WEBVTT 00:00.000 --> 00:04.280 The party that's in power doesn't really matter. It's the monetary system. 00:08.520 --> 00:13.480 Hi, this is Mike Maloney with Alan Hubbard once again, and I want to let everybody know 00:13.480 --> 00:20.240 that Alan did a brilliant video last week, but it got lost in the noise of the election cycle. 00:21.260 --> 00:27.520 But those people that did watch the video loved it. And so we're going to revisit that 00:27.520 --> 00:35.260 video today. But basically what Alan pretty much proved in that video is that, yeah, it's important 00:35.260 --> 00:44.160 to the individual which party wins an election, but it pales into insignificance when it is compared 00:44.160 --> 00:51.520 to the monetary system. The monetary system is so much more important than who wins the election 00:51.520 --> 01:00.180 that almost who wins the election doesn't matter. So Alan, take us through this a little bit here. 01:00.520 --> 01:06.020 I just thought it was a brilliant video that you put together and a brilliant analysis of the 01:06.020 --> 01:11.640 situation. Well, thank you very much. I really appreciate the kind words. And yeah, I mean, 01:11.680 --> 01:15.800 you inspired me to do it right over the last many years. So thank you very much. 01:15.800 --> 01:22.180 And maybe a good place to start is actually a quote from you. The mission of goldsilver.com 01:22.180 --> 01:27.300 is to enlighten the world that maximum prosperity can only be achieved through individual freedom, 01:27.580 --> 01:34.700 free markets, and sound money. And one of the big triggers for me to sort of go down this path 01:34.700 --> 01:39.080 was thinking about how nobody, no presidential candidate really talks about sound money, 01:39.140 --> 01:42.480 not at all. I mean, Ron Paul maybe being the only exception I could think of 01:42.480 --> 01:47.380 throughout my entire lifetime. There's a lot of talk about individual freedom, whether it's, 01:47.420 --> 01:53.180 you know, whatever topic, whether it's immigration or abortion or vaccines or whatever, all different 01:53.180 --> 01:57.780 freedoms, freedom of speech. We talk about individual freedoms all the time and free markets, 01:57.920 --> 02:02.740 of course, with regulations and taxation and all that. But we don't talk about sound money. And 02:02.740 --> 02:07.240 I started wondering why? Like, why is this not talked about? And as I dug deeper and started 02:07.240 --> 02:10.920 looking at the numbers, I realized, oh, my goodness, because if we had sound money, 02:10.920 --> 02:15.540 the world would be a dramatically different place. So that was sort of the catalyst to go 02:15.540 --> 02:20.380 down this path. And I think sound money matters arguably more than these other things in the 02:20.380 --> 02:27.800 long term, in the long term. Yes. So, so yeah, so I want to add one thing that it's not just 02:27.800 --> 02:34.240 sound money. It's also honest money, as compared to dishonest fiat currency. 02:35.580 --> 02:38.940 Yes, absolutely, absolutely. Sometimes in my head, I think they're the same thing, 02:38.940 --> 02:44.200 but yes, something that can't be printed into existence is, you know, made to 02:44.200 --> 02:50.900 yes, it has to be has to be worked into it into existence. So it is fundamentally an asset when 02:50.900 --> 02:56.400 it's created, not promised into existence so that it is fundamentally a liability. So 02:57.560 --> 03:02.060 absolutely. So here's the two the two pieces I want to look at throughout the presentation. 03:02.480 --> 03:06.420 It's gross federal debt, which we can think of as future taxes. These are going to be 03:06.420 --> 03:11.480 taxes on us and our children. So we want to keep that that as small as possible. If we can get it to 03:11.480 --> 03:18.880 zero, that's the best. And I want to look at CPI, which is also known as the cost to be alive. So 03:18.880 --> 03:23.720 just by being alive, you're pretty much going to have to buy things. It's very hard to produce 03:23.720 --> 03:28.020 everything yourself. You're probably going to have to buy things. And that's just fundamentally 03:28.020 --> 03:32.340 the cost to be alive. So again, we want that to be as low as possible as well. 03:32.340 --> 03:40.820 Okay, I want to thank you for this new perspective, this spin you put on things here. 03:41.360 --> 03:47.780 Gross federal debt is future taxes that somebody has to pay. That's what it is. 03:48.260 --> 03:54.460 So let's not just call it gross federal debt. It's your future enslavement. You have to pay 03:54.460 --> 04:03.320 these taxes in the future. And the cost to be alive. People hear CPI, CPI inflation. Cost to 04:03.320 --> 04:08.920 be alive is a great way to sort of slap everybody in the face and wake them up. 04:10.040 --> 04:14.280 Yeah, a lot of times we call it cost of living. But that just sort of it's been used so many 04:14.280 --> 04:18.280 times. We don't really think about what that means. It is the cost to be alive. Like just 04:18.280 --> 04:22.700 by being alive, you're going to have to buy things. It's very hard to produce everything 04:22.700 --> 04:27.000 yourself. You're going to have to buy things in the marketplace. So you want the average price 04:27.000 --> 04:32.800 level to be as low as possible. And we all want that. We all want the CPI to be as low as possible. 04:34.320 --> 04:41.240 And there's a predictability about this then. If CPI remain neutral, you wouldn't have to 04:41.240 --> 04:45.960 ask for a raise. You wouldn't be falling behind all the time. This is the important thing. 04:45.960 --> 04:54.020 The evils of inflation is that it keeps on just to tread water, to be where you're at. You have to 04:54.800 --> 04:59.420 struggle and then ask for a big raise and ask for a big raise. And when you get those big 04:59.420 --> 05:04.520 raises, it pushes you into a new tax bracket. And now you're paying more of your income to 05:04.520 --> 05:10.540 the government. So you have to ask for another raise. And it's because of that cost to be 05:10.540 --> 05:16.920 alive going into runaway. Absolutely. And that's what I'm going to show with some of my charts. 05:18.600 --> 05:23.080 So yes. So the first one I want to start with here is federal debt. We're going to talk about 05:23.080 --> 05:28.740 federal debt for the first half and then CPI for the second half. So this is basically federal 05:28.740 --> 05:33.780 debt since 1960. And you can see it pretty much goes up no matter what. I have a color coded 05:33.780 --> 05:40.100 based on Republican and Democrat presidents. And maybe you could argue that it goes up more 05:40.100 --> 05:44.880 or less for one color versus the other. But if you step back and look at the big picture, 05:45.140 --> 05:49.700 it's pretty much a smooth line that just goes up. That's it. It doesn't look like a wave where 05:49.700 --> 05:55.320 all the red lines go up and all the blue lines go down. It's not like that. It's just everybody's 05:55.320 --> 06:01.460 up. It's just a question of how much up. And this is not a good trend. It doesn't matter 06:01.460 --> 06:07.140 what party is in power. Exactly. Exactly. And if we ask ourselves, well, what happened 06:07.140 --> 06:12.440 before that? If we go back early in the founding of the Republic here, going back to 1790, 06:13.920 --> 06:19.160 we can see that gross federal debt was very low. It kind of hovered around zero. I mean, 06:19.200 --> 06:25.320 less than one billion dollars. Explain the black line versus the red and the blue. 06:26.220 --> 06:31.240 Oh, my apologies. So early on in the nation's history, the presidential parties were not 06:31.240 --> 06:36.440 Republicans or Democrats. Starting with George Washington, he didn't have a party 06:36.440 --> 06:43.520 affiliation. Some of the others were Federalists or Whig parties or Whigs or Democratic Republicans. 06:44.560 --> 06:50.680 And then we had a union party. So anything in black is not officially a Democrat or 06:50.680 --> 06:54.740 Republican. It's something else. And then of course, the red and blue are the official 06:54.740 --> 06:59.320 parties that we're familiar with. So yeah, you can see that it sort of didn't really 06:59.320 --> 07:04.380 matter what the political party was for, you know, 70 years. And then we had the 07:04.380 --> 07:10.520 Civil War, so massive federal debt. And then after the Civil War, the debt came back down 07:10.520 --> 07:15.340 regardless of the political party of the president. So, you know, Republican, Democrat, Republican. 07:15.980 --> 07:21.220 And it came down pretty significantly, almost halfway back down to zero, almost halfway. 07:22.300 --> 07:26.400 And, you know, it's sort of like a Civil War. You don't really plan for that. I wouldn't 07:27.560 --> 07:31.680 blame Lincoln or whoever the president would be at the time. It's sort of like those types 07:31.680 --> 07:37.060 of crises are unavoidable. So I don't think the political party of the president really matters 07:37.060 --> 07:41.460 for this period of history. It's I think was a function of the monetary system. 07:44.040 --> 07:52.460 Okay. So after 1890, you can see we have an increase here for World War One, 07:52.740 --> 07:56.620 and an increase here for World War Two. And those just happened to be Democrat presidents. 07:56.620 --> 08:01.960 But again, as we just saw, the Civil War was a Republican. So not really a trend, 08:02.080 --> 08:07.720 it's sort of like a coin flip. And you can see that we barely paid down the debt after World 08:07.720 --> 08:13.420 War One, and then it just kept on rolling after World War Two. So it didn't really come down at 08:13.420 --> 08:17.740 all. And I don't think this has to do with the political party. It has to do with the monetary 08:17.740 --> 08:23.100 system, which I'm about to show. And the round dot. And the round dot, I'm sorry. Yes, 08:23.100 --> 08:28.800 this is the creation of the Federal Reserve. So 1914, the first year it started operating. And that, 08:28.920 --> 08:34.620 of course, is well, independent, let's say, of the political party of the president. However, 08:34.760 --> 08:39.820 it is itself the monetary system. So we're going to see in just a second how the monetary system 08:39.820 --> 08:45.720 before the Fed and after the Fed have a much higher correlation in terms of what happens 08:45.720 --> 08:50.140 to our overall prosperity than whether we have a Democrat or Republican in the White House. 08:50.940 --> 08:55.320 So this is a key turning point. And it's going to become plain as day 08:56.600 --> 09:01.260 in just a second. So look at this. You can see a gross federal debt. Remember how low it was 09:01.260 --> 09:05.960 before the Civil War and how it started coming back down? Well, you can't even see that giant 09:06.740 --> 09:11.500 increase, that giant spike for the Civil War. It's not even a single pixel on this chart. It 09:11.500 --> 09:17.320 is so small that the debt was basically zero. I mean, it rounds to zero. You can see World 09:17.320 --> 09:23.720 War II just barely. But then after that, I mean, look at this, it doesn't matter red, blue, red, 09:23.760 --> 09:28.580 blue. It doesn't matter. It just goes up like a rocket. And that's because of the monetary system 09:28.580 --> 09:35.900 or, you know, which we'll see in a second. Okay. So let's look at those same charts recolored 09:35.900 --> 09:41.100 instead of red and blue based on political party will color them gold and green based 09:41.100 --> 09:47.640 on the monetary system. So here's the beginning of the country, primarily on a bimetalism standard, 09:47.820 --> 09:55.520 gold and silver, and then just gold. With the exception of the Civil War, when Lincoln created 09:55.520 --> 10:03.560 the greenback, basically the beginning of fiat in our country. And then after the war resumed 10:03.560 --> 10:10.740 the backing to gold. So the dollar became as good as gold. And that allowed presidents of 10:11.100 --> 10:17.940 either political party to pay down the debt. So you can see that that fiat was the the enabler 10:17.940 --> 10:23.660 of the massive debt. And you could argue that that is that was a prudent decision or it was 10:23.660 --> 10:27.540 wise or it was good for the country. I mean, obviously during the Civil War, that that move 10:27.540 --> 10:33.900 sort of is what kept the country together. So as a temporary emergency measure, it's understandable 10:33.900 --> 10:38.060 and probably justifiable, probably justifiable without doing that, you know, the country 10:38.060 --> 10:46.000 falls apart. So yeah, and then the conversion back to making it convertible into gold and standing 10:46.000 --> 10:52.380 behind that currency, the debt starts coming down. And I do want to point out that Andrew Jackson 10:52.380 --> 10:59.740 there was the only time that the US was completely debt free right in there. Yes. 11:00.520 --> 11:08.160 Mm hmm. Yeah. 1830s. The good old days. It seems if you look at his policies and things like that, 11:08.180 --> 11:15.500 he would seem to be a Republican today, but he was a Democrat, right? Yeah. Yeah. Yeah. So yeah, 11:15.580 --> 11:20.960 I don't think we had any Republicans until Lincoln, I think. So I think based on how I 11:20.960 --> 11:27.880 had it color coded a minute ago. Yeah. So yeah, so really the monetary system there. So if we 11:27.880 --> 11:32.280 if we move forward a little bit in history, you can see that, you know, that was pretty low until 11:32.280 --> 11:39.100 the creation of the Federal Reserve. And then despite being on a sound money system, the Fed was 11:39.100 --> 11:45.080 basically allowed to create Federal Reserve notes in excess of the gold that was able to back them. 11:45.300 --> 11:49.880 So this was sort of the beginning of the end. And this is what caused a shift in the monetary 11:49.880 --> 11:55.120 system to a gold exchange standard. And then ultimately to fiat in 1970, which we'll see 11:55.120 --> 12:00.380 on the next chart. So you want to say here, Mike? Yeah, before you go to the next chart, 12:01.860 --> 12:07.600 why do you start the gold exchange standard in 1933 or 34 there? 12:09.340 --> 12:16.000 Basically because Roosevelt nationalizing the gold and saying that, you know, 12:16.800 --> 12:22.700 basically is illegal for America's own gold. What do you call the gold standard between 12:23.360 --> 12:29.180 the creation from the fed creation of the Federal Reserve to 1933, where it's not really 12:29.180 --> 12:36.140 a full gold standard? Because I've always called that a gold exchange standard as well. The Federal 12:36.140 --> 12:42.740 Reserve, that when the law, you know, when we enacted the Federal Reserve Act, it became legal 12:42.740 --> 12:53.700 to only back those Federal Reserve notes by 40% gold. And so for every $50 that they put into 12:53.700 --> 13:02.320 circulation, there was a $20 bill backing up the $100 worth of notes was backed by only two 13:02.320 --> 13:08.980 $20 gold pieces. It was a lie and a fraud. And so it isn't a true gold standard. 13:08.980 --> 13:13.780 What do you call the interwar gold standard then if it's not part of the gold exchange standard? 13:14.280 --> 13:27.020 I've always, I've been trying to get everybody else to call this because it's not a real 13:27.020 --> 13:31.100 gold standard. It's a pseudo gold standard. And if we don't have a name for it, then it's part 13:31.100 --> 13:38.700 of the gold exchange standard, which was continued on after England dropped out of the 13:39.400 --> 13:46.880 gold standard in, you know, being backed fully by gold in 32, I think that was, and then 33 13:47.420 --> 13:55.640 Roosevelt breaking the big promise of gold with American citizens were banned from owning gold. 13:55.640 --> 14:01.600 And then 1944, the Bretton Woods system officially starts or at 45, 14:02.420 --> 14:07.420 Bretton Woods meeting was 44. I don't know when the actual Bretton Woods system started. 14:08.380 --> 14:15.300 That is, to me, that's all interlinked and all part of a pseudo gold standard. And what do we call 14:15.300 --> 14:21.660 that pseudo gold standard? I call it, do you have any other definition for gold exchange 14:21.660 --> 14:28.940 standard that would exclude the period where the Federal Reserve was able to print lies and put 14:28.940 --> 14:35.140 them out in public? Yeah, I don't know, a fractional gold standard or a partial gold standard. 14:35.880 --> 14:40.640 Yeah, when I was putting this together, I had these decisions to make. And you know, 14:40.680 --> 14:43.960 from one video to the next and one series of charts to the next, I don't always use the 14:43.960 --> 14:48.660 same thing. And for example, like when we were on a bimetalism standard till, I guess it's 14:48.660 --> 14:53.580 not here, it's on the previous chart, but until 1873, you know, I thought about coloring the line 14:53.580 --> 14:59.300 gold and silver, and then making it just gold. And then the charts started getting too busy. So 14:59.300 --> 15:06.120 for sake of simplicity, I just, I did it the way I have here. And again, to your point about 15:06.120 --> 15:11.160 terminology, like what do we call all these different monetary systems? You know, I don't 15:11.160 --> 15:15.080 have the definitive answer. I'm not sure any of us ever will. It's, I think more important 15:15.080 --> 15:20.720 to understand what was going on than what the label is. You can see, though, that each time they come 15:20.720 --> 15:26.980 up with some phony baloney fictitious gold standard here, these are all gold standards, 15:27.280 --> 15:35.060 but they're fictitious. And they unleash the ability to take on enormous quantities of debt. 15:36.220 --> 15:40.900 Yes, exactly. And that's sort of the theme of this video. That's exactly it. So yeah, 15:40.900 --> 15:47.900 it's the monetary system that enables all this nonsense, all this borrowing. It's not necessarily 15:47.900 --> 15:55.380 if it's a Democrat or Republican in office. It's like small peanuts. So yeah, this is the key here, 15:55.560 --> 16:02.000 1914. So yeah, so after 1960, this is the type of thing you'd see on the Federal Reserve website. 16:02.240 --> 16:06.220 Well, not color coded, obviously, but you'd see just debt increasing little by little, 16:06.220 --> 16:12.280 oh, no big deal. And then from the experts you might hear, debt is just money we owe to ourselves. 16:12.940 --> 16:18.920 No big deal. Debt is sustainable. But that is absolutely not the case. And this runaway debt 16:18.920 --> 16:23.920 on a fiat monetary system is only possible because of what we just said, the Federal Reserve and 16:23.920 --> 16:28.480 basically breaking promises. Breaking promises. That's really what it is. 16:28.480 --> 16:35.740 Yeah. So yeah, looking at that all in one large one fell swoop here, 16:35.780 --> 16:40.560 you can see that, you know, again, there's really no pixels coming up on this chart here 16:40.560 --> 16:45.100 when we were on a gold standard. And then once we the Federal Reserve is created, 16:45.240 --> 16:50.760 it's the beginning of the end. And we just take off like a like a rocket ship like a hockey stick 16:50.760 --> 16:56.780 here. So the real inflection point is what? The inflection point creation of the Federal 16:56.780 --> 17:01.220 Reserve. Well, there's another one after that there where you go from gold to green. 17:01.960 --> 17:10.920 Oh, I see. Right here. This is this is 1971. Yeah, 1971, the Nixon shock. 17:11.700 --> 17:16.760 Yeah, you really pointed that out in your video. And I encourage everybody to go back 17:16.760 --> 17:22.240 and watch Alan's video. It was it's brilliant. So keep on going. Thank you very much. Thank you, 17:22.780 --> 17:27.420 so yeah, just a brief pause here of quote from Ron Paul. It is no coincidence that the 17:27.420 --> 17:32.000 century of total war, okay, 20th century, World War One, World War Two and all those other 17:32.600 --> 17:37.020 wars to follow coincided with the century of central banking. It's no coincidence. 17:37.240 --> 17:41.340 These are closely connected because you can't fight forever wars and you can't fight global 17:41.340 --> 17:47.300 wars unless you have infinite currency to back them. And that only comes from the Federal 17:47.300 --> 17:52.320 Reserve, the central bank basically having a license to steal as much as they want from 17:52.320 --> 18:01.540 honest hardworking citizens. Yep. So yeah, that's that. So that's that's debt in a nutshell. CPI, 18:01.740 --> 18:05.980 the cost of being alive. Let's take a look at that and see if the president, whether it's a 18:05.980 --> 18:10.880 Republican or a Democratic president has a bigger effect on the CPI or if it's the monetary 18:10.880 --> 18:17.320 system. So again, you can anticipate where this is going. The CPI from 1914 from the creation 18:17.320 --> 18:21.940 of the Federal Reserve pretty much only goes up. It's a question of does it go up a lot or does it 18:21.940 --> 18:29.540 go up a real lot? Those are the only two sizes. It goes up a lot or a real lot. And for folks who, 18:29.700 --> 18:33.800 you know, pretty much everyone watching this video lived through, you know, Trump and Biden, 18:33.960 --> 18:38.020 you know, four years of each, you can see that the red line did not go up as much as 18:38.020 --> 18:43.500 the blue line. So that feels like a significant difference living under those two administrations. 18:43.980 --> 18:48.880 And I agree, right? I live through it too. They felt different to me. No doubt about it. 18:49.200 --> 18:54.480 However, if you zoom out and look at all of this, you know, is something else going on? Is there 18:54.480 --> 18:59.300 something that's more important than the political party of the president? Yes, there is. Yes, 18:59.600 --> 19:06.940 yes. So looking at the CPI before 1914, before the Federal Reserve, it did not just continuously 19:06.940 --> 19:12.640 go up, right? It's not like goods and services were free a long time ago and all of a sudden 19:12.640 --> 19:17.180 they started to cost a little bit of money and then a lot of money. No. Generally speaking, 19:17.260 --> 19:22.320 prices go down. And you can see that in the first, you know, 150 years of this country's history, 19:22.560 --> 19:28.300 prices tended to go down. The exception is wartime when all the people who ordinarily 19:28.300 --> 19:35.960 produce stuff are off fighting each other. So the Civil War and World War One and those 19:35.960 --> 19:40.140 basically explain all these sharp increases and prices. And then after the war is over, 19:40.240 --> 19:45.500 because we're on a gold standard or sound money standard, prices come down, down, down, down, 19:45.500 --> 19:49.700 down, down. Regardless of the political party of the president comes down, down, down, down. 19:49.820 --> 19:55.720 Because the monetary system is that set of incentives for the executive branch and the 19:55.720 --> 20:00.680 legislative branch to behave nicely, right? To spend resources efficiently, only spend what 20:00.680 --> 20:07.740 they have. They can't print their way to stealing resources. So yeah, Mike, any thoughts here on 20:07.740 --> 20:14.480 this one? No, I just think it's brilliant that you did all of this. I really do. It really does 20:14.480 --> 20:19.800 show you. It doesn't matter who is in power. What matters is the monetary system. It's 20:19.800 --> 20:25.540 something we do not talk about enough. Absolutely. Absolutely. And like if you look here, 20:25.540 --> 20:32.860 this is 100, whatever it is, 150 years. And if you go from the year 1800 to the year 1900, 20:33.280 --> 20:38.800 prices went down. So like 100 years, prices went down. I mean, this is just so... 20:38.800 --> 20:46.600 They should come more efficient at making things. Productivity goes up. And so prices should 20:46.600 --> 20:55.020 always be... Slow, gentle deflation is the natural order of things. And any difference 20:55.020 --> 21:01.440 between the slow, gentle deflation and inflation is the theft that we are experiencing from it through 21:01.440 --> 21:09.060 our phony baloney monetary system. Yes, exactly. And so for a while, I used to think... Because I 21:09.060 --> 21:14.760 listened to financial commentary and so forth, I used to think that, oh, 2% long-term inflation, 21:15.140 --> 21:20.200 that's normal. And if we're above it, then the difference between 2% and wherever we are, 21:20.200 --> 21:26.000 say 3%, that's kind of like the actual inflation. And then I realized, well, the Federal Reserve 21:26.000 --> 21:31.360 just made up 2%. It's really... Whatever the inflation rate is compared to level prices, 21:31.540 --> 21:35.820 that's it. And then I thought, no, wait a minute, we don't compare it to zero. We actually compare 21:35.820 --> 21:41.460 it to the normal rate of deflation. We should have negative CPI. So there's actually a gigantic 21:41.460 --> 21:46.780 gap between, let's say, positive 3% inflation or 7%, whatever it is going up, 21:46.780 --> 21:51.460 compared to what it should be going down. That is a tremendous, tremendous difference. 21:53.140 --> 21:59.000 That is a tremendous insight that you just gave all of us, because we have all been 21:59.820 --> 22:11.860 acclimatized. We've been... These things have been put in us... We've been brainwashed, basically, 22:12.500 --> 22:20.220 to believe that the Fed thinks 0% is dangerous. We've got to have that 2% inflation. 22:20.700 --> 22:26.840 But there is this slow, mild deflation of how much goods and services are available 22:27.400 --> 22:32.660 per person. We're always increasing the amount of goods and services. I mean, think about, 22:33.120 --> 22:38.420 when I was a kid, we had one telephone. We had one television. And I was in an upper middle 22:38.420 --> 22:46.280 class family. And now television set in every room. Everybody's got their own cell phone. We've 22:46.280 --> 22:54.220 got computers. It's a mind-boggling array of the amount of wealth that we actually have 22:54.220 --> 22:59.800 for the same amount of work that we put out, which means that prices should be falling. 23:00.400 --> 23:06.540 And the gap between... People are thinking, well, 2% is normal. So anything above that 23:06.540 --> 23:15.360 may be that's theft. No. It's the difference of minus 1% or minus 2% year over year deflation. 23:16.180 --> 23:23.900 And then whatever the positive number is, that is the theft that is going on from the public 23:23.900 --> 23:32.120 to the government and the banking sector. Yes. And inflation affects the poorest people in 23:32.120 --> 23:38.760 society the most. Yes. This is another critical point. So I'll make a brief analogy here. 23:39.480 --> 23:45.220 It might feel a little off topic, but it is relevant to inflation and how dangerous it is 23:45.220 --> 23:50.580 to the poor and middle class. Mike, have you ever gone paddle boarding? 23:51.220 --> 23:55.960 No. Okay, so paddle boarding. So like on an inflatable paddle board, or you could think 23:55.960 --> 23:59.260 of like a canoe going canoeing or kayaking or something, just paddling down a river. 23:59.770 --> 24:04.760 Okay. But sometimes my fiance and I, we go paddle boarding. All right. And one of the 24:04.760 --> 24:09.100 worst things for paddle boarding is a strong wind because if the wind is too strong, 24:09.320 --> 24:14.940 you can't paddle into it unless you're extremely strong. So anyways, I think of 24:14.940 --> 24:19.360 inflation like a wind. And let me give you an example. Think of these numbers. 24:19.880 --> 24:25.300 So suppose I'm a little bit stronger than my fiance. Okay. Let's say normally I can paddle 24:25.300 --> 24:30.120 at 12 miles an hour, just making up numbers, 12 miles an hour, and she can only paddle at 10. 24:30.640 --> 24:36.800 Okay. So I'm 20% faster than her. Okay. 20%. So if there's no wind, I'm 20% faster than her. 24:37.080 --> 24:42.000 It's not that big of a deal. Now, what if there's a 10 mile an hour wind, right? We could 24:42.000 --> 24:46.440 think of this as like inflation, right? There's a headwind right in your face, 24:46.500 --> 24:51.080 preventing you from getting ahead in life. If there's this inflationary headwind 24:51.080 --> 24:56.740 at 10 miles an hour, she can only paddle at 10 miles an hour. So she can't go anywhere. 24:57.620 --> 25:02.880 Right. If she works as hard as she can, she can't go anywhere. 10 minus 10 is zero. Whereas I, 25:02.960 --> 25:07.380 if I work as hard as I can, 12 minus 10, I can still paddle at two miles an hour. So I can 25:07.380 --> 25:13.620 still move very slowly, but I'm infinitely faster than her all of the sudden because we have this 25:13.620 --> 25:18.980 enormous headwind. That's extremely unfair. And it means like the skilled people or the 25:18.980 --> 25:23.220 strong people or the smart people or however people with an unfair advantage or maybe it's 25:23.220 --> 25:29.860 a fair advantage, anyone with an advantage has their advantage magnified sometimes to infinity, 25:30.520 --> 25:37.420 right? Because it becomes a tailwind instead of a headwind. Yes. I would put in the analogy is 25:37.420 --> 25:47.180 that if you own assets that inflate, then you are getting the tailwind. If you are a renter, 25:47.180 --> 25:54.980 if you own real estate and it inflates or if you own stocks and it inflates, you're doing very good. 25:55.420 --> 26:01.400 But if you're somebody that rents that real estate, you are falling behind. It's a headwind for you, 26:01.980 --> 26:07.860 a tailwind for them, very, very unfair. Yeah, exactly. And what we should all be enjoying, 26:08.000 --> 26:12.680 if we were on a sound money system and we all experienced deflation, we would all have a 26:12.680 --> 26:19.060 gentle breeze at our backs, right? And that would essentially move all of us down the river effortlessly 26:19.560 --> 26:26.340 and make for a much, much more equitable society actually. And it'd be harder, it'd be harder to 26:27.740 --> 26:32.880 create wealth inequality, even if you work super, super hard, like other people are 26:32.880 --> 26:42.660 following you without working, like they're following you down the river. So it's even 26:42.660 --> 26:50.500 equal society as far as wealth distribution goes. But also, Ron Paul mentioned the central banking 26:50.500 --> 26:59.560 was the century of total war. And when we were using gold and silver as money, it constrained the 26:59.560 --> 27:10.980 government to borrowing about one third of GDP was the maximum that they could spend to conduct 27:10.980 --> 27:18.360 those wars. That's where the War of 1812 and Civil War and World War I sort of topped out at. 27:19.280 --> 27:25.120 We were never able to get to these and where are we today? We're not in a world war and we're up at 27:25.120 --> 27:32.880 what, 120% of GDP or something? I haven't looked at it today. But it's absolutely insane that 27:32.880 --> 27:40.140 we're here. And it's because of this evil via currency system. Yeah, exactly. It's totally 27:40.140 --> 27:46.520 the monetary system. So yeah, let me show it all in one chart here, looking at the CPI. This is 27:46.520 --> 27:53.680 250 years of the CPI. And you can see that it's super low. And when we zoomed in, we saw that 27:53.680 --> 27:57.940 this was actually moving down very, very, very slightly. And then after the Federal Reserve 27:57.940 --> 28:03.360 is created, it takes up like a rocket ship. And again, the political party of the president 28:03.360 --> 28:11.220 has no bearing on this when you zoom out like this. And then the day they eliminated gold, 28:11.440 --> 28:18.060 August 15th of 71. That's the big inflection point here. Yeah, right here. And we'll see 28:18.060 --> 28:24.360 that when we when we recolor the chart based on monetary system. So here, let's do 28:25.120 --> 28:31.380 some of the early monetary systems here. Yeah, I mean, we talked about this. So basically, 28:31.380 --> 28:38.540 you know, borrowing for wars, but then comes back down. So prices rise, and then prices come back 28:38.540 --> 28:42.940 down. So prices rise for wars, and they come back down. But after the Federal Reserve was created, 28:43.820 --> 28:49.200 the prices didn't return to the prewar era like they normally do. So normally before each 28:49.200 --> 28:53.980 war and after each war, prices go down to to where they were before. But that didn't happen 28:53.980 --> 28:58.460 after World War One. And it's because of the monetary system. And then after World War 28:58.460 --> 29:03.260 One or after the Fed, right, I would argue that we wouldn't have fought in World War One if it 29:03.260 --> 29:09.400 weren't for the creation of the Fed, you know, just prior. So yeah, we can see the monetary 29:09.400 --> 29:15.280 systems changing here. And it just increases the slope of these lines more and more and more. 29:15.600 --> 29:20.780 And we had these inflection points. And then there probably is one here. Well, I guess, I 29:20.780 --> 29:26.260 guess, global financial crisis was here. So it's just getting steeper and steeper. I mean, 29:26.260 --> 29:34.040 this is obviously unsustainable. So yeah, I'm looking at the whole thing. I mean, 29:34.100 --> 29:39.680 it's the same story. It's just looking at across different time periods that the monetary system 29:39.680 --> 29:45.120 matters so much more than the political party. This is for long term freedom. So man, I just 29:45.580 --> 29:50.340 think about what the world would be like if we were on sound money, and prices just went down 29:50.340 --> 29:54.580 little by little every month, or like you wouldn't have to worry about, oh, I should just go 29:54.580 --> 29:59.060 buy something. I should just go buy something this weekend, because if I wait until next weekend, 29:59.520 --> 30:03.060 whatever I want to buy is going to cost more. So I might as well just spend it today. 30:03.660 --> 30:05.660 And this is how people operate, like subconsciously. 30:05.660 --> 30:10.020 Well, also, we wouldn't be speculating as much, because you can actually just 30:10.460 --> 30:18.560 hold on to your cash at home, and you're getting paid. And back when banks would take 30:18.560 --> 30:27.420 in deposits and loan out currency, they were working on a spread. So they were paying you 30:27.420 --> 30:34.620 an interest for those deposits. With slow, mild deflation, you don't even have to put it 30:34.620 --> 30:39.340 in a bank, but banks would still be offering some sort of interest, which would put you 30:39.920 --> 30:46.180 even more ahead. And then if we had honest banking, where they actually loaned something 30:46.180 --> 30:54.860 that really existed, we don't have honest banking, but we would have a much more moral, 30:55.000 --> 31:01.040 fairer society. We would have less wealth disparity. I'm certain that there would be less poverty. 31:01.820 --> 31:07.300 And on top of all that, the maps of the world would be completely different. 31:08.180 --> 31:13.660 These wars funded by central banking and currency creation from nowhere, 31:13.660 --> 31:21.860 which is just a tool for the theft of the wealth of the population of each country that's trying 31:21.860 --> 31:28.320 to win the war. The inflation of their own currency supplies is that tool so that they 31:28.320 --> 31:32.040 can try and outspend their opponents, but it leaves the countries impoverished. 31:33.040 --> 31:41.020 And so, yes, this is brilliant that the party that's in power doesn't really matter. 31:41.020 --> 31:44.760 It's the monetary system. Absolutely, absolutely. 31:45.920 --> 31:51.540 And so, we finally got an Inflation Reduction Act after all this vertical, however many years 31:51.540 --> 31:56.660 it's been, 50 years since the Nixon shock and 110 years since the Federal Reserve. 31:57.280 --> 32:01.180 Finally, an administration says, you know what, we've had a lot of inflation, 32:01.400 --> 32:04.900 let's reduce it. And of course, this is a large investment in the economy, 32:05.680 --> 32:10.160 you know, spending, borrowing and spending, which is, you know, 32:10.520 --> 32:15.540 biggest spending bill in history. And this is supposed to somehow reduce inflation. 32:15.840 --> 32:24.200 It's very Orwellian that we just, we take whatever the real cause, the real effect 32:24.200 --> 32:31.900 is going to be of this law, this act, and invert it and label it something that is 32:31.900 --> 32:35.800 exactly the opposite of what it's going to end up as. 32:36.460 --> 32:42.140 Yep. It's like the Patriot Act was extremely unpatriotic. The Affordable Care Act made healthcare 32:42.140 --> 32:48.540 unaffordable. Inflation Reduction Act was an inflation creation act. I mean, yeah, I totally 32:48.540 --> 32:54.340 agree with you. But if you were going to have an Inflation Reduction Act, what would it do? 32:54.460 --> 33:00.040 What would the policy be? Well, I would argue, revisit the Nixon shock, right, when he 33:00.040 --> 33:05.500 directed Secretary Connolly to suspend temporarily the convertibility of the dollar into gold and 33:06.340 --> 33:11.380 unsuspend it, un-make it temporarily, play an uno reverse card and say, we're going back on the 33:11.380 --> 33:16.080 gold standard. You can trade the dollar for gold. It is as good as gold. And then probably what 33:16.080 --> 33:21.020 would happen is exactly what happened after the Civil War when we were temporarily on a 33:21.020 --> 33:25.840 little fiat standard. Prices came all the way back down to pre-war levels. Again, 33:25.840 --> 33:30.880 regardless of the political party of the president, we had Democrats and Republicans during this period 33:31.470 --> 33:38.280 and prices came back down and we had a great reconstruction. That's how I would do it. If you 33:38.280 --> 33:44.000 had an Inflation Reduction Act and yeah, it would be super painful. There can be no healing without 33:44.000 --> 33:52.460 pain. So that's my thought. Yep. I absolutely agree. And so the last kind of thing I want 33:52.460 --> 33:56.700 to touch on here is like the incentives going on. This is kind of how I've been thinking about 33:58.720 --> 34:02.800 basically the incentives in an economy. Folks watching this might not know, but I actually 34:03.560 --> 34:08.320 started out in school as a physics major. So I was really good at physics, really enjoyed it. 34:08.700 --> 34:13.800 And then I switched to finance and got an MBA and now I'm in this world. But anyways, 34:13.960 --> 34:18.700 if you want to predict the behavior of an object, you can draw a free body diagram 34:18.700 --> 34:21.960 where you label all the forces, the magnitude and the direction, 34:22.860 --> 34:27.040 like the applied force pushing a block up a plane or the force of friction pulling it down, 34:27.260 --> 34:32.680 the weight of gravity pulling it towards the earth or the reactionary force or the normal force 34:33.760 --> 34:38.400 pushing it the opposite direction. And by adding up all these forces, you can figure 34:38.400 --> 34:42.580 out the net force acting on the object and that's how it's going to move. So you can 34:42.580 --> 34:46.860 predict its behavior and you can do this for any object. And so I've thought about people 34:46.860 --> 34:52.020 in this way for a lot of years. People respond to incentives and a lot of times it's financial 34:52.020 --> 34:58.040 incentives or it's reputational incentives or a romantic relationship or a friendship or 34:58.040 --> 35:02.620 all these different incentives facing people. And what we have in common in the economy is 35:02.620 --> 35:06.960 we got to do some kind of work, some kind of job. That's what keeps us going. And that's 35:06.960 --> 35:11.560 like the hard thing to do. But pulling us back the other way is taxation, pulling us down 35:11.560 --> 35:16.040 is regulations. Whatever you're doing, it's regulated somehow. And then we've got our 35:16.040 --> 35:20.220 survival instincts that oftentimes move us in a completely different direction. We'd rather 35:20.220 --> 35:27.500 sleep in and whatever play video games or indulge our selfish urges. But we can't do that. 35:27.900 --> 35:31.020 But if you figure out all the incentives acting on a person, you can figure out how 35:31.020 --> 35:36.540 they're going to behave. And for individuals, if they know that the prices of what they want to 35:36.540 --> 35:42.780 buy next week are going to be higher than what they are today, they'll a lot of times just 35:42.780 --> 35:47.380 buy it today because they don't want to spend extra a week from now. And that's a terrible 35:47.380 --> 35:54.180 incentive that crushes any incentive out there to save, to be disciplined, to plan for the future. 35:54.720 --> 35:58.700 Like all these things that should be healthy things that we want everybody in society to do, 35:59.140 --> 36:04.040 we strip those incentives away because we have an inflationary currency. So that's 36:04.040 --> 36:08.500 absolutely terrible. So anything you want to add to that set of incentives, Mike? 36:09.220 --> 36:16.640 No, I just thought it was a brilliant analysis, creating that incentives diagram. 36:19.380 --> 36:26.200 And yes, this is awesome. It's a great way of looking at things. And it's a new way of looking 36:26.200 --> 36:32.060 at things for me. Yeah, cool. Well, thank you very much. Thank you. And yeah, we can look at 36:32.060 --> 36:36.280 those same incentives for policymakers. And again, this might not be a perfect analogy. I'm not 36:36.280 --> 36:41.280 for anyone watching this. I'm not trying to argue that each of these forces is a perfect analogy 36:41.280 --> 36:48.040 to like a physical force. It's just a general lens through which we can observe human behavior. 36:49.040 --> 36:53.100 And by the way, if you notice a person or a politician or a policymaker 36:53.700 --> 36:58.080 behaving in a way that you didn't predict, if they do something very strange, 36:58.080 --> 37:02.840 then I would argue there must be some incentive that they're facing that you're not 37:02.840 --> 37:08.660 aware of, some hidden force moving them in that direction. So once you start looking for that, 37:08.780 --> 37:15.100 you might wonder, man, why do all these Republican presidents keep raising the debt ceiling or 37:15.100 --> 37:19.660 spending into oblivion? Aren't they supposed to be like fiscally disciplined? Ah, there's a 37:19.660 --> 37:24.000 monetary system that allows them to just print into oblivion. No wonder they do the same 37:24.000 --> 37:29.920 things as Democrats. That type of thing, as well as warfare and all this other stuff, if you 37:29.920 --> 37:36.140 find a politician or policymaker behaving in a way that you didn't predict, there's probably some 37:36.140 --> 37:42.100 incentive facing them that you weren't accounting for. And so some of the incentives that they're 37:42.100 --> 37:50.080 facing is wanting ideally to spend their money and time and resources efficiently for the good 37:50.080 --> 37:57.000 of the country. Sorry, what's that, Mike? Currency. Currency, yes, thank you. I've been 37:57.000 --> 38:02.420 purposely goofing it up and catching myself for a while now, and there I legitimately forgot to 38:02.420 --> 38:10.240 catch myself. So yeah, so politicians, a lot of times the goal is to spend efficiently. However, 38:11.020 --> 38:16.060 there's this strong incentive to borrow. And sometimes they could borrow money or currency 38:16.060 --> 38:22.240 that already exists, but other times they could borrow it by printing it out of thin air 38:22.240 --> 38:28.420 and borrowing it at the same time. And that is just a tremendous, tremendous incentive. And it's 38:28.420 --> 38:32.820 one that we absolutely need to take away. Like for the good of the country, for the good of the world, 38:32.980 --> 38:37.620 we have to eliminate that incentive, which is basically- Yes, but they can't print it out of 38:37.620 --> 38:43.740 thin air. They can only print it by enslaving us in the future. So it's never out of thin air. 38:44.200 --> 38:48.500 The Federal Reserve is handcuffed to where they can only buy assets that are guaranteed 38:48.500 --> 38:53.920 by the U.S. government as to the principal and interest. And that means they've got to buy U.S. 38:54.040 --> 38:58.740 Treasuries and then since the nationalization of Fannie Mae and Freddie Mac mortgage-backed 38:58.740 --> 39:06.040 securities, but either way, somebody has to work to make those assets good and to pay 39:06.040 --> 39:11.560 that principal plus the interest. And for the U.S. Treasuries, it comes out of your taxes, 39:11.560 --> 39:17.340 which means every time they print up new currency, they enslave you in the future. 39:18.640 --> 39:23.940 Exactly. And we have to get rid of that incentive. It's terrible. It's too tempting. It's too tempting 39:23.940 --> 39:30.100 to print. And as you guys have seen, looking at the federal debt or the CPI, for 100 years, 39:30.220 --> 39:35.740 200 years, it doesn't really matter the politics of the president. It's so tempting 39:35.740 --> 39:43.460 to just print, print, print. And that can allow tiny, tiny short-term benefits or the illusion 39:43.460 --> 39:48.940 of short-term benefits with massive long-run costs, massive, massive long-run costs, and they 39:48.940 --> 39:55.420 accumulate. So we collectively suffer the negative effects of compound interest. We don't want to 39:55.420 --> 39:59.180 be doing that. And that's what we've been doing for 110 years since 1914. 39:59.480 --> 40:05.320 Yes. And the accumulation has always fallen on top of a demographic that is a larger 40:05.320 --> 40:11.720 demographic. And now we have all of these retirees and fewer and fewer people working each decade 40:11.720 --> 40:18.220 to support the number of people that are retired. So this whole thing is sort of running into a 40:18.220 --> 40:27.380 brick wall at this point in time where all of these perverse incentives have put us in a trap. 40:28.440 --> 40:35.040 Yes, exactly. There's no way out other than to do the very hard thing of allocating resources 40:35.040 --> 40:43.580 efficiently, ending that terrible incentive and just feeling the pain of a lot of broken promises 40:44.900 --> 40:51.720 and the healing process. It's going to be very hard, but we have to do it. And the longer we wait, 40:51.780 --> 40:58.080 the harder it's going to be. So yeah, last thing I want to end with is the same thing we started 40:58.080 --> 41:03.320 with, the mission of Gold Silver. Yes, I'm very proud that we've been able to, 41:03.920 --> 41:14.420 you know, especially the media team here. This has been our mission since we founded the video 41:14.420 --> 41:25.880 channel basically. So this goes back to 2009 or 2008. Yeah, it is something that we have stuck 41:25.880 --> 41:32.060 to our guns. The education has been the reason for goldsilver.com to exist was to support 41:32.060 --> 41:37.460 the education. This was my passion. This is what I wanted to do, is to enlighten the world that maximum 41:37.460 --> 41:43.020 prosperity can only be achieved through individual free markets and sound money. And it's the truth. 41:43.300 --> 41:50.300 And you have just proven the sound money part of it. Yes, well, thank you so much, Mike. And 41:50.300 --> 41:56.200 it was actually your mission statement here that attracted me to Gold Silver. So thank you so 41:56.200 --> 42:02.520 much for sticking to your guns and finding these values and using that as a North Star. It's what 42:02.520 --> 42:07.780 attracted me to you and to this company. And I am absolutely thrilled to be, you know, pushing 42:07.780 --> 42:13.260 that message forward. So thank you for having me on the team. And I want to thank you for being 42:13.260 --> 42:17.080 here. I want to thank everybody for watching. And we'll see you all next time.