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Dawie Roodt on why crypto money will change the world

We may see the end of banks, including central banks, and even a decrease in taxes.

Many readers will know the name Dawie Roodt. He is chief economist at the Efficient Group and undoubtedly one of South Africa’s leading economists.

Roodt gave a fascinating presentation on Wednesday evening at the Free Market Foundation in Johannesburg, where he spoke on the subject of cryptocurrencies such as bitcoin and ethereum.

He begins the presentation by talking about the state of the world economy, then zooms in the state of the South African economy, before moving onto a discussion about the digital economy and different types of money, including cryptocurrencies.

To paraphrase Roodt, governments in recent decades have become fat and lazy, and central banks all powerful. In the presentation, he explains how virtual/crypto/private/decentralised money will impact on finance and why we may see the end of banks, including central banks, and even a decrease in taxes.

Listen to Roodt explaining why these developments could lead to the end of monetary policy and a much smaller state.

Roodt’s presentation is long, but highly informative and very entertaining. You really don’t want to miss this podcast.

This article was first published on TechCentral. To access the original, please click here.

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David Kop

David Kop

The Financial Planning Institute of Southern Africa (FPI)
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Hi,

I am still very young and started investing in shares only a year ago. I have been doing a lot of research and during my research I have realized that the Dollar as Fiat currency is failing, thus I have been buying a lot of gold and gold shares to protect myself from this. I have not invested in Bitcoin as I would think that it is very risky due to the massive price movements in this vehicle and my lack of knowledge thereof. My question however is that if the Dollar fails (as it is currently doing as it has been depreciating over the last 7 months, under a lot of pressure), will gold and gold shares be enough? This presentation has just reiterated the fact there will definitely be a change in the world monetary system, but is there enough faith in Bitcoin or will we move back into gold standard or something similar?

There is no question that Bitcoin has still a lot of potential on the up side as if all bitcoins have been mined there is only 21 Million (I think) out there, thus it could eventually become over a million dollars per Bitcoin (eventually). The flip side is also will we see a new world superpower economy, could the Yuan replace the Dollar perhaps?

Very interesting times we are in at this moment with America being in a Bond, Housing and Stock Bubble, the question is when and how violently will it burst.

Bitcoin has surged year to date. If the last 5 surges are evidence, the price should come down signficantly before rising again. Also consider the Bitcoin UASF on August 1st – the largest event in the history of Bitcoin i.e. whether or not it can scale (if you aren’t aware of the UASF then I strongly suggest doing mroe research before buy a crypto currency).

Summary – current buble should crash, I suggest waiting for a strong pullback before buying in. You could always Rand cost average into Bitcoin. Never invest the majority of your money into one asset (bitcion or one share etc).

Crypto-currencies and gold are an alternative to cash, not an investment per se. If you want to be in cash, then gold, rhino horn and maybe crypto-currencies are a better alternative to fiat currencies.

An investor should only be in cash during the times when assets devalue relative to cash, during a crash that is. During the times when the value of assets rise in terms of the currency, one should be holding that asset.

To get to the point. When the share market is rising in terms of gold, one should be invested in shares. Over the short term nothing will beat bitcoin but how sustainable that is, nobody knows. I am certainly not willing to bet my life savings on bitcoin.

It is the very devaluation of fiat currencies that drives the bull market in assets. If you are worried about the ongoing devaluation of the dollar, you should be fully invested in shares. It is only when you believe the value of the dollar will appreciate, as during a contraction of money-supply (market crash), that you would want to be holding cash.

The market itself tells you when it wants to crash. When money has a positive price in real terms, in other words, when the short term interest rate is above the inflation rate (yield on 30 year bond), we can expect a contraction in credit and a crash in the money supply. What this tells us, is the growth in the USA is merely a result of free money. The secret is this, don’t fight the Fed, join the Fed, for the Fed will make you wealthy. Every person in the world hates the Fed, but everybody wants the Fed to succeed because if they do fail, there will be nothing to buy with your gold or bitcoins.

Hello Willem
You may be young, but you think very clearly and maturely.

Dankie Dawie. Dit was nou ‘n uur se luistertyd goed spandeer. Ek stem saam jou dat hierdie geldeenhede nie ‘n belegging is nie, en dat te veel mense dit tans as ‘n belegging sien. Die feit dat soveel mense Ether en BTC koop en vashou laat die blockchain soos ‘n piramideskema funksioneer. Daar sal ‘n tyd kom wanneer nuwe “beleggers” opdroog en die waarde stagneer of selfs val. Luister ook gerus hierna, ek het baie van hierdie potgooi geleer: http://traffic.libsyn.com/timferriss/The_Tim_Ferriss_Show_-_Nick_Szabo.mp3

Probably the best and most exciting podcast i have heard
thank you Ducan and Dawie
i take back all the scepticism i had on crypto currencies- i am stoked.

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