free, when people fill out the survey and they try they beers and they go "yes this is fantastic", we pay a pre-order to buy a six pack for instance, when we have 6000 people on that list we then know that there's enough of a test there that we know that people would be interested in buying it, without having to then fork out the money for larger infrastructure and any of the licensing costs and so on and so forth. Speaker 4: So what will it cost you though, to give those 6000 beers for free? Joshua: Well the beers for free to start off with, the 6000 beers are quite cheap. Maybe 30 cents a beer or something like that. Speaker 4: Oh, okay. Joshua: Yeah, so it's very, very cheap. And in scale, cheaper than that. So that's why my wallet, it's better to be producing something that you can test the waters with. So if you need any help with the agile development process or anything in your business we can jump in and have a look at some of the projects that you're doing and make sure that you are doing them in the most efficient and effective way. So, what Steve Jobs did, is he has six different iPhones in front of his stand. On the six different iPhones one of them played videos, one of them received SMSs and calls, one of them played music and so on and so forth. So one of them had different apps that showed maps, and all these different things. Not a single iPhone could do all the things at once without crashing. Additionally, if you tried to, and you accidentally did it, it may start working and then crash mid presentation. So to save face, while he was showing everyone this revolutionary new technology, each different person with agile methodology was able to create the certain function working on each device, but not all of them together. He went up and said, "this is world-changing, this is revolutionary, everyone's going to have one of these in their pocket". And he's not half wrong. What he did there it was just fancy video editing, as he put the phone down and then picked it up, he already knew that it was going to be exactly the spot where it needed to be. Additionally to that, they had a tower that was put there by Verizon that, that was only paired to their phones that were on the stand, to make sure that they had absolutely lightning-fast speed, that had no congestion with everyone else that was in the audience. So, that is, that bit isn't really agile, that's just tricky. But having the different phones, knowing that you can do it somewhat, but you don't have the capital to continue producing a single device, and you don't know how well it's going to be received, this allowed for a world audience to see, pre-order the devices, continue to have the money to then build it out. Does that make sense? Does that kind of answer your question before on the, how it can be varied with the approach for agile development as opposed to just creating a full device from start to finish? Jeff: I'd be interested to know what your thoughts are on the difference between lean, agile and scrum, as delivering outcomes for small business owners like us. Joshua: With communication and branding you'd say that a lot of that would come to their marketing, and how well they're being shown on the web, making sure that everything's consistent. Yeah? Jeff: Oh, well I'm thinking about story-telling, so, if Steve Jobs you just gave is the best example of, any marketing story-telling, best businesses telling their stories. Joshua: That's correct. But if you went to a small business and you said "you need to make sure that your story resonates with your ideal client, and you need to make sure this you do that and this", and you said that the marketing budget is going to be $200,000 to make sure that we get your message our the appropriate people. Most business owners are going to be like "I can't afford that, I know that that's what I need to do, but I can't afford that". So let's test the water, use a long tail key word, sniper marketing, target a very test small audience, because you can't afford the $200,000 even thought you know that's going to work. You test a smaller audience, a subset niche of their target market, and then from that go "okay, that has worked, that is now bringing in an income", especially for startup business or something like, even if the income's not huge, it's bringing in then an income to then afford to then push the money towards the $200,000. So it's about, that would still be testing the waters, as opposed to knowing that you've got from start to finish the full solution. Speaker 4: Isn't that just the normal way that you would start a business? [crosstalk 00:29:17] don't startups just do that? Joshua: Do what, sorry? Speaker 4: Exactly what you're saying. You start with a smaller part of the market, make some money. Joshua: You should. That's exactly right. But even if you know that you need to have the larger portion of the market, or you're not necessarily a larger portion, but you need to market and brand in a certain way. Like I know that for instance, YouTube, cost the business a lot of money to produce a channel, it doesn't necessarily have a whole bunch of views, but the views that are does have, convert, and work towards our end goal in our business. So it's a functional platform, but most businesses when they start out they know, "if I have a YouTube channel I'll be able to get my message across more easily, be able to tell the story about what we do", but you won't necessarily be able to afford to be able to tell your story to the audience that needs to hear it. So, does that, am I explaining that right? I don't know, does that sound fair? So, sometimes you don't know how to go about finishing creating a product to service, and that's where we've sort of just said: "agile developmental design is your answer". That's what Steve Jobs did to make sure that they had a product, although they would have had the money and the market research that said "this product is going to work", they may not have wanted to spend the capital on something that might have flopped because there already was the Nokia phone that could do nearly everything, but it just didn't have the right story-telling and the right approach to it. So, security is another big objective towards agile development. If you don't have good security in your business, if you don't have good security practices, it will delay and push things out. One of the things that a lot of businesses, has everyone seen the HTTPS at the start of their website? So like, up until a couple of years ago, there was this thing, a vulnerability in it, that had been there for decades, for about a decade. Called heart bleed. Apple was aware of it. Apple had protected all their systems. Apple didn't let everyone else know about that. Apple was able to snoop and see any details that were deemed encrypted on everyone else's system. That's terrible. The OpenSSL protocol was able to be broken into. Certain people knew about it and other people didn't. The person that developed that was in their garage, just a home business that developed this and gave it away for free for everyone to use, and then everyone abused that, and that then opened up to mass hysteria when that came out of, the security problem came out about a year ago. So that's where you need to make sure you keep your eyes on the process and your security around all of the processes. Because if you don't, you, you'll have delays in the way that your product's going to be released.  

He's a libertarian, anarcho-capitalist. He hosts the biggest conference, Anarchapulco, for anarcho-capitalism. He's The Dollar Vigilante. Originally from Canada, hailing from Mexico. Jeff Berwick   Stefan: Ladies and gentlemen, welcome to the show, Respect The Grind, with Stefan Aarnio. This is the show where we interview people who achieve mastery and freedom through discipline. We interview entrepreneurs, athletes, authors, artists, real estate investors, anyone who has achieved mastery and examined what it took to get there. Today on the show, I have a very special guest out of the norm, Jeff Berwick. He's a libertarian, anarcho-capitalist. He hosts the biggest conference, Anarchapulco, for anarcho-capitalism. He's The Dollar Vigilante. Originally from Canada, hailing from Mexico. Jeff, good to have you on the show today. Respect The Grind, my friend. Jeff: It's a pleasure. Thank you. Stefan: Yeah. I really appreciate having a guest like you on the show, because we normally talk about like business and making money, and real estate. A lot of people listening to this show, they want financial freedom for themselves, and they're trying to make money. They're trying to invest, whatever that means. It's cool to have a guy like you on the show. We had a mutual friend of ours, John Sneisen, on the show a little while ago, and I love talking to guys like you, because we end up talking about the money system. We talk about freedom in the free world, free speech, all this kind of stuff. For the people at home who don't know you, Jeff, can you introduce yourself in your own words? Who are you, and why is this a relevant conversation for us to be speaking? Jeff: Sure. Yeah. Actually, it's a totally relevant conversation that's everything that I talk about. I've been doing that for about nine years now, since 2010, with The Dollar Vigilante, which is a anarcho-capitalist financial newsletter talking about how to free yourself. Not just financially, but in every way possible. Of course, for people that don't understand the word, "anarcho" means anarchy, of course, and that's a Greek word which means "an," without, "archy," ruler. I just believe that no one should have a ruler and no one should be a slave. I don't know why that's controversial at all, but that's the government indoctrination camps that people have had for about 12 years that most people have been forced into. Jeff: Then the capitalist part, a lot of people actually misunderstand that word, too. They think that what you have in the U.S. today is capitalism. There is a small part of capitalism still remaining, and that's why the U.S. is still standing, but it's mostly fascism, and crony capitalism, and what I call crapitalism. Really, when I say "capitalism," I just mean free market. I've been, and completely free market, so no government involvement whatsoever, no taxation, no regulation, no central banks, and no fiat currencies and things like that. I've been doing that for about nine years. Jeff: I also do a podcast called Anarchast. I've been doing that for about seven years, and it's grown quite a bit. It's nothing too huge, but it's actually spawned an entire conference now called Anarchapulco, as you mentioned. It's now the world's premier liberty and freedom event held in Acapulco, Mexico, every year. It's coming up in February 14th to 17th. We're expecting about 3,000 people, because the freedom, the idea of it is actually growing, believe it or not. I've been doing all that stuff for about, as I said, about eight or nine years now. Stefan: That's tremendous, Jeff. People like you, I really got to salute a guy like you, because it's not easy. It's not easy going against the grain. It's not easy speaking out about this stuff. It's not a popular table topic at the Thanksgiving table or the Christmas table. I remember when I was telling my family years ago about the money system at like at Christmas dinner or Thanksgiving dinner. Everybody got up and left. The average person doesn't want to hear about how they are enslaved. They don't want to hear about the money system. I remember years ago when I was 21, 22, I read a book called Atlas Shrugged by Ayn Rand, and that's the capitalist bible. The communists have Karl Marx, Das Kapital, and then the capitalists have Ayn Rand's Atlas Shrugged. It's number two most influential book in the United States. Stefan: Can you explain to the people at home, that's where I've first heard the word "libertarian." What's a libertarian? Because people, we're from Canada, or I'm from Canada, in Winnipeg, today, and people hear "libertarian," and they think libertarian is liberal, because it's L-I-B. They don't know the difference between the two words. What's a libertarian? Jeff: That's interesting you're up there in Winterpeg. I'm originally from what I call Deadmonton, so up in Canada. Stefan: Dude, that's the other Winnipeg. I'm giving that a gong. Bang. Just gonged it up. Deadmonton and Winterpeg. Jeff: Yeah, so the word "libertarian," I actually didn't even really know the word until about 15 years ago. It's become quite popular. It's become fairly popular since Ron Paul ran for president in 2008. Really, what the word means is, well, it's pretty simple word, "libertarianism." What it means is that if you're a libertarian, then you hold as one of your highest principles liberty or freedom. If you truly hold that as one of your highest principles, then you should actually be a anarchist, because an anarchist believes in complete freedom. It believes in the freedom of the individual that no one has the right to enslave and say they own another person. Of course, whenever you have a government, you're just born somewhere, and they go, "Well, you're ours now," especially in the U.S., where every baby born today in the U.S. has a quarter of a million U.S. dollars worth of debt and liabilities overhanging it from the government that it's supposed to pay off. Stefan: My God. Jeff: That's absolutely criminal and absolute tyranny and slavery. That's what we have in every country today, as well as Canada and every other country. A true libertarian truly believes that no one should be ruled or owned by anyone without their permission. Of course, there's a lot of people who don't mind being owned or being slaves. They're called statists, and if they want to do that, that's fine. I have no problem. As a libertarian or as an anarchist, do whatever you want. Just don't aggress against me. The only problem is, when they get these governments going, they always seem to include us and seem to think that, "Well, you are now owned by whichever government in whatever area you're in." I just completely disagree with that. Stefan: Yeah. I saw Jordan Peterson. You're probably familiar with Jordan Peterson, right? Jeff: Yeah. Stefan: I saw Jordan Peterson speak in the summer. He was speaking here in Winnipeg, Winterpeg, at the Burton Cummings Theatre, and he said something interesting that I thought something that I think people need to hear more often. He said, "The human race for most of history has lived under tyranny. We used to have monarchies. We used to have feudalism. For most, most of the human race, we've had tyranny, and for very brief times, we've had democracies or republics, but democracy lasts for about 250 years. Then it turns into a tyranny, usually, and then after that, turns back into a monarchy." Why do you think monarchies and tyrannies have existed throughout history, and why does it always seem to consolidate power like that? Why can't we just stay as a democracy or republic all the time? Jeff: Well, first of all, I'm not so sure about human history. I think most things we're told about history are lies, and so really, anything beyond a couple of hundred years ago, I really have doubts about what really happened. I really don't know what happened, but I don't trust anything that we're told by the media, or the governments, or the schools, which are all sort of the same sort of people running those sort of things, but what I understand happened is, a few hundred years ago, there was things like kings and queens, and they were doing that quite a bit. They were going around doing similar things that governments do today and say, "Hey, you were born here, so now you have to pay us a certain percentage of whatever you make," and that sort of a thing. Jeff: Really, a few hundred years ago, and it sort of seems to have happened in France, which is kind of interesting, because there's a bit of an uprising happening there again right now, is a lot of people said, "This is crazy. Just because you're born, this whole idea of kings and queens is so insane." I love the Monty Python, I think it was in the Holy Grail one, where the king's walking around, and he's like, "I'm your king." They're like, "You're who?" He's like, "I was born of this mother," and everyone's like, "What?" He's like, "I found a sword in the lake, and therefore I'm your king." They're like, "You're crazy," but for whatever reason, people kind of fell in line with that. Jeff: Of course, a lot of these monarchies were really tyrannical, and they would really, if you didn't pay them, they would kill you, that sort of a thing. That's very similar to governments. A few hundred years ago, people kind of woke up from it, and they said, "Well, this is stupid." The people who were in control at the time really realized they're going to lose a lot of power, and so they came up with an absolutely ingenious idea. That ingenious idea was democracy, which is a totally heinous, evil system of mob rule. If you have 51% of people decide that legally they can kill the other 49%, then everything's fine. Jeff: It's absolutely insane and just keeps people battling each other, but it's absolutely ingenious, because they've managed, through the government indoctrination camps, and through the media, the mainstream media, television, propaganda programming, to tell people that, "Oh, when you have a democracy, then you are the one who rules yourself, and you get to rule yourself by voting once every four or five years. You get to tick a box," and then some guy goes somewhere, and he makes decisions about what you're going to have to give up and how much they're going to extort you and things like that, but it's absolutely an ingenious idea. It's worked now for a few hundred years, and people have really fallen for it, but they're starting to wake up to it. That's what we're starting to see across the world, really. Jeff: We're starting to see that in France right now. Again, they're starting to realize, "This is absolutely insane that we have people ruling us without our permission, and taking our money, and things like that." Even Donald Trump, in the U.S., was to an extent an awakening of people going, "This system is horrible. We've got this total political class that is totally ruling us and just totally enslaving us." Jeff: What they thought was, "Well, we have democracy, thank God. We have democracy, so we can elect someone else," so they elected a kind of a bit of an outsider, Donald Trump, who's best friends with the Clintons and has been involved with central banks and with the Bush family for decades. His family's been very involved with the Bush family, so he's been very involved in the political class, but he came in as sort of an outsider, and you kind of see a lot of people saying, "Oh, he's an outsider, so he can fix things." He's not an outsider whatsoever. It's another sort of ruse in the whole democracy game, but really, that's what we've got today. Jeff: Now, what we've got at The Dollar Vigilante, I cover how bankrupt all these nation states are, how the central banks are printing money until we're going to be, hit hyperinflation very soon, so we're very near the end of this sort of system of these big nation states, of these big welfare states, warfare states, Big Brother nanny states, where everything is controlled, and regulated, and extorted, and taxed, and that sort of a thing. It's all going bankrupt right now, so even if people didn't wake up to what I'm talking about, we're still going to go through a massive amount of change in the next few years as all these systems all go down because they're all bankrupt. Stefan: Yeah. Well, there's a ... Man, Jeff, you said a mouthful there, man. I don't even know where to start, but I'm going to try to weigh in on what you said there at the end. Now, I wrote a book here called Hard Times Create Strong Men. I'm holding it up here for the camera for the people at home, and the cycles of history, as I understand it, goes like this. Hard times create strong men. Strong men create good times. Good times create weak men. Weak men create hard times. That whole cycle takes about 80 years, and every 80 years, there's a major war, a major crisis, a major reset. 80 years ago was World War II. 80 years before that was American Civil War, and you can trace this back in history. 80 to 100 years, every 80 to 100 years, is a major reset. Now, if you trace that out to the future right now from World War II to now, 2020 is the next "hard times create strong men." Stefan: That's what the book's about is, the men are becoming weak. When men become weak, the backbone of society falls apart. The family falls apart. The churches and the freedom of that falls apart, and what we end up with is some sort of major crisis. Would you say something like that's coming up? Jeff: Oh, absolutely, and I think those cycles are very true. If you just look at anyone who's like a rich kid, so his father most likely worked really hard his entire life and amassed a fairly large fortune, and then the kid comes along, and he's just pampered, and he never does anything. He never learns how to do anything. He never has to learn anything about life, and they usually become idiots, and they actually end up usually wasting or losing most of their money. This is a very natural sort of a cycle that can happen if you're not smart, if, as a father, if you make a lot of money, you don't just give it to your kids. That's absolutely ridiculous. Talk about a really great way to destroy your children, but the big problem with that cycle that you just mentioned that's been going on now for centuries is the government. Jeff: When you get the government involved, it's not just people who are destroying themselves through the cycle of people having to have hard times to get better and actually learn skills and work hard, and then they get soft afterwards, and then their kids get really soft and that sort of thing. That happens all normally, but when you add the government into it, it gets way worse, because then what, that's exactly what we're seeing today in a place like the U.S., which used to be quite capitalist. It has been fully capitalist, really, since its inception. It hasn't been, definitely has not been capitalist since 1913 when they first put in the Federal Reserve and the income tax acts in the same year, which is no coincidence whatsoever. It's been kind of a mix of the socialism, and communism, and fascism since then. Jeff: About what you've seen because of the capitalism, because of the free markets, there was quite a bit of free markets in the U.S. There isn't any more, but there used to be quite a bit. You build up all this wealth, and when you have a government, it always seems to skew to these people going, "Well, now that we have quite a wealthy place, we should be quite giving." Yeah, that's great. Give, but what they're talking about is, the government should steal money from everyone, extort everybody, and then give some of it to some people, which is absolutely heinous, and evil, and destroys everything. Jeff: Even the welfare system destroys the people on welfare, but as I was mentioning, like that whole cycle would happen probably quite normally unless people start to wake up and realize what they're doing, but the fact that we have governments today makes it so much worse, because that's what we're seeing in the U.S. You even see communism is really catching on in the U.S., because you've got all these pampered little kids. They sit there on their MacBook Pro at Starbucks ranting about how evil capitalism is and saying they want communism, and they don't even look up the last 100 years of what communism has brought a lot of places, like the Soviet Union, or Cuba, or Venezuela, and places like that. Jeff: They just, because they're so soft, and they've never really done anything, that's why they call them little snowflakes and things like that, and they become social justice warriors. Really, they're just non-player characters, NPCs, but yeah, the big problem with that whole cycle is government. If we can get government out of the way, then you'd have families destroying themselves over time over and over and not realizing the problems that they keep creating for themselves, but they wouldn't force it all on the rest of us through government. Stefan: Yeah. Wow. I mean, this is some really good stuff, and the snowflake thing, the snowflakism's a reason why I wrote Hard Times, because I had some of these snowflakes in my company. I have a company. I got 13 employees, and these little snowflakes were crying, "Oh, you're mean, and I don't love this. This isn't my dream job, and you make me feel like a piece of shit," and I had people showing up late. Just snowflakism all day, and I said, "Where does this come from? Where does the snowflakism come from?" I started writing this book Hard Times, and it's interesting, because what you said is absolutely true. Stefan: We've had some communist subversion come in from the Cold War into our schools, into our churches, into our militaries, everything, and we got this virus in our brain that thinks that communism is going to save inequality, but in history, communism has never worked. It has never worked once. It ends in massive, massive killing and massive death. There's something like 100 million people slaughtered in the last 100 years with communism. It's something brutal. It's the biggest cause of unnatural death, and every 80 years, we think it's going to work somehow. Somebody somewhere's trying communism. Stefan: As an extension, I've been studying communism, I was watching a show with Stefan Molyneux on Freedomain Radio, and he was talking about how feminism actually spawned out of communism when they started talking about equality, and men and women are equal, and next thing you know, in communist Russia, in 1917, when they switched over to communism, you had all sorts of major problems, where there was one crazy stat was, more babies were aborted than were born. You think about that, it's just a big, crazy, evil system. Why do we get this idea that we think that communism's going to save us from our own poverty? Like why does that idea keep coming in every 80 years into different societies around the world? Jeff: Yeah. That's a good question. I wish I knew the real answer, because it makes no sense. Obviously, these people don't look at actual history. As you pointed out, there's never been one ... It's not like there's been one that really worked out well, and they're like, "Oh, we screwed it up a few times." It's like every single one turns into disaster. It actually makes total sense why, because of human nature. For someone like yourself who's read books by Ayn Rand, you kind of understand the individualist sort of a thing, and that people will always do what's in their best interest. That just makes total and normal sense as human being. When you have this system that comes in and you say, "Okay, the guy at the top decides everything that we're all going to do," you don't keep anything from your work, so that makes it so a lot of people don't really want to work anymore, because why would you work if all the incentives go away to ... Jeff: I don't know about you, but when I do work, it's because I know I'm going to get something from it. I'm not just doing it because for no reason whatsoever. A lot of these people, especially ... Well, what's really happened in the West is that they've really pumped it up in the government indoctrination camps. That's why I say to people, "Get your kids out of the government schools. There's nothing that can be worse than that than having government actually teaching you ... " Not teaching, actually indoctrinating your child for like 12 of its most important years of its building of its sense of self, of its intelligence, of everything. Even Vladimir Lenin, of all people, said, "Give me your child for four years and the seed I plant will never be uprooted." Jeff: It starts a lot there, and then you go home in places like the U.S., or Canada, or a lot of places, and you turn on the television programming, and it's called programming for a reason. You get pro-cops, and pro-presidents, and, "The government saved us today," and turn on the news, which is total fake news. It's just government propaganda, and they're like, "Well, we saved this today," and all that sort of stuff. With the cycles that you're talking about, and we're in the snowflake cycle now of sort of this millennials that have never seen anything hard their whole life. To them, the hard thing they've seen is like when there's a long line at Starbucks or something like that. Stefan: No Wi-Fi on the plane. There's no Wi-Fi on the plane today. Darn. Jeff: Yeah, like that's the hardest times they've seen. Because they've gone through this indoctrination and that they're really, I actually stay away from colleges and universities, because it freaks me out to hang around, like they're all zombies, and they're the stupidest people I've ever met in my life. They're all indoctrinated and programmed. You go there, and half the classes are talking about communism and socialism, so they've got them in this sort of thing, and they're all going out there now. We've seen that ... What's that, there's that U.S. politician, some young girl, is just complete and total moron who's just got selected or elected into Congress. It's called Congress because it's a con game, and it's called the Constitution because that's also a con, and all that sort of stuff. Jeff: You've got those people out there pushing this stuff, and these kids just go out, and they think, they don't know anything better. It's very unfortunate, but that's why it's really important that we continue to push out what we push out, which is more free market stuff. A lot of people do catch on to it. It's not as bad as it seems. The worst place that it really is in the world today is the U.S. They've got everyone ... Not everyone, but most people, they're so indoctrinated, and so brainwashed, and so propagandized, but you go to a lot of other places like Mexico here, and a lot of people are pretty free market. They don't like government and things like that. That's why they make Mexico look so bad on the news. That's on purpose, because it's a lot more free market down here. Stefan: It's amazing. I mean, you moved to Mexico. I have this prediction that Russia right now is a freedom-growing country. They're getting more freedom over there. It's like the 1950s U.S. over there, and then over here, it's like we're a freedom-losing country in Canada and the U.S. It's interesting with, you're talking about the universities being scary. When I get a stack of résumés, and I'm hiring, I throw the ones with degrees in the trash. Yeah, they don't- Jeff: Yeah, me too. Stefan: The people can't think for themselves. I remember I went out with this 18-year-old girl, and she wanted a job, so we went out for lunch, and I said, "Okay, look. What do you want to do?" She goes, "I want to start a social media company." I'm like, "Great. Start it." We're eating lunch. I said, "Great. Start it." She says, "Well, I'm in the business school, and I'm going to get my MBA, and I don't think I can start, because I don't know how," and I said, "Well, go google that. Just start." "Oh, I don't think I know how. I'm not qualified." The school system literally disabled her mind from figuring out how she could just start a social media company. Stefan: I mean, I got some guys running my social media. They're 18, 19 years old, and I just met them at a restaurant. Boom, they're banging out my social media like crazy, doing a great job, but this same girl in the government indoctrination camp, as you say, the universities and the schools, can't think for herself. I also think it's interesting in the colleges and universities right now, the number one read book on economics is Karl Marx. That's just like, that just doesn't make sense. Why don't you tell me a bit, Jeff, why does Karl Marx as the number one economics book not make sense? Jeff: Oh, my God. First of all, he knows nothing about economics. He was a homeless guy who had no money, and he wrote a ... If I was around when he wrote the book, I would have given it a few minutes, or even maybe a few days, maybe even a month or two, of thought, because it sounds really good. Right? Like what is the communist sort of slogan? It is, "Give to-" Stefan: Seize the means of production? Jeff: No, but they have this slogan like, "Someone's needs ... " Stefan: Oh, "To every man's need," or, "To the best of his ability and every man's need," or something like that. Jeff: Something, but basically what it's saying is ... See, that's how stupid it is. I don't even memorize the stupid quote, but basically, it sounds nice. It sounds like, "Yeah, if people can't do things, then you help them." It's like, "Yeah, sounds great," but the way they're talking about is, you have this giant government. They come around. They steal things from people, and they decide who gets your money, essentially, and things like that. Yeah, and it's shocking that ... It's really mostly caught on in the U.S. Like obviously, if you go to the ... You brought up Russia. If you go to Russia, no one wants to read Karl Marx. They'd probably burn that book if they saw it, just because they'd be so angry at it. Jeff: Anyone who's actually lived through communism, a lot of the old Soviet Union, the Eastern Bloc, Poland, and a lot of those places, even Germany to an extent, they still remember a lot of that. That's all you need to know about communism is live through it, and you realize it. That's one thing that I always thought that's funny is, you have all these people like Bernie Sanders and all these people, and they're so pro-communism and socialism and all these sort of things. It's like, have you ever even just gone to Venezuela even for a weekend? Because I was there like a year and a half ago, and it was pretty bad. Jeff: I remember being there about 15 years ago, and it was really nice. In fact, you can look up Venezuela back in the '60s and '70s. It looked just as nice as what you see in the videos of the U.S. People got around in nice cars, looking all nice. Everyone's looking good and happy, and they have lots of food and all that sort of stuff, and now it's just a complete and total disaster, so ... Yeah, you have some people still ... It's mostly in the U.S., though, I have to say [inaudible 00:23:04]. Jeff: I meet a lot of people from the U.S., and they say, "Man, this whole world's going to hell." It's like, actually, it's not too bad. Most of the world is pretty good. It's really the U.S. is like, and Canada is almost just as bad now, and when you go to the universities, as you pointed out, and I do the same thing, I have only hired one university graduate ever, and it turned into the biggest disaster I've ever had. He was actually a producer at CNBC, I hired him in 1999 to head up a video department of a internet company I had, and he was a total disaster. He was an MBA, and I had all the, all that stuff, and I ended up having to pay him out like two years' salary to get him to leave, that sort of- Stefan: Oh, my God. Jeff: But yeah, so I just stay away from the universities. As you pointed out, if I ... I've got a number of businesses myself, so if someone's interested in working with us, I'll ask them what they do, and if they go, "Well, I just spent the last eight years in university," I'm like, "Well, you don't make very good decisions, do you? You [inaudible 00:24:00]-" Stefan: Bro, I'm going to give you a gong for that. Boom. I want you to instant replay that for the kids at home. "If you're hanging out in university the last eight years, you don't make very good decisions, do you?" Tell me why that's a bad decision in 2019. Jeff: Well, I'm sure there's probably a couple courses you could take in college that make some sense somehow. I've never seen them, though, but I ... There must be a couple, but the reason that it makes no sense in 2018, 2019, is because we have the internet now, and all information is on the internet. You don't have to pay $100,000 a year to go sit in a room with probably a unionized teacher who's never done anything his whole life, that's why he's a teacher, he doesn't know anything, and sit there with a bunch of other idiots like you, because you don't know anything, they don't know anything, and learn about socialism-type stuff pumped into you. It's a complete and total waste of time. Really, the best- Stefan: You mean it's a virgin sex therapy class, so the guy teaching, it's a virgin, but he's teaching sex therapy to everybody? Jeff: Yeah, that's one good way to put it, but yeah. It's just a waste of time. I think trade schools or something, where if you're going to become a mechanic, so you have to work on cars, so you can't really do that over the internet, I think that makes some sense, but 90-percent-plus of what you go to college for is just a complete and total waste of time that you could just totally learn much better stuff on the internet. It actually just came out, I don't know if you heard this, but Google and Facebook just said that they've removed university education as one of the requirements to work there. I think they're really slow and late to do that, but I think they're starting to realize, it's like, "Man, the people we're getting from the schools are just brainwashed idiots, whereas the young guy who's sitting at home just hacking away, and going on the internet all day, and figuring everything out, those are the kind of guys you want." Stefan: Yeah. I got a policy in my office, and when people come to me and ask for stuff, I say, "Google it, or handle it." Those are the two things, handle it, google it. Google and ... I think it was Google, Apple, Facebook, they don't need degrees anymore. I think that's been going on for some time, but it's an official statement now. Right? That's like super, super official. Jeff, let's go back to collapse of society and things like that. One thing that's common in history, and I've studied it over and over again when these collapses happen, it's usually, the people can't buy bread. The nonsense can keep going on. The ... Stefan: I've got the numbers in my book here, Hard Times, about minimum wage, and minimum wage in 1968, indexed to gold, is 103,000 dollars U.S., so you work at McDonald's, you made one cheeseburger, one hamburger, French fries, Coke, and a milkshake, you made 103 grand in purchasing power back then, indexed to gold. Same guy today making a cheeseburger, hamburger, French fries, well, he has to make 150 items down at McDonald's. They got a crazy menu. Stefan: Same guy at McDonald's makes 13,000 a year, so he's lost 90% of his purchasing power indexed to gold, and this shenanigan with the money system where the banks and the government rob people through inflation every year, and then suddenly, at some point, it keeps going, going, going, going until the average man can't buy bread. That's when the Russian Revolution happens. That's when the French Revolution happens. Why does that pattern keep happening over and over again? Jeff: Well, first, let me just mention that the reason that these jobs have gone so far down in value is because of the central bank. It's because of money printing and inflation, and that's why you pointed out those numbers in inflation terms. You have a lot of people out there today who are like, "We need to raise the minimum wage," which is, what you're saying is, "We need these people who extort us, called the government, to go out with guns and force businesses to pay us more because we can't afford to live." Well, the reason you can't afford to live is because you've had most of your stuff stolen from you by the central bank, and the central bank, by the way, is a tenet of communism, and that's why I say the U.S. is nothing even close to capitalism today. Jeff: Actual communism has already destroyed most of these people. You ask about revolutions, and yeah, it seems that people, this is one thing you can say about anarchy, a lot of people think about anarchy, "Well, if there was not government, it'd just be chaos, and horrible, and everyone would just kill each other." It's actually not true. Your average person, and this relates to your question, your average person just really doesn't want to do too much. They want to have a nice little life. They want to have a family or whatever, or they don't, but they want something nice, and that's about it. They don't want to go out and rock the boat too much. Your average person just does not want to rock the boat, and that's what ... Jeff: That's one of the problems we have today is, we have the statist system, and most people are just too scared to change it, but it appears, at some point, when you finally run out of even just food, and you can't even eat anymore, that's when finally people start to wake up, and stand up, and demand some sort of change. When I say demand, the problem is, they're demanding from the government change. What they should really realize is, the government caused it, the central bank caused it, and just break away from this system and stand up and become their own person and not be a slave to the systems, but yeah, it's unfortunate that your average person, for whatever reason, will wait until they're basically starving before they actually face the real problems in the world. Stefan: It's interesting in history, I think Putin kicked out the central banks. Is that right? Jeff: I'm not sure if Putin did, but the ruble basically collapsed. I don't think they had a central bank, definitely, at the start there. Stefan: Well, I've heard Putin's kicked out the central banks. I think it's interesting is, Hitler did that back in the day. I guess Germany was so poor, and they were so messed up, and they couldn't make their war reparation payments. They just couldn't pay, and that's how World War II started is, a bunch of people, super poor, couldn't pay their payments, boom, world war starts. It's interesting, because somehow, in the system, the political system, they go right versus left, and the right versus the left, and the left versus the right. Really, it's the same kind of thing. Nobody points the finger at the central banks. Stefan: One thing I love about America that still stands is, there's 300 million guns in the States and 300 million people, and they keep that gun amendment in there because they know that tyranny's going to come at some point. They left that in there, and if people can't buy bread, or they're really hungry, that's where those 300 million people with guns are going to rise up. Do you think we're going to see something like that in our lifetimes? Jeff: Yeah, definitely, because the U.S. is going to collapse in the next few years. It's not going to be decades, because it's so bankrupt. We have 22 trillion dollars' worth of debt now, so we're basically ... I said when I started The Dollar Vigilante that the U.S. dollar will collapse by the end of this decade, so we've got about a year left. I think we're pretty close to on track. That's how close we are to the end of this system. Yeah, we're definitely going to see collapses anyway. As far as people in the U.S. having guns, I think all people should have the right to defend themselves, obviously. I don't think anyone should be able to say, "You can't have this," if you're not hurting anyone else, and that's what government does, of course. It's very good. That's the only thing left in the U.S. that is keeping it from being complete and total carnage is that the people still can protect themselves, so the government has to be very careful about how they enslave everyone, but they've done an incredibly good job of enslaving people. Jeff: When you think about how the U.S. started, it started over the Tea Party, where it was a tax from England on tea, and that was it. It wasn't a tax on everything else, income tax, and capital gains tax, and smoking tax, and hotel tax, and food tax, and all this sort of stuff. It was just a little tax on tea, and that started the so-called American Revolution. Now you have people in the U.S. today where you have taxes that are over 50%. It's probably closer to 60 or 70% when you add up all the taxes, because literally every single thing in the U.S. is taxed today, including death. Death has a tax, and so when you die you get taxed. You still don't have people wanting to revolt. It's because, again, people are fairly, if they have a decent life, they don't tend to want to change things too much. You look at the U.S. and your average person, even poor people have a television. They probably even have a car. Even poor people have cars in the U.S. Jeff: That's how much free markets, even the poorest people are still ahead of a lot of other people in the world, and so because of that, they don't really want to have a revolt or anything like that. Plus, they don't even ... Because of all the years of government indoctrination and all the war propaganda about how they're trying to save the world by spreading freedom by bombing the entire world in the War on Terror, war of terror. It's absolutely insane, but your average person just doesn't seem to want to even break out of this system. Jeff: What's going to probably happen is, that system's going to collapse on its own because of all the debt and go into hyperinflation. Then hopefully, and you brought up about how Russia's become much more free market now. That's what happens. The same cycles that you mentioned before when you have countries, they usually start off quite small and poor. Even the U.S. was like that when it first started. Because it had a lot of freedom, it becomes quite rich. Then they get soft because of that and because of government and statism, they start doing socialism and all these sort of things which start to destroy everything. They start putting kids into the government schools and all that, and they get worse and worse until they eventually totally collapse, like the Soviet Union. Once it has a total collapse, then you can actually have free markets again. The U.S. actually, once this collapse happens, and after a few weeks or months, and that's sort of what happened in the Soviet Union as well, it takes a little bit of time, like weeks or months, definitely not years, then you can start to rebuild immediately again with free markets. Jeff: We've seen how the free markets, if you just allow people to be free, you just have to look at places like Hong Kong. That was a fishing village like 200 years ago. Look at it now. I don't know if you've ever been there. It's amazing to even go there. Singapore, even 100 years ago, was a fishing village. It's now one of the most luxurious, wealthy places in the world. Dubai was just desert. They just started doing like low-tax, no-tax sort of stuff, and all of a sudden, there you got like indoor ski parks in the hot, 150-degree desert. Once you have like all this tyranny, it will eventually collapse. Then once it collapses, you have freedom again, and then things take off again. Jeff: Really, that's the whole point of what I do at The Dollar Vigilante is, that's our actual tagline, which is, "Helping you to survive and prosper during and after the dollar collapse," because if you can hold on to some of your assets, and if you can get through this collapse that's coming, we're going to go on to amazing, prosperous times again, but if you have no assets, you'll have to work a lot harder to get back up, but if you have kept some of your assets and things like precious metals or cryptocurrencies, once everyone else gets wiped out, and all the banks close, and the currency becomes worthless, you'll be one of the richest guys around, and then you can start rebuilding the new free market. Stefan: Yeah. There's two cycles that are coming to an end. I wrote about this in my book, Hard Times. One is the 2020, which is that 80-year cycle of war. That's an important one to watch. Hard Times Create Strong Men. Then the other one is the 250-year cycle of democracy. Democracies only last about 250 years, so if the U.S. was born in 1776, it's going to be dead by 2026, so somewhere between 2020 and 2026, we know there's probably going to be an end of democracy, probably usually goes democracy into tyranny, and then tyranny back into monarchy usually is what happens. We'll see something happen. Do you think it's going to go back to tyranny and monarchy, or do you think it's going to go just to open freedom? Jeff: Yeah. A really good question. I don't know how it's going to play out. I could definitely see the tyranny part coming after this. What will likely happen, and probably be Trump will be in, his regime will be in as this collapse happens. As everyone's gets wiped out, as the banks close, as it's complete, way worse than 1929, Great Depression, someone like Trump will become sort of like Hitler-like in that sense, in that he will be the strongman who will lead the country out of this. Because of that, we're going to need more laws, and of course, Trump has been pro-asset, civil forfeitures, having the police just take whatever they want. He even came out recently and said that he's okay if the cops go and just take everyone's guns and then figure out if they did the right thing afterwards and go to court in that afterwards, so no due process and things like that. Yeah, I could totally see that we have this collapse in the next couple years. Jeff: It leads into a very sort of like Nazi Germany like sort of like tyranny type thing, and perhaps war, because the U.S. does have a massive amount of military just sitting there, and of course, if you're desperate, and if you're broke, and if your people are all crying out for something to be done, and of course, what do they always say on the news, the television programming? "Well, it's always Russia. Russia's always messing with us." Russia's not doing anything to the U.S. whatsoever, but they've been putting this into place, and they also mention China a lot. Yeah, they'll probably go into some sort of major war at some point. The key for people like us will be to stay outside of it and let them all go through this, again, if they want to go through this again, which is unbelievable. Jeff: There's lots of stories of people surviving through all of these, World War II, World War I, the Great Depression, and coming out way ahead afterwards, and even surviving quite well through it. A lot of them would go to places like Argentina or whatever for a few years, wait till all the craziness dies down with their assets and things like that. That's really the key, and to me, it's, we can't change everyone else. I wish we could, but we can't. Jeff: Actually, I don't wish I could. That'd be a huge responsibility, to change everyone else, but I wish that they would be a bit more able to see what's going on, but if they can't, really all that's left for us to do is to take care of ourselves and to keep spreading this information the ways that we can do it, but if they're going to go ahead and destroy the whole world with their statism, and their craziness, and their communism, and socialism, and fascism again, then it's really just up to us to survive and prosper through it and then try to be there to help rebuild once they get through doing it all again. Stefan: There's two interesting things that come to mind when you say that. There's the Hitler-Trump connection, which I think is super interesting. There's two things I want to allude to. There's the Hitler-Trump connection, and then there's another one, an Abraham Lincoln and Trump connection. When you look back in history, so if we go back 80 years to World War II, Germany was one of the most advanced civilizations on the planet, probably actually was the most advanced in science and medicine. They were so broke, they were so poor, they were so hungry, they were so messed up that the Nazis became popular, because Hitler was offering them a better life. He said, "Look, here's a better life. We can have a better way." People got behind that, the most sophisticated, probably, society on the planet went into absolute terror at that time. Stefan: I think there's a similar thing going on in the U.S. You've got a huge amount of people on food stamps. People are poor. People are pissed off, so they elect a strong leader. It's not ... It's interesting, like if it wasn't Hitler back in World War II, it probably would have been somebody else leading them, because the people were so poor and so messed up ... I like what Jordan Peterson said in the summary. He said, "You don't have an idea. An idea has you." That idea had Nazi Germany. I think there's a similar idea in the Brexit right now. There's a similar idea in the United States, and then that's the 80-year cycle. Stefan: If you go back 80 years before, you got the Civil War, the American Civil War, and Abraham Lincoln got shot. It's interesting, because Lincoln was a guy that wasn't totally popular with half the country. He got assassinated, and those things are all kind of floating around. You got a Trump, Trump-Hitler-like ruler there. I mean, I actually like Trump, personally, but at the end of the day, there's a sentiment in the country and a feeling around that that's Hitler-like, and then there's also an Abraham Lincoln kind of feeling where do you think he could get assassinated? Jeff: Look, I think it's possible. I think most of those sort of things, they're all actually orchestrated. JFK, for example, I believe that was Lyndon B. Johnson and the CIA who took him out. Ronald Reagan, that was the first Bush, the one who just died, George W. Bush, or sorry, George Bush, who was behind the assassination attempt, so-called assassination attempt, on Ronald Reagan. It's usually like an inside sort of a thing. It's really controlled. It's really theater. They actually keep all these things, including Putin, including little Kim in North Korea. They're all controlled by the same people, and it's just this big theater to keep people just mesmerized and watching their CNN and, "Oh, what did Trump say today," and all that. It's just no different than people in North Korea like, "What did little Kim say today? What are we supposed to do today?" Jeff: That sort of a thing, but anything is possible, but it is pretty tough to assassinate the president, as an outsider, but as an insider, it's not that hard, but they also seem to have some sort of weird like almost like protection around them. Like even George W. Bush, when he was in Iraq and the guy stood up at the media thing, and he was very mad, because Bush had been destroying his country and killing his family and all that sort of stuff, and he threw one shoe, and Bush just did the little dodge and just missed him, and then threw another shoe, and he just ... It's like, I don't know what it is with these people. They're kind of like, I don't know what it is, but it seems like he can't really get to them that way, not physically violent sort of thing. I think the only way we get rid of all of this is for people to wake up and realize that these people don't own you, and start to move away from these systems, and these people just go away and have to get real jobs. Stefan: I think one of the problems with human nature and people, I mean, you were talking about human nature and communism, where human nature doesn't work inside of communism, and then there's also another side of human nature, which is, I think humans have a hero worship, innate hero worship ability where we see someone, we see a leader, and we just want to worship them, and we want them to handle our problems. We want to have a personal Jesus. We want to have somebody we can just give it all to. Somehow, that's going to be the easy button. It'll all be solved, and then we don't have to think or deal with anything. Would you say that's true? Jeff: Oh, absolutely. That's exactly what government, it really is. That's what government always does. You look at every election. They come up there, and they give all these promises. "I'm going to solve this for you. I'm going to solve that." They never solve anything. They're just extorting you and destroying everything in the process, and making everything worse in the process, but yeah. That's absolutely the case is, your average person just won't take responsibility for themselves and just say, "I don't need this person to run this entire country for me. I can run myself," and that sort of a thing. Of course, it gets a little interesting how that would all, we've been in statism now for hundreds of years, so to actually break away from it's going to be difficult. Jeff: That's actually why we're starting up numerous sort of countries across the world now, so we've started Liberland in Europe, which is near Croatia and Serbia, which is a new sort of anarcho-capitalist country that's just being started, and there's some few others working on buying some islands, and we're going to start some totally anarcho-capitalist free sort of places there. We're also seasteading, so we're trying to start up in the ocean, start up our own little, what you call countries. None of them are really like countries, because there's no real government, but it's a place that we're going to start up that it's going to be completely free. Then through that, hopefully we could show the world, because they've never really seen it, what life would be like in a true free market. Jeff: If, all evidence seems to point to when you have a totally free market that it's incredibly good for most people. It just increases the wealth dramatically, as we've seen, as I pointed out, in places like Hong Kong, Singapore, Dubai. Whenever you have a lot of freedom, everything gets a lot more prosperous. The only sort of question a lot of people have is, "What if you have total freedom? What would happen?" We don't really have any good examples for that yet, so we're hoping to start do that in the next couple of years and try to show the world the light that, really, this governmental sort of statism system with central banks, and all these sort of things, are just absolutely terrible. The best thing for all humanity is to get rid of those sort of things and not have a belief in their authority. Stefan: Sounds like a page out of Atlas Shrugged right now. You got all the productive smart people wanting to go start their own country or start their own island. This is, it's just human nature. It's all written down in the book. It's all happened before, and here's a thought, Jeff. I don't know if you thought about this. At some point, there probably was some nice, true freedom in the Wild West, maybe, Wild West America or some place, and then at some point, the people organized themselves. At some point, there's a government. At some point, there's a king. At some point, there's a good king. He dies, and then you got his son, the bad king. Stefan: Do you think we've had freedom in history at some point, like true freedom, and then it just got consolidated into power? Because it seems to me that whether you look at a market like a real estate market, or you look at a Monopoly board, or you look at anything in life with humans, it seems that there's like always a consolidation going on. There's a consolidation at some point where somebody just ends up taking over, and we just end up in that over and over again, and the dominoes fall down at some point. We reset. Do you think we can actually exist as free people, like truly, or do you think someone's going to seize power at some point? Jeff: Well, the thing is, if you have enough people who actually believe that freedom is the way to go, and they want to do that, then no one can seize power, because there's nothing there to seize. You pointed out rightly that over history, it appears that people have always been okay with giving away their power to someone else and hoping this guy takes care of them all, and that never works out for the best, just like communism, it just never works out well. Jeff: Yeah, that's actually been the case over time is that people seem to have always sort of gravitated into these sort of things, but at the same time, when you think about life even today, we actually live in a state of complete anarchy right now. It just so happens that there's a lot of governments on earth which you can just consider to be criminal organizations who are stealing and extorting people, and kidnapping people, and forcing them to do things they don't want to do, but we actually live in a state of anarchy. Jeff: Your average person, actually, every single day of their life, pretty much lives in anarchy. When you're in your home, or you're talking to your friends, or you go to work, that's just anarchy. That's just day-to-day life, and there's no one there telling you what to do, except for a street cop or whatever, a road pirate who might try to extort you if he thinks you're going a little too fast over a arbitrary speed limit or things like that, but generally kind of already live in anarchy. Really, the important thing to understand is that the word "government," what it really means, "govern" is, the word "govern" comes from the Latin [Latin 00:46:24] which means to control, which makes a lot of sense, and the word "ment." Jeff: There's a lot of different sort of where that came from, but I lived here in Mexico, Spanish, [Spanish 00:46:34] is mind, so really, government is mind control. It's controlling people's minds to make them believe that this thing has authority over them and that it's sort of taking care of them as well. This is where we get into Stockholm syndrome and things like that, where people actually begin to really adore their kidnapper, the person who has basically kept them enslaved. I see [inaudible 00:46:56]- Stefan: I wanted to give a gong. At some point, you got to stop for me to give you a gong. I didn't know that "government" meant mind control. It's really interesting, because if you control the information, you control the thoughts, and if you control the thoughts, you control the stories. You control the stories, you control the beliefs. If you control the beliefs, you control reality. It's almost like ... In Hard Times, I talk about we almost live in a 1984 future from George Orwell, and some of it's like Brave New World, Aldous Huxley, which was Orwell's mentor. We got half of our stuff is the American Aldous Huxley Brave New World future with orgies, and synthetic music, and all these women with narrow hips that don't bear children anymore, and we have alphas, and betas, and gammas, and deltas and all that stuff, and epsilons. Stefan: Then the other part of our world is like the 1984 future where there's three gigantic powers that are always at war with each other, and it's like a Stalinist future. What do you think about those two books right now, Jeff, like 1984, Brave New World, and what we got going on right now? Jeff: Yeah. Both those guys, both, I think they went, both went to Oxford or one of those major schools. They hung out with the same people like the Bush crime family and all those, so they hung out with what you could call the elites, or some people call them the Illuminati or whatever words you want to put to these sort of secret societies that mostly sort of are in these schools like Oxford and stuff like that. They were actually good friends, as you pointed out, and it's really amazing that that long ago, what is it, like 60, 70, 80 years ago, they wrote- Stefan: It was 1945- Jeff: ... these books. Stefan: ... I think. It was like right after World War II the books came out. Jeff: Yeah, so I can't do the math. I went to government schools, but 70 years ago, whatever it was, and they've really just roadmapped the exact both ways that we're going. Actually, they're both happening at the same time. The Aldous Huxley, Brave New World, that was a lot of bread and circuses. The people would be too dumbed down, which we're seeing, through fluoridization in the water, through all the government indoctrination camps, through the television programming, all that sort of stuff. People are just watching the Kardashians and all that. Jeff: The sports, so the sports ball games, and that sort of thing, so people, that's what Aldous Huxley was saying is, people would be too dumbed down and too into these things like sports and entertainment to even notice that they're enslaved. That's what we have today, especially in the U.S. Then on the other side, there was Orwell went the other way with a bit more it's like a hard, top-down dictatorship. You can't say anything. Everything's the opposite of what it means in political speak, which is what we have today. You brought up about how there's these certain sectors of the world that always at war. East Oceania's always at war with whatever the other one was. That's what we have today. It's like, who's at war with who? This War on Terror, it's a war on a feeling. It's a war on, it's like terror is a feeling. It's like, "I was terrified when I saw that. We need a war against that." It's like- Stefan: Well, we got the- Jeff: ... "Who are you [inaudible 00:49:47]" Stefan: ... War on Drugs which doesn't work. We got the War on Terror that doesn't work. You got the War on Cancer that doesn't work. You got all these wars. They keep just funneling money into a couple dudes' pockets, and the War on Drugs makes drugs worse. The War on Cancer makes cancer worse. The War on Terror makes terrorism worse. It's pretty scary how those things just simply don't work. Jeff: Yeah, and it's all by design, like the people who really do these things know this is what's going to happen. It's just sad that people keep falling for it, but people are slowly waking up thanks to the internet. Yeah, I even saw like, who's that blonde, fairly not attractive, woman on U.S. TV who's like a really mean, nasty sort of ... Anyway. She just came out, and she just said all these wars are just stupid. They're just like, like we shouldn't be doing them. She was like a total war sort of a person. This just came out. Jeff: People are starting to wake up, but the biggest issue is, they don't know what the answer is, and so that's why they keep going back to what you pointed out, which is this false left-right paradigm, which they tell everyone that's all there is. There's left or right or somewhere in the middle and there's nothing else, but that's a very narrow range of political spectrum. That's basically statism right there, and you can have left or right in statism, but there's a whole other spectrum of just not having governments whatsoever that could really free a lot of people. It's really growing, actually, like when we first started Anarchast, Anarchapulco, Anarchapulco started five years ago. It was 150 people. We're now expecting about 3,000 people. It's doubled every year. Stefan: Wow. Jeff: My show, Anarchast, a lot of people said no one had ever watched the show, but anarchy, that's crazy. They think anarchy is throwing bombs and all this sort of stuff, but it's catching on. People are catching on to a lot of this stuff now, so we're going to see what happens. We're at an amazing time in human history, because all these things are coming to a head all at the same time. All these governments are bankrupt. The central banks are about to go into hyperinflation. Then we have people waking up and starting to realize what's going on, and then you still have all these people in the universities who think that communism's the way out, so they'll probably try to push for that. Jeff: It's just amazing, incredible time, and there's going to be so much change in the next 10 years. I don't think anyone will believe what happens over the next 10 years. I couldn't even imagine what will happen, but I know it's going to be mind-blowing what happens. It's going to be that much change. Stefan: Yeah. It's unbelievable. Now, Jeff, I got to wrap up the show, but I want to ask you a couple questions I ask every guest, because I think they're cool. If you can go back in time to, let's say, 15-year-old Jeff and give yourself a piece of advice, what's a piece of advice you'd give yourself? Jeff: Oh, man. That's a good question. I would say work on yourself. I really just started working on myself over the last couple of years. I'm like 48 years old now, and it's changed my life dramatically. I didn't deal with a lot of my past issues, childhood issues, a lot of the programming that we get from our cult, our culture they call it, but our cult, through our younger years. That still stays in your head. I think if I would have, if I could go back, I'd say, "Buy Bitcoin as soon as you hear about it," and I'd- Stefan: [inaudible 00:52:55]. Jeff: ... say, "Work on yourself," like- Stefan: [inaudible 00:52:57] man. Jeff: I'd probably also say, "Don't go to the bars that much. Don't be having a lot of drunken sex. It's a total waste of time. Try to find a good girlfriend. Try to fix yourself and work on yourself more than anything." That's what I'd tell him. Stefan: Wow. Great answer. Top three books that changed your life. Jeff: A good question again. We talked about G. Edward Griffin earlier. The Creature from Jekyll Island was one of the first books that got me looking into all this stuff that I talk about today. That was a really important to my life. I'd say The Lord of the Rings is, I read it when I was very young. I used to love to read. I was probably like 12 or something. This giant book, it's even bigger than your book there. What I didn't realize about The Lord of the Rings that is interesting, I love the book, and I loved everything about it, and it wasn't until a couple years ago I realized that that ring of power was actually a metaphor for government power. I actually looked- Stefan: Wow. Jeff: ... into it a couple years ago, and J. R. R. Tolkien, who wrote the book, called himself an anarchist, so that entire book was an allegory about the problems caused by government. Those two books are pretty good. I guess the third book that I thought was really interesting, and it's like a pamphlet. You can read it in about two hours. It's called The Market for Liberty. You can actually find it online for free in PDF format, and it shows what the world could be like without government. When I read that book, it just blew my mind, because I'm sure if you even read it, you'd go, you'd be like me, you'd be like, "Wow, I never thought things could work that way or that ... " Jeff: They actually thought about how things would work without government, so there'd be like private security companies. Well, how would that work? Well, there'd be insurance as well, so the insurance companies ... For example, like people go, "Well, how would you put out fires without the government?" Which is kind of funny, because the government rarely puts out fires [inaudible 00:54:34]. Stefan: Fire insurance. Jeff: Yeah. Fire insurance, and then the insurance companies have all this insurance money, and they'll have to pay out a ton if there's a giant fire, so they actually put out fire stuff, and fire stations, and all that kind of stuff so it can all work in the free market. I think that book really, in just such a small amount of time, can really just show how the free market can handle everything. Stefan: Yeah. Well, that's great. I always, people say, "Well, who's going to pay for the roads?" Well, you just tax cars and gasoline. If you got a car and gas- Jeff: Not even tax, right, but like the businesses would own the roads. You would never put up ... Let's say you're Walmart, and you want to put up a Walmart somewhere and there's no road there. You're going to build the road, because you want people to get to your thing. Plus, not to mention there's already all roads. All roads that already exist. I don't know why people think they'll just disappear, but obviously like gas stations would have a giant interest to making sure there was roads, so they would probably do something. The gas stations would all work together and say, "Okay, let's take 10% of all of our money that we make every month and put it into maintaining the roads." Right? It's fairly basic sort of stuff. Stefan: Right. All right. Second last question today, Jeff. What's the one thing that young people need to succeed these days? Let's talk to the snowflakes. Let's talk to the millennials, the guy with the MacBook Pro at Starbucks. What's something you want to say to h

Jeff Neumeister, Founder and CEO of Neumeister & Associates, joins us today to talk about cryptocurrency taxes, a confounding area of tax law (what isn’t?) and one that you should master if you are an investor in digital currency. Because what you don’t know could have an adverse impact on your pocketbook. That’s what happened to one U.S. college student in 2017 who invested $5,000 in Ethereum and somehow would up owing the IRS $400,000 in taxes. Yes, you stand to benefit greatly from understanding how the IRS views crypto (Hint: It’s in the same category as your house). And you’ll learn the cardinal rule of crypto taxation: The buck stops with you.   This is specially important this year after the 2018 market crash since many investors are selling their cryptocurrency and fleeing the market, without full knowledge of the tsunami of capital gains liabilities that these transactions may be triggering.   A forensic accountant by trade, Jeff brings great credibility to the task of walking us through the minefields of crypto taxes. He offers practical tips on everything from what constitutes a taxable event to what makes crypto taxes so challenging and how mined coins are taxed. That’s just a few of the questions Jeff answers in this episode. You’ll come away feeling a lot more confident about understanding your tax burden as you stagger into your tax prep marathon.     Topics Covered in this Conversation with Jeff Neumeister   What makes crypto taxes so challenging. What constitutes a taxable event? What is the difference between short-term and long-term gains? How are mined coins taxed? What happens if I give some coins as a gift, or someone gives me crypto? Do I have to pay tax on coins that were hacked? What happens if I lose some coins? What are the acceptable ways to report coin gains? What are the biggest obstacles to easily filing crypto taxes? Increasingly, there are charities that accept crypto. Is that something that would be helpful at tax time?  How are exchanges doing in terms of making it easy for investors to file taxes? Can crypto losses be balanced against traditional fiat capital losses. What’s the craziest thing you’ve ever seen or heard with it comes to filing or not filing crypto taxes. Let’s step back a bit and look at the process involved - let’s look at two scenarios: Scenario A: Let’s say you are Sally Fey, a beginner investor in 2017 and you got all caught up in the buying and selling during the Bull Market and you didn’t track all the coins you traded across multiple exchanges nor did you jot down the buy/sell price  for each transaction. Now your taxes are looming and you have your head in your hands. How do you regroup? Scenario B: Unlike Sally Fey, you are Matt Jones -- a beginner investor in 2019 and it’s a Bear Market and you’ve been told now is the time to buy. You’re starting with a clean slate. You’ve set up your exchange accounts, you are ready to trade. What’s good tax hygiene you should follow from Day One and on to Day 365 to simplify your tax headache for the year? Can you get away with NOT paying crypto taxes? What are the penalties for non-compliance? Any closing thoughts on how to make our crypto tax lives easier?   Questions and Comments? chasingunicorns@gem.co   Guest Contact Information Jeff Neumeister Website | LinkedIn | Twitter Resource Links: 3 Ways the IRS Is Taxing Cryptocurrencies Taxes and crypto Turning your 2018 Bitcoin and Crypto Losses into Tax Savings What You Don’t Know About Crypto Taxes Can Hurt You Tax Nightmare: Student Invested $5k in Ethereum & Now Owes $400k in Taxes 4 things to know about your cryptocurrency at tax time Year-End Tax Tips And Strategies For Cryptocurrency Investors IRS Guidelines Transcript: Interview with Jeff Neumeister Interview Recorded On: November 12 Topic: Crypto Taxes Chitra: Hello, and welcome to Running with Unicorns, your portal to the world of cryptocurrency. I'm Chitra Ragavan, Chief Strategy Officer at Gem. It's that time of year again, and your crypto taxes are looming. Here's what you can do about it. Our guest today is going to walk us through the ins and outs of crypto tax filing. Jeff Neumeister is CEO and Founder of Neumeister & Associates, an LA-based tax advisory firm with a growing practice in crypto taxes.   Jeff, welcome to the program.   Jeff: Thank you.   Chitra: What makes filing crypto taxes so challenging?   Jeff: It'd be probably because there are so many different things that are happening in the crypto world. It's not just mining coins or just trading coins, but there are forks, airdrops. There's just a lot happening. Because it's a new space, it's a lot that the taxing authorities are still trying to wrap their heads around.   Chitra: Let's start with the basics. What constitutes a taxable event in cryptocurrency?   Jeff: A taxable event is anything that results in a tax obligation or a potential tax obligation. That could be selling something, it could be generating income, it could be incurring a expense.   Chitra: Is it different than in regular taxes? What are the differences and similarities?   Jeff: It's similar in concept, except with cryptos there's just, again, so much more going on. Normally, if someone is just, say, a W2 earner, they have a paycheck, and that's the sole source of income that is subject to tax. With cryptos, however, if you're mining and trading in the ICO world, there's so many things that are happening that you're constantly subjected to different types of taxes.   Chitra: One of the basic things one needs to know is short-term and long-term gains. How does that work?   Jeff: Short-term gains just refer to anything, anytime you hold an asset or a piece of property for less than 12 months. Long-term is anything above that. Now, they also come along with different taxable rates. With long-term capital gains, it could be anywhere from 0 to 20%, so much better than what most of us pay with taxes for our income earnings. For short-term gains, it's anywhere from 10 to 37%. Short-term capital gains are essentially the same as ordinary income tax rates.   Chitra: Let's look at different types of crypto and how they will be impacted by taxes. Let's start with if you're mining cryptocurrency. How do you account for those?   Jeff: Mining's interesting, because it's kind of two things at once. When you mine a coin, or a fraction of a fraction of a coin, you're generating ordinary income, so whatever the value of the mined coin was, or fraction of a coin was, you have to pay ordinary income taxes on that. Then, that also establishes your cost basis in the coin that you now hold. If you do something else with it later on, trade it or sell it, you'll have capital gains on top of that.   Chitra: Then, let's look at crypto gifts. If you get a gift of Bitcoin, or Ether, or EOS, how do you handle that when it comes to tax time?   Jeff: If you're the receiver of a gift, then you just need to be aware of what the holder's or the donor's cost basis was. If they acquired something for, say, $100 and gave it to you, you need to make sure that you have that down in your records that your cost basis is $100.   There's no tax owed on a gift received. However, if you're the gift giver, you might have to do a informational filing, a form 709. What that is is anytime you gift more, at least in 2018, more than $15,000, you have to file a form 709. You don't have to pay gift tax on that, but if you exceed your gift-giving of $5.6 million during the course of your lifetime, then you have to start paying gift taxes.   Chitra: If only we could all be so lucky.   Jeff: Right. Most of us will never have to worry about that, but make sure that you file a form 709, because there are penalties with not filing.   Chitra: Then, can you give crypto to charity? I see that increasingly, there are a lot of, even the Red Cross and other organizations accepting crypto. When that happens, is that a good thing to do, when it comes to tax time? Obviously, it's a good thing to do in any case, but it probably helps with taxes, doesn't it?   Jeff: Absolutely. It's just like any charitable contribution, except instead of giving clothes, or fiat, or artwork, or jewelry, you're giving cryptos, yeah.   Chitra: It's taxed similarly?   Jeff: Yes, mm-hmm (affirmative).   Chitra: Then, if you're hacked, what happens? You're losing a bunch of coins because you got hacked. Do you have to pay taxes on that?   Jeff: No, but you have to make sure that it's documented. It's the same thing as if someone came into your house and burglarized it, right? It's a casualty loss. That would be an itemized deduction. You have to make sure that you record those things. Chitra: What if you just lose your crypto? Like, they're on some exchange, you don't know where it is, or you've lost the password. Can they figure it out that you have this crypto? How do you account for the missing crypto?   Jeff: That's a little bit more challenging. If you no longer have access, say, to your key, and you'll never obtain access, then that could be construed as a casualty loss, as well. If you just say, "I don't know which exchange it's on," hopefully that won't come up if you're audited, yeah.   Chitra: And if you are?   Jeff: Then, as long as you show a good faith effort in being consistent and transparent with taxing authorities, and they could see that you're not trying to hide anything, then you should be okay.   Chitra: Do you hear of people that are trying to hide crypto by claiming losses, that they've lost it?   Jeff: Some folks, yeah, yeah. More egregious than that, though, we've had, there was one gentleman that was seeking out a CPA, who made a little over 2.5 million in cryptos, and said, "No, I'm just not going to file. If they want the money, they have to come after me."   Chitra: Did they?   Jeff: Well, that's what's going to happen over the next couple years, yeah. The IRS has started mounting a task force specialist specifically to investigate cryptocurrency filings.   Chitra: Is that going to be an easy task? Will they find people that are scofflaws?   Jeff: They will absolutely find people, right? It's going to be interesting in the tax world for the next couple of years, and tax courts, people fighting them.   Chitra: You're seeing a lot of new developments in tax filings, in tax law as a result of this?   Jeff: Not yet. Really, they're just kind of testing the waters, now. The last, about a year ago, they started issuing subpoenas to exchanges, and they were winning, to get transaction records from them, so they could see what people are trading and how much people are earning, so they could compare that with individual tax returns, to find evidence of those that are evading their taxes. They're just starting to institute those audits now and will be taking these folks to tax court as needed. There's a lot of things that will come out of it, but it hasn't happened yet.   Chitra: Because I think, particularly in the early days, there were probably a lot of people who weren't filing taxes. Is there like a statute of limitations, or does it matter if like 10 years ago you weren't filing taxes, and now the IRS is starting to think about this and starting to do these audits?   Jeff: There is a statute. It's, generally speaking, three years from the date of which a filing was due, but that's only if it was an innocent mistake. If you're intentionally evading, there's no statute on that.   Chitra: How do you report, typically, gains and losses? What's the process?   Jeff: The process is usually, you want to have everything calculated, all the transactions. Coin for coin, coin for fiat, and those will be itemized on a form 8949, and summarized on a schedule D, which are attached to the tax returns.   Chitra: Having done my crypto taxes this year, it's fairly complicated. It's just, you have to look at every single transaction. Talk a little bit about what that process is like. It's fascinating for me to see the level of detail and how you actually go about finding those records, if somebody hasn't kept those records, and being able to trace the flow of that currency from the exchange to your wallet, or if you're trading, you've got all of these multiple transactions that have taken place, hundreds, maybe thousands of them.   Jeff: Yeah, it could get very complicated. That's why a lot of our clients have come to us, to help them untangle these complex array of transactions, ranging from, if they have a few hundred coins that they're trading across multiple years, you can end up having thousands and thousands of cost pulls, because you have to trace every single transaction to its cost basis. Its cost basis depend on whether you used FIFO, LIFO, or HIFO.   Chitra: Explain that a little bit.   Jeff: Sure, yeah. Those are the manners in which you inventory the cells of different coins. LIFO, last in, first out, that's saying, when you sell a coin, you go to the last time that you had acquired that coin, and you sell it out of that pool. If you're buying and selling coins all day long, go across multiple months, you have many cost pulls, even thousands or tens of thousands of cost pulls.   FIFO, first in, first out, is where you sell your oldest coin. What that does is it will result in fewer long-term capital gains, but you're kind of eating up your tax obligation now, versus deferring it to later on.   Chitra: Let's say I'm trading, okay? I'm on exchanges, and I'm trading. I'm not really thinking about ... It's not something you think during your trading process, right? It's something you do after the fact. I'm not thinking LIFO and FIFO when I'm like, "Let me find what's my oldest Bitcoin, and let me trade that for Ether." I'm just like, trading. Am I doing the right thing? Is this something you go after the fact, and start to look through it and make those calculations?   Jeff: The easiest thing is to maintain good records, so that whoever, whether you're doing it yourself or outsourcing it to a professional like us, then they could go through those records a lot easier, because it does get complicated. As long as you have the information, it could be all untangled.   Chitra: What's the largest number of transactions you've done, filing taxes, that you've seen? Thousands, hundreds of thousands?   Jeff: Probably in the hundreds of thousands. I think our largest client had a little shy of 200,000 transactions across about 2.5 years. It was a lot. It took a massive amount of manpower, because there isn't a way to fully automate it, yet. We've established a proprietary method to semi-automate portions of it, but not the whole thing. There's still a lot of manual touches that have to be done to it.   Chitra: Were you able to do it?   Jeff: Yeah, yeah. We were able to untangle all of it. He had a massive tax obligation, but most importantly, it'll keep him compliant with the IRS. He had the cash, right? If you make a million dollars in cryptos, and if you have to pay a few hundred thousand in tax, you know, you're still coming out ahead.   Chitra: This is true. What are some of the biggest obstacles today for average investors, when it comes to filing taxes?   Jeff: I think having an understanding about how complex the tax aspect is with cryptos, if you're trading, mining, doing anything else. I think just being aware and mindful of that.   Chitra: There's also the issue of documentation, right? For example, different exchanges can give you different levels of information about your trades, so at the end of the year, some exchanges will give you a lot of information. Other exchanges give you virtually no information. How do you start to do the detective work to find all of your records?   Jeff: That's one of the tricky parts, yeah, because there isn't really any sort of regulation about what all the exchanges have to provide users. There's going to be, and it's moving that direction. For now, it's kind of up to the individual to maintain their own records. If the exchange only provides piecemeal stuff, or in the case of Bittrex that just up and deleted people's information, it's still your obligation to make sure that you're tracking things.   Chitra: What happened in that instance where the information was deleted?   Jeff: Well, they up and decided just to remove information.   Chitra: This was an exchange?   Jeff: Yeah, yeah, Bittrex. It's still the user's responsibility to maintain the records. The individuals that were subjected to that, had they downloaded their transactional information, let's say, every week or every month, they would have been okay, right, just in case something does happen to an exchange. That's something we advise our clients to do is don't wait till the end of the year to start pulling your information, even if you're using a CPA like us, right? Pull the information maybe once a month, just in case something happens.   Chitra: That's interesting. That's something I've never thought to do. It's kind of surprising that they're allowed to even delete information. Is that going to change, in the future?   Jeff: Yeah, there's definitely more pressure in regulation around what the exchanges are doing. Also, keep in mind that a lot of these are foreign exchanges, too, right? The IRS and the federal government only has so much control over what they do.   Chitra: Because this is such a global flow of money.   Jeff: Exactly. It's a global thing. Right.   Chitra: How does the US government, or how is the US government attempting to get a handle on this? Do you feel like the government is kind of playing catch up, now?   Jeff: A bit, yeah. I think there was too much downtime from 2014 to now. You know, the last time the IRS issued any formal guidance was in 2014.   Chitra: What was that initial guidance?   Jeff: It was maybe like a five-page notice, 2014-21, which pretty much just said that it's not legal tender, and to pay your tax on it. There really wasn't much guidance beyond that.   Chitra: What happened before then, like 2009 through '14? Was there any guidance?   Jeff: Nothing formal.   Chitra: What were people doing then?   Jeff: I think, at the time, IRS and other government agencies probably just assumed that this is just a fringe thing, it's a temporary thing, it's not going to last, but look at us now. There are industries being built around blockchain and crypto, and they realize that, now, and the amount of money that people have earned in the sector. They see it as, like, it's a huge nest egg waiting to be tapped.   Chitra: Build your highways and all of that stuff.   Jeff: Right, yeah.   Chitra: Now, when you're filing taxes, can your crypto losses or gains, be balanced against your traditional portfolio?   Jeff: Yes, yeah. The way it works is short-term gains and losses get netted against other short-term gains and losses, regardless of if they're crypto or not. Then, the same thing with long-term.   Chitra: Great. Now, what are the penalties for noncompliance?   Jeff: For failing to file a return, it's a flat 5% of whatever your tax obligation is. For not paying the total amount of taxes owed, it's one half of 1% per month. If it's just one month late, half of 1%, it's not a lot, but if a couple of years go by, a few years go by, it can add up really quick, plus interest.   Chitra: Can you go to jail?   Jeff: Absolutely, unfortunately. If it's deemed that it was tax evasion, like in the example that I gave you of the gentleman that was looking into using our service and decided, no, they can just come after me, a couple million dollars, if they find evidence of tax evasion, then it could be subjected to a felony, which leads up to up to five years in prison and up to a quarter million dollars in penalties.   Chitra: Now, there's a lot of money laundering also going on, right? Does that play a role at all in this?   Jeff: Not so much with the taxes, but it is something that they're mindful about, out there. I see that more in the banking sector, that being an issue. In fact, one of our clients in the crypto space, their bank account was just abruptly closed with no notice. They said, "You can't bank with us," because they are concerned about potential money laundering.   Chitra: What is their fear?   Jeff: I think because they don't know where the money is coming from, right? If you have crypto-related money, it's so easy for it to be maneuvered from overseas. I think that's the concern, because there isn't enough regulation out there yet, right? Some people are just distancing themselves.   Chitra: It seems like there's a whole bunch of areas in which the federal government and governments around the world are now grappling with, how do you make people accountable for all of this wealth that they're generating, and how do we get a piece of that action?   Jeff: Right, that's what it is. They want their cut. As long as you give them their cut, they're not going to bother you.   Chitra: Now, let's look at two scenarios. Let's say you're a Sally Fay, you're a woman investor. You're just starting out. You're super excited. It's 2017. The bull market is in full swing, and you've learned how to trade, and you're just buying and selling without any regard for keeping tabs on your cost basis or the proceeds that you're making. Then, come December, you're stuck with having done thousands of transactions, and you have no idea how to go about finding those records, because every trade that you've done is potentially taxable, correct?   Jeff: Correct.   Chitra: What do you do?   Jeff: In those kinds of situations, because it's a lot of cleanup, the best thing to do is consult with an expert like us, so we can get you cleaned up and caught up. Then, going forward, you're on the right path, right? And to be mindful just about all the tax consequences of all that trading activity.   Chitra: Do you just sort of systematically start to go back and look at every trade you've made?   Jeff: In order to calculate all the gains and losses, historically, yeah. We have to kind of start from inception. If someone started trading in 2014, right, we have to go back to square one.   Chitra: That's pretty daunting.   Jeff: It is, yeah, yeah. At least once we get you caught up, then you should be okay, right?   Chitra: Let's look at scenario B. Let's say that I am a young man, Matt Jones. I'm not in the crypto market yet. It's the bear market, and people are telling me, "Hey, now's the time to come in. Buy low, and you can sell high." I have a clean slate. I've set up my exchanges, but I haven't done any transactions. What are the kinds of things I need to put in place to have tax hygiene, so to speak?   Jeff: Some best practices.   Chitra: Yes.   Jeff: I'd say, first, be mindful that you do any sort of trade coin for coin, that's all going to be a taxable event. Have at it, but just be mindful that there could be a lot of tax compliance to deal with at the end of the year. That affects some people's volume activity.   Another thing, to make sure to pull their records on a consistent basis. We usually, we're advising our clients now to download their transactional history from each exchange they use about once a month. Just make it a month-end practice, just in case either they got locked out, the data is deleted, or something is hacked, just in case anything happens, at least you have the records.   Then, outside of transactions like that, if you're trading on an exchange, if you're gifting coins, jot down somewhere on a Excel sheet or a Word document who you gave it to, when you gave it to them, and how much you gave, right? Just in case if there's any gift tax compliance to do, we could do that as well.   Chitra: Is it advisable to have a notebook and a pen, and when you're making these trades, to actually just jot it down, or put it on an Excel sheet that on this date, I bought X amount of Bitcoin, or I sold X amount of Ether for X amount, and to have that? Is that going to be helpful at the end of the year?   Jeff: It could, but like all the transactional data within the exchanges usually is going to have all that information. If someone wants to just separately track it, and if they're not doing a lot of trades during the year, that could be just as efficient and make their process easier at the end.   Chitra: Now, tell us some war stories. What are some of the anecdotes that you tell people about folks having challenges in filing taxes, or cases that you've seen, or what the government is doing to come to terms with this new source of income?   Jeff: Sure. Probably a couple examples. We have clients that were trading back from, the oldest one is 2013, maybe about a little over $4 million, and of course, they never reported any of it. Thankfully, in contrast to the other individual I was referencing, he said, "You know what, I just want to be compliant, right?" He came to the table. We went through everything, all the records, and got him up to speed.   Going forward, if he's audited, or maybe I should say when, because it's a lot, a big amount, we have work papers in place that we could provide in response to an audit. 90% of the time, that'll just make it go away, almost immediately. As long as the IRS can see that you've made a good faith effort, that there's been due diligence in being compliant, and you have work papers and a CPA to back it up, the audit will go away, right?   Another example, well, with the IRS, it's not so much a war story, but it's come to my attention that they've selected around 1200 to 1300 cases already from the 2017 filings that they're going to move forward with audits. Now, I don't know which ones those are. That comes from a source I have within the audit community, but we suspect that those are probably the larger ones, mostly, people that have generated hundreds of thousands, if not millions.   Chitra: Is the IRS not only trying to get revenue back from these taxable events but also trying to set precedence in some way?   Jeff: Yeah. It serves both purposes, yeah. One, it's a huge amount of revenue just sitting there for the government that hasn't been tapped yet. The second is going through this process, and going through these audits, and taking some people to tax court will set precedence, so that it's clear to everyone else that, one, you need to be compliant. Don't play games with them. I wouldn't be surprised if they send at least a few people to jail over this that have evaded their taxes.   Also, it allows them to kind of establish authoritative guidance, because they're going to take everything they find. They will undoubtedly issue some pronouncements about, "Here's how you calculate this. Here's why you file things this way," which right now, we don't have.   Chitra: What about moving out of the US, like just moving abroad so you don't have to pay your taxes, or even moving to Puerto Rico. You hear a lot about that. Is that going to help you or hurt you, in the long run?   Jeff: I think for taxes, temporarily, it would help, right? But, do you really want to expatriate yourself, denounce the US, in order to just save some money temporarily on taxes? I don't know.   Chitra: Depends, I would say.   Jeff: It depends, yeah, yeah.   Chitra: On what the amount is. Are you hearing about people who are actually doing that?   Jeff: No one I know has actually done it. Some folks that we know have been debating it, and they asked to do some research on expatriation process.   Chitra: It's a fascinating area. When you're doing the forensic work, you've been asked to help, I think, with investigations and things like that. How do you go about collecting the forensic evidence on these cases?   Jeff: Really kind of the same way we do crypto calculations for our clients, right? We pull all the underlying third-party documents. In this case, transactional records. We get their narrative about what happened, hear the story, because any forensic case, anything that we do, it's not just the numbers. It's also the context. It's also what happened, the story, if you will.   With forensic cases, there's usually a lot of other moveable parts, as well, particularly like divorce cases, where people are sometimes hiding funds. Partnership disputes, where one partner is embezzling money. We see that kind of stuff a lot more often than what people realize.   Chitra: What happens in the case of a divorce? Who gets the crypto? How do you actually even split the proceeds, if that's what happens?   Jeff: Same thing with kind of like a house, right? If it was community property, assuming it's a community property state like California, then any assets would be split 50/50, unless it was bought with separate property. If you don't want to cash out the portfolio, then usually one partner would buy out the other half from the other partner, just like a house. If you don't want to literally split the house in half, one person wants to keep it, one partner would buy out the house from the other.   Chitra: Well, that actually raises an interesting question, because let's say one partner is very crypto-savvy and the other partner is not crypto-savvy. It probably is pretty easy to hide your assets in the form of crypto, because the other person has no way of finding out how much you have and where you have this.   Jeff: True. Yeah, there's an opportunity there for someone to try to take advantage. Part of the divorce proceedings process is to come to the table and be transparent with both partners. Usually, like, you're essentially signing off to the court that let the partner know 100% of the assets out there. To try to hide it is essentially perjuring with the court.   Chitra: Where do you see all of this going in the next few years, as more and more people get into the space? There is a prediction that you're going to have a billion new crypto investors, over the next five years, entering the market. Where do you see the field of taxation going?   Jeff: Yeah, definitely, I see a second adoption, as well, coming in the coming years. I think, by the time that happens, there'll be a little bit more infrastructure in place with the taxation piece. One, with the exchanges. They'll start being a little bit better about what they record for their clients and what they issue out at the end of the year. I think we'll get to a point where exchanges are very, very similar to brokerage accounts, where you just get a 1089 of, "Here's your cost basis, here's your proceeds, here's what you report on your tax," and make it much easier for folks.   Chitra: Just as the industry is growing up, the tax piece will grow up, as well.   Jeff: Yup.   Chitra: Yeah. Great. Is there anything I haven't asked or anything really important, closing thoughts?   Jeff: One closing thought, just, I think it's good for everyone to remember that almost everything is a taxable event. If the question is, "Do I have to pay tax on this?" 9 times out 10, it's yes.   Chitra: Sadly.   Jeff: Yes.   Chitra: Thank you so much for joining us. Where can people learn more about you and find out more about the work that you're doing?   Jeff: Sure. Our website is neumeistercpa.com, that's N-E-U-M-E-I-S-T-E-R-C-P-A.com. We're a full-service accounting consulting firm, but we specialize in things like cryptos.   Chitra: Great. Thanks so much for joining us.   Jeff: All right, thank you.   Chitra: That's all for now. Join us again next time for another edition of Running with Unicorns. Until then, enjoy your crypto journey, unicorns.  

Learn how to make a hotel reservation in English in this podcast. Slow dialog: 1:27 Explanations: 4:21 Fast dialog: 14:53 I just finished a huge project at work and I needed some down time. I decided to take a short vacation. I liked the idea of a long weekend out of town. My friend Sara offered to let me crash at her place in San Francisco, but I decided to stay at a hotel instead. Sara has a couple of roommates and I thought it might be too crowded. I called the toll- free reservation number for a major hotel chain. The reservation agent was very helpful, after I got through the long phone tree. Agent: Dutton Hotels. How may I help you today? Jeff: I wanted to check rates and availability for your San Francisco location. Agent: Certainly, I can help you with that. Will that be the downtown or waterfront location? Jeff: The waterfront location. Agent: What date do you plan to check in? Jeff: I'd like to check in on October 12th and check out the 15th. Agent: Okay, let me see what we have. For how many? Jeff: One. And, if possible, I'm looking for a non-smoking room. Agent: Sure, we have a non-smoking queen with an ocean view for $189 or a standard room with a courtyard view for $139 a night. Jeff: I'd like to book the standard room. Agent: Okay, your last name? Jeff: Rama. Agent: And, your first name? Jeff: It's Jeff. Agent: Okay, I have you booked in a standard non-smoking queen, checking in on October 12th and departing the 15th. What major credit card would you like to use to guarantee the reservation? Jeff: A Visa. Agent: The number and expiration? Jeff: It's 7388- 2424-3535- 1818 and the expiration is 05/08. Agent: Your confirmation number is PD672. Is there anything else I help you with? Jeff: No, that's all. Thanks. Agent: Have a nice day and thank you for calling Dutton Hotels. Script by Dr. Lucy Tse