Never Stood A Chance

Ajouté : 2026-05-13

[00:00:00]All right, good evening everybody.

[00:00:01]Uneducated economist here. So I saw the statement on Twitter asking the question, what ex what broke exactly?

[00:00:11]Talking about how it used to be that a single wage could bring in all this income and buy a house and raise the family and do all the things that people thought was really awesome and the American dream. And the question was what broke exactly? And in my mind, we never stood a chance of keeping that kind of economy going. Like the idea of having that good American standard of living off of a single income from a producing saving economy is something of the past and it's not something that is going to come back and it was never going to be remaining because that's not the way it works. See, the canion essay from hundreds of years ago describes it so well that there's really no other way of looking at it other than the view of canion and how it is that the everinccreasing amounts of new money separates the rich from the poor. And as this takes place, you will find those good domestic manufacturing jobs shipped overseas. Now, I have broken down this speech or this essay many times on this channel, but I still think every single time I read through this, I find even more information that I didn't see before that I am recognizing today. And when you start to recognize how these underlying economic forces are playing out, then you could start to position yourself in a way that is going to give you the best outcome for you and your family and friends and neighbors and everything else that's going on in your existence because the better you do, the better you can do for everybody else around you. So, I'm going to read through these chapters again. I don't know if I'm going to read through all three of the chapters 6, 7, and 8, part two of the essay, but I want to start reading through some of these things so we can get the discussion going so we can recognize how it is that these underlying economic forces are playing out and what it is that we need to do for our personal position because nobody's going to be doing it the same way. So again, when I saw that those tweets coming up and that idea, what it what broke exactly? And I'm like, okay, I'm going to tell you what broke exactly, and we're going to read it right here within these within these chapters. So again, this is Canion's essay on economic theory. There's a link down in the description to an Amazon affiliate link to to the essay, but you do not have to buy the essay off of Amazon. You can get it for free at the Mises Institute. Go and check it out.

[00:02:45]Download the PDF and read it for free.

[00:02:48]All right. Chapter six, the increase and decrease of of the quantity of money to the state. This is in part two of the essay here. Canton uses his price species flow mechanism to analyze some of the effects of inflation. Increasing the supply of money by mining hurts some people and benefits others because certain prices and incomes rise faster than others. However, if the new money is accumulated and saved by those who successfully export goods, either because of superior quality or more efficient transportation, it will lead to a higher standard of living. And man, does that not describe right off the bat, the abstract to this to this chapter describes it exquisitly, right down to a T. This is what happened with America.

[00:03:35]They were successful at exports and became superior and efficient at transportation.

[00:03:43]This led to a high standard of living.

[00:03:45]Now you can recognize that from happening in the United States. And here it is. Canton described that's that is exactly what would happen if you mastered those two things. A master of exports and goods that other people would want and transportation.

[00:04:02]Let's continue on.

[00:04:06]If gold and silver mines were found in a state and considerable quantities of minerals were extracted from them, the owners of these mines, the entrepreneurs and all those who were there will increase their expenditures in proportion to the wealth and the profit they make. Just like anybody else out there, right? If you increase your industriousness and you start earning more money, what are you going to do?

[00:04:28]You're going to increase your wealth, right? And your consumption and the things that you buy. Let me read it again. If the owners of these mines, the entrepreneurs and all those who work work work there will increase their expenditures in proportion to the wealth and the profit they make. They will also lend the money they have over and above what they need for their expenses and earn an interest.

[00:04:55]You see how some people are spending it and some people are going to go and put that money towards a return. All right.

[00:05:03]Spending the money and investing the money. This is what people will do. All right. First paragraph.

[00:05:10]All this money whether lent or spent will enter into circulation and will not fail to raise the prices of commodities and the goods in all the channels of circulation it enters.

[00:05:22]Now think about that like all the money that it enters into circulation and the direction and places that it enters. It doesn't go through all directions. is not all channels at the same time.

[00:05:35]The places that it enters first, that's where you see the inflation. That's where you start seeing the prices start to move. All this money, whether lent or spent, will enter into circulation and will not fail to raise the prices of commodities and goods in all the channels of circulation it enters. So, it has to enter into those circulations for it to happen. Increased money will bring about increased expenditures.

[00:05:59]Increasing your money will ex you will start spending it right. Increased expend increase sorry increased money will will bring about increased expenditure spending the money and this will cause an increase of the market price in the good years and to a lesser degree into the bad years.

[00:06:19]Everybody agrees that the abundance of money or an increase in its use in exchange, that's another thing to think about, right? The ve velocity of money, the increase in the use of its exchange raises the price of everything. So, it's two things. The abundance of money or an increase in the use of it exchange, right? Raises the price of everything.

[00:06:44]The truth is uh this truth is substantiated in experience by the quantity of money brought to the Europe uh brought to Europe from America for the last two centuries. Mr. Locky lays it down in in a fundamental maximum maxim that the quantity of goods in proportion to the quantity of money is a regulator of the market prices.

[00:07:11]I have tried to elucidate this his idea in the preceding chapters. He has clearly seen that the abundance of money makes everything more expensive but has not considered how this happens. So here it is. Canton is arguing with the idea that the quantity of money is in relation to the goods and portions of the quantity uh sorry how does he say it? The quantity of goods is in proportion to the quantity of money is the regulator of market prices. Canon says, "No, that's not it." Right? This is the way that most people will see it.

[00:07:44]Canon's like, "No, that's a that's a way of looking at it, but it ain't right." I have tried to elucidate his idea in the preceding chapters. He has clearly seen that the abundance of money makes everything more expensive. Everybody sees it, right? Everybody says, "Well, how can you possibly see it any other way? More money, things go up in price."

[00:08:01]But what he has not considered is how this is happening, right? This is important, right? The great difficulty in this question consists in knowing in what way and in what proportion the increase of money raises the price of things. So now here it is. We have the increase of money not necessarily creating the increase in prices but what it does is it increases the expenditures. It increases the consumption.

[00:08:28]Once you start increasing the consumption now you start to have issues. Here he goes into describing it.

[00:08:36]I have already noted that the acceleration of a great pace in the con in the circulation of money in exchange is equivalent to to a certain degree an increase of actual money. Here it is describing money velocity right doesn't have to necessarily increase the money.

[00:08:52]You have to increase the money how much time how much that money is rolling over right how many hands it turns over.

[00:09:00]I have also noted that an increase or decrease of the prices in a distant market, domestic or foreign, influences the local market prices. That's right.

[00:09:09]How much they're selling it for in another country will alter how much you're going to pay for it inside of your country because of the market forces of prices out there. If they're selling it cheaper, guess what? You're going to get a cheaper product from them than you can make it yourself, right? So mark exterior forces, exterior market prices. On the other hand, money flows through so many retail channels that it seems impossible not to lose sight of it. Seeing that having been amassed to make to make great large sums, it is distributed in small amounts in exchange and then gradually accumulated again to make large payments. For these operations, it is necessary to cons con it is necessary to constantly exchange between gold, silver, and copper money according to the requirements of exchange. It is also usually the case that the increase or decrease of hard money in the state is not perceived, right? People don't even realize it's happening is not perceived because it comes into the state from foreign countries by such impersonable means and proportions that it is impossible to know exactly the quantity which enters or leaves the state. So back in Kanton's day they had a serious problem not knowing exactly how much money was even there. Like they didn't even realize how much money was coming in or going out.

[00:10:35]Now this is a serious situation when you think about it from canon's day when you have a gold and silver but now think about it from your local areas. Think about industriousness of a particular area that loses their factory. What happens to the new money that pours in?

[00:10:53]How is it that those conditions are faced? This is something that he is somewhat describing where this money comes in and where that money goes out.

[00:11:06]However, all these operations happen before our eyes and everybody takes direct part in them. I therefore venture to offer a few observations on the subject even though I am not able to give an exact and precise account. In general, an increase of hard money in a state will cause a corresponding increase in consumption and this will gradually produce increased prices.

[00:11:32]That's why quantitative easing 1 2 3 and four failed to produce an inflationary scenario because it never really entered the people's circul into the hands of the people. It never entered into circulation.

[00:11:45]This is one of the things that really needs to take place if you're going to enter new money into circulation. It needs to actually circulate and it needs to start trading hands. All these operations happen before our eyes and everybody takes part in them. I therefore venture to offer a few observations on the sub oop sorry that was the wrong chapter in general an increase in the sorry guys an increase in the hard money in the state will cause a corresponding increase in the consumption and this will gradually produce increased prices. The increase of hard money comes from gold silver mines within the state. The owners of these mines, the entrepreneurs, the smelters, the refiners, and all the workers will increase their expenses in proportion to their profits. Their households will consume more meat, wine, beer than before. They will they will become accustomed to wearing better clothes, having finer linens, and having more ornate houses, and other desirable goods. Now, tell me that doesn't happen when people get their new money, right?

[00:12:45]If they get a raise, if they get a better job, if they move to an area that is all of a sudden has their cash flow doing better, what do they do? They increase their expenditures. They live in better houses. They wear nicer clothes. They eat better food. They do all the things that is of a luxurious experience.

[00:13:04]Consequently, they will give employment to several artisans who did not have that much work before. Now, this is something I think we should pay keya key attention to.

[00:13:16]That the new money coming in has given employment to several artisans who did not have much work before.

[00:13:27]Now, when the money is spent, when the luxurious people are spending their money, where is it going? It's going into the hands of people who never worked before.

[00:13:37]This is interesting to think about. When you have a productive saving nation that's producing stuff and say, you know, selling that stuff off there to the world, it's a whole different experience than when you have new money coming in from a luxurious experience.

[00:13:50]And these people are now employing several artisans who did not have much work before and who for the same reasons will increase their expenditures.

[00:14:01]You see how the new money flows? All this increased expenditures on meat, wine, wool, etc. necessarily reduces the share of reduces the share of the other inhabitants in the state who do not participate first in the wealth of the minds in question. So here it is all those people who have first access to the money and the f people who have first access to their money they're the ones who are getting first access to it and enjoying it. Everybody else is getting last access to it and failing to be able to enjoy their experience because it's getting harder and harder.

[00:14:36]Right. All this increased expenditures on meat, wine, wool necessarily reduces the share of the other inhabitants in the state who do not participate in the wealth of the mines in question. So all these other people are increasing their consumption and the people at the end of the line are suffering the consequences and not even being able to keep up.

[00:14:58]Does it sound familiar to the K-shaped economy?

[00:15:02]Right. This is why I read this stuff over and over again because if we can recognize it from hundreds of years ago, you can think about what it is that you need to do to position yourself. People who think this is new or made up or I don't know, like somehow manifested out of some kind of globalist elitist thing. Go for it, man.

[00:15:25]Go ahead and go down that road. I've been down it. But to recognize that Canon described it from hundreds of years ago, it makes me believe that those people are manipulating this. And if you understand it, you can position yourself for it. The bargaining process of the market with demand for meat, wine, wool being stronger than usual will not fail to increase the prices. As everybody's got the new money and they want to start eating more ribe eyes, what happens to the price of ribe eyes?

[00:15:51]They go up. These high prices will encourage farmers to employ more land to produce the following year. And these farmers will profit from the increased prices and will increase their expenditures on their families like the others. So everybody gets to enjoy the new money. Yay, new money. Those who will suffer from these higher prices and increased consumption will be first of all the property owners.

[00:16:20]Right? Did anybody think it was going to be the property owners first? No. They all thought it was going to be the people at the end of the line during their terms of leases, then their domestic servants and all the workmen on fixed wages and earners who support their families on a salary. See, these people were stuck at their wages, stuck at those leases, stuck at their rents that they had guaranteed or contracted.

[00:16:42]They all must diminish their expenditures.

[00:16:46]These people diminish their expenditures in proportion to the new consumption that has taken place which will compel a large number of them to immigrate and to seek living elsewhere.

[00:17:00]The property owners will dismiss many of them and the rest will demand a wage increase in order to live as before.

[00:17:09]It is in this manner that a considerable increase of money from the mines increases consumption and by diminishing the number of inhabitants greater expenditures result by those who remain.

[00:17:22]So as all these people suffer the consequences and the inequality is growing and they're like hey I can't keep up and my wages are fixed and I'm out of here. There is now more stuff for the people at the top to buy and they increase it even more.

[00:17:41]You think about it. The top 10% of the people used to do 35% of the consumption. Now they do close to 50% of the consumption. Canton's describing it, guys. He's describing it from hundreds of years ago. He's predicting the future, but actually he's describing what he had witnessed from the past because this is how it works. Nothing broke.

[00:18:01]This is the way the system operates.

[00:18:04]When you have everinccreasing amounts of new money that pour into the system, it's the way it goes down. The new money continues to be extracted from the mines. The abundance of money will increase all prices to such a point that not only will the property owners raise their rents considerably.

[00:18:21]Uh, sound familiar? when the leases expire and resume their old lifestyle, increasing their servants wages proportionally, but the artisans and workmen will increase their prices of articles they produce so high.

[00:18:39]Here's a problem, guys. You see, see, at first it's cool. All the people are like, "Hey, man. We'll just increase their prices. Everybody gets to work.

[00:18:47]Everybody gets to increase. And we all get a raise, right? We all get the raise together. We all all it rises the all the boats together. No, no, no. Canton's like that's not going to happen. No, that's not going to happen to you.

[00:18:59]Listen to it again. If the money continues to be extracted from the mine like and you have to think, replace the mine with the Federal Reserve and the central banking system. All right, that's the mine, right? The abundance of money will increase all prices to such a point that not only will the property owners raise their rents considerably when the leases expire and resume their old lifestyles.

[00:19:24]So all the all the landlords out there are like, "Hey, give me more money."

[00:19:27]Right? So they get their money. They go back to living the way they were. They increase the servants wages. All their workmen, right? Everybody who's working with them, right? They increase their wages proportionally. But the artisans and workmen, the artisans and workmen, these are the people who are producing stuff, producing stuff and selling that stuff, will increase the prices of the articles they produce so high because they're trying to keep up with the inflation, right? So they're increasing their expenditures, you know, just the same as everybody else. So they got to sell sell their produce, all the things that they make at a much higher price, right? They have to increase that. There will be considerable gains in buying them from foreigners who will make them much cheaper. Boom. There it just went your job.

[00:20:15]Now it's gone and it's not going to come back because you're going to have everinccreasing amounts of new money that come into the system and therefore those people who lost their job because of the foreign competition will never ever ever get it back.

[00:20:32]Not until there's a complete collapse of the entire system. What broke? Nothing broke. This is how it works. This is how the system goes down.

[00:20:43]Uh this will naturally encourage several people to import products at a lower price from foreign factories and this will gradually ruin the artisans and manufacturers of the state who will be unable to sustain themselves by working at such low rates because of the high cost of living. How do you compete against somebody who's sleeping on the ground? You can't. You're not going to.

[00:21:07]It doesn't work like that.

[00:21:10]Canon described it hundreds of years ago. He says, "Good luck with that. When you have foreign competitions making the same thing that you're making, you're not going to be able to compete against it if they're doing it so much cheaper than you are. Especially if they master the shipping part of it.

[00:21:26]They master the transportation and it's over. You're done.

[00:21:30]The overabundance of the mines has diminished the number of inhabitants in the state, accustomed those who remain to excessive expenditures, raise the price of farm products and the wages of the labor to high levels and ruin the manufacturer of the state by the purchase of foreign products by the property owners and the mine workers. You see what happened there? They increased their money lot. I mean, it's just it's just amazing to see how well canon can describe the K-shaped economy. It's not a K-shaped economy.

[00:22:04]It's the Kanton effect. That's what it is. Every single article that you read that talks about K-shaped economy, what they are describing is the Canton effect. They just don't call it the Kion effect because either they don't know.

[00:22:18]I guess they just don't know. Like that must be it. They just don't know. All right. But we know when the overabundance of money from the mines has diminished the number of inhabitants in the state accustomed those who remain to excessive expenditures because everybody loves spending money right and they spend excessive amounts of money raised the prices of the farm products and the wages of the labor and high levels. It ruined the manufacturers the manufacturers of the state by the purchases of foreign products by the property owners and mine workers.

[00:22:49]Think about it. Like all the Chinese crap that was that was your domestic manufacturers getting exported when they say the you know the greedy rich corporations and all the politicians and stuff like that. Kanton didn't know about any of that stuff. He barely knew about the Americas, right? How could he possibly think about politicians and greedy corporations exporting all the good domestic manufacturing jobs when here he is talking about what it is that really drives that economic force.

[00:23:24]There's no other way of looking at it.

[00:23:28]All right. This will gradually impoverish the state.

[00:23:33]Um let me read that again. Let's see here.

[00:23:37]The money produced by the mines will necessarily go. Okay. Yeah. For the high levels, the manufacturers of the state purchase foreign products by the property owners. Okay. The money produced by the mines will necessarily see this is kind of like the Triffins dilemma. The money produced by the mines will necessarily go abroad to pay for the imports. This will gradually impoverish the state and make it in a way dependent on the foreigners to whom it is obligated to send money every year as it is extracted from the mines. Think about the central banking system and how it is we buy all this foreign product and we send fiat currency out there. All this money we have to constantly export.

[00:24:20]The great circulation of money which was widespread in the beginning ceases.

[00:24:24]Poverty and misery follow and the exploitation of the minds appears to be only advantageous to those employed in them and to the foreigners who profit thereby. So how is it that your position inside of this? Like think about the end here. Is it good to be a hardworking American producing and saving at the end of this of this game where all the new money is coming in and it's really only benefiting those who are closest to it and the foreigners from which it is benefiting those people as well. Poverty and misery follow the exploitation of the minds. Remember the exploitation of the central banking system appears to only be advantageous to those employed in them and to the foreigners who the profit is by profit who profit thereby.

[00:25:12]You see that like describes exactly what it is that's taking place within our economy right now from hundreds of years ago from things that he had witnessed from hundreds of years before that.

[00:25:25]Why why is it that nobody else seems to want to break this stuff down and then share with their audience how it is that this K-shaped economy is really occurring and what it is that you need to do to understand that if you can see how this K-shaped economy is really occurring because of the canion effect that you can position yourself so much better because of that like how many other people are describing that I I can't find any Right.

[00:25:58]This is approximately what has happened to Spain since the discovery of the Indies. As for the Portuguese, since the discovery of the gold mines in Brazil, they have nearly always used foreign articles and manufactured goods.

[00:26:13]It and it seems that they work the mines only for the account in advantage of foreigners.

[00:26:20]All the gold and silver of these two states extract from the mines does not supply them with more precious metals in circulation than others. England and France usually have even more. So this this is incredible to think all the money doesn't benefit them, right?

[00:26:37]Excuse me. Here it is. They have all these mines. They extract all this gold and silver from these mines. They work them like hell and all they do with it is buy foreign production with it because they don't produce it themselves.

[00:26:49]That's how come that's what happens when they have everinccreasing amounts of new money that comes in. The everinccreasing amounts of extraction of money from coming from these mines and how it is that they found the discovery of the the new mines kept the foreign production coming in and now they are reliant on it and they don't keep any money in their country because it all goes out to foreign production.

[00:27:12]Soon as they get it, they have to give it away.

[00:27:16]All the gold and silver in these states extract from the mines does not supply them with more precious metals in circulation than others. England and France usually have even more.

[00:27:27]Now if the increase of money in the state comes from the balance of foreign trade, this is my favorite part. This is where United States really started to kick it. When people say, "Man, how come it is that we can't go back to the awesome ways of the high standard of living?" This is it right here. Nothing broke. This is what failed. This is why it did so well and why it failed right here. Now if the increase of the money in the state comes from a balance of foreign trade i.e. sending abroad articles and manufactured goods of greater value and quantity than it is imported is consequently receiving the surplus in money. Exporting more than you import. Export stuff import money.

[00:28:09]This annual increase of money will enrich a great number of merchants and entrepreneurs in the state. It will give employment to numerous artisans and workmen who provide the goods sent to the foreigners from whom it is drawn.

[00:28:24]That is why you had a good manufacturing job and a high standard of living. That right there is the reason why we were all kicking it and having a great time here in the United States. This manufacturing of good quality stuff and sending it out there to the world and being really awesome at it is what gave us the ability to raise our standard of living. That did it.

[00:28:49]Not anything else. Our industriousness.

[00:28:53]All right.

[00:28:55]Gives employment to Okay. Um this will gradually increase the consumption of these industrial inhabitants and will raise the price of land and labor. But the industrious people who are eager to acquire property will not at first increase their expenditures. They will wait until they have accumulated a large sum from which that they can draw secure interest income independent of their occupation.

[00:29:27]right there. Those are the baby boomers that everybody wants to cry about like to a lesser degree. There is much higher levels of this. But those people right there, those are the reasons why they have separated themselves. They become property owners. They did not. They were industrious people, right? We're not industrious people, not like we used to be. They were industrious people. The industrious people who are eager to acquire property, the industrious people who are eager to acquire a house, buy things, get stuff will not at first increase their expenditures. They will wait until they have accumulated a large sum from which that they can draw secure interest income.

[00:30:10]This is what they will do independent of their occupation.

[00:30:15]Once a large number of inhabitants have acquired a considerable fortunes from this money which enters into the state regularly and annually, it will not fail to increase the consumption and raise the price of everything. Boom. Right?

[00:30:32]If you have been an awesome producing, saving nation, investing that money, positioning yourself well, getting the cash flow, and you get that cash into your hands, you will increase your expenditures.

[00:30:47]No doubt about it. Right then, um, although these prices, oh, I'm sorry, will not fail to increase their consumption and raise the price of everything. Although these higher prices result in a greater expenditures than they first contemplated, right? People were like, "Oh man, guys, prices are really high." But did you fill up your tank? Yeah, I sure did because I'm a rich baby boomer, right? This is what people want to say out there. All these people who have positioned themselves so accordingly. They did not contemplate this as high, right? Way higher than they first contemplated, they will for the most part continue so long as their capital lasts. It doesn't really matter.

[00:31:29]As long as their assets are kicking, right? As long as that new money is coming in, as long as they have access to it, they will continue as long as their capital lasts.

[00:31:40]For nothing is easier or more pleasant than to increase the family's expenditures. And nothing is more difficult or unpleasant than to decrease them.

[00:31:53]Now, don't get me wrong. I'm not blaming baby boomers. I just use it because I like people who accuse them of that. But to think about it, they were industrious people who have positioned themselves accordingly, who saved and invested and then put themselves in a spot of property ownership that they now take full advantage of. This is something that canon described would happen. If you have a manufacturing state that produces and saves, this is the results of it. This is how it goes down. I mean, it's literally in one paragraph, right?

[00:32:24]If the annual and continuous balance has caused a considerable increase in of money in a state, it will not fail to increase consumption.

[00:32:34]Right? All about consumption. Increase consumption. It will increase the consumption. How many times does it say it right through this essay?

[00:32:43]Raise the price of everything and even diminish the number of inhabitants unless additional products are drawn from abroad. proportionate to the increased consumption. So if you increase the consumption, you better start increasing more more production from the out foreign production being imported into the nation.

[00:33:04]That's what it says, right? Uh unless additional products are drawn that if you don't bring in more products, if you don't bring it in, the inflation is going to take off. Moreover, in the state if Moreover, in states that have acquired a considerable abundance of money, it is natural to import many goods from neighboring countries where money is rare and consequently everything is cheap. Think about China taking off, right? They did so well when they had nothing and we were buying all their production. They had cheap labor.

[00:33:37]However, as money must be exchanged for these products, the balance of trade will become smaller. The cheapness of land and labor in foreign countries where money is rare will naturally cause the building of factories and businesses similar to those of the state but what but which will not at first be as perfect or as highly valued. Hey, thank you very much for the $2. Uh what is that? See me rolling. Give me one second here. I'll get back to that. How much further? Actually, let's take a quick second and read that super chat. That was really cool of you. Uh, where do you think of this Hannah virus stuff? Oh, okay. Well, we'll get back to that in just a minute. Let's not break our concentration on this um on this chapter here. I might just finish the chapter off and we'll call it goods cuz this is a really good chapter and I think we're getting the point out of it.

[00:34:30]All right. Um, in this situation, the state can retain an abundance of money. Okay, hold on here. I lost my place. Uh let's see here. The cheapness of land and labor in foreign countries where money is rare will naturally cause the building. Okay.

[00:34:48]In this situation, the state can retain its abundance of money, consume all its own products and a great deal of foreign products and over and above all this maintain a small balance of trade against its foreigners or at least keep a balance leveled for many years. In other words, a state will import in exchange for its commodities and manufactured goods as much money for these foreign countries as it sends to them for the goods or or products of the land it takes from them. So basically doing a balanced trade, right? Equal trade. I you know sell you as much as you sell me. If the state is a maritime state, the easiness and low cost of shipping for the transport for the transport of for the transport of its commodities and manufactured goods to foreign countries may comp may compensate in some way for the high cost of labor caused by the overabundance of money. So here it is. If you have the ability to ship and that's really important that the man the it's not just a matter of manufacturing, it's a matter of transportation too. If you own the shipping channels, you still own a you still own leverage.

[00:35:59]Therefore, the commodities and manufactured goods of this state, expensive though they may be, will continue to sell in foreign countries and sometimes will be cheaper than the manufactured goods of another state where the labor is paid less. So even if you can manufacture it cheaper again if you can ship it if you own the shipping channels the cost of transport greatly increases the price of goods sent to distant countries. However these costs are very moderate in a maritime state and where there is regular shipping to all foreign ports and ships are nearly always found there ready to sail taking on board all caros entrusted to them at a very reasonable freight. So basically a what they were saying is like you know even if you were able to protect like let me read that again the cost of transport greatly increases the price of goods sent to distant countries. However these costs are very moderate in a maritime state where there is a regular shipping to all foreign ports and ships are nearly always found there ready to sail taking on board all cargos entrusted to them at a very reasonable rate. So basically like neutralizing the cost of the of the shipping like you can't take advantage of it if these guys have it about as cheap as you can do it.

[00:37:15]This is not so in a state where navigation does not flourish. There it is necessary to build ships especially for the transportation of goods and this sometimes absorbs all the profit and transportation there is uh and transportation there is always very expensive which entirely discourages commerce.

[00:37:37]England today consumes not only most of its own small production but also large amounts of foreign production such as silks, wines, fruits, linens in a great quantity, etc. Meanwhile, she sends abroad the products of her own minds and manufactured goods for the most part. No matter how expensive the labor is, due to the abundance of money, she does not fail to sell her products to distant countries because of her maritime advantage at prices as reasonable as those of France where the same products are cheaper. So even though France has them cheaper than England, England can ship them. And because they can ship them, now they're just as cheap as everybody else's stuff, even though their labor is costing more. The increased quantity of money in a state may also be caused without a balance of trade by the subsidies paid to the state by foreign powers by the expenditures of several ambassadors or travelers wanting to stay there for political reasons, curiosities or pleasures or by the transfer of property of wealth by families who choose to leave their countries to seek rel religious freedom or for other reasons and to settle down in these states. So basically just like rich families showing up with it. In all these cases, the sums entering the state always causes an increase in expenditures and consumption and consequently increase the price of all goods in the channels of exchange where the money enters. So there it is like all these people coming in if you bring in new money what is it they're going to do? They're going to increase their expenditures and along with all the channels in which that they are spending that money, right? Doesn't matter how the new money comes in, so long as new money comes in, even if it's just brought in by foreign families before the increase in the quantity of money. Suppose that a quarter of the inhabitants of the state consume meat, wine, beer, etc. on a daily basis and frequently acquire clothes, linen, etc. But after the increase, a third or half of the inhabitants consume these same things. Prices for these goods will increase and the high prices of meat will convince several of those who form the original quarter to consume less meat than usual.

[00:39:59]A man who eats three lbs of meat daily will manage with 2 lbs, but he feels the reduction. Meanwhile, the other half of the inhabitants who hardly ate any meat at all will not feel the reduction.

[00:40:16]See, the people who were used to eating it now have to cut back on their expenses. But if you never really had it to begin with, you don't really feel the pain.

[00:40:26]The price of bread will increase gradually because of increased consumption as I have often suggested but it will be proportionally less expensive than meat. The increase in the price of meat is noticeably felt because it causes a reduction in the consumption on the part of a small portion of the people. Only a handful of people were eating meat anyway and so when those few people had to cut back it was noticeable.

[00:40:54]But the increased price of bread is less noticeable because the decreased consumption is spread across the entire population.

[00:41:03]If 100,000 extra people move to a state with 10 million inhabitants, the extra consumption of bread will only amount to will amount to only one pound in a 100, which must be subtracted from the old inhabitants.

[00:41:23]But when a man consumes 99 pounds of bread for his substit hardly feels the reduction.

[00:41:34]So when people come in and start consuming more bread is not really noticed because of the amount of abundance and of bread that is out there and how widely it is consumed. Because meat is consumed by a small portion of the population. The reduction is felt quite dramatically but not noticed in bread.

[00:41:56]See, it's like you could kind of think about it in other items. If you know uh anyway, let's move on here.

[00:42:06]We're almost done with this.

[00:42:08]When the consumption of meat increases, farmers increase the size of their pastures to produce more meat and this diminishes crop land and consequently the amount of wheat produced. However, what generally causes meat to become proportionally more expensive than bread is that it imports of foreign wheat are usually permitted while imports of for while imports of beef are absolutely forbidden as is the case in England or heavily import duties are imposed on other states. This is the reason why rents for meadows and pastures raise in rise in England with the abundance of money three times more than the rents of crop lands.

[00:42:51]You see that? Like he's blaming the tariffs the duties on beef on the reasons why those particular properties are that expensive.

[00:43:01]Keeping the prices high. This is the reasons why the rents in the meadows of the pastures rise in England.

[00:43:08]See how that works? There is no doubt that when ambassadors, travelers, and families move to a state, the increased consumption will cause higher prices in all the markets where they spend their money. As for the subsidies the state has received from foreign powers, they are either hoarded for the state's necessities or are put into circulation.

[00:43:30]If we assume they are hoarded, they do not concern my argument, for I am considering only money in circulation.

[00:43:37]Hoarded money, silverware, churches money, etc. are resources that the state turns to in emergency situations, but are of no present utility. If the state puts these funds into circulation, it can only it can only do so by spending them. And this will certainly increase consumption and raise the price of all goods. Whoever receives this money will set into motion or set in motion the principal business of life which is food either for himself or someone else since everything else is connected to this directly or indirectly. Right? It all comes down to eating.

[00:44:21]I love that chapter. I'm not going to read any more of them. I think that was good. But I think it's very telling of our situation when it comes to the everinccreasing amounts of new money that comes into the state from the manufacturing of goods that we sent out there to the world and then the world sent us that money and then we lost that manufacturing base to our high standard of living. Kanton describes it hundreds of years ago. And I love when I see people who want to blame politics, who want to like, no, let me tell you how it's politics. And I'm like, well, can you argue against a 250y old essay that's describing events that happened hundreds of years before him? Because if you're talking about a new found religion of politics out there that's going to describe what it is that's going on within this economy and not take into account the underlying economic forces that Canton is describing, then you're probably going to miss it, right?

[00:45:23]Because he's describing it like clearly.

[00:45:30]And I think how is it that he could describe it if it isn't accurate to what it is that not only he saw but what we're seeing from it. We got a lot of people who are joining in. 173.

[00:45:44]All right. I don't blame the boomers.

[00:45:46]Yeah, I don't blame the boomers either.

[00:45:47]I I kind of made fun of the boomers while I was reading that, but I wasn't like I wasn't trying. I was being sarcastic. Probably shouldn't do that as much. Okay. I should probably be as serious as I can when I do this. 48 ounces of meat a day is savage. I know, right?

[00:46:05]All right. Um, box, I am not sure you know what you're talking about. All nighter Haidider seems to have a pretty good grasp of things. What do you think is coming that we don't see? Yeah, I mean, I would trust All Nighter's opinion.

[00:46:28]Oh, here we go. What? No, I'm not going to get into it. Let's read Let's do some other stuff. My dad is a cool dude. My dad is a cool dude. Question. Can you tell us how you're positioning yourself with the negative interest rate? And can you please be specific? Um, no, Jamie, I'm not. All right. And something that I learned about um letting go of your secrets, letting go of your ideas, your plans, and telling people in I before they occur, before that it happens is literally setting yourself up for failure. You're going to put the universe in a defensive mode against whatever it is you're doing. I have described it so many times out there. if you want to come join us on the school community, right? I'll get into more detail there, right? We're a group of guys over there who are sharing in detail what it is that we are doing specifically for ourselves. And I'm not going to ruin my chances of doing something successful out there by spilling it out here for just, you know, the universe to recognize and put up the defensive walls against. So, no, right?

[00:47:34]Internalize it for yourself so that you can position yourself accordingly for it. Now, I've talked about all the different ways of looking at it. I've I did an interview with Mike Zuber, who, you know, also broke down the idea of the negative interest rate environment and what that means for the individual out there. How it is that an individual can take advantage of that as a poor broke dude is my opinion is get the hell out of debt. If you have any kind of consumer debt, you want out of that. At the same time, you want to get into debt. So, if you can find the ability to borrow money to buy a cash flowing asset like a rental property, I would suggest doing something like that. If you can't position yourself like that, then you might want to be positioning yourself into stocks or crypto or bonds or something of those things. Now, I'm telling you, some of those things I am doing.

[00:48:23]Not all of them am I doing all of them attempting to do, but not all of them I'm successful at getting done. But those are my mindsets. If I'm not a position in if like for example if you're not positioned in cryptocurrencies then you might want to get a little bit just some right I mean you know at least be in the game I know people say I wouldn't touch it with a 10-fold pull and I'm thinking damn it is one of the best positions I have ever had is volatile as hell is scary if you were trying to count on it but if you dollar cost average into that it's a really good deal and it seems to work out very well silver gold like how do you get out of a third party risk without You can't if you don't have silver and gold, you have no insurance policy, man. Like, that's dangerous.

[00:49:06]Don't be in Don't be without your insurance policy. My goodness, right? Do you have an emergency fund? Like, these are positions that you have to take right now with a negative interest rate environment if that is to take place, right? And that's a big what if.

[00:49:21]Do you believe that inflation expectation is going to be elevated going into the future?

[00:49:26]Because that's a key component. If if the inflation expectation falls, if it disappears, well, so does the negative real interest rate environment and goes into a positive real rate environment.

[00:49:38]But the I'm guessing from what it is that I'm hearing from the people out there that the inflation expectations going to remain elevated. So this is how you have to understand it for yourself.

[00:49:49]I'm not going to talk about the specifics anymore about anything I do, all right? Cuz it, you know, you're setting yourself up.

[00:49:57]Aloha from Hawaii. Thank you, financial firefighter. But if you want to, I mean, if you really want to know, you can come join us on the school community.

[00:50:06]All right.

[00:50:08]Uh, what do you think of the Hannah virus situation? Oh, thank you so much for the $2 super chat, too. Um, you know, to be to be perfectly honest with you, I haven't really looked at it because I don't fall into like a lot of the, you know, crazy propaganda news stories and stuff like that. I don't know what's real. I don't know what's fake about it. And so therefore, what I have a tendency to do with that information is literally just push away from it. And I I I mean, I wish I could give you a better answer than that, something that was more entertaining and stuff, but I I don't even look into it.

[00:50:43]I just kind of ignore it, you know? Um otherwise, you you kind of fall into the hype, right? Like what is it that I could possibly do with the information?

[00:50:54]Like I guess one could like you know maybe do some stock trading in a particular thing like if they can kind of you know see the trend right um in that to me like I don't I don't really have like the mindset that leans that way. So in that sense like I just don't even really give it any kind of consideration. Um I don't think it's really going to mess with like the inflation expectation too much. Uh not at this point like that might change but you know um but at this time I think it's more like kind of narrative control than it is actual like you know going to be any kind of economic event you um I did it by myself. Let's not count on labor. Let's not count labor.

[00:51:48]I'll be there this Saturday. Thanks a lot. Yeah, you bet. Jamie got Yeah.

[00:51:55]All right. Position yourself in a sick and receiving position yourself in a sick and receiving of the money.

[00:52:08]Okay. All right. Uh my tin my tinfoil no midterms. Hope I am wrong. Is my tinfoil hat in here or does that just happen to be the way you commented that I don't see it? Okay.

[00:52:29]Uh, the Fed is done cutting rates. Time to just put their hand over the spike of the energy shock and let the real rates go negative. I mean, I think that that was the plan the entire time. I mean, you think about it. I mean, you know, if you go back and and you look at speeches and you see them talking about events that then come to fruition later, like how is it that it's not part of their plan or part of their expectations or, you know, I don't know how I mean, I don't want to call it like the conspiracy to me. It's just now it's just the monetary policy.

[00:53:10]Like, I understand the monetary policy in a way.

[00:53:13]I I almost feel like I could be like in the room with the Federal Reserve. And I guess that's probably one of the reasons why a lot of the people say that I'm just a shill for the Fed or work for the Fed or anything else like that. And I laugh when I hear that. And I'm thinking, man, if you really want to disassemble the Federal Reserve, you kind of have to figure out how they're doing it, right? You know, so anyway, um knowing that they had issues a long time ago and that Oops, that's not the one I wanted. um and that they actually talk about that neutral interest rate in a way that makes so much more sense to what it is that we are facing right now. Excuse me.

[00:53:54]And I love going back to the John Williams speech, but when he says this, the downward shift in inflation expectation has a second round effect on real interest rates, the economy, and inflation. When policy is constrained by the effective lower bound, the downward shift in inflation expectation raises the real interest rates, further diminishing the degree of monetary stimulus, making the downturn worse and reducing inflation even more.

[00:54:25]So think about that. The increased in inflation expectation lowers the real interest rate increasing the degree of monetary stimulus.

[00:54:36]This is the Fed's words, right? I mean, I said it opposite, you know, I mean, he's talking about, you know, looking at it the other way, but it's still this it's the same. All right. The downward shift in inflation expectation raises the real interest rates, further diminishing the degree of monetary stimulus. So increasing the inflation expectation lowers the real in lowers the real interest rates increasing the degree of monetary stimulus. That's what we're about ready to face.

[00:55:08]All right. And so now this is the Federal Reserve from 2018 talking about that.

[00:55:19]They sit still. They push inflation expectations around.

[00:55:26]All right. Uh, Simon is smarter than some white collar guys at the Fed.

[00:55:32]Well, I appreciate it, guys. I mean, I thank you for sticking it out as much as you have because I know for a lot of people out there, they were like they lost faith in me and gave up a long time ago and decided that they were just going to move on or maybe I just started talking so to such a level that it was hard to keep a hold of as far as, you know, the attention of, you know, essentially the I don't know what to call like this the distracted, you know, I mean, people were like, "Man, you need to shorten these videos up. I can't handle them being this long. And I'm thinking, you can't get the information in 5 minutes. There's no way. Any video that has delivered information in 5 minutes and you think it's a profound video full of information is not. It's propaganda. All right? Because no real video can possibly do it.

[00:56:20]It's much deeper than that. You know, I mean, if you're already in the know, then you might be able to take an information in five minutes from somebody, but if you're not already like understanding of how it is that the neutral interest rate is being pushed on the of the expectations and what that means for the real interest rate environment, like this is how the Fed's monetary policy is operating. And literally, we're the only ones who have a regular discussion about it. I'm trying to share it every single day out here. I try to find other evidence of it so we can look at it from a different angle so we can think about what it means when wars comes on and stops communicating in the fashion that the Federal Reserve once had. Do they go back all the way to the Greenspan days where they literally said nothing and then the press is looking to see if he has a fat briefcase or a skinny briefcase to whether or not there's going to be an interest rate adjustments. It's like this is literally how the press used to operate before the Federal Reserve and their all their massive communications that they were doing out there like discussing the things that we break down on this channel I know are unique and I know it's beneficial to the working class the wage earner because once you see what it is that's happening to you then you're going to start positioning yourself to deal with it and part of dealing with that is securing a rate of interest beyond that of your occupation dividend paying stocks, bonds will do it if you get the right ones. You know, I mean, I'm not trusting in many like corporate bond kind of stuff, but there's a lot of people who are. There's a position that could be had with it. They do pay a yield. All right? There's all kinds of things out there that you can get really creative with as far as starting businesses. These are the things that you need to think about as far as getting into cash flow and then taking that cash flow and finding a secure rate of interest. Now the security rate of interest is really relative. Everything is risk. There is nothing that is guaranteed. Anybody who says well how is it that you're going to guarantee that this is going to happen? You can't, man.

[00:58:24]Like the entire world is full of op, you know, 50/50s, right? It's going to be like anything is possible out there. But when you recognize how it is that the monetary policy is operating in the fact that they literally do not teach anybody or show anybody how this works, like if you didn't have the uneducated economist by your side breaking these speeches down and sharing all these po all these parts and components and theories and ideas, who is it that was going to be doing it for you? Right? It's going to be some salesman out there trying to get you to buy their financial plan, their gold and silver, their whatever. I'm the only one that is trying to sell you the theory and that's it. To a better understanding of monetary policy and economic forces. That's the only thing I have to sell.

[00:59:17]Justin, thank you so much for the five bucks. Ultimately, Simon is trying to convert wage earners into asset owners here. Yeah. Well, at least I mean I don't know if you're going to get into asset ownership like you're going to get like I would do or you know Mike Zuber or you know somebody else is going to do but if you can recognize it if you can see it like you're if you just go okay like wait a minute man I've been busting my ass down here at the bar serving beers and like you know I make pretty good money but I just like party it all away because I'm a bartender and I know that life because I lived it for a long time now. What is it that I could possibly do, man? What is it that I could get started with? Well, you think about some of the things that I've said. Do you have a savings? Do you have debt? Do you have silver? Do you have cryptos? Do you have an idea for a business to get started? Do you need to level up some education? Right? These are things that there's like massive questions like some people will be like, you know, I got that got that check. Right? And they have all these things and they checked them all off and they come to me and they say, "Hey, man. I got $100,000 and all those things that you talked about.

[01:00:21]I've already checked it off. What do I do next? And I'm like, holy crap, man.

[01:00:24]Like, you're on your way. Like, I understand it's scary out there, but dang, dude. Think about what you just said. You know, you got all those things and $100,000 and you're asking me what to do. Like, I mean, I understand it's fearful. Like, nobody can predict the future. And I would love to say, "Hey, man, it's going to be this way, you know, etched in stone, black and white." It it doesn't work like that. It never will. So, you know, think about how it is that you can position yourself in a way that then gets into that cash flow, right? Maybe it is leveling up a different job while maintaining your standard of living like that that once you get the cash flow, once you get a little piece of it, it doesn't take much. And if you're young, that's awesome because if you're young, you can just like essentially just do a little tiny bit. Yeah. $150 a month for 50 years at 8% compounding interest is a million dollar. So, if you start putting that money at $150 a month and you do at least that, I'm sure as time goes on, you'll be leveling that up and you'll be finding that your compounding interest account, whatever it is that you put it into is going to be one of the most amazing things that you could ever have in your life considering you didn't do anything else. All right, that's it. You just did that. You didn't go become a landlord, none of that other stuff. Now, you are taking risk because it is going into the markets or something of that nature. You're going to have to figure that part out and trust your instincts or trust an advisor or something of that nature. Now, everybody that I have ever seen who has ever done any kind of extreme wealth have always done it in property.

[01:02:06]Every one of them. Not only the people I know on YouTube, but all the people I know personally, all of them did it with real estate. all of them. All right. So, I don't know why we would want to reinvent the wheel. That's where the wealth is. That's where that's where Canion says it's at. That's where it is, right? It's obvious if you just look around at it. But you don't necessarily need to do that specifically. Capitalist live just as independently as property owners, but they don't get to make the decisions of what it is that's happening out there. That's ultimately the property owners who do that.

[01:02:44]That was a nice little rant. Should have recorded that. All right. Uh I get nervous about uh kids jobs income. Yeah, I do too. I sold dollars and bought Swiss Franks and Kuwaiti dinars. The real estate more risky than deplorable stockpick. Um yeah, I mean real estate is risky. Like I mean I'm in real estate kind of right like I got my residence here and I am attempting to try and build up some sort of team or network or something from my area around here but this area is ridiculous. It's not like it's not for like you know the not for the first timer I don't think you know like I mean not for me anyway.

[01:03:30]It just doesn't feel that that that right. So in that in that sense like you know for me it's been a very difficult path but I am getting there slowly it's happening right other things are a lot easier like for somebody who doesn't have much going on in their life you know deep down inside that you could save $5 if you have a job you could save $5 a day you know it right people say I can't even do it and then they smoke and drink and you know smoke weed or whatever it's just like you know yeah $5 a day if you're 18 years old, you can have a essentially a million dollars in your life if you just be that disciplined. All right, compounding interest is an amazing thing for the young, right? Youth have the youth are the have the greatest in the greatest gift an investor could ever possibly have is being young.

[01:04:25]Like once you're old, it's just like and then most of the people don't figure it out till they're old anyway because they look back and like ah dang it, you know.

[01:04:32]This is like now it's too late cuz you can't you ain't got the time.

[01:04:39]All right. More rent equals better tenants.

[01:04:46]More rent. There we go.

[01:04:49]Uh those who have nothing going on watching Dancing with the Stars or CNN.

[01:04:54]Yeah, that kind of happens a lot. All right. A real estate. I like real estate in landlord friendly states. All right.

[01:05:07]Kids are so close to financial freedom.

[01:05:13]All right. I have zero carpentry skills.

[01:05:15]Really jelly of people who learn that skill.

[01:05:20]Yeah. I mean, I can honestly say I built a lot of stuff, you know, and that's what's kind of weird about it. like all all the all the stuff that I've ever built.

[01:05:36]I have like a good ability to like put just about anything together. But what I don't really have a good ability to is have like a vision for something to put together. Like if somebody says, "Dude, do this." All right. And I'll be like, "Yeah, right. Give me the picture." And I can totally hammer that. Like, "No problem. I can do it. But like looking at like something that doesn't exist like a spot and then envisioning something there. I just like to me I have such a difficult time like getting that like I have no creativity no creative imagination in that fashion.

[01:06:12]And what's weird because I feel like I can draw like I can you know I can draw a picture and you know I mean I think I do okay. I'm not like some crazy great artist or anything, but I can at least make the look like I want it to or look like the image I'm intending it to. But like having a vision of something like, you know, oh man, if we just took this landscape and did this with it and like to me it's just like, man, it feels like a magical thing to do. Like I can't do that. I try like I try to piece it little pieces, but I just it's weird to put this bigger picture together like that.

[01:06:46]Uh, I remember getting paid to change over coolers for 125 per cooler back in 2010.

[01:06:59]The parts of the coolers went up five times since then. I love building on the fly with my imagination. Yeah. And I love I like seeing what it is that people can come up with as far as things. Sometimes I do. All right. like I can like I like I'll just have like this, you know, this flash of inspiration on something and I get it. Like I see it, I'm like, "Okay, I'll put this thing together."

[01:07:24]But if somebody says, "Here, man, like, you know, think of something to put here." And I'm like, "I don't know."

[01:07:33]But yeah, give me a picture of it and I'll put it together.

[01:07:41]fabricating essentially.

[01:07:44]Uh do you feel the clarity act will pass in order for the banks to advance to the next stage in the negative interest rates?

[01:07:54]You know, I couldn't tell you I couldn't like at this point. I mean, I don't know exactly what it is that is intended by the banking si like there's kind of two different things that are happening because of the inflationary scenario and then the labor market. So really like these are counter to for the dual mandate is kind of counter for what it is that the Fed's actions would require on a typical understanding of the Federal Reserve. So ultimately like the Federal Reserve is you know supposed to support the labor market but then at the same time not let inflation get out of control. So if inflation is rising then they have to deal with the inflation but if labor is getting really weak then they have to deal with this labor. How is it that they could possibly deal with both of them at the same time? So with the banking system level like on the balance sheet adjustments and stuff because this is what you hear wars talking a lot about.

[01:08:53]To me, this is really the direction in which that they're going to try to deal with the inflationary scenario. And then at the same time, they're going to use like the narrative or the idea of an inflation expectation and the neutral interest rate rising to keep the labor market from getting weaker. And now I know those almost seem like counterintuitive things to even try to describe at the same time, but really when it comes to balance sheet adjustments or constraints or anything like that that's happening within the banking system, this is such an esoteric way of like trying to even view how it is that that constrains policy without really being like highlevel banking.

[01:09:36]Like it would be a great discussion to have with like Joseph Wang on that and like I that would actually be a great conversation to have is with Joseph Wang from like the credible threat theory standpoint to his view of what it is that's going on within the Federal Reserve. Like that to me would be like that would be a badass combo.

[01:09:59]All right.

[01:10:02]So ultimate I don't know man I I got to think about it harder.

[01:10:07]All right.

[01:10:13]Uh, so, okay, here's a good question.

[01:10:15]So, is Wars taken over on the 15th or is Pal staying? Yes and yes. Uh, Powell staying on as a governor, which typically would not happen like typically the chairman would step down and just leave the Federal Reserve altogether, but they're not required to.

[01:10:29]they can finish out their term. And that's what essentially Powell is going to do is he's going to stay on as a governor and on the FOMC. So a voting member on the FOMC and Wors is going to take over as the chairman on the 15th. So yes, and yeah, he's he's going to do both now. It doesn't really matter anyway. Like I mean it's still his vote and you know you got so much disscent within the Federal Reserve right now that that part right there is more of the monetary policy than them aligning in a particular direction. Like if you can keep the descent in the Federal Reserve, this is going to leave the open-ended policy like almost like if you can keep that descent there, like you know a 50/50 split at the Federal Reserve, then you will keep that open-ended policy from now on. It's when they all start to align whether or not they're going to or not cut. Right now, it's not going to like people have no idea on what it is that the Federal Reserve is going to do.

[01:11:44]You got some of them saying they need to cut immediately like me. You got other ones talking about there may be needing to raise rates. And so, the ultimate idea behind of what it behind what the Federal Reserve is planning on doing with their interest rate adjustment is now more like uncertain than ever. All right. And now this is part of the plan.

[01:12:04]Like I mean to think about it uh again uh Philip Jefferson had brought it up in his speech. Let me see if I can bring it up here.

[01:12:19]Oops.

[01:12:27]That one. And I mean, I love this speech communicating about monetary policy.

[01:12:32]This speech is so telling. I mean, it is just so telling in every way about how it is that the Federal Reserve was going to use their words in order to conduct the situation of raising and lowering the inflation expectation. It's all delivered in this speech, but a section of it, I think, is very telling of the current situation with this dissent within the Federal Reserve. It says the potential for misinterpretation is especially acute when many policy makers speak at the same time and disagree with each other. So these policy makers, that's the FOMC, the voting, you know, the the Federal Open Market Committee, these are the policy makers out there who speak at the same time and disagree with each other. Now, that's something that they never did.

[01:13:17]like they have had dissenting votes but they like for the last 25 years or whatever it is like they've always essentially aligned.

[01:13:28]All right. Maybe some little bit dissenting happening here and there but nothing to the level that we have today.

[01:13:37]The potential misinterpretation is a the me the potential for misinterpretation is especially acute when many policy makers speak at the same time and disagree with each other. There's never been really a time when many policy makers would disagree with each other.

[01:13:53]That is not something that had ever happened really. I mean it had but long time ago.

[01:14:00]So when we think about how this was stated just what 2 years ago when was the speech getting done?

[01:14:10]May 13th of 2024. Yeah. So like literally two years ago.

[01:14:16]And we think about two years ago to the day they have disagreeing by many policy makers to create a stimulating debate in ultimately better policy. Why? Because now they can keep that open-ended policy as an ability to then use their words or a narrative to then guide the markets.

[01:14:40]He actually brings that up a little ahead of that. Let me read the entire paragraph. It's really good. It says s surely sometimes when central bank communications have unintended consequences. Let me give you two examples. First there is always the risk that polic policymakers statement about their economic outlook and their expected future path of policy rate are interpreted by the public with a false sense of certainty. How many times have you heard the people say well the Federal Reserve is going to be forced to right based on this statement they're going to right this is a misinterpretation that is that is had by the public with a false sense of certainty for example the data dependent forward guidance announcement can be mistaken for a commitment to a fixed fixed path of interest the data dependent forward guidance if inflation keeps running we're going to have to do this can be mistaken for a commitment to the fixed rate.

[01:15:40]When that interpretation is proven wrong down the road, it can create more volatility and uncertainty than if had there been no announcement. If they just didn't say anything at all, then the uncertainty would have just been like flattened and no volatility. It just would have been nice to cruise and ride, right? But it created this it created this volatility and uncertainty because of these statements that they had made that came with a false sense of certainty by the public themselves even though it was a data dependent forward guidance. You know this is why policymakers always always make sure to stress that data dependence of future policy decisions. They always do this. Always keep it open-ended. always be data dependent. All right. Second, it is also possible that the public misinterprets the views of individual policy makers as a committee view. One of them gets out there and makes a statement about how it is my going to lower interest rates.

[01:16:41]Worse is going to lower interest rates, right? These things get misinterpreted, right, by the public as a committee view. They're not committee views.

[01:16:50]They're policy maker, individual policy makers, not the committee.

[01:16:55]The potential for misinterpretation is especially acute when many policy makers speak at the same time and disagree with each other. The diversity of viewpoints among policymakers lends itself to stimulating debates and ultimately better policy. But in such a situation, more communication could increase rather than reduce uncertainty about the policy.

[01:17:20]if they had never done it before and they say when they come out and many of them come out and disagree with each other and then it happens like you know do you think it was just like oh that's coincidental you know of course not nothing's coincidental all righty guys I think I'm going to call it quits I really appreciate everybody joining in hitting that like button we have 136 people who are watching right now we broke down the canton uh essay chapter 6 part two, chapter 6. Um, awesome increase decrease of money to the state. Very much describes our certain situ our current situation, the K-shaped economy, really everything that the average working individual would need to know to understand why it is that manufacturing jobs left and why they're not coming back and why it is that you need to position yourself into assets. Be sure and join the school community. Again, we are going to be breaking down some really good stuff. Not only do we talk about the economic theories, but how it is that these the today's world impacts us individually and what it is that we need to do as an individual to get through this world. I don't know of anybody else who is doing it to the level that we're doing it. Like, you have got to check out this community. It is really something else. And I'm I'm so looking forward to to next Saturday to to see who it is who joins in on the next one because it is it's a great conversation.

[01:18:49]Um and I just can't rag it up enough.

[01:18:52]But you also have access to the credible threat theory which is great. Right. So now you can go and you can listen to the credible threat theory the audio video series that I put together that describes the credible threat theory in detail. And you'll also have access to all the speeches that I have put together. I have highlighted these speeches in manners. I don't know if you can see that. Anyway, something like that. All the spots that you would need in all those different speeches in order to to grasp the credible threat theory in, you know, from their own words and statements. And really, there's no other place I think of that you can get that information. And it's essentially something that you can download for free, take with you, give it away, do whatever you need to, but you have to join the school community to get it. So, uneducated economist, you guys let me know.