Picture this. It’s 1925. A crew of Prohibition-era bank robbers cracks open a vault, thrilled to find $1 million in gold. But at $20.67/oz, they’d need a convoy to haul away the loot -- over 3,300 pounds of metal.
Fast forward to mid-1975: gold’s up to $142.50/oz, so the same million weighs 489 pounds -- more vending machine than getaway bag.
Now leap to July 15, 2025. With gold around $3,357/oz, $1 million fits in a carry-on: just 20.4 pounds. Lighter than a medium-sized dog.
What changed? Not gold. The dollar.
We didn’t become more efficient. We just debased the currency.
This isn’t monetary “progress” -- it’s a tragedy of the fiat commons. Decades of dilution have pushed savers into scarce assets such as Bitcoin. Sound money isn’t a goldbug’s fetish -- it’s a growth imperative. As Jude Wanniski argued in The Way the World Works, stable money fuels production by giving investors a predictable yardstick. Unstable money hijacks incentives, funnels savings into barren stores of value, and punishes investment.
The 1913 Fed charter, under a gold standard, never envisioned the untethered discretion that followed. Back then, the dollar was pegged to 1/20th of an ounce of gold -- a tether that curbed excesses and made inflation structurally tough.
Not anymore.
Today, we face monetary mission creep -- and a whole generation locked out of homeownership, with prices far out of sync with incomes and elevated rates making buying prohibitive. Fiat instability acts as a stealth tax, eroding real incomes and warping capital flows. It distorts decisions at every level, from family budgets to corporate investments, turning potential growth into stagnation.
At a Morris County barbecue last fall, surrounded by crypto enthusiasts, one Michael Saylor fan put it simply: “Fiat has proven it won’t hold value. Eventually, Bitcoin will be solid collateral.” This wasn’t a pump-and-dump crowd -- it was wartime stacking, echoing gold hoarding in 20th-century currency crises.
Bitcoin Isn’t Gold 2.0. It’s a Revolt.
After Nixon severed the final gold link in 1971, the dollar was left untethered -- subject to policy whims. Since then, cycles of tightening and easing have dominated economic life. As economist Rudi Dornbusch observed, “None of the postwar expansions died of natural causes -- they were all murdered by the Fed.”
Bitcoin emerged in protest, born from the 2008 crisis wreckage -- a predictable fallout from overtightening.
The business cycle feels administered by unelected managers. Result? House prices disconnected from incomes, walling off ownership for many.
This is Bitcoin's world. Its rise signals rejection of fiat failures. A longtime fund manager and early Wanniskian said:
I’ve heard -- why would anyone part with bitcoin today for fiat? To those who believe that fiat is running amok and to those who believe BTC is a real store of value because of scarcity, why would they sell? ... It underscores the palpable sense that fiat is rapidly disintegrating. It’s exactly the motive my friends who own BTC have. They are clueless about Jude Wanniski’s gold history of money. It’s emotional attachment to scarcity. But it’s bigger and more influential than anything I’ve seen in my lifetime. That’s why I use Tulip Bulbs. It’s the only historical analogy I can find."
Bitcoin is our era's tulip mania -- not speculation, but emotional response to broken signals. Its pro-cyclicality and Veblen traits make it volatile, prone to corrections sharper than the dollar's -- yet that turbulence itself underscores the revolt, as users flee fiat's subtle erosions for something with hardcoded limits.
Its emergence is revealing: markets crave scarcity and predictability, sought in code when institutions fail.
This isn’t new. In 1981, Reagan's Gold Commission explored restoring a dollar-gold link. The majority dismissed it, but Ron Paul and Lew Lehrman's dissent argued for sound standards. Shelved, proponents were cast as cranks -- yet the conversation had merit. Fiat persisted by inertia.
The lesson: Bitcoin's appeal protests fiat's shortcomings. Wanniski pushed gold for discipline, saving rewards, and stability. Bitcoin, despite turbulence, echoes that demand -- drawing in those frustrated by endless debasement.
The policy breakdown -- and the supply-side way forward
Supply-side rests on four pillars: low marginal tax rates, a stable currency, limited regulations, free trade, and peace born of the latter. Taxes and regulations are reviving in Washington; geopolitical tensions ease in spots. But monetary neglect persists. Without stability, capital hoards. Gold at $3,300+/oz signals distress. With it, capital flows to risk and growth.
History -- from Rome’s Punic Wars debasement to Syracuse’s reminting -- shows debt prompts devaluation over discipline.
America is no exception. Rising debt underscores the need. Bitcoin and gold indict the system.
Some supply-side remedies:
- End unbounded discretion. Reassert a dollar anchor -- metallic or digital -- to restrain inflation.
- Deregulate crypto. Eliminate capital gains on Bitcoin transactions. Unlock circulation.
- Embrace pro-cyclical capital. Let digital wealth fund real investment in booms.
This isn’t utopian. It extends Wanniski: Gold was the mechanical era’s constant; Bitcoin signals enduring demand for discipline -- scarce, mobile, tamper-resistant, catalytic with pro-growth policy.
It’s time to course-correct. A backpack heist shouldn’t be possible unless value’s already stolen.
That’s the point. The Morris County stackers hold up a mirror.
The heist already happened.
