Speak Plainly Podcast
Hosted by 2 time best-selling trauma author, Owl C Medicine. A veteran of the US Military, Owl's no nonsense approach to mental physical and relational health is exactly what you didn't know you need. Listen in for ideas worth chewing on and science based tools for living life after trauma.
Speak Plainly Podcast
Unraveling Economic Mysteries with Jess Doengess: From Federal Reserve to Billionaire Wealth Strategies
Have you ever wondered how billionaires like Elon Musk leverage debt to magnify their wealth, while the average person struggles with inflation? Join us as we unravel the mysteries of economics with my good friend Jess Doenges.
We start with the foundational concept of transactions and then explore the distinctions between the fiscal and real economies.
Our discussion ranges from the historical evolution of money and the impact of inflation to the undervalued domestic work performed by women. We tie these economic themes back to personal evolution, offering fresh insights into how they shape our day-to-day lives.
Get ready to dive into the intricacies of the Federal Reserve, government debt, and the real estate market.
Why is the median listing price of homes skyrocketing, and what does it mean for the value of the dollar?
We explain the mechanisms behind central banking and government bonds, and how fiscal policies—such as Trump's CARES Act and Biden's international spending—affect GDP and the real economy. By examining the origins of inflation and the role of the Federal Reserve, we shed light on how historical events like the Vietnam War and the Bretton Woods Agreement continue to influence today's economic landscape.
Finally, we discuss the importance of integrity and authenticity in both personal and economic contexts. From the unintended consequences of central control to the complex dance between corporate and governmental interests, this episode covers it all. We even delve into the concept of decentralization and envision a future where community trust and voluntary interactions define our economic systems. Tune in for an enlightening conversation that not only clarifies complex economic principles but also raises thought-provoking questions about the world we live in.
Music by Wutaboi
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Hey everybody and welcome back to another episode of the Speak Plainly Podcast, where we speak plainly about things that matter. I'm your host, al Metzner, and today I have with me Jess D'Anches Say hi, hi. And today I have with me Jess Donchez, say hi, hi. So I've had Jess on this podcast before and we had a marvelous conversation on a completely different topic. But today we're going to be moving into the world of economics and this is going to be a slightly different layout of a podcast because this is going to be a bit of a conversation between people who well me, who knows the very basics and that's kind of it of economics. But it's something I've been interested in and I tend to have more questions than I do answers, and I'm going to be asking Jess a lot of questions about what his views on economics are. We've already had, like, many conversations over our friendship where we've touched on pieces of this and we've had it out over definitions and over, like where stuff means. And this is why I love Jess so much and and I'm really happy to have him on the podcast again it's because when we have conversations, we, especially in the first half of it, we're disagreeing more than we're agreeing, and it's always on definitions of things and we we agree on, like, everything that matters and the actual functions, and like where the rubber meets the road. But I, I think this, I think this strategy of just having the conversation and having it out and being like, oh, I think you're wrong here and I disagree here, and I don't think I don't see that this way and you don't see that this way, so, and let's figure out where the actual misunderstanding is and keep pressing forward. So don't expect to be able to listen to this podcast and then have a stock market-like thing that will make you a millionaire or whatever. We're not going to increase your portfolio or anything like that, not today.
Speaker 1:Today, the goal is to be able to understand what is going on when we talk about the economy. A big piece of what I want to talk about is inflation, and in order to do that, we'll have to talk about interest. We're going to have to talk about the economy and we're going to be talking about the economy in a couple of different ways. We'll talk about the fiscal economy and we'll talk about the real economy, and this is all going to be part of a bit of a series that I do on the economy and talking about.
Speaker 1:By the end of this episode, you're going to recognize that the US, and therefore the global economy, is basically a junkie and the federal governments around the world are the enabling family members and, at the end of it, the way that you solve addiction and substance abuse and use is by providing the things that that unit needs. What that person needs they need, like friends and love and unconditional care and support All of those things we take care of intrinsically within ourselves or within our systems. And we aren't doing that and the way that we're not doing that has led to devaluing women over time, because the work that they have done is not accounted for in our economic system as we, as the we being especially the media portrays it out today that kind of fiscal economy. But we're going to be getting to that down the road. Today, what we're trying to set up is here's the basics of how economics works when you're watching it on TV, and we're going to go into a little bit of the history about money and different important moments in time through American history and how that has led to our economy being the way it is now.
Speaker 1:Our economy being the way it is now, and just to have a good little example, we're going to be talking about billionaires and how billionaires get to leverage their debt to become more rich, and we'll use Elon Musk as an example on that.
Speaker 1:But I think that's everything out of the way as far as what I want to talk about. We'll get to most of those probably not all of those today, because I will lose track of everything that I just said. So enjoy the conversation as I have it with my good friend, jess Strap in Expect to leave this with a few more answers than you had before, but probably a lot more questions, because that's how big this whole thing is. But that's what we do on this podcast. We take large concepts and we try to break it down to be digestible for the regular person, because the world is full of middlemen that have made everything hard to understand to, in my experience, keep the poor poor and make the rich richer, which leads us right into inflation. But let's get started with the definition of economy, at least as far as what we see on TV.
Speaker 2:All right, let me just give a quick little opening statement first. First, I want to edit one word that you said, which was women. So, instead of women, anyone who does the domestic work at home, absolutely when the value is not being compensated financially directly with money.
Speaker 1:That's what you're referring to, right.
Speaker 2:And I also like to say I would love to end this podcast with actually tying it in a bow. That comes back to our last podcast, which is there's no revolution without personal evolution. I think it's all going to get connected.
Speaker 1:Oh, beautiful. Okay, I fully expect that now.
Speaker 2:So your question is what the economy is.
Speaker 1:Yeah Well, if you'll let me, I'm going to lay out what my understanding is.
Speaker 2:I certainly like your distinction between fiscal and real economy.
Speaker 1:Go ahead. It's a very big difference, your distinction between fiscal and real economy. Go ahead. It's a very big difference between the fiscal and the real economy, and a lot of that has to do with real money versus debt. But basically what we're talking about any economy is built upon transactions. Transactions are the fundamental building block of any economy.
Speaker 2:Which is any voluntary interaction between two entities.
Speaker 1:Absolutely. And when you have those voluntary interactions, we call that a transaction and that's usually exchanging goods or services among each other and now we often use money as a stand-in for those goods or the services. But any exchange that happens like that, that's a transaction and those transactions, importantly, there is a buyer and a seller in the transaction. So a transaction, by definition, means there has to be an exchange between two individual units, means there has to be an exchange between two individual units. And when you take that transaction say there's a transaction over purchasing wheat, that is part of the wheat economy. If there's a transaction to buy a car, then that is part of the automotive market. And when you look at all of these markets together, that is what we call the economy.
Speaker 2:The fiscal economy, I'm assuming.
Speaker 1:Right, the fiscal economy, and that includes the real economy, but is not the real economy, and I guess we'll get to that and break it down a little bit more later, but that's my basic understanding. Does that sit right with you?
Speaker 2:That sits right with me. For the most part, I'll say that one transaction could have like three, four, five, seven markets attached to it. Oh, absolutely.
Speaker 1:So it's not just a linear straight one for one intrinsically tied with itself. Right, it's all so if, but if we get the basic units down, the basic building blocks, then we can have a conversation at least, and anything that we say about the economy in this podcast understand that as soon as we say one thing about any piece of the given economy, there are automatically going to be things that are left unsaid, because everything is so intertwined that there's going to be blank spots, now leading toward inflation. Let's talk about the difference between money and credit. I feel like that's a good place to start, because we all know what money is. Most people work 40 or 50 or 60 hour work week to then get paid a certain amount of money every week or two weeks, and then we take that money to live our lives, and right now the world is in a especially America right now is in a financial crisis. The regular people can barely afford a place to live. I remember it's insane out there.
Speaker 1:It's insane out there, especially out here where we live. In January, when I looked, the median listing price for a house in Clallam County was $725,000.
Speaker 2:Oh my God, I'm in the slums over here.
Speaker 1:Three quarters of a million was the median listing price, not too surprised. Which is insane, and part of this is and this is due to how much value we put on assets right, and this is where we can get into credit. There's a bunch of value. There's a value placed on these assets. Your house is worth $725,000 or whatever, but it's actually only worth whatever people are going to pay for it.
Speaker 2:Right. But I would suggest I mean, has the value of that house changed 15 years ago? I mean, has the value of that house changed 15 years ago? That same house that $750,000 now was probably $250,000 then or $300,000 then. Has the value of that house changed very much? I don't think it has. I don't think it's so much that the value is going up. I think it's the devaluation of the dollar.
Speaker 1:That is happening, yeah, and I would say it's probably a combination of the both right Combination, but much more weighted towards the devaluation of the dollar. Yeah, I would say that that's very accurate, and it's hard to parse those two out, because the devaluation of the dollar one of the things I wanted to get to is the devaluation of the dollar. Largely one of the one of those examples that we see every single year, it seems on TV, is when the federal government says we don't have enough money, we need to print.
Speaker 2:We need like it's the.
Speaker 1:We've hit the debt ceiling, we don't have enough money to pay our debts, and so what do we do? We print more money, and what that does is then go okay, so, ok, well, now we have more money to buy the things, but that is automatically devaluing the dollar, because now the dollar has less backing it, and I guess, before we get any further in it, I would like to get back to you here to talk about, to talk about the, the origination of all of that.
Speaker 2:It's a long story and it's not new either. It's not new to fiat currency, and if anyone doesn't know what fiat currency is, it means like the paper. We have a fiat currency system, which is where you have pieces of paper that we call dollars, but they actually don't have any intrinsic value of their own Right. It's based on faith, and that's a long conversation. When we say what they're based on, I say they're protected by the military at this point. But it's a long, long conversation. But the fact that you haven't had much economics in school actually gives you a step up, because I took all that in school and when I was younger, there were two things I thought was over my head, and that's music and economics.
Speaker 1:That's ironic.
Speaker 2:So here I am, 25 years later. I'm a professional musician and I think I have my head wrapped around economics, but I did it in school because I always had questions you know, and they would say, oh, bank needs money.
Speaker 2:They go to one of the core banks and they borrow from them. And I said, well, what if the core bank doesn't have that money? Well then they go to the reserve bank. What if the reserve bank? Well then they go to the federal reserve bank. And I said, well, if they don't have money? And I can never get that final answer, that final question answered in all my years of college.
Speaker 1:I think I just learned the final answer to that question. Can I answer and see if I'm correct yes, so if the federal, if in our case, in the US, the Federal Reserve is the central banking thing. If they can't get the money, what they do is then basically get money by buying bonds from the federal government.
Speaker 2:That's one of the many ways they can just print it too.
Speaker 1:Right, of course they can. They can just print it and they do that all the all the time. But short of printing it, which is like supposedly the last ditch effort, because we know that it devalues the dollar and it creates issues later on. But I mean, this is all the government, which is run by politicians which, if are good at anything, it's kicking that can down the road, and so they just keep kicking it down the road and kicking it down the road, whether that be between, like, a farmer and the neighboring beekeeper, or between federal government and the federal bank. That federal government is basically saying they create these US bonds.
Speaker 1:And I had to do a bit of Googling to be like what is a bond? Like what are these reserve bonds? And they just called them government securities. And I was like what is a bond? Like what are these reserve bonds? And they just called them government securities. And I was like what is a government security? And it basically is just the government saying we have assets and we're a government, so you can rely on us to be good for it.
Speaker 2:Yeah, you know what their collateral is the taxpayer. Right, right, this is why they care about jobs so much.
Speaker 1:This is why they care about all that, because we are their collateral. That makes perfect sense.
Speaker 2:And to not go too deep down a rabbit hole, if you ever look at all your bills, all your bills are in an all caps name.
Speaker 2:Oh, yeah, this is your corporate name and they are leveraging your corporate name and they keep all the corporate names counts in one of their offshore entities Usually it's in Puerto Rico but also on every check you sign. I don't want to go too far down the rabbit hole, but look at every check you sign on that you know that line that you sign your name on. That's not a line. Take a magnifying glass out and look at it. That is fine print and you're signing a contract.
Speaker 2:Oh, interesting, and you're giving them authority to use your corporate name.
Speaker 1:Okay, well, that makes sense. That makes sense to me, but what was shocking to me is that I always thought, like it was, the federal bank is what was creating money. And that's true. Bank doesn't have money. They just go to the federal government, who then basically just creates credit by putting the taxpayer as the collateral, and then now the federal bank has money to be able to loan out, right.
Speaker 2:That's one of the many ways, but they can. They often do just print it as well.
Speaker 1:Yeah, definitely they do print it, but, like I said, that's usually like the last ditch effort and that's like it always gets put on TV.
Speaker 1:But the thing that I didn't know that was so surprising is that the federal government can literally just create credit. But the thing about any time that you create credit, what's happening is I don't have the money to pay you for this transaction right now. So we have an agreement that I will pay you later, which okay now, for me, that is credit, but for the person that I'm lending to, that is automatically debt. So it's important, when we think about this stuff and we're hearing people talking about credit, that we understand that that is actually debt, because one of the stats that blew my mind doing research for this was that of the federal, the US federal budget the amount of money that we spend each year $3 trillion last year was money and $50 trillion was credit In the US total. Oh gotcha, which is that includes private credit? Right, right, right. Oh gotcha, which is that includes private credit? Right, right, right, which is mind boggling.
Speaker 2:For the federal government alone, I think it's somewhere between nine and 11 trillion. Yeah, so it's not just they're not spending three trillion. Three trillion is about what they're taking in in taxes. That makes sense Two to three trillion but they're spending about 11 trillion a year. When they had the CARES Act, when COVID came, that's when they really ramped it up to a new level.
Speaker 1:Yeah, and then we also printed more money.
Speaker 2:Ukraine and Israel. That got sustained by that. So Biden didn't back off of that, but Trump started it. You know not that I want to get politically here, but all the Trump people talk about Biden causing all this. Trump started it with the CARES Act, the new rate of spending, the new rate of inflation, and then Biden continued it with Ukraine and Israel.
Speaker 1:Yeah, well, and one of the things that we saw in COVID was them printing more and more and more and more and more and more money to then and this was one of the few times that the fiscal economy touched the real economy, because often what happens is they'll print just enough to make the fiscal economy. That's what's been happening it seems like they're printing just enough to make the fiscal economy still function, while not actually affecting the real economy, being the real people, whereas with COVID there was a tiny bit of actual trickle down where the stimulus packages went into people's actual accounts and then they used that money to pay bills and that sort of thing. And that's what we're talking about.
Speaker 1:The real economy is when people, when everyday people, are using the money or the credit that they get to live life to purchase things, because the thing about this is my spending is somebody else's income, right, and their spending as somebody else is, could be, could be my income. So anytime that there is a debt that I have to, then that like so I go, I go to a bank and I get a loan that if, when, or let's go to 2008 and to the big, to the big crash, right, we can go to 2008. Where houses were, they were incredibly over, like overvalued, um, and a lot of that was because they were. They were loaning money to people who they shouldn't have been loaning money to that was a Bush program to get.
Speaker 2:They wanted to increase home ownership from like 20% to 40%, so they put all these incentives into the system so that people could buy more homes Right, and that led to the bubble, of course.
Speaker 1:It did, especially when a lot of those homes like built into the contracts they'd be like oh, you have a four per 4.9% APR for the first 10 years or whatever, and then 10 years down the road it jumps from 4 to like 15. And when you're looking at hundreds of thousands of dollars, those few percent interests, like I mean that can triple your house payment.
Speaker 1:Sure you know and that happened to a lot of people no-transcript slavery and sex trafficking, all of that stuff in black and black market gun sales all of that is actually accounted for in the gdp but like growing your own food isn't, and I think that's that's one of the black holes that, once we get this established a little bit, what the kind of economy is that's one of those black holes I'm going to get into in another future podcast is those kinds of unaccounted for productivities.
Speaker 1:Because when we're talking about the growth of an economy, often what we're expecting to drive that growth at least for me as a layperson is I'm expecting that productivity then brings the most growth. But it turns out that that's not the credit. That's not the truth. That credit brings the quickest short term productivity for an economy, which makes sense because you just give people money in the short term they have more money to spend, but essentially what they're doing is borrowing from the future, which means eventually the money that they borrowed they have to pay back, which then puts less money into the real economy, more money into the fiscal economy, and since they're spending less money in the real economy, their neighbors aren't making as much money, because whatever I spend is the intake for my neighbors.
Speaker 2:There's a million reasons why they. How they calculate GDP is just warped and absurd. Not just what you're mentioning right now, but also just just government jobs alone. Government jobs, and I mean every, every government job. They're getting paid with taxpayer dollars. There's nothing being produced there. What's being produced are the taxpayer dollars and the jobs are paid out. So that really should not be included in GDP either. Gdp, like you said, is production, is things growing, or maybe it's workforce.
Speaker 2:One thing I want to push back on you said is that before COVID, the fiscal economy didn't really affect the real economy too much. I would push back on that really hard because unfortunately, we don't see the world that would exist if they weren't doing that. And that's one of the big points with inflation that I want to talk about, because what is true and what is natural and what is organic is that prices go down. Over time people get more efficient at producing things. There's economies of scale. Economies of scale means you know when you make one of something, it costs a lot and a lot of time to do it. You get really good at it. You make 10 of them. I don't care if you're an artist painting a painting or a factory making a widget. You're going to get better and more efficient at it over time, so in economic terms, that's an increase in productivity.
Speaker 2:An increase in productivity always translates to a lowering in price. We don't get to see that world. No, we don't. Why? You know we've become the richest country in the world, but none of our people are, at least none of our lower or middle class people are feeling that Right. Things just get tougher and tougher for us. So why is that? It goes? Because of inflation. That's why, because of all the money printing and all the things.
Speaker 2:So I want to just go back a minute to try to know your first question and start with the origins of inflation, and I'm going to go all the way back to Rome, because inflation is not a new thing. Uh, the government stealing from the currency is not a new thing. Rome, with their gold coins, they would actually cycle towards the end of their empire. They would cycle through the gold coins and remove 10% of the gold from the coin and give it back to the people. Remove 10% of the gold from the coin and give it back to the people. They would literally do it because they had real money back then. Right, you know Right. And so this has been going on since the beginning of time. Governments, you know, central powers, are always going to need more money, always going to need more control, and this is one of the ways to do it is to steal from the currency itself, right? So that's happened all the way back then 2 000 years ago.
Speaker 1:And since we can't, since there's no value to the us dollar, you can't shave 10 off of benjamin franklin's face or whatever and make that less. So what we do is print money. Is that the current equivalent or a current equivalent.
Speaker 2:We got to talk to get up to that, okay, so the very beginning of it, one could say, was the creation of the Federal Reserve, which was in 1913. Okay, and our Constitution says we're not allowed to have a central bank. All our money is supposed to be in gold and silver, and it's not like a central power ever decided gold and silver to be money thousands of years ago. And we've all followed the rules. It happened organically. It happened organically because these things have intrinsic value and they still do now. Gold works in computers. They are conductors. So it's not just that they're pretty, but most cultures do believe that they're pretty also.
Speaker 2:They also have value like that. But for whatever reason things like gold and silver and bronze these things have, they make for really good money because they tend to hold their value. They don't have high variance, high volatility in their value. They tend to hold their value steadily over time, which is just what makes them organically good to be used for money.
Speaker 1:Right, because there's a built-in kind of cap. There's a certain level of rarity to it in general, so you can't flood the fund, I guess.
Speaker 2:Yeah, I mean I wouldn't rule it out happening, but I'm just saying relative to other commodities that could arguably be used for money, and other things have been.
Speaker 1:I think we've talked, I think, salt at one time yeah, salt was the longest, the longest standing economy, which makes sense because, again, salt is like infinitely usable right and and and. That was the economy, that was the, the basis, all the way up until the bronze age, which but now I can steal salt from every restaurant, nobody cares right yep, no one cares it's.
Speaker 2:It's gotten very cheap because of that productivity thing that you're talking about how it gets cheaper to produce this thing right we get better at it, we get more efficient at it and I wouldn't rule it out happening with gold, like what you know what, if we just have a big thing where all of a sudden everyone's got, I wouldn't't rule out it happening. But the point is that over the thousands of years it has generally held its value and that's why people have used it for money. So even in the 1800s in America and most of the world, people were using gold, silver, bronze, these types of things for money. Yeah, and it got a little too cumbersome to be carrying around all the time. Right, who wants to carry around a bunch of gold coins in their pocket? Right, it's heavy.
Speaker 2:So that's how the banking system originally started, like, hey, it was just a security thing. It was like, hey, we'll hold on to your gold for a certain percentage. We'll protect it for you, mm-hmm, and we'll give you gold certificates that you can go around and use, and and we'll give you gold certificates that you can go around and use and anyone can redeem them with us if they ever want to get the gold back. This is feeling very Wild West.
Speaker 1:It is very Wild West. Okay, yeah, sure.
Speaker 2:That's why bank robberies were a really big thing back then Right, absolutely.
Speaker 1:That's where all the gold was Right and that was a real value.
Speaker 2:But anybody. If you paid somebody you know you wanted to buy a tractor for your farm and you pay them in these gold certificates, well, they could either reuse the gold certificates to somebody else or they can go cash in for the gold themselves, Right? Okay, so 1913 is when the Federal Reserve was created. Okay, and I won't go down too many rabbit holes. I know a lot of conspiracy theorists out there want to talk about the Titanic. I won't do that right now.
Speaker 2:But, everyone who was going to stop the Federal Reserve from being created was supposedly on that ship. But there's a really good book called the Creature from Jekyll's Island which tells the whole story of how the Federal Reserve got created. And, of course, it was all the big robber barons at that time all meeting on an island and meeting with government officials and trying to figure out how they're going to pass this, and they passed this act the same exact time they passed the Income Tax Act. Okay, so up until this time, america became one of the best countries or greatest countries on the planet with no income tax.
Speaker 1:Right, okay.
Speaker 2:So the Federal Reserve Act and the income tax were passed both at the same time, in the middle of the night during Christmas recess in Congress, okay, and that gave obviously great power. So now it's the power to create money. But they said don't worry everybody, this is just to streamline things, this is just to make things more efficient and more nice. We're not going to go printing a bunch of money. We have the gold. We have to cash in the gold every time, so don't worry, we're good. Well, as you were talking about now recently, every time they hit the debt ceiling it goes up. Back. Then they would say, oh, we just need a little bit more money. Remember? This is the time where world war one was starting, right? So they always needed more money. So they said, okay, just this one time we're going to say we can print a little bit, but we'll still have to keep 90% of the gold reserves on hand, right, okay? So instead of 100% of the gold reserves, now we can print enough that we can pay out 90%.
Speaker 1:So this is basically the beginning of credit on a federal level. Yes, yes.
Speaker 2:Okay, Before that, interest rates and things like that I think I was saying this to you earlier it would all happen organically, Right with market forces, of the combination of people how many people are wanting to save their money in the bank and how many people are wanting to borrow money from the bank Right? So that interest rate would happen organically from those two forces at play.
Speaker 1:Right, because basically what's happening is the bank is just being the middleman, like keeping the money safe because it can be a fairly large amount and and. But what's happening is a person is essentially borrowing from another person you're not borrowing from the bank you're borrowing the money that another person has stored in the bank right, okay, bank wants to be irresponsible with that.
Speaker 1:Well, they would lose all their customers exactly um and but that and that works in a system where 100% of the money is backed by. Whatever the money is backed by, in our case gold or silver.
Speaker 2:Right, which would actually be in the vault of the bank that people could go in cash at any time.
Speaker 2:Right. So all those forces at play kept it somewhat reasonable, right? That makes sense. Now, once the Federal Reserve System started, this created a central power. Now, all of a sudden, they could determine the interest rates. Instead of the market forces determine the interest rates, they could determine the interest rates. They could determine how much gold had to be on hand. This is 100 years later. This has come all the way down to fractional reserve banking Right, but I'm jumping the gun a little bit here, but back then it was how much gold do we need to have on hand in order to lend out a certain amount?
Speaker 2:Okay Me, I'm fine with anything, as long as there's total transparency.
Speaker 1:Right, right. So long as we all agree and we all know what's happening, it's fine.
Speaker 2:Right so the Federal Reserve System happening. It's fine. Right so the federal reserve system and and and. Uh, like I said earlier to you, no coincidence, we had the great depression. 15 years later, they started loaning out all this new money. They started printing new money for the wars because they need it, but back then they had to get permission from the people. They would actually advertise it, just like they advertise the debt ceiling now, but they would advertise it like we need a little bit more money, more money. Is it okay if we go to 90 reserves reserves for the gold instead of 100%.
Speaker 2:And they, you know, splashed the media with it and everyone was like well, we got to defeat the evil axis of evil in Europe, or whatever it is.
Speaker 1:Right.
Speaker 2:Yeah, sure, okay, and we love being boiled frogs. Mm-hmm. So that went on for decades and decades. Okay, just 90% of the gold reserves we need. Okay, just 80% of the gold reserves 70%. World War II happened, and another thing I'll push back on is that war is good for the economy and that war saved us from the Great Depression. That's a thing I think again that's been filled out in our heads in school.
Speaker 2:I was definitely told that. Sure not very accurate war, you know, with any, you know, traditional. What I would call real economist war is not, um, it's never a generation of wealth, at best it is a transfer of wealth. Right, okay. But if you look at the world as a whole, when you look at the economy as a whole, then that becomes a little more clear. And the reason why we benefited so much from World War II is pretty obvious, in my opinion. Europe had to rebuild, japan had to rebuild. Everywhere was literally destroyed by all the bombs and everything. Our shores were fairly unscathed. We had nothing going on here. So we were the most powerful nation after World War II because none of the wars happened on our shores. Yeah, that's a fact. So it's a very simple thing why we were the most powerful then. They were too busy rebuilding Germany and Italy and everywhere they were rebuilding.
Speaker 1:Just like.
Speaker 2:Palestine is going to have to do eventually, or Israel will be building up their waterfront properties Right One or the other. But it's not that war is good for the economy, it's that we were unscathed by that war, right.
Speaker 1:Well, also, I'm interested is war good for the fiscal economy while being bad for the real economy? Is that another way to say it?
Speaker 2:If you look at it purely in the fiscal economy sense and you look at it as competing nations and you just had a war where your shores are untouched and they're all bombed to hell, yeah, sure, I guess you could say that.
Speaker 1:Because what I see by people saying that is that during a time of war, everyone's going to agree that printing more money to kill the enemy is good, which then puts more money out into a well, puts more credit not actual money, but puts credit out into the world that then people can spend. But again, then people are spending future money that they don't have right now. But because people are able to afford the things that they need to afford because they have printed more money, creating more credit out there for people, that in the short term of like GDP level, like kind of bird's eye view of an economy, is that where they got their excuse. Basically that war is good for the economy. Osama bin Laden put like go straight to war, spend whatever money. You don't know, you don't need to figure out where that money is going to come from, we'll make it up and kick that can down the road, like I could see that being like how they got around because it's a marketing ploy.
Speaker 2:Right. Yeah, I think they just try to come up with the reasons and excuses to fit what they want to do anyway. Well, of course they want the war because it expands the empire, it expands the people at the top making the most money. Um, imperialism and all that taking control of resources in other countries. This is extremely profitable for the people at the top. So they will find their reasons and excuses and and and implement in schools how war is good for the economy. So it's more like a derivative off of what they wanted Right, and explaining that away. But let me just back up and finish the inflation story, because we've jumped ahead a bit there. So to understand that the money we have right now. So I've gotten up to World War II and, like I said, they keep lowering the reserves on how much they can borrow as compared to how much gold they actually have in their.
Speaker 2:Federal Reserve building. Probably the most expensive war we've had, believe it or not not, world War II was probably Vietnam. Okay, that's where we really spent a lot of money and didn't get as much back, because it's not like Germany and Japan promising all these things, letting us keep military bases there, controlling their economy, having them use dollars, expanding our monetary system. A big thing that happened after World War II was the Bretton Woods Agreement in the early 50s, which kind of established the dollar as the world's reserve currency, which means all these countries had to use our dollar for a lot of their transactions, so that really made us rich.
Speaker 2:When all these other countries are forced into your economic system, that's where the real empire lies. You know, I have a lot of people argue with me against the empire, like, hey, france is still called france, they're not called the united United States Because they're thinking about stuff 200, 300 years ago. The real power now is are we forcing them to use our monetary system? Are we forcing them to have our military bases? It's what's called soft power these days.
Speaker 2:But if you look in those eyes then you can see how big the empire is. We're not a country, we're an empire.
Speaker 1:Yeah, absolutely.
Speaker 2:And our monetary system has been forced everywhere. There's a good argument. That's why we destroyed Iraq. That's why we destroyed Libya Because they were saying we're not using dollars anymore. That was the cutoff, like oh you can kill whoever you want, just use the dollar when you do it Right.
Speaker 1:That happened within like three years or something Like. Are we doing that with Iraq anyway? I think.
Speaker 2:So Vietnam was so expensive and that's when we really ramped up. I think now we're down to 20% gold reserves, Wow. And the speculators and the investors are not dumb. And I'm talking globally, so around the world. So everyone wants to cash in their dollars and get the gold. We don't trust you anymore. You're printing too much, Right? Okay, the more you print of something, the more you have of something, the less value it has. You know, just like we were talking about gold and salt, you know, once there's so much salt now I can steal it from a restaurant, Nobody cares. There's so much of it, so the supply is greatly outweighing the demand. So the supply is greatly outweighing the demand.
Speaker 2:So Nixon, in 1971, he cut the last title and he said I'm going to protect and that was the speech. I could show you the speech sometime. He was protecting the US dollar from the speculators, because they're taking advantage and they're acting in bad faith and they're acting in ill will. Meanwhile, they're just looking at the market and using common sense. Okay, gotcha, You're in bad faith and they're acting in ill will meanwhile, they're just looking at the market using common sense.
Speaker 2:Okay, you're gonna print all the money off the dollar. Well, I'm gonna take the gold while I still can give me my damn gold okay, so the the what, what were the prospectors looking at?
Speaker 1:like what was? What were they looking at? That they were getting this the same thing that we're looking at of just like the federal government's just printing money whenever they need it and they keep lowering the margins for the gold requirement.
Speaker 2:So I'm going to get my cold while I still can okay I'll hold my gold. I'll take the security risks. I'll hold the gold, but I'm not going to keep having it devalued, right okay by the printing of the dollar and lowering the margin requirement for the gold.
Speaker 1:Okay.
Speaker 2:So they're pretty much saying, they're pretty much betting and if you understand, futures markets or whatever I mean which is pretty much like a straight up casino, you're just betting on futures of something that's going to be more valuable or less valuable. And the US government with their actions were just showing repeatedly that we're going to keep making the dollar less valuable. Right, so the speculators started keep making the dollar less valuable, right, so the speculators started betting against the dollar and also demanding their gold, right, okay. So Nixon cut that last tie from the gold standard. He said no more Dollar's not attached to anything anymore. Germany, you want to cash in all your dollars for gold? Fuck you, you ain't getting shit, we've cut that. Okay.
Speaker 2:So we pretty much gave the entire world a middle finger in 1971 when Nixon did that. Okay, and to me it's no coincidence that ever since that day, we've had endless war. Now they don't have to get the people's permission anymore. Now they can just print whatever money they want. Now it's a purely fiat currency not backed by anything. Now one of us can take one of those notes and go in there and say, hey, I want my silver, hey, I want my gold. Right, there is nothing you can get? You ever see one of those old dollar bills where it says silver certificate on it?
Speaker 1:Yes, I'm old enough to remember seeing those ones.
Speaker 2:Yeah, they're not in circulation anymore. No, that makes sense. So what they are and this actually goes back to FDR, you know, after the Great Depression happened, they're really, they're not money anymore. What we should understand is money and what money has been for thousands of years. All Federal Reserve notes are not money. They are debt instruments, right. They are promissory notes Right. And that starts off a whole rabbit hole. Like I said, people can make their own promissory notes under this thing, that fdr thing, at this thing that fdr did, you can make your own promissory notes and you don't have to pay anything back until they have sound currency again.
Speaker 2:That's the loophole that a lot of people are taking okay and that's one of the the things that the whole um wacky q? Anon conspiracies actually have a point with.
Speaker 1:Okay, they always have a point somewhere.
Speaker 2:There always is. There always is somewhere, and it gets obfuscated by all the nonsense.
Speaker 1:By all the crazy? Yeah, Absolutely.
Speaker 2:Okay, but it's a fascinating rabbit hole. I'm not going to go down there.
Speaker 2:We're just going to talk about inflation. So ever since 1971, we've had a purely fiat currency that's backed by absolutely nothing, okay, and ever since then they've judged it on how big. Now we can talk about all those things. They're judging it on GDP. We can naturally print this much because there's that many more people on the planet. It's centrally controlled. It's just totally deciding how to do it.
Speaker 2:But, as I said, the world we don't get to see is if they never printed anything and what the prices would look like all around us if they did that and if Bitcoin did anything. It proved that, because the biggest argument against this was always well, you can't subdivide down forever, and Bitcoin does that. Right, you can subdivide. I'm gonna pay, I'm gonna get a donut for one one millionth of a bitcoin, right, you know you can subdivide it all the way down. So you know, it's just sad to me and, um, the minimum wage in the 60s was something like a dollar 25. In the 60s it was something like $1.25. So if they never printed anything from the 60s? On the purchasing power, which is a much more important economic term than prices, Absolutely.
Speaker 2:The purchasing power of that $1.25 would have the purchasing power of almost $35 today, right, right. So when I say raising the minimum wage is meaningless, I'm not against raising it to help poor people in the short term.
Speaker 1:Yeah.
Speaker 2:But in a long-term economic view it's a Band-Aid.
Speaker 1:Yeah.
Speaker 2:And the real problem is the printing of the currency. Right, you could be making $1.25 an hour today and be doing great if the currency wasn't so overprinted Right.
Speaker 1:And that's the big thing that I wanted to get to is like where we watch it every year. And I remember I was in the military active duty when all of this was happening and they were like. They were like, well, we might not get checks, we might not get paid, and they were like you'll get paid. They always do this, you'll get paid, don't worry about every year and a half, they go through the same thing.
Speaker 2:And it's not even about that's not the point, owl, where they start printing money. That's just the point where they've last allowed themselves to go over, right, that's not where they start printing. That's where they start printing at new levels, right, exactly right, like they've been kicking this can down the road with the debt ceiling, for, you know, ever since nixon left the gold standard, right, you know. But every time it's raised like crazy, raised like crazy. And then stuff like the cares act was totally even outside of all that. That wasn't even an official vote, gotcha. They used that time of trauma for the whole country to sneak that in, and that was separate from the whole thing. And that's what added to the new level. And if I'm to toot my horn one time, it it's the day after Trump signed the CARES Act and I put on Facebook.
Speaker 2:I said, in a year and a half from now, I said I don't know if this is going to help people. I don't think it is, but I can guarantee two things in a year and a half. Number one corporations will have a bigger market share of every market over private businesses, like ever before. And number two, two. We will see inflation like we've never seen before. Done and done, done and done, done. So people who want to blame corporate greed and I'm not going to defend corporations, right. But people who want to just blame corporate greed or not understand corporate greed is a constant right. You can't predict corporate greed. It's a constant right.
Speaker 2:It always exists you can't say corporate greed, it's a constant Right, it always exists. You can't say, oh, a year and a half from now, corporate greed is going to spike 33%.
Speaker 2:Right, no, it is, yeah, no, but the inflation, and it wasn't even a prediction, it was a guarantee, it's math Right and it takes about a year and a half for the inflation to cycle through. Okay, through Okay. And who benefits when you say you know the CARES Act was the greatest transfer of wealth, probably, you know, last 30 years? I mean, the bank bailouts were pretty big in the early 2000s. Yeah, they were huge, but this was bigger.
Speaker 1:Yeah, I just heard that.
Speaker 2:This was bigger, and when you look at who benefits, it's who gets the money first.
Speaker 1:Right, exactly Because they're getting that newly printed money first and then it takes about a year and a half for the devaluation of the currency to happen and all the prices to go up Right, add more productivity to some market that they have to then be able to increase productivity, which ought to lower prices, but then they don't lower prices, collecting more money Back to the corporate greed which, like you said, is a constant.
Speaker 2:Who's getting that money first? Usually it's the military industrial complex. This time it was big pharma.
Speaker 1:Right.
Speaker 2:Yeah, but you could really just look at who their biggest lobbyists are and make a direct line Right.
Speaker 1:Well, and we've gotten a new at least the last stat I saw, which was at least six months ago or maybe even a year ago, but it's like we've gotten a new pharmaceutical billionaire every 31 hours since.
Speaker 2:COVID, One thing I forgot to say and, like I said, because you didn't go to school for this stuff.
Speaker 1:I honestly think you have a leg up than people who did, because people who did are so, so misinformed, you know, and Steph and I were just talking last night about how the stuff that we were trained in as EMTs were like, oh, once you have an allergy, it's always there. Like there's just so many of these basic things that you're that you're just like here's the information, swallow it, put it on a test and now I believe this for the rest of my life, right, but we're seeing that that's not the reality, which, then, is the whole thing for schools, which is a whole nother conversation.
Speaker 2:So two last things I want to say for this whole inflation talk. Number one the US government changed the official definition of inflation in 1977. So remember, nixon took us off the gold standard in 1971. The US government changed the official definition of inflation. So most people don't even know what inflation is. You know people think inflation. I remember I asked you this a few weeks ago, like what do you think inflation is? Al Uh-huh, can you answer me again?
Speaker 1:I don't remember what my answer was.
Speaker 2:Your answer was you know, prices get higher, oh yeah, okay, yeah, and that's what most people would answer, and that's a very sound, good answer, and it's what most people would think, and it's also what we're taught in school. Right, but inflation originally meant inflating the money supply. Okay, one of the symptoms of which would be rising prices. Right, but rising prices wasn't the definition. The definition was inflating the money supply. Deflation is deflating the money supply.
Speaker 2:I had in my notes earlier was like the difference between the definitions and the viewable symptoms Right Are very different and it's super important it's super important because, because inflation will not always rise prices, because what if an industry had gotten 10 more efficient when making their product over a year and in that same year there was 10 inflation? Then the price would be the same right? And this is what I mean by the world. We're not seeing the world. We're not seeing the world. We're not seeing where prices should always be coming down. You know, look at video game systems when they started you know like $700 to get a pong.
Speaker 2:You know and then five years later, it's $75. Right, that's the natural order of things. Things get less expensive over time as people get more efficient or industries get more efficient.
Speaker 1:Yeah, I remember when flat screen TVs first came out they were like $3,000 a piece for like a small 16 inch TV or something.
Speaker 2:And now one of those is 30 bucks. One of my favorite examples is LASIK eye surgery. Like, look at everything else in healthcare, everything that's got insurance attached to it, government guarantees attached to it, government funding attached to it All those have shot through the roof like crazy. You look at LASIK eye surgery. When I was working for the government in the 80s, that was the one thing that wasn't covered by their insurance. That was only left to the free market, you can call it.
Speaker 1:There's no free market.
Speaker 2:Don't get me wrong. But relatively speaking, to stuff that's being supported by government laser guy surgery wasn't, and that has gotten nothing but cheaper and better, yeah, over time. Yeah, the market, just competition, market forces, people loving what they do, right, you know, makes things better over time. And that's the world we don't get to see, because all this inflation and all this government printing so they can have their empire, they can have the endless wars. They can have all their lobbyists paid for and they basically where it's.
Speaker 1:That's how they get an infinite supply of money they just have by having control by having control of the money they have an infinite supply of money because they can just print more.
Speaker 2:And controlling the interest rates is another way that they print money.
Speaker 1:Right, because usually what like my? My introduction to all of that, especially most recently looking to buy a house, and all of that. The house housing prices were skyrocketing a couple of years ago out here anyway, and I was looking at trying to get a house. I couldn't afford one with walls, even with $300,000 pre-approved or whatever.
Speaker 1:And then, and housing prices were just going up and up and up and up and up and up and up, and I watched a house right around the corner from Michael's house that was for sale. It went up for sale, I went to go get pre-approved, and then it was sold before I could, but it sold for 325, which it pre-approved. And then it was sold before I could, but it sold for $325,000, which was just $25,000 over what it is now. Well, then it went up for rent again and I looked at the new value and it's now valued at almost $500,000. Two years later it almost doubled in value, which is nuts.
Speaker 1:And then, in order to create, in order to stop prices from going up, the Federal Reserve then cranks up interest rates to make lending harder, right? So then people, and then, so then people stop taking out those loans and buying things at expensive interest rates. And it seems like a good idea, like the way that they sell it from a marketing standpoint. It seems like a good idea to have somebody be like oh well, things are getting too expensive, so let's, let's put a, let's put the brakes on by cranking up interest rates. But then, when you take into account that my spending is another person's income, then that becomes hard. And when you look at just the numbers of the amount of money in the US versus the amount of credit in the US that the entire thing is spending, you realize that I don't even know what that fraction is, some overwhelming. From 3 to 50, whatever that 3, 50ths is actual money, which means 47, 50ths of the money that is spent in the US isn't money, it's actually credit.
Speaker 2:And when you realize that credit is debt plus some right you haven't even touched on fractional reserve banking no, insane, it really truly even goes above and beyond the scope of what we're talking about and I'm not looking on that rabbit hole, but I'm just saying, trying to point out the scale, right of everything the scale is in is insane absolutely nuts and while you say like it might sound like a good idea to change the interest rates because of that situation.
Speaker 2:See, this is the danger and the lure of central control right, a lot of things can sound like a good idea uh-huh and I love comparing the economy, the real economy, which is the, the, the grand total of every single voluntary interaction between every single human being on the planet. I like comparing it to an ecosystem, right, okay and, like I said, if you go, down the, down the road to the pond in solmar.
Speaker 2:you know you'll go look at it and you're like, okay, this looks like it's in balance, look like it's doing well. But just imagine if you got a central controller in charge of it and all of a sudden he's like, well, we need this many frogs, this, this many tadpoles, this much algae, this much thing. And it might sound like a good idea to be like hey, oh, these squirrels are coming in and eating too many nuts. It's upsetting the balance. We need to adjust this. What you're not seeing, even though these things sound like good ideas, what you're not seeing is all the unforeseen consequences Right, and unintended consequences, right. So, in a very linear motion, that might sound like a good idea. But once you centrally control something, you throw off the natural balance and the organic way of it being.
Speaker 1:I think one of the most famous examples of that from an ecology perspective was Yellowstone, when they were like oh well, we want more caribou or whatever. So they're like, we just shot all the wolves from helicopters and then suddenly everything started going crazy. The rivers started meandering and destroying a bunch of the land because turns out that, with like without the wolves, there were too many caribou eating too much grass and then the grass wasn't holding the ground and then the ground started eroding from the rivers and then things weren't getting a chance to grow as much and they had to reintroduce wolves, which there was a good, a, really, um, a good book I saw that.
Speaker 2:Well, I saw the video on the little I guess a summary video on the wolves coming back in and everything getting back to normal yeah, it was really cool, but it reminds me of that whole um the the tyranny of the expert exactly having people who are experts come in, and what that automatically eliminates is the chance for any kind of grassroots problem solving. Right and 300 million people looking for a solution will always be better than one person touting a solution.
Speaker 1:Right.
Speaker 2:You've got to let it happen organically with those who are actually involved in it. We had the talk before about the farmer and the tractor and I think I push back on you because neither one of them are trying to be central controllers. They're just trying to fill that transaction and whether they're doing something that's wrong for the ecosystem or not, that farmer is going to learn right if he's not uh-huh. So he's got that personal incentive to not screw up the ecosystem um, it's a personal incentive.
Speaker 1:But also like to me that's, that's part of the real economy is his interactions with the earth itself, not just with the, the banker, or the, the, the, the tractor oh okay, I see your point now yeah, see, so that's part of the unaccounted-for economy that is not being accounted for, which means that the—.
Speaker 2:Well, it's been addressed in economic theory. It's been addressed in that it's called tragedy of the commons. Okay, tell me about that. Tragedy of the commons is—and it's a debate, so I'm not trying to paint one side more than the other.
Speaker 1:Yeah, I'm trying to learn.
Speaker 2:But the tragedy of the commons is the debate over whether something is communal land or something is private land, and if it's communal then people tend to take less care of it because they always assume that someone else will. Okay, so it's just the framing of the debate, more so than anything I'm going to be able to teach you with it. Okay, but it is addressed in economics, so I highly recommend looking that up Tragedy of the Commons and seeing both sides of it.
Speaker 1:Yeah, I can see it being addressed through that and that sounds like a fun way for them to talk about it without actually doing anything, because it's still not being accounted for.
Speaker 2:Well, there's a lot of economics I would highly recommend I wouldn't put them in a group that just says government, government promotes the types of economists that do what they want.
Speaker 1:Right.
Speaker 2:I mean, there's no other reason why paul krugman would have a nobel prize, trust me okay, I'll trust you on that I don't know who that was or what they did um yeah, he won a nobel prize in economics. We're pretty much preaching uh, there's no such thing as government printing too much. It always helps the economy oh, that makes perfect sense.
Speaker 1:That, yeah, that makes perfect sense he would get a nobel prize. Okay, chris hedges has came out and said nobel prizes are shit yeah, well, there's also. Have you heard of the there's, there's, I think it's the call the nobel phenomenon where, um, some like 60 or 70 percent of nobel prize winners have some other like absolutely batshit. Crazy thing that they also believe that after they got their nobel prize they like dedicated their life to some like total crapshoot, bullshit, like theory one of my favorites is the guy who invented the pcr test well, I don't, I don't know how carrie mullis.
Speaker 2:He won a nobel prize for that invention and the pcr test is an amazing invention. It's being highly misused right now. We won't get into that rabbit hole, but but um, if you look at his wikipedia page, they just rip him apart because he was a psycho babbler and he only thought of the PCR test because he was on a mushroom trip.
Speaker 1:Well, I don't, yeah, I mean, that's fine.
Speaker 2:Fascinating stuff, go ahead.
Speaker 1:Before we get too far. I did want to talk about, and we've talked about. Have we talked about interest, like everybody knows what interest is. You go, like I want to take out $100,000. And the way that the bank makes money on this. So everybody, it's a win-win for everybody. Hopefully is that they make an additional amount of money on top of that. We call that interest Right. So there's interest. But as far as inflation goes, I want to talk about because I just I I decided to listen to a couple of the like the, the, the leading young buck investor people, random people on youtube who, like have a bunch of followers and it seems like obviously we're started with a bunch of money and they're they're investing that money to try to maximize it down the road.
Speaker 1:And I listened to a few of them and how they're like trying to diversify their, diversify unaffiliated things within their portfolio and and all of this stuff. And I was, I was thinking about, okay, well, like, these are people who have, who have stuff, who are trying to make, turn their stuff into more stuff. I was raised without stuff. The only thing I might inherit other than trauma is debt. But when I'm looking at this and I'm looking at okay, well, now there's nothing backing the dollar, it seems like it's a free-for-all. It is. We're kind of in a financial free-for-all, free-fall free-for-all.
Speaker 2:As soon as the endless wars stop and we stop forcing away, it all ends.
Speaker 1:Right, which is why the endless wars will not stop until everybody's dead, except for the people who own the beachfront properties. But what I'm looking at, what I didn't expect when I was looking into this, is that debt is rewarded by inflation, and this is that was like wait. What do you mean? Debt is good for inflation, but it makes sense to me now.
Speaker 2:Of course it does Think about it If you have a mortgage right and you're paying $500 a month for that mortgage. I mean, I know that's ridiculous now, but have a nice round number If you're paying $500 a month for your mortgage and inflation goes like crazy and those dollars are worth less. Right, Okay? So that's why I always advise people don't get a variable rate when you get a mortgage.
Speaker 1:Never, never, Never, never, never, never, never, never.
Speaker 2:You have to assume that they're going to keep printing money. So get a fixed rate Right. Even if it sounds astronomical to you now, trust me, they're going to keep on printing. And 10 years from now, that fixed rate, that $500 you're spending. Well, now you're going to be making $3,000 instead of $1,500 at your job because inflation, everything's going up and that $500 gets smaller and smaller as a percentage of your income, so inflation helps debt. Right, but if you're trying to buy an asset now.
Speaker 2:you're screwed If you had the same $500 10 years ago and now you have $500. I can't buy what I could 10 years ago.
Speaker 1:Right. So, and this is perfect. This leads me into what I wanted to talk about, with Elon Musk buying Twitter, because this is one of those loopholes I think everybody should become aware of. This is how the rich stay rich, and they leverage debt to do so, because what I've learned doing the little research that I did here, what I've been putting together, is that everything is run on debt. The entire financial system of the world relies on debt. It is not about productivity.
Speaker 2:Which can never be repaid by math.
Speaker 1:Right Literally.
Speaker 2:Literally can never be repaid.
Speaker 1:Can never be repaid, it's a Ponzi scheme. It's one giant Ponzi scheme, but we all agreed on it to some degree, right, or were born into the system and bought it, bought into it even if we didn't agree to it. We bought into it because we like buying things, um, and that's the way the world works. But what?
Speaker 2:as soon as we get our social security number, we agree to it exactly, exactly.
Speaker 1:But what elon musk did is that I was like, okay, well, because there there's all the things about like trading, trading money on the stock market and whatnot and not, and like capital gains taxes and all and all of that sort of thing. But what happened is he decided he wanted to buy twitter. And what's really great about this and this is kind of unrelated, but the that cracks me up the most about this is he decided to buy twitter because there was a twitter page that was just constantly uploading where his private jet was and he was mad about it and he told them to shut it down. And they said no, they're like it was. They were only posting after he arrived. It wasn't where he was going, it was just like after he arrived. So there wasn't a security threat. There wasn't anything like that. And they're like even if there was, you're Elon fucking Musk, buy your own security bitch.
Speaker 2:Whatever, the rest of us are on cameras 24-7.
Speaker 1:Exactly. But he didn't like that. So he started throwing a hissy fit. He wrote cease and desist letters and told them not to. And then he was like, well, fuck you guys, I'll buy you out. And they were like, okay, fine, oh, I don't want to. And then he tried backing out of it because he didn't have the money. He didn't have the however many billions or whatever I forget what the number was now to buy the thing, because rich people don't actually have all that much money. They have an obscene amount of assets and credit, and his assets were Tesla.
Speaker 1:So what he did once he was forced to follow through on his word. After he said I'm going to buy twitter, they were like that's a legally bonding, legally binding contract. You have to. Now he went, okay, well, I'm going to go to the banks and I'm going to, I'm going to take out loans on these, uh, based on these assets. And so he went to the banks and went to a bunch of other rich people and said and there was like and he was like I want to borrow a bunch of. They were like well, you don't have any fucking money, so what are you going to use? Because you can't actually pay any of this back. And he was like well, I have assets and that's what you do. You trade assets. You can take out a second mortgage on your house. You're leveraging your house to buy your own house.
Speaker 1:In this case, this is that because those assets weren't realized, because they were just prescribed a given value the Tesla stocks say they're worth $500 a stock or whatever. They're given this arbitrary value, but because the value changes, it's volatile, they're like it's not actual money and so we won't tax you on those assets. But then you can leverage those assets to take out loans. So it's like we can't tax you on your assets when you have them, but you can leverage those assets. You do have them when you want to take out another loan, but you don't have them when we come to tax you on them.
Speaker 1:And this is how the rich people stay filthy, filthy, fucking rich. It's because they never actually pay for anything, because they understand that there is not enough money in the world to ever pay for all of the credit that we have. Right, and and which makes me think that the incredible comfortability of the western world right now is all because of building our entire financial system on credit. That, like so much of the technology that we have, the comfortability that we have is all because we have borrowed from our future and said, hey, we'll just throw all this money out here and see what you can do with it, and we've done this to an incredible degree and made some really incredible stuff now down to where we have a financial system that is backed on. I'm good for it, bro.
Speaker 2:You've won me over on this one. I certainly. I mean I'd rather not live in the corporate world at all. I mean we're covering enough today inflation, I don't want to jump into too many more stuff, but I would love to live in a world without corporations. Corporations are not a product of the free market. It's literally impossible. They're government chartered and they are a part. There are literally a partnership between business owners and the government is what corporations are, and they remove people's personal liability and I don't think they should exist, however, in the world that we have with them existing.
Speaker 2:I do agree that capital gains cannot be taxed until they're realized. I 100% agree with that. It would be insanity if you could tax the capital gains. But the second part of your argument you totally won me over with. That. It's insane that you can have capital gains which can't be taxed because they're not realized, right? So if they're not realized, how can you use them as collateral? Right? It makes no sense, right. But it makes sense when you look at the government's perspective of what they want. Right, then it makes sense. You look at the government's perspective of what they want Right, then it makes sense. All they care about is cash flow. All they care about is putting more job numbers down.
Speaker 2:So they love big corporations, you know one big corporation is a lot easier to control and do business with than a thousand little corporations. Right, exactly so. Government and corporations have natural incentive. You know I mean people on both sides of the political equation have these fantasies about separating corporation and government. I don't think there's any way. No, not now, there's too much mutual vested interest there.
Speaker 1:Absolutely. There's too much synergy. There's too many people sitting in boards on both ends, that are, on boards for federal positions and federal boards and sitting on the board of directors.
Speaker 2:When people ask you what the deep state is.
Speaker 1:That's the deep state. That's the deep state.
Speaker 2:Unelected bureaucrats who have a revolving door with all the boardrooms and all the biggest corporations in the world, exactly, which is why we don't even have lobbyists anymore.
Speaker 1:We don't even really need them, because now they're just in. It's a direct line.
Speaker 2:It's a direct. Line.
Speaker 1:Right, we don't need lobbyists coming in, because now those lobbyists are in the seat that they used to lobby to. It's been really wild. But that's the thing that really got me is, if you and I get why you can't tax unrealized gains, that makes perfect sense. It does.
Speaker 2:It really does, because it would be anarchy if you did Just think about it. I mean, it would be nuts.
Speaker 1:Right, and I don't see how that system would continue if you did, like it would just instantly, like as soon as you started, that it's like, ok, well, when and how often? And then like if then, when it goes, when it goes down, do then you pay them back, or do they like you or I get that. But so to me it seems like the thing that would. That, should that ought to happen, which doesn't fucking matter. But the thing that ought to happen is, if you're going to leverage a certain number of assets, a certain number of shares valued at a certain dollar, because this is the day that you decided to transition, so that day it's worth this many dollars.
Speaker 1:You pay those taxes that day and then they're. Then you're able able to leverage them but that's not.
Speaker 2:Even I would go further. You're just not allowed to leverage that. I would go further. You're just not allowed.
Speaker 1:It doesn't make sense, marvelous especially when you look at like this is tying it together with what we're talking about earlier, of the, like the government bonds that the, the central bank is buying, having the, having the, the regular worker and taxes coming in. They're borrowing from the future and saying, well, we're going to have this many more people and the corporations are going. Well, we're going to be creating this many more jobs. Until we're in this situation we're in right now, where we have all of these people and there are more jobs than there are people who can do the jobs, and corporations are getting mad at people for working multiple jobs just so they can pay their fucking bills. But that is the system that they have consistently perpetuated and we're mad at, like Joe Blow.
Speaker 2:Right. And so when you realize that the taxpayer is the collateral for the government getting their loans, then all of a sudden, with the low birth rate, the immigration starts to make a little more sense.
Speaker 1:Oh, I didn't think of that.
Speaker 2:It all comes together with synergy, with what the government wants, which is to expand its power constantly and expand its income constantly.
Speaker 1:Right, and that's why they want everybody coming in legally, because then that's another legal number that they can throw in their thing to then create more debt to leverage out in the greater economy.
Speaker 2:Even illegally. No one, unless you're working under the table off the books, which is not really happening. They're still going to get payroll taxes.
Speaker 1:They're still going to get all that and this is what their collateral is, that's why they prefer legally. On the face of it all right, because then a person who is legally registered is somebody that is another tally mark that the federal government can then basically create loans out of. Because you are legally registered in the United States government, they can now loan the people who print money more money to then loan you.
Speaker 2:Now they can use their new all caps name and use their corporate name and leverage that.
Speaker 1:Right, exactly Because we are the collateral that the federal government uses to give money to, and so, basically, the entire economy boils down to one transaction, and that one transaction happens between the federal government and the central banking, the central government and the central banking of each country.
Speaker 2:And then you can zoom out into.
Speaker 1:There's also all of these economies between countries and between federal central banks.
Speaker 2:I will say that most of the central banks at least, like in Europe, in the Western Empire, in the Western world, all the central banks are bitches to our central bank. Oh, yeah, yeah, that's for sure. Yeah, I want to say one big fact and then I want to try to segue into the real economies to have a setup for your next podcast yes, I want to try segue into that.
Speaker 2:But before I say that, just to all the people who just think we're not taxing the rich enough, there's just just one fact, and that is, if we took a hundred percent of every billionaire's wealth in this country, 100%, all their assets, all their money, not just tax them, but took everything from them, every penny from every billionaire, it would fund the government for two and a half months. And then what? So that's not a defense of billionaires, that is um, um and uh. What's the word? That's a condemnation of the system that we're in Taxing the rich. Well, I'm not going to fight you on it. I'm not going to tell you not to do it. I'm telling you it solves nothing. It's the spending that needs to stop. It's the spending that is so out of control.
Speaker 2:To take every penny from them and fund the government for two and a half months is insane yeah, that is insane.
Speaker 1:My, my pushback is there that that it solves nothing. I call bullshit on that just because, like the I, it would change behavior of well, it would change behavior, but still with those largest maybe it'll change the behavior so that we can change the system, which is well, maybe, so maybe I'll give you that, but but I agree that if the system stays, the same.
Speaker 1:More heads will just pop up and it'll be the same same problem right, and that's why, like I think we we need to be taxing the billionaires and and those and those things.
Speaker 2:Um, because, but it's going to the same system that they're both part of the corporations and the governments we already agreed to. They're the same entity, so you're just feeding the same entity, you're just cycling it around, but they're the same people.
Speaker 1:But by doing that, you are automatically changing the system that feeds itself. So if they have it set up that way, it's set up that way for a reason to make it easier for them to have that system. So if then you go and you tax those billionaires, what's going to happen is the very slow slowing down of the constant expansion that we have, because what's happening is those billionaires, in theory, are going out and creating more jobs and we see that there are more jobs and there are unemployed people or even underemployed people, and there are unemployed people or even underemployed people and we don't need more jobs. But because those jobs those future quote jobs are what are leveraged for federal loans going out to the central bank. That's why it keeps going.
Speaker 1:But if we actually would tax those, what would be capital gains or whatever? When Elon Musk goes to buy Twitter and says, okay, you want to buy Twitter, so you're taking out a loan, so we're not going to tax you because we don't tax loans, you have to pay an interest rate on that. But inflation, as we know, rewards debt. So if we forced them to pay the tax that they would have to pay on withdrawing like $3 billion or $4 billion or whatever it was that he used to buy Twitter. If he had to actually pay the taxes on that, that would change how these megacorporations are building and expanding the markets that they already have a chokehold on, and I think that would change things.
Speaker 2:I think that they would just be creative and break up into small LLCs so that none of them had enough income to qualify for that billionaire status. I think that's all what would happen. But at the end of the day, like I said, I'm not going to fight you. I mean, you want to tax the billionaires?
Speaker 1:go ahead, that's not a hill I'm going to stand on and fight for.
Speaker 2:The only point I'm trying to make is how little it would actually affect things to have to give people a grasp of how much the spending is. The problem right more so than not taxing enough. That's the only point I'm trying to make, not to defend billionaires whatsoever. Um, take all their wealth. As far as I'm concerned, I don't care, or tax them 90, I don't't care, but the system itself. So, segueing over to the real economy, which is voluntary interaction between all the people and all the world.
Speaker 1:And let me just interject really quick with the real economy versus fiscal economy and kind of lay that out. At least as far as my understanding, what we've been talking about the fiscal economy is things like the GDP and when you see the economy discussed on TV, Stock market, Stock market. Gdp, all of that kind of stuff. That's the unemployment rate. All of that's the fiscal economy. That's a very theoretical framework that is only concerned with credit and money that changes hands and is recorded when it changes hands and centrally controlled.
Speaker 1:And centrally controlled. So that's the fiscal economy, Right. And when we say the real economy, we're talking about those things to some degree, but we're talking, we're including things like everything like changing carrots with your like exchanging carrots for zucchini with your neighbor, because somebody always has too much zucchini. Anybody who grows one plant knows that there's always too many goddamn zucchinis. But when we're talking about the real economy, we're talking about that. We're talking about every single exchange that happens, that is unaccounted for, including child.
Speaker 2:Unaccounted for in the fiscal economy.
Speaker 1:Unaccounted for in the fiscal economy and that's the big parts that I will be getting into later on in another episode are specifically elder care, child care and the processing that is necessary to turn like produce into food, like even just that the basic processing that a person living in, like living in a hunter-gatherer or even third world process. When you go and you're like, okay, I have a potato and I have to wash the potato and have to smash and they're like the least processing that you have to do and you still have to wash and smash and do all of this stuff, like cassava root, same thing. You have all these processes and when those processes are done on an industrial scale and shipped out across the world, that's accounted for. But when you do that process at home, it's unaccounted for and not not not considered part of the economy but it really.
Speaker 1:That is the real economy that we're talking about. I just wanted to give a very practical, like a grabbable, definition for real economy versus the fiscal economy. I probably should have done that earlier, but I feel like now people will get it I think it's a good time.
Speaker 2:We're going right into it. To me. To me, the utopia in the future is not everybody having jobs. To me, the utopia in the future is everyone being their own small business, every single individual.
Speaker 1:Yes.
Speaker 2:Okay, and then it's just this voluntary network all over the place, from every single angle. To me, that's the utopia that we're going for, and the real economy includes all that. I find it interesting that a lot of you know. You know you've called yourself an anarcho, anarcho socialist and I've called myself an anarcho capitalist, and we have way more in common than more most socialists and capitalists do because the key phrase is anarchy.
Speaker 1:Well, and I think, anarcho communist, actually communist okay, decentralization is our real goal.
Speaker 2:Absolutely. I've lost my train of thought here. Can you get me back?
Speaker 1:Maybe the thing that combines us is the decentralization, and I think it just has to do with what we take for granted in the other people. I side with anarcho-communism because I've seen that when people work together in a very communistic way that we create and do our own capital exchanges. So to me capitalism is built into the human spirit.
Speaker 2:I remember now. I remember now most capitalists who I generally tend to side with on things. They are so scared and they hate the idea of the Chinese credit score thing and to me in my world, like I said, I see everyone as their own small business, everyone as their own individual entity. Now again, if it's centrally controlled, I'm with them, like I agree, that's a horrible system, that is a scary system if it is centrally controlled.
Speaker 2:But if it is not centrally controlled, if it's authentic and it's real, well, to me that's the future. Because what's the real currency? If economics is the interaction between voluntary individuals and everything they do, then how could the currency be anything other than integrity? Right, right, right Right.
Speaker 1:Yeah.
Speaker 2:So, to me, I'm not so against that kind of if it's centrally controlled, yes, then it's completely evil, right, but if it's not, no, that's how the real economy will be accounted for. And so the people who we're trying to be relatable to, people who have money problems and people who don't have money, and I'm just trying to get them to see that future where this system is going to collapse, it's going to collapse under its own weight. It's going to collapse under its own immorality. It's going to collapse under its own usury.
Speaker 1:Yeah, math says, there's no way out.
Speaker 2:There's no way out. So what happens, you know? Have we built up false wealth? Well, what happens, you know, have we built up false wealth? Well, not really. There's actual things around us.
Speaker 2:There's buildings, there's, there's structures, there's, you know there is wealth, there is also there is wealth and I and I look at you, like, look at you, probably not much more than a penny to your name. You're living out of your van, you're doing all this, but you know what? If you really needed something around here, I could probably count 25 to 35 people that would help you out in a heartbeat. And why is that? It's because you've built up the currency of integrity, because you've built up the capital of that, and people trust you and people like you, and you give value to them. Right, you give value to their lives. You've given valent to my life.
Speaker 2:Even when there was just talking, I gave you 20 for that day. You come in with a car because we were fresh in our relationship. If I I did that tomorrow, I wouldn't give you $20. Good, because I know that you would trust that I would be there for you as well. Exactly so. It's a currency of integrity and a currency of trust, and that's the real thing it is. That's the real economy. So, whether you're a domestic goddess at home or a domestic god at home, or whatever you are in your life, the people around you are going to know whether you are, um, consuming less than you're creating, whether you're giving, whether you're giving, if there's a balance, if you seem to have self-awareness.
Speaker 1:Integrity is the currency of the future, in my opinion agreed 110 and I remember a video I showed you of an economics professor and the setup of the video. It was him in class teaching. It was like day one of class or something, and I forget the way he set it all up. It was fucking, it was amazing. But he set it all up and was like so if, by the time that you come home after you go to work every day, you feel just a little bit cheated, it's because you are. It's because the way the system works, economics works is you have to provide more value than you consume, Because they're middlemen.
Speaker 1:Yeah, like that's the reality.
Speaker 2:Central controllers.
Speaker 1:That is the reality of our system.
Speaker 1:Because of central controllers, you have to provide more value than you consume, and I think that's why and leading back to integrity and for me, a word that goes along with it, even though it's a very much a buzzword now authenticity is I can provide much more value with a lot less cost to me by being authentic to who I am and by limiting what value I bring to people, because I'm not trying to be anything that doesn't come naturally to me.
Speaker 1:So the value that I can bring to other peoples is I have oh, it's like that productivity scale. It's that productivity climb I have gone. I've gotten more efficient in providing value to the people around me, and that costs me less energy. So I can have more value out there into the world, which then gives me more security because I have a phenomenal community who loves and adores me well, we think of everyone as their own small business, and it sounds like you've done a fine job optimizing your business I think, think, I have, I think, and it's been a complete blessing and a total surprise and all kinds of like, just cool shit along the way.
Speaker 1:But I agree, I couldn't agree more. This is, I mean, it's the future, it's also the past or the origins. Yes, it's the origins of it. It's the origins of it, you know, and in our conversations before, not just about this but in general we kind of come to that where we have to go back to the very origins of a thing and see, like okay, if we play this out again and we change this one little variable, what's likely to happen and that's always like, like the most fun, that like we get, that we have, I think you and I have in the conversations is going okay. But if we change this, this perturbation like like goes off in this direction, this one goes off in this direction and finding like okay, well, we tried this and this was the automatic human instinct, and then that created juries. I think we were, I don't even remember what it was, but we, we freedom is scary.
Speaker 2:It is, freedom is scary, but you will have the best outcomes in the long run, just like the way the ecosystem down the pond down there. Then that right, you know they're not trying to control things, they're just trying to survive and everything works out the way it does. But it's hard. It's hard to have a, a pet or a child and give them total freedom and be prepared to have that guilt if something bad happens right it's not easy as a human thing and it comes, and now we get into spiritual and free will stuff.
Speaker 1:But it's not easy, no, and I but it is the answer it is the answer and that's the thing about if you're operating yourself as a small business, then integrity is of utmost importance and for me, I'm kind of lucky in this way, because I grew up in the Midwest to a very traditional family and, like when you shake a man's hand, you've made a contract with God. Yep Period.
Speaker 2:And if you don't want to have integrity, well then incorporate yourself.
Speaker 1:Yes, but the risk that we all take in doing this is the risk of rejection because of our authenticity. Right, and this was one of the first blogs I ever wrote was the Authenticity Attachment War, talking about developmental trauma, and the rubbing points of this is how I authentically feel about this, but this is the reality of this. Like I may authentically feel that the economic system in the US is super fucked up, but the reality is that it exists, and the more stink that you make about it, the harder your life is going to be. And so now you have to create, you have to decide how much of your authenticity you're going to display versus how much security you're going to get out. Right, and we have to all, and we have to do that with ourselves.
Speaker 1:How much value are we bringing to other people? How much of that value is authentic to us? How good does that feel? How good does the value that we bring to other people feel to us? And if we're not providing value, or whatever then we get, then we risk losing our community, which is our safety net, you know, and so it it really is which I, it goes for me, it goes back to my, my ultimate like, if there's the 10 commandments, I I feel like there is one know thyself, just know thyself above above everything else. Know thyself above above everything else. Know thyself, whatever it is that you do, just know that you do it. And as long as you know it and you like, you have your little book of crazy and be like this is this is how I am uniquely crazy but.
Speaker 1:I own it, but I own it, I'm transparent. And then you can walk around to other people and be like hi, jess, nice to meet you, here's my book of crazy. Can I see yours? Does our crazy match cool? And then the value that you get from each other is super easy, like that's the reason I love, I love you and staff and love coming over and hanging out is because there are very few zero social battery friends that I have like it doesn't take, like there's a lot of times I'm like I just don't want people, and that doesn't include coming over to here because you're not people Like and I and I love, like last night when I'm just totally done.
Speaker 2:I had a long day and I was tired. I know it's not going to affect you at all. No, just come inside, lay down shut. I didn't even say goodnight or goodbye you know exactly and it's a good feeling, yeah.
Speaker 1:It's such a good feeling and that's available to us because of the honesty and integrity that we'll never get out of a centralized system. So I know we went transactions. We call transactions on a specific thing. We call those markets.
Speaker 1:There is very much a fiscal economy that we see on TV and there is very much a real economy, which includes many aspects of the fiscal economy but I believe is largely what I'm calling dark economics or unaccounted for economics, because the baseline, if the baseline building block, is an exchange between two people. There are exchanges like we are all of the earth and we need things of the earth in order to maintain our systems right, our one unit as a person. And then when you're looking at economies you're not looking at. I mean, you can look at one person, but a lot of times we're looking at household spending or whatever. You can kind of zoom in and zoom out on scale here, but the things that we're not accounting for are the transactions between earth and humans. Our fiscal economy, the scope, begins at transfers between humans that are regulated through a centralized agency of some sort.
Speaker 2:Made of humans Right, not made of earth.
Speaker 1:Right unit in this, whether that be a family, like child care and enough time to like be present with children and all all of that sort of stuff, elderly care and food processing and actual cooking and the and maintenance around the house and all of the things that go into just being like letting your house and your, your family, be a whole functioning unit, which is an obscene amount of work, and we account for maybe five% or 10% of that. That's where the real like that's what I think matters the most to get into people's heads is just understanding that when we see the economy on TV, if we were able to find a way to quantify the dark economics, the unaccounted for economics that maintain the health of an individual unit, whether that be a person or a family, I think we'd all be much, much better off. And I think that that even bleeds into whether it's subconscious or leading to or leading from. I think that bleeds into why it's so hard for people to self-care, because self-care is literally just the things that you have to do to maintain the unit and those things are unaccounted for in economics. And when we think about productivity and we think about, when we think about productivity, we think about the, about economics, and we think about needing to make money to pay for bills and all of that, and we don't think about the amount of resources that it takes to maintain a single unit that is capable of a transaction. And that's what we need to consider, is we need to consider what are the things that are required to maintain the health of a unit that is capable of a transaction.
Speaker 1:I don't know if we want to call those microeconomics or subeconomics, or I'm sure those names are already probably taken, but that's what I think we have to focus on and that I'll be talking about very soon with Huma Khali, and her and I will be going over the ways in which the traditional female role and traditionally females have been held down because of the roles that they play, being typically roles that are unaccounted for, all of the productivity and that we talk about all the time and things of like. We get more efficient at making widgets. Well, we also get more efficient at grinding Kosova and we get more efficient at all these other things that maintain the health of the unit, but that's for another future podcast.
Speaker 2:I love that strategy. I love that strategy. I admire that strategy of trying to insert the real economy into our fiscal economy. I'm not very hopeful, though. I'm more hopeful that the fiscal economy would collapse and then we can just have a real economy.
Speaker 1:Yeah, that would be really nice, and time is not money.
Speaker 2:Attentiveness.
Speaker 1:Attention, attention, attention, attention, yeah, attention and attentiveness.
Speaker 2:Time could be empty.
Speaker 1:Time.
Speaker 2:it often is so whether you're sitting in an office staring at a wall for eight hours or you're sitting at home eating bonbons for eight hours they're the same value.
Speaker 1:Yeah, it's very true, only one gets fiscally rewarded and the other doesn't Right which is why people are freaking out, corporations are freaking out all over the world because there are many, many people like some 30% of people my age 30 to 40% of people my age are now like basically independent contractors who are like full-time digital nomads. There's a massive amount of people who are digital nomading and they're working two or three jobs.
Speaker 1:massive amount of people who are digital nomading and they're working two or three jobs and they have, like the mouse movers that will like just constantly move the mouse to make sure that it looks like they're logged in and working and whatnot but ultimately, and so they're working three jobs and making 350 or 500 000 a year by working three jobs and they're able to do all three because they're they're efficient at work, but the work wants to pay them for their time and not their actual productivity because of the way that they break everything down.
Speaker 2:There's always a scam available Always.
Speaker 1:There is always and will always be scams available. But thank you so much for joining us. I'm going to see if you have anything left that you would like to add to this. You're good, Jess.
Speaker 2:I'm toast.
Speaker 1:Thank you, al. All right, awesome. Thank you so much for joining us. I really hope that you enjoyed this podcast. I hope that you got something good out of it. If you enjoyed this podcast, consider sending me a message, leave a comment, go to the link in the description that says buy me a coffee and you can buy me. You can send me five bucks and I'll buy a latte with it and you can guarantee that it'll go to lattes, because that's what powers me I vouch. So thank you again for joining us and remember, stay curious and stay uncomfortable.
Speaker 1:Thank you Bye.