Chapter 3

Technology wants prices to fall. Money wants them to rise.

We are living through the largest deflationary force in human history — artificial intelligence — colliding with the largest inflationary force in human history — coordinated central bank money printing. Whichever side wins decides what your future looks like.

The Price of Tomorrow

In his 2020 book The Price of Tomorrow, technologist and investor Jeff Booth makes a deceptively simple argument: technology is inherently deflationary, and we are now at the start of a deflationary wave so powerful that no monetary policy can outrun it forever.

"Technology is deflationary. The lower prices that result from it allow for an increase in standard of living. To fight that with more debt and money printing is not just futile — it is destroying the future to preserve a system that no longer works." — Jeff Booth, The Price of Tomorrow

Every time a technology gets better at producing something — solar panels, software, semiconductors, ride-sharing, food, communications — the cost of that thing drops, often dramatically. Booth's central observation is that this should make life cheaper for everyone, generation over generation. And it would, if our money were sound. But because our money is constantly being expanded, the natural fall in prices is masked by an artificial rise. The productivity gains get captured by asset holders rather than passed along to wage earners.

AI is the accelerant

Booth wrote his book before the AI boom of the 2020s. The thesis got stronger.

🧠

Cognitive labor going to zero

Tasks that required a $200/hour consultant five years ago can now be done in seconds for fractions of a cent. Translation, research, copywriting, code generation, design, customer service, legal review, financial analysis — all collapsing in cost simultaneously. Entire categories of work that used to anchor a middle-class income are deflating to near-free.

Energy and materials following

Solar costs have fallen ~90% per decade. Battery storage is on the same curve. AI is now optimizing chip design, materials science, drug discovery, and logistics — pulling deflation into industries that used to be considered "physical" and immune.

🤖

Robotics catching up

Embodied AI — humanoid robots and autonomous vehicles — converts cognitive deflation into physical-world deflation. Construction, agriculture, manufacturing, transportation, eldercare. The labor cost of producing almost anything is on a downward curve that nothing in history has matched.

📉

Unit economics inverted

For most of history, scaling a business required scaling labor and capital roughly proportionally. AI breaks that. Companies are now reaching billions in revenue with dozens of employees. The marginal cost of one more customer, one more task, one more product approaches zero.

The collision

Two opposing forces. One must give way.

Force 1: Money printing (~7% per year)

Governments cannot stop expanding the money supply because their debt loads have become mathematically unmanageable without inflation. The U.S. spends more on interest than on defense. Every developed nation faces the same trap. Stopping the printer means crashing the system. The political incentive is to keep printing forever.

Force 2: AI deflation (estimated 5–15%+ per year on affected sectors)

Productivity gains compound. A 30% improvement in code generation efficiency this year doesn't reset next year — it stacks on top of a 30% improvement in chip design, which stacks on top of a 30% improvement in robotic manipulation. The deflationary curve is accelerating, not stabilizing.

The scissors
Money supply rising while the cost of producing nearly everything falls. The space between them is the prize — captured by whoever owns scarce assets.
Bitcoin sits at the perfect intersection: scarce by protocol, impossible to produce more of regardless of how cheap energy and computation get.
◆ What this means

The result is not a "smooth" 0% inflation. It's chaos in relative prices.

Things that AI can produce — software, content, services, eventually goods — will get dramatically cheaper. Things AI cannot produce more of — land, scarce energy, prestige assets, trusted human attention, and units of an absolutely scarce monetary asset — will get dramatically more expensive in dollar terms.

Bitcoin's supply cannot be expanded by AI. Its issuance is mathematically fixed. As the world's productive capacity explodes and the dollar supply explodes alongside it, the asset that captures the spread between the two is the one that is provably scarce and globally portable. Booth himself has argued publicly that Bitcoin is the natural endgame of his thesis: the only honest unit of account in a world where producing everything else is converging to free.

What this looks like in your life

Forget the macro for a second. Here's what actually happens.

◆ The optimistic view

This doesn't have to be a tragedy.

Booth's argument isn't that AI will destroy us. It's that AI is delivering a once-in-civilization gift — the ability to produce abundance for everyone — and our broken monetary system is the only thing standing in the way of that gift being broadly shared. With sound money, deflation would mean your savings buy more every year. Your kids would inherit a higher standard of living automatically. The productivity dividend would flow to everyone, not just to whoever owns the most assets at the moment the new money is printed.

Bitcoin is, in this view, the bridge from the broken system to the working one. You don't have to wait for governments to fix anything. You just have to opt out — one satoshi at a time.