The party that's in power doesn't really matter. It's the monetary system.
Hi, this is Mike Maloney with Alan Hubbard once again, and I want to let everybody know
that Alan did a brilliant video last week, but it got lost in the noise of the election cycle.
But those people that did watch the video loved it. And so we're going to revisit that
video today. But basically what Alan pretty much proved in that video is that, yeah, it's important
to the individual which party wins an election, but it pales into insignificance when it is compared
to the monetary system. The monetary system is so much more important than who wins the election
that almost who wins the election doesn't matter. So Alan, take us through this a little bit here.
I just thought it was a brilliant video that you put together and a brilliant analysis of the
situation. Well, thank you very much. I really appreciate the kind words. And yeah, I mean,
you inspired me to do it right over the last many years. So thank you very much.
And maybe a good place to start is actually a quote from you. The mission of goldsilver.com
is to enlighten the world that maximum prosperity can only be achieved through individual freedom,
free markets, and sound money. And one of the big triggers for me to sort of go down this path
was thinking about how nobody, no presidential candidate really talks about sound money,
not at all. I mean, Ron Paul maybe being the only exception I could think of
throughout my entire lifetime. There's a lot of talk about individual freedom, whether it's,
you know, whatever topic, whether it's immigration or abortion or vaccines or whatever, all different
freedoms, freedom of speech. We talk about individual freedoms all the time and free markets,
of course, with regulations and taxation and all that. But we don't talk about sound money. And
I started wondering why? Like, why is this not talked about? And as I dug deeper and started
looking at the numbers, I realized, oh, my goodness, because if we had sound money,
the world would be a dramatically different place. So that was sort of the catalyst to go
down this path. And I think sound money matters arguably more than these other things in the
long term, in the long term. Yes. So, so yeah, so I want to add one thing that it's not just
sound money. It's also honest money, as compared to dishonest fiat currency.
Yes, absolutely, absolutely. Sometimes in my head, I think they're the same thing,
but yes, something that can't be printed into existence is, you know, made to
yes, it has to be has to be worked into it into existence. So it is fundamentally an asset when
it's created, not promised into existence so that it is fundamentally a liability. So
absolutely. So here's the two the two pieces I want to look at throughout the presentation.
It's gross federal debt, which we can think of as future taxes. These are going to be
taxes on us and our children. So we want to keep that that as small as possible. If we can get it to
zero, that's the best. And I want to look at CPI, which is also known as the cost to be alive. So
just by being alive, you're pretty much going to have to buy things. It's very hard to produce
everything yourself. You're probably going to have to buy things. And that's just fundamentally
the cost to be alive. So again, we want that to be as low as possible as well.
Okay, I want to thank you for this new perspective, this spin you put on things here.
Gross federal debt is future taxes that somebody has to pay. That's what it is.
So let's not just call it gross federal debt. It's your future enslavement. You have to pay
these taxes in the future. And the cost to be alive. People hear CPI, CPI inflation. Cost to
be alive is a great way to sort of slap everybody in the face and wake them up.
Yeah, a lot of times we call it cost of living. But that just sort of it's been used so many
times. We don't really think about what that means. It is the cost to be alive. Like just
by being alive, you're going to have to buy things. It's very hard to produce everything
yourself. You're going to have to buy things in the marketplace. So you want the average price
level to be as low as possible. And we all want that. We all want the CPI to be as low as possible.
And there's a predictability about this then. If CPI remain neutral, you wouldn't have to
ask for a raise. You wouldn't be falling behind all the time. This is the important thing.
The evils of inflation is that it keeps on just to tread water, to be where you're at. You have to
struggle and then ask for a big raise and ask for a big raise. And when you get those big
raises, it pushes you into a new tax bracket. And now you're paying more of your income to
the government. So you have to ask for another raise. And it's because of that cost to be
alive going into runaway. Absolutely. And that's what I'm going to show with some of my charts.
So yes. So the first one I want to start with here is federal debt. We're going to talk about
federal debt for the first half and then CPI for the second half. So this is basically federal
debt since 1960. And you can see it pretty much goes up no matter what. I have a color coded
based on Republican and Democrat presidents. And maybe you could argue that it goes up more
or less for one color versus the other. But if you step back and look at the big picture,
it's pretty much a smooth line that just goes up. That's it. It doesn't look like a wave where
all the red lines go up and all the blue lines go down. It's not like that. It's just everybody's
up. It's just a question of how much up. And this is not a good trend. It doesn't matter
what party is in power. Exactly. Exactly. And if we ask ourselves, well, what happened
before that? If we go back early in the founding of the Republic here, going back to 1790,
we can see that gross federal debt was very low. It kind of hovered around zero. I mean,
less than one billion dollars. Explain the black line versus the red and the blue.
Oh, my apologies. So early on in the nation's history, the presidential parties were not
Republicans or Democrats. Starting with George Washington, he didn't have a party
affiliation. Some of the others were Federalists or Whig parties or Whigs or Democratic Republicans.
And then we had a union party. So anything in black is not officially a Democrat or
Republican. It's something else. And then of course, the red and blue are the official
parties that we're familiar with. So yeah, you can see that it sort of didn't really
matter what the political party was for, you know, 70 years. And then we had the
Civil War, so massive federal debt. And then after the Civil War, the debt came back down
regardless of the political party of the president. So, you know, Republican, Democrat, Republican.
And it came down pretty significantly, almost halfway back down to zero, almost halfway.
And, you know, it's sort of like a Civil War. You don't really plan for that. I wouldn't
blame Lincoln or whoever the president would be at the time. It's sort of like those types
of crises are unavoidable. So I don't think the political party of the president really matters
for this period of history. It's I think was a function of the monetary system.
Okay. So after 1890, you can see we have an increase here for World War One,
and an increase here for World War Two. And those just happened to be Democrat presidents.
But again, as we just saw, the Civil War was a Republican. So not really a trend,
it's sort of like a coin flip. And you can see that we barely paid down the debt after World
War One, and then it just kept on rolling after World War Two. So it didn't really come down at
all. And I don't think this has to do with the political party. It has to do with the monetary
system, which I'm about to show. And the round dot. And the round dot, I'm sorry. Yes,
this is the creation of the Federal Reserve. So 1914, the first year it started operating. And that,
of course, is well, independent, let's say, of the political party of the president. However,
it is itself the monetary system. So we're going to see in just a second how the monetary system
before the Fed and after the Fed have a much higher correlation in terms of what happens
to our overall prosperity than whether we have a Democrat or Republican in the White House.
So this is a key turning point. And it's going to become plain as day
in just a second. So look at this. You can see a gross federal debt. Remember how low it was
before the Civil War and how it started coming back down? Well, you can't even see that giant
increase, that giant spike for the Civil War. It's not even a single pixel on this chart. It
is so small that the debt was basically zero. I mean, it rounds to zero. You can see World
War II just barely. But then after that, I mean, look at this, it doesn't matter red, blue, red,
blue. It doesn't matter. It just goes up like a rocket. And that's because of the monetary system
or, you know, which we'll see in a second. Okay. So let's look at those same charts recolored
instead of red and blue based on political party will color them gold and green based
on the monetary system. So here's the beginning of the country, primarily on a bimetalism standard,
gold and silver, and then just gold. With the exception of the Civil War, when Lincoln created
the greenback, basically the beginning of fiat in our country. And then after the war resumed
the backing to gold. So the dollar became as good as gold. And that allowed presidents of
either political party to pay down the debt. So you can see that that fiat was the the enabler
of the massive debt. And you could argue that that is that was a prudent decision or it was
wise or it was good for the country. I mean, obviously during the Civil War, that that move
sort of is what kept the country together. So as a temporary emergency measure, it's understandable
and probably justifiable, probably justifiable without doing that, you know, the country
falls apart. So yeah, and then the conversion back to making it convertible into gold and standing
behind that currency, the debt starts coming down. And I do want to point out that Andrew Jackson
there was the only time that the US was completely debt free right in there. Yes.
Mm hmm. Yeah. 1830s. The good old days. It seems if you look at his policies and things like that,
he would seem to be a Republican today, but he was a Democrat, right? Yeah. Yeah. Yeah. So yeah,
I don't think we had any Republicans until Lincoln, I think. So I think based on how I
had it color coded a minute ago. Yeah. So yeah, so really the monetary system there. So if we
if we move forward a little bit in history, you can see that, you know, that was pretty low until
the creation of the Federal Reserve. And then despite being on a sound money system, the Fed was
basically allowed to create Federal Reserve notes in excess of the gold that was able to back them.
So this was sort of the beginning of the end. And this is what caused a shift in the monetary
system to a gold exchange standard. And then ultimately to fiat in 1970, which we'll see
on the next chart. So you want to say here, Mike? Yeah, before you go to the next chart,
why do you start the gold exchange standard in 1933 or 34 there?
Basically because Roosevelt nationalizing the gold and saying that, you know,
basically is illegal for America's own gold. What do you call the gold standard between
the creation from the fed creation of the Federal Reserve to 1933, where it's not really
a full gold standard? Because I've always called that a gold exchange standard as well. The Federal
Reserve, that when the law, you know, when we enacted the Federal Reserve Act, it became legal
to only back those Federal Reserve notes by 40% gold. And so for every $50 that they put into
circulation, there was a $20 bill backing up the $100 worth of notes was backed by only two
$20 gold pieces. It was a lie and a fraud. And so it isn't a true gold standard.
What do you call the interwar gold standard then if it's not part of the gold exchange standard?
I've always, I've been trying to get everybody else to call this because it's not a real
gold standard. It's a pseudo gold standard. And if we don't have a name for it, then it's part
of the gold exchange standard, which was continued on after England dropped out of the
gold standard in, you know, being backed fully by gold in 32, I think that was, and then 33
Roosevelt breaking the big promise of gold with American citizens were banned from owning gold.
And then 1944, the Bretton Woods system officially starts or at 45,
Bretton Woods meeting was 44. I don't know when the actual Bretton Woods system started.
That is, to me, that's all interlinked and all part of a pseudo gold standard. And what do we call
that pseudo gold standard? I call it, do you have any other definition for gold exchange
standard that would exclude the period where the Federal Reserve was able to print lies and put
them out in public? Yeah, I don't know, a fractional gold standard or a partial gold standard.
Yeah, when I was putting this together, I had these decisions to make. And you know,
from one video to the next and one series of charts to the next, I don't always use the
same thing. And for example, like when we were on a bimetalism standard till, I guess it's
not here, it's on the previous chart, but until 1873, you know, I thought about coloring the line
gold and silver, and then making it just gold. And then the charts started getting too busy. So
for sake of simplicity, I just, I did it the way I have here. And again, to your point about
terminology, like what do we call all these different monetary systems? You know, I don't
have the definitive answer. I'm not sure any of us ever will. It's, I think more important
to understand what was going on than what the label is. You can see, though, that each time they come
up with some phony baloney fictitious gold standard here, these are all gold standards,
but they're fictitious. And they unleash the ability to take on enormous quantities of debt.
Yes, exactly. And that's sort of the theme of this video. That's exactly it. So yeah,
it's the monetary system that enables all this nonsense, all this borrowing. It's not necessarily
if it's a Democrat or Republican in office. It's like small peanuts. So yeah, this is the key here,
1914. So yeah, so after 1960, this is the type of thing you'd see on the Federal Reserve website.
Well, not color coded, obviously, but you'd see just debt increasing little by little,
oh, no big deal. And then from the experts you might hear, debt is just money we owe to ourselves.
No big deal. Debt is sustainable. But that is absolutely not the case. And this runaway debt
on a fiat monetary system is only possible because of what we just said, the Federal Reserve and
basically breaking promises. Breaking promises. That's really what it is.
Yeah. So yeah, looking at that all in one large one fell swoop here,
you can see that, you know, again, there's really no pixels coming up on this chart here
when we were on a gold standard. And then once we the Federal Reserve is created,
it's the beginning of the end. And we just take off like a like a rocket ship like a hockey stick
here. So the real inflection point is what? The inflection point creation of the Federal
Reserve. Well, there's another one after that there where you go from gold to green.
Oh, I see. Right here. This is this is 1971. Yeah, 1971, the Nixon shock.
Yeah, you really pointed that out in your video. And I encourage everybody to go back
and watch Alan's video. It was it's brilliant. So keep on going. Thank you very much. Thank you,
so yeah, just a brief pause here of quote from Ron Paul. It is no coincidence that the
century of total war, okay, 20th century, World War One, World War Two and all those other
wars to follow coincided with the century of central banking. It's no coincidence.
These are closely connected because you can't fight forever wars and you can't fight global
wars unless you have infinite currency to back them. And that only comes from the Federal
Reserve, the central bank basically having a license to steal as much as they want from
honest hardworking citizens. Yep. So yeah, that's that. So that's that's debt in a nutshell. CPI,
the cost of being alive. Let's take a look at that and see if the president, whether it's a
Republican or a Democratic president has a bigger effect on the CPI or if it's the monetary
system. So again, you can anticipate where this is going. The CPI from 1914 from the creation
of the Federal Reserve pretty much only goes up. It's a question of does it go up a lot or does it
go up a real lot? Those are the only two sizes. It goes up a lot or a real lot. And for folks who,
you know, pretty much everyone watching this video lived through, you know, Trump and Biden,
you know, four years of each, you can see that the red line did not go up as much as
the blue line. So that feels like a significant difference living under those two administrations.
And I agree, right? I live through it too. They felt different to me. No doubt about it.
However, if you zoom out and look at all of this, you know, is something else going on? Is there
something that's more important than the political party of the president? Yes, there is. Yes,
yes. So looking at the CPI before 1914, before the Federal Reserve, it did not just continuously
go up, right? It's not like goods and services were free a long time ago and all of a sudden
they started to cost a little bit of money and then a lot of money. No. Generally speaking,
prices go down. And you can see that in the first, you know, 150 years of this country's history,
prices tended to go down. The exception is wartime when all the people who ordinarily
produce stuff are off fighting each other. So the Civil War and World War One and those
basically explain all these sharp increases and prices. And then after the war is over,
because we're on a gold standard or sound money standard, prices come down, down, down, down,
down, down. Regardless of the political party of the president comes down, down, down, down.
Because the monetary system is that set of incentives for the executive branch and the
legislative branch to behave nicely, right? To spend resources efficiently, only spend what
they have. They can't print their way to stealing resources. So yeah, Mike, any thoughts here on
this one? No, I just think it's brilliant that you did all of this. I really do. It really does
show you. It doesn't matter who is in power. What matters is the monetary system. It's
something we do not talk about enough. Absolutely. Absolutely. And like if you look here,
this is 100, whatever it is, 150 years. And if you go from the year 1800 to the year 1900,
prices went down. So like 100 years, prices went down. I mean, this is just so...
They should come more efficient at making things. Productivity goes up. And so prices should
always be... Slow, gentle deflation is the natural order of things. And any difference
between the slow, gentle deflation and inflation is the theft that we are experiencing from it through
our phony baloney monetary system. Yes, exactly. And so for a while, I used to think... Because I
listened to financial commentary and so forth, I used to think that, oh, 2% long-term inflation,
that's normal. And if we're above it, then the difference between 2% and wherever we are,
say 3%, that's kind of like the actual inflation. And then I realized, well, the Federal Reserve
just made up 2%. It's really... Whatever the inflation rate is compared to level prices,
that's it. And then I thought, no, wait a minute, we don't compare it to zero. We actually compare
it to the normal rate of deflation. We should have negative CPI. So there's actually a gigantic
gap between, let's say, positive 3% inflation or 7%, whatever it is going up,
compared to what it should be going down. That is a tremendous, tremendous difference.
That is a tremendous insight that you just gave all of us, because we have all been
acclimatized. We've been... These things have been put in us... We've been brainwashed, basically,
to believe that the Fed thinks 0% is dangerous. We've got to have that 2% inflation.
But there is this slow, mild deflation of how much goods and services are available
per person. We're always increasing the amount of goods and services. I mean, think about,
when I was a kid, we had one telephone. We had one television. And I was in an upper middle
class family. And now television set in every room. Everybody's got their own cell phone. We've
got computers. It's a mind-boggling array of the amount of wealth that we actually have
for the same amount of work that we put out, which means that prices should be falling.
And the gap between... People are thinking, well, 2% is normal. So anything above that
may be that's theft. No. It's the difference of minus 1% or minus 2% year over year deflation.
And then whatever the positive number is, that is the theft that is going on from the public
to the government and the banking sector. Yes. And inflation affects the poorest people in
society the most. Yes. This is another critical point. So I'll make a brief analogy here.
It might feel a little off topic, but it is relevant to inflation and how dangerous it is
to the poor and middle class. Mike, have you ever gone paddle boarding?
No. Okay, so paddle boarding. So like on an inflatable paddle board, or you could think
of like a canoe going canoeing or kayaking or something, just paddling down a river.
Okay. But sometimes my fiance and I, we go paddle boarding. All right. And one of the
worst things for paddle boarding is a strong wind because if the wind is too strong,
you can't paddle into it unless you're extremely strong. So anyways, I think of
inflation like a wind. And let me give you an example. Think of these numbers.
So suppose I'm a little bit stronger than my fiance. Okay. Let's say normally I can paddle
at 12 miles an hour, just making up numbers, 12 miles an hour, and she can only paddle at 10.
Okay. So I'm 20% faster than her. Okay. 20%. So if there's no wind, I'm 20% faster than her.
It's not that big of a deal. Now, what if there's a 10 mile an hour wind, right? We could
think of this as like inflation, right? There's a headwind right in your face,
preventing you from getting ahead in life. If there's this inflationary headwind
at 10 miles an hour, she can only paddle at 10 miles an hour. So she can't go anywhere.
Right. If she works as hard as she can, she can't go anywhere. 10 minus 10 is zero. Whereas I,
if I work as hard as I can, 12 minus 10, I can still paddle at two miles an hour. So I can
still move very slowly, but I'm infinitely faster than her all of the sudden because we have this
enormous headwind. That's extremely unfair. And it means like the skilled people or the
strong people or the smart people or however people with an unfair advantage or maybe it's
a fair advantage, anyone with an advantage has their advantage magnified sometimes to infinity,
right? Because it becomes a tailwind instead of a headwind. Yes. I would put in the analogy is
that if you own assets that inflate, then you are getting the tailwind. If you are a renter,
if you own real estate and it inflates or if you own stocks and it inflates, you're doing very good.
But if you're somebody that rents that real estate, you are falling behind. It's a headwind for you,
a tailwind for them, very, very unfair. Yeah, exactly. And what we should all be enjoying,
if we were on a sound money system and we all experienced deflation, we would all have a
gentle breeze at our backs, right? And that would essentially move all of us down the river effortlessly
and make for a much, much more equitable society actually. And it'd be harder, it'd be harder to
create wealth inequality, even if you work super, super hard, like other people are
following you without working, like they're following you down the river. So it's even
equal society as far as wealth distribution goes. But also, Ron Paul mentioned the central banking
was the century of total war. And when we were using gold and silver as money, it constrained the
government to borrowing about one third of GDP was the maximum that they could spend to conduct
those wars. That's where the War of 1812 and Civil War and World War I sort of topped out at.
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
what, 120% of GDP or something? I haven't looked at it today. But it's absolutely insane that
we're here. And it's because of this evil via currency system. Yeah, exactly. It's totally
the monetary system. So yeah, let me show it all in one chart here, looking at the CPI. This is
250 years of the CPI. And you can see that it's super low. And when we zoomed in, we saw that
this was actually moving down very, very, very slightly. And then after the Federal Reserve
is created, it takes up like a rocket ship. And again, the political party of the president
has no bearing on this when you zoom out like this. And then the day they eliminated gold,
August 15th of 71. That's the big inflection point here. Yeah, right here. And we'll see
that when we when we recolor the chart based on monetary system. So here, let's do
some of the early monetary systems here. Yeah, I mean, we talked about this. So basically,
you know, borrowing for wars, but then comes back down. So prices rise, and then prices come back
down. So prices rise for wars, and they come back down. But after the Federal Reserve was created,
the prices didn't return to the prewar era like they normally do. So normally before each
war and after each war, prices go down to to where they were before. But that didn't happen
after World War One. And it's because of the monetary system. And then after World War
One or after the Fed, right, I would argue that we wouldn't have fought in World War One if it
weren't for the creation of the Fed, you know, just prior. So yeah, we can see the monetary
systems changing here. And it just increases the slope of these lines more and more and more.
And we had these inflection points. And then there probably is one here. Well, I guess, I
guess, global financial crisis was here. So it's just getting steeper and steeper. I mean,
this is obviously unsustainable. So yeah, I'm looking at the whole thing. I mean,
it's the same story. It's just looking at across different time periods that the monetary system
matters so much more than the political party. This is for long term freedom. So man, I just
think about what the world would be like if we were on sound money, and prices just went down
little by little every month, or like you wouldn't have to worry about, oh, I should just go
buy something. I should just go buy something this weekend, because if I wait until next weekend,
whatever I want to buy is going to cost more. So I might as well just spend it today.
And this is how people operate, like subconsciously.
Well, also, we wouldn't be speculating as much, because you can actually just
hold on to your cash at home, and you're getting paid. And back when banks would take
in deposits and loan out currency, they were working on a spread. So they were paying you
an interest for those deposits. With slow, mild deflation, you don't even have to put it
in a bank, but banks would still be offering some sort of interest, which would put you
even more ahead. And then if we had honest banking, where they actually loaned something
that really existed, we don't have honest banking, but we would have a much more moral,
fairer society. We would have less wealth disparity. I'm certain that there would be less poverty.
And on top of all that, the maps of the world would be completely different.
These wars funded by central banking and currency creation from nowhere,
which is just a tool for the theft of the wealth of the population of each country that's trying
to win the war. The inflation of their own currency supplies is that tool so that they
can try and outspend their opponents, but it leaves the countries impoverished.
And so, yes, this is brilliant that the party that's in power doesn't really matter.
It's the monetary system. Absolutely, absolutely.
And so, we finally got an Inflation Reduction Act after all this vertical, however many years
it's been, 50 years since the Nixon shock and 110 years since the Federal Reserve.
Finally, an administration says, you know what, we've had a lot of inflation,
let's reduce it. And of course, this is a large investment in the economy,
you know, spending, borrowing and spending, which is, you know,
biggest spending bill in history. And this is supposed to somehow reduce inflation.
It's very Orwellian that we just, we take whatever the real cause, the real effect
is going to be of this law, this act, and invert it and label it something that is
exactly the opposite of what it's going to end up as.
Yep. It's like the Patriot Act was extremely unpatriotic. The Affordable Care Act made healthcare
unaffordable. Inflation Reduction Act was an inflation creation act. I mean, yeah, I totally
agree with you. But if you were going to have an Inflation Reduction Act, what would it do?
What would the policy be? Well, I would argue, revisit the Nixon shock, right, when he
directed Secretary Connolly to suspend temporarily the convertibility of the dollar into gold and
unsuspend it, un-make it temporarily, play an uno reverse card and say, we're going back on the
gold standard. You can trade the dollar for gold. It is as good as gold. And then probably what
would happen is exactly what happened after the Civil War when we were temporarily on a
little fiat standard. Prices came all the way back down to pre-war levels. Again,
regardless of the political party of the president, we had Democrats and Republicans during this period
and prices came back down and we had a great reconstruction. That's how I would do it. If you
had an Inflation Reduction Act and yeah, it would be super painful. There can be no healing without
pain. So that's my thought. Yep. I absolutely agree. And so the last kind of thing I want
to touch on here is like the incentives going on. This is kind of how I've been thinking about
basically the incentives in an economy. Folks watching this might not know, but I actually
started out in school as a physics major. So I was really good at physics, really enjoyed it.
And then I switched to finance and got an MBA and now I'm in this world. But anyways,
if you want to predict the behavior of an object, you can draw a free body diagram
where you label all the forces, the magnitude and the direction,
like the applied force pushing a block up a plane or the force of friction pulling it down,
the weight of gravity pulling it towards the earth or the reactionary force or the normal force
pushing it the opposite direction. And by adding up all these forces, you can figure
out the net force acting on the object and that's how it's going to move. So you can
predict its behavior and you can do this for any object. And so I've thought about people
in this way for a lot of years. People respond to incentives and a lot of times it's financial
incentives or it's reputational incentives or a romantic relationship or a friendship or
all these different incentives facing people. And what we have in common in the economy is
we got to do some kind of work, some kind of job. That's what keeps us going. And that's
like the hard thing to do. But pulling us back the other way is taxation, pulling us down
is regulations. Whatever you're doing, it's regulated somehow. And then we've got our
survival instincts that oftentimes move us in a completely different direction. We'd rather
sleep in and whatever play video games or indulge our selfish urges. But we can't do that.
But if you figure out all the incentives acting on a person, you can figure out how
they're going to behave. And for individuals, if they know that the prices of what they want to
buy next week are going to be higher than what they are today, they'll a lot of times just
buy it today because they don't want to spend extra a week from now. And that's a terrible
incentive that crushes any incentive out there to save, to be disciplined, to plan for the future.
Like all these things that should be healthy things that we want everybody in society to do,
we strip those incentives away because we have an inflationary currency. So that's
absolutely terrible. So anything you want to add to that set of incentives, Mike?
No, I just thought it was a brilliant analysis, creating that incentives diagram.
And yes, this is awesome. It's a great way of looking at things. And it's a new way of looking
at things for me. Yeah, cool. Well, thank you very much. Thank you. And yeah, we can look at
those same incentives for policymakers. And again, this might not be a perfect analogy. I'm not
for anyone watching this. I'm not trying to argue that each of these forces is a perfect analogy
to like a physical force. It's just a general lens through which we can observe human behavior.
And by the way, if you notice a person or a politician or a policymaker
behaving in a way that you didn't predict, if they do something very strange,
then I would argue there must be some incentive that they're facing that you're not
aware of, some hidden force moving them in that direction. So once you start looking for that,
you might wonder, man, why do all these Republican presidents keep raising the debt ceiling or
spending into oblivion? Aren't they supposed to be like fiscally disciplined? Ah, there's a
monetary system that allows them to just print into oblivion. No wonder they do the same
things as Democrats. That type of thing, as well as warfare and all this other stuff, if you
find a politician or policymaker behaving in a way that you didn't predict, there's probably some
incentive facing them that you weren't accounting for. And so some of the incentives that they're
facing is wanting ideally to spend their money and time and resources efficiently for the good
of the country. Sorry, what's that, Mike? Currency. Currency, yes, thank you. I've been
purposely goofing it up and catching myself for a while now, and there I legitimately forgot to
catch myself. So yeah, so politicians, a lot of times the goal is to spend efficiently. However,
there's this strong incentive to borrow. And sometimes they could borrow money or currency
that already exists, but other times they could borrow it by printing it out of thin air
and borrowing it at the same time. And that is just a tremendous, tremendous incentive. And it's
one that we absolutely need to take away. Like for the good of the country, for the good of the world,
we have to eliminate that incentive, which is basically- Yes, but they can't print it out of
thin air. They can only print it by enslaving us in the future. So it's never out of thin air.
The Federal Reserve is handcuffed to where they can only buy assets that are guaranteed
by the U.S. government as to the principal and interest. And that means they've got to buy U.S.
Treasuries and then since the nationalization of Fannie Mae and Freddie Mac mortgage-backed
securities, but either way, somebody has to work to make those assets good and to pay
that principal plus the interest. And for the U.S. Treasuries, it comes out of your taxes,
which means every time they print up new currency, they enslave you in the future.
Exactly. And we have to get rid of that incentive. It's terrible. It's too tempting. It's too tempting
to print. And as you guys have seen, looking at the federal debt or the CPI, for 100 years,
200 years, it doesn't really matter the politics of the president. It's so tempting
to just print, print, print. And that can allow tiny, tiny short-term benefits or the illusion
of short-term benefits with massive long-run costs, massive, massive long-run costs, and they
accumulate. So we collectively suffer the negative effects of compound interest. We don't want to
be doing that. And that's what we've been doing for 110 years since 1914.
Yes. And the accumulation has always fallen on top of a demographic that is a larger
demographic. And now we have all of these retirees and fewer and fewer people working each decade
to support the number of people that are retired. So this whole thing is sort of running into a
brick wall at this point in time where all of these perverse incentives have put us in a trap.
Yes, exactly. There's no way out other than to do the very hard thing of allocating resources
efficiently, ending that terrible incentive and just feeling the pain of a lot of broken promises
and the healing process. It's going to be very hard, but we have to do it. And the longer we wait,
the harder it's going to be. So yeah, last thing I want to end with is the same thing we started
with, the mission of Gold Silver. Yes, I'm very proud that we've been able to,
you know, especially the media team here. This has been our mission since we founded the video
channel basically. So this goes back to 2009 or 2008. Yeah, it is something that we have stuck
to our guns. The education has been the reason for goldsilver.com to exist was to support
the education. This was my passion. This is what I wanted to do, is to enlighten the world that maximum
prosperity can only be achieved through individual free markets and sound money. And it's the truth.
And you have just proven the sound money part of it. Yes, well, thank you so much, Mike. And
it was actually your mission statement here that attracted me to Gold Silver. So thank you so
much for sticking to your guns and finding these values and using that as a North Star. It's what
attracted me to you and to this company. And I am absolutely thrilled to be, you know, pushing
that message forward. So thank you for having me on the team. And I want to thank you for being
here. I want to thank everybody for watching. And we'll see you all next time.