Speaker 1: Hey, everyone, welcome to another episode of the Mark Moss Show.
Speaker 1: Of course we're talking about bitcoin, we're talking about cryptocurrencies.
Speaker 1: We're talking about the decentralized revolution that is here in
Speaker 1: front of us. It's happening as we speak each and
Speaker 1: every week. Now I'm joined in the studio with one
Speaker 1: of my friends, Jason Buack. You can find him on
Speaker 1: Twitter at Jason E. Burrock. That's bu r A c
Speaker 1: K and uh. He is a He's an amazing financial analyst,
Speaker 1: really someone that I bounced a lot of ideas off
Speaker 1: on a macro level and I wanted to bring him
Speaker 1: on the radio. So Jason, thanks so much. We are
Speaker 1: joining me today. It's great to be on Mark. You're
Speaker 1: doing a really good job on here. Congratulations on your
Speaker 1: new show. Thanks man, thank you. I know, you know
Speaker 1: sometimes you've you've been been nice enough to start to
Speaker 1: send me a lot of information and and some d
Speaker 1: m s, and we've kind of gone back and forth,
Speaker 1: and you know, there was something that we were talking about. Um,
Speaker 1: it might have been a week or two ago, a
Speaker 1: couple of weeks ago when we start talking about get
Speaker 1: you on the show, and you were talking about how um,
Speaker 1: the government the Central Bank, and the government is in
Speaker 1: this situation to a where a large percentage of their
Speaker 1: tax revenue now has started to come increasingly more from
Speaker 1: capital gains, and there's a reason why they need to
Speaker 1: continue to get asset prices to go up, including they
Speaker 1: might even want to see bitcoin going up to a
Speaker 1: million dollars because they need that revenue. I think, is that?
Speaker 1: Is that right what you were saying. Yes, there's a
Speaker 1: lot of reasons for this. So there's been enormous structural
Speaker 1: changes in the annual US federal government tax or seats
Speaker 1: of the last couple of decades. So a couple of
Speaker 1: decades ago, capital gains, taxes on stock spawns, real estate,
Speaker 1: it was barely ten percent. Most years, it wasn't ten
Speaker 1: percent of annual tax revenues. So the real economy, corporation,
Speaker 1: small businesses, that was what was paying the tax revenues.
Speaker 1: Now what has changed is, depending upon how you measure GDP,
Speaker 1: government spending now accounts for around fifty of g d P,
Speaker 1: and the government's not going to tax itself. A lot
Speaker 1: of corporation and don't pay taxes, especially the ones that
Speaker 1: are politically connected like General Electric or Tesla Motors that
Speaker 1: are relying on a lot of government subsidies to survive
Speaker 1: and are not consistently profitable. So you have a situation
Speaker 1: where the government realized this, the Futtal Reserve Bank realized this,
Speaker 1: the large banks in the US realized this. The large
Speaker 1: banks decided a couple of decades ago that it was
Speaker 1: a lot more profitable for them. There's no caps on
Speaker 1: lending the amount of percentage interest rates that they could charge,
Speaker 1: so the large banks have basically they take depositor money
Speaker 1: and they take the reserves that the Futtle Reserve gives them,
Speaker 1: and they could use that as collateral. They can pledge it,
Speaker 1: they can um put it as hypothecated and rehypothecated, all
Speaker 1: this stuff, and they put on hedge fund trades, so
Speaker 1: on stocks, bawns, real estate, currencies, commodities, over the counter derivatives.
Speaker 1: The majority of annual bank profits now is not from
Speaker 1: normal lending. It's from like leveraged hedge fund trades on
Speaker 1: bonds and currencies and over the counter derivatives. So the
Speaker 1: this is what a lot of people have called the
Speaker 1: financialization of the economy, where the real economy um where
Speaker 1: there's investments by the follow government investments by the private sector.
Speaker 1: The government releases press releases. You know, it's I've lived
Speaker 1: here in d C for over twenty years now, and
Speaker 1: there's always infrastructure plans announced, and these infrastructure plans, the
Speaker 1: return on investment on these things, the actual infrastructure never
Speaker 1: seems to get done correctly. It so basically, when the
Speaker 1: government spends money, it's not helping the regular people. It's
Speaker 1: going for corporate welfare, it's going for bailouts, it's helping
Speaker 1: out large corporations and special interest groups. And that's where
Speaker 1: the capital gains on stocks, bonds, royal estate and now
Speaker 1: crypto comes in. Because the official FED policy mark for
Speaker 1: the last two decades, and the FED doesn't even want
Speaker 1: to talk about this in more publicly because the wealth
Speaker 1: disparity that they've created intentionally, by the way, because you
Speaker 1: had the Alan Greenspan FED, you have the Ben Bernanke FED,
Speaker 1: you had the Janet yelling FED all talking about the
Speaker 1: wealth effect, and the wealth effect basically means asset price
Speaker 1: inflation and what Austrian School economists call the canceil Wan effect,
Speaker 1: which is enormous amounts of currency and credit being misallocated.
Speaker 1: It's not going to the right places. It's being subsidized,
Speaker 1: given to large corporations for bailouts, UM, people on Wall
Speaker 1: Street to put hedge fund bets, or for bailouts, covert bailouts,
Speaker 1: and political insiders here in d C. And that's how
Speaker 1: the tax base has changed. Now here we are a
Speaker 1: couple of decades later. And I said at the beginning
Speaker 1: of the segment that the annual tax revenues for stocks, bonds,
Speaker 1: in real estate were ten percent or less for capital
Speaker 1: gains taxes. Now we're here, we are, we're approaching, so
Speaker 1: we've had a three x move now in capital game taxes.
Speaker 1: This is all part of my stagflate tax life thesis
Speaker 1: that I've been talking about for years. And it's just
Speaker 1: gonna get worse the government, the federal government and all
Speaker 1: levels of government because in a lot of states and
Speaker 1: a lot of counties they're going there increasing property taxes
Speaker 1: a lot too. So this is all part of inflating
Speaker 1: royal state as well. So I mean it makes perfect sense.
Speaker 1: I mean, asset prices have gone sky high. Obviously, we've
Speaker 1: seen cryptocurrencies going high. Real estate price has never been higher,
Speaker 1: stock market has never been higher, etcetera. Um. And so
Speaker 1: then it makes sense that they're making more on capital gains,
Speaker 1: and so it also makes sense that the revenue that
Speaker 1: the government's collected off cap gains has gone from ten
Speaker 1: to thirty or whatever. But what happens if asset prices
Speaker 1: were to drop and then that revenue from cap gains
Speaker 1: drops down? Are they that dependent on that increase in
Speaker 1: cap gains taxes? Yes? Yes. And the other problem here, Mark,
Speaker 1: is you're creating a country of speculators. So instead of
Speaker 1: a business owner, an entrepreneur or a small business owner,
Speaker 1: the citing that I want to invest in new property,
Speaker 1: plan and equipment, I want to expand my business, I
Speaker 1: want to hire employees. Instead, you have people that have
Speaker 1: some savings or capital or their retirement account. They want
Speaker 1: to go gamble on n f T s, they want
Speaker 1: to go gamble on crypto. They're not creating jobs, so
Speaker 1: they're they're the real economy, human beings who actually want
Speaker 1: to work, who actually want to grow their income. It's
Speaker 1: not happening the conventional way. It's happening like it basically
Speaker 1: created a nation of speculators. And if you go back
Speaker 1: through financial history, this is actually looking now. Obviously things
Speaker 1: are more modern and more digital people are trading on
Speaker 1: their smartphones. But the speculative behavior is actually reminding me
Speaker 1: a lot of studying prior to the Weimar Republic hyperinflation,
Speaker 1: the crazy amounts of speculation on stocks and currencies. Yeah,
Speaker 1: it's interesting you say that, because just this week I
Speaker 1: put out a video um I'm calling I called it
Speaker 1: Generation Gamble, which is actually from a little documentary that
Speaker 1: CNBC did, and basically it's exactly what you're what you
Speaker 1: just said there, which is we've created this generation of gamblers.
Speaker 1: And I saw that um on robin hood or or
Speaker 1: not just robbing it, but everywhere options trading has surpassed
Speaker 1: stock trading for the first time in history. And so
Speaker 1: between options trading and what that shows is, you know,
Speaker 1: buying stocks, you're kind of buying equity, and a company,
Speaker 1: you're like buying a business. You're kind of investing in
Speaker 1: a business. Maybe there's some money going to I mean
Speaker 1: kind of supposed to be going towards a business for
Speaker 1: capital expenditure, But when you're doing options, it's just pure gambling.
Speaker 1: And we've seen obviously, you know the rise of the
Speaker 1: cryptocurrency investing, as you said, n f T S etcetera.
Speaker 1: And and we're even seeing reports now people quitting their
Speaker 1: jobs to just be full time traders. And when you're
Speaker 1: trading options or you're trading crypto assets, you're not providing
Speaker 1: any value to the point that you're making, right, So
Speaker 1: like you're trading these assets, you're not providing any value
Speaker 1: to anything. But what you're doing is you're increasing your
Speaker 1: dollars without providing value. But then you take those dollars
Speaker 1: and then you go buy goods and services from productive people.
Speaker 1: And so really it's this net drags drain onto the
Speaker 1: entire economy. And I was explaining this video how how
Speaker 1: this is happening and how bad it is for the society.
Speaker 1: The problem is is that I mean to explain to
Speaker 1: somebody why they should go slave over a job making
Speaker 1: twenty bucks an hour and then go flip n F
Speaker 1: T s and make, you know, fifty bucks a pop.
Speaker 1: It is very difficult. But it's it's not you know,
Speaker 1: it's it's just a sign of the times as a
Speaker 1: sign of of where we're at, and it's a sign
Speaker 1: of what has happened with the Fiat money system. Now,
Speaker 1: by the way, you're listening to the Mark Moa show.
Speaker 1: We're talking about bitcoin. We're talking about cryptocurrencies, We're talking
Speaker 1: about the decentralized Revolution. I'm in the studio with Jason Barack.
Speaker 1: You can find them on Twitter at Jason e Berrock.
Speaker 1: Of course I'm on Twitter at one. Mark Moss and
Speaker 1: I have him on and we're talking specifically about the
Speaker 1: problems that are happening in the financial system with the
Speaker 1: Federal Reserve and some of the dangers that are going
Speaker 1: on inside the government that I think proves the use
Speaker 1: case and the need for something like bitcoin. When we
Speaker 1: come back, we're I want to talk about how you
Speaker 1: said that the g d P, or the gross Domestic
Speaker 1: Product of the government, is fake, and how the federal
Speaker 1: government spending is now accounting for a majority of what's
Speaker 1: put into that g DP. It's like, uh, I made
Speaker 1: another video. I said, it's like a ponzi, and you
Speaker 1: can't taper a ponzi. So we're gonna talk about those
Speaker 1: things when we get back again. You're listening to the
Speaker 1: Mark ma Show talking about bitcoin, talking about cryptocurrencies, talking
Speaker 1: about the decentralized Revolution, and we're talking about what's happening
Speaker 1: in the government and the Federal Reserve, we're gonna be
Speaker 1: right back. Hey, everybody, welcome back. You're listening to the
Speaker 1: Mark Moa Show. We're talking about bitcoin, we're talking about cryptocurrencies.
Speaker 1: We're talking about the decentralized revolution. Each and every week.
Speaker 1: I'm in the studio right now with Jason Barack is uh.
Speaker 1: You can find him on Twitter at Jason e back
Speaker 1: and he's uh, somebody that I spent a lot of
Speaker 1: time talking about, UM. Talking to I should say about
Speaker 1: what is going on with the FED and the debt
Speaker 1: and all these things, and so UM we're talking about
Speaker 1: before the break, we're talking about how the FED needs
Speaker 1: these asset price is to continue going up because they
Speaker 1: depend on that much tax revenue. UM. But Jason, something
Speaker 1: else that you had told me is that the GDP,
Speaker 1: the gross domestic product that the government uses, UM, is
Speaker 1: all fake. Tell me about that. Well. Murray Rothbard, the
Speaker 1: Austrian School economist, He used to say that government spending
Speaker 1: should be subtracted from GDP. But as of as of
Speaker 1: right now, government spending, depending upon how you measure it,
Speaker 1: is about fifty GDP. Now, there is a lot of waste, fraud,
Speaker 1: corruption and abuse here in the DC metro area. There's
Speaker 1: a lot of bribes, there's a lot of unbidded contracts,
Speaker 1: lobbying as part of it. There's also an enormous amount
Speaker 1: of revolving door corruption between Wall Street in d C.
Speaker 1: Between the regulators who want to go work at in
Speaker 1: the regulatory department of hedge funds and investment banks, big pharma,
Speaker 1: military industrial complex. So a lot of that government spending
Speaker 1: mark is actually corporate welfare, is actually secret bailouts, covert
Speaker 1: bailouts with based on bribes and unbidded contract so large corporations.
Speaker 1: And this is common in a lot of other countries,
Speaker 1: but um here in the United States. You know the
Speaker 1: corruption levels. In the past, it was looked at as
Speaker 1: not as corrupt as other countries, but now like the
Speaker 1: United States has emerging market corruption levels. So the the
Speaker 1: amount of government spent and the government is not going
Speaker 1: to tax itself. So if the government is spending this much,
Speaker 1: and the government is handing out enormous amounts of welfare payments,
Speaker 1: all these different social transfer payments for healthcare payments and
Speaker 1: welfare checks and ebt cards to the states, it's not
Speaker 1: gonna that stuff is not gonna get taxed. Now the
Speaker 1: individuals who are receiving some of these things. If they
Speaker 1: based on income, they might get taxed on some of
Speaker 1: these things depending upon how much like subsidies and stuff
Speaker 1: they get. But that over the government's not paying taxes
Speaker 1: that people here in d C. I mean, I've had
Speaker 1: off the record conversations with people I've been at parties
Speaker 1: and charity events. I mean, there's lots of people here
Speaker 1: in DC that are making a lot of money and
Speaker 1: not paying taxes or figuring out ways around it. There's
Speaker 1: that type of level of corruption here in the DC
Speaker 1: mat area. Yeah, you know, um, I I was. You know,
Speaker 1: there's something I've I was told a long time ago,
Speaker 1: and I'd always recite over and over is that the
Speaker 1: government cannot give something that has not taken um. And
Speaker 1: so in order for them to spend money, they have
Speaker 1: to take it from somebody else. Um. Which is why
Speaker 1: you said, you know, like GDP or should be removed
Speaker 1: or government spending should be removed from GDP because it's
Speaker 1: not real GDP. They've they're basically just redistributing that money.
Speaker 1: So something that I've been kind of paying attention to
Speaker 1: is this debt to GDP level and per like the
Speaker 1: Kinsey and multiplier um Like, once you get over to GDP, UM,
Speaker 1: the more debt you have, the less growth you're getting.
Speaker 1: And eventually you don't get enough growth out of that
Speaker 1: debt and you dig yourself deeper and deeper in a hole.
Speaker 1: And then like, um, you know, once you get over
Speaker 1: a hundred debt to GDP, then it's basically game over
Speaker 1: at that point. Now we're at over a hundred debt
Speaker 1: to GDP. But if what you're saying is fifty percent
Speaker 1: of it is phony, then we might even be way higher.
Speaker 1: Is something that you're thinking about. Well, the and this
Speaker 1: is why the dollar hasn't crashed. You the entire global
Speaker 1: financial system, all these emerging market governments, these foreign governments,
Speaker 1: a lot of foreign corporations, they're using dollars still, they're
Speaker 1: borrowing dollar denominated debt. When the dollar index gets weak,
Speaker 1: and it got week in twenty, they borrowed even more dollars.
Speaker 1: So as long as that continues, as long as dollar
Speaker 1: denominated debt grows, the US is going to be able
Speaker 1: to get away with this, get away with stag flee
Speaker 1: tax life for a while. Plus you have all these
Speaker 1: other governments and this is a global macro analysis. Here
Speaker 1: you have all these other governments trying to do the
Speaker 1: same thing. Um in and I've talked about this example.
Speaker 1: I've done YouTube videos on this. There's almost two thousand
Speaker 1: free YouTube videos on my channel if your listeners want
Speaker 1: to check it out. But in the Indian government last
Speaker 1: year in two run a record trades or plus. What
Speaker 1: did they do? Their central bank printed a bunch of
Speaker 1: their own currency, Indian routpees and bought US dollars. They
Speaker 1: propped up, They helped prop up the dollar so they
Speaker 1: could run an enormous trades or plus. Now India is
Speaker 1: paying for it with a weaker currency and they're having
Speaker 1: inflation problems and um you know, the normal problems from
Speaker 1: creating a lot of currency and emerging market. But the
Speaker 1: US has benefited heavily from this dollar standard system, the
Speaker 1: world reserve currency. Plus you have with the current system,
Speaker 1: all these other foreign governments for incorporations. If the dollar
Speaker 1: gets weak, they borrow in dollars, so it creates like
Speaker 1: this is why the dollar is basically in a trading range.
Speaker 1: And these other governments and central banks are doing very
Speaker 1: similar policies. I call it Japanification. Similar to Japan and
Speaker 1: the United States. M hmm, yeah. And you know, I know, uh,
Speaker 1: you know, another one of my friends, Brent Johnson, he
Speaker 1: always talks about the you know, dollar milkshake theory and
Speaker 1: how the dollar is going to continue to suck all
Speaker 1: the liquidity out of all the other currencies, and um,
Speaker 1: you know, we're we're seeing that to some extent. But
Speaker 1: the one thing that I always think about is like, Okay,
Speaker 1: that's great if the dollar is getting stronger against all
Speaker 1: the other currencies, Like that's cool, but like it's still
Speaker 1: losing ground in terms of purchasing power. Right, So it
Speaker 1: may be stronger than the currencies, but it's still buying
Speaker 1: me less houses and less stake at the grocery store. Right. Well,
Speaker 1: the asset prices are being inflated, you have foreigners who
Speaker 1: want to buy US assets because as bad as a
Speaker 1: lot of Americans think things are here in the United States,
Speaker 1: the US on a relative basis, still has better private
Speaker 1: property rights and a lot of other countries. So there
Speaker 1: are a lot of foreigners that want to invest in
Speaker 1: royal state here in the United States. Even though property
Speaker 1: taxes are going up, there are a lot of foreigners
Speaker 1: who want to buy U s stocks at the right valuation.
Speaker 1: There are a lot of foreigners is still want to
Speaker 1: move to the United States, so Americans have to think
Speaker 1: of things on a relative term that the US is
Speaker 1: still attractive for an investment. UM. I don't agree with
Speaker 1: a lot of what Brent I'm friends with Brent to
Speaker 1: um the dollar. He's calling for a big dollar rally.
Speaker 1: But they Fed and the Treasury want to try to
Speaker 1: keep the dollar like in a trading range. So every
Speaker 1: time the dollar gets too strong, that basically gives the politicians,
Speaker 1: the bureaucrats, and the PhD economists here in d C
Speaker 1: an excuse to spend more to try to weaken the dollar.
Speaker 1: So that's gonna it's gonna be. I call it the
Speaker 1: dollar tug of war. So the dollar index has been
Speaker 1: a trading range for seven years. I expect that to
Speaker 1: continue for the most part because of the way the
Speaker 1: system is designed and what all these other governments and
Speaker 1: central banks are doing. But Mark, the U S imports
Speaker 1: so many things, and that's really where a lot of
Speaker 1: this stagflation and shrink flation is coming. And I've been
Speaker 1: talking about stagg flee tax lie and stagflation and shrink
Speaker 1: flation for years. So a lot of people are talking
Speaker 1: about stagflation right now, and yeah, it's bad right now.
Speaker 1: It's double digits right now, and taxes are going up.
Speaker 1: But I mean it's been going on for years. It's
Speaker 1: been getting bad for years. It wasn't quite at these levels.
Speaker 1: I was noticing it, but the majority of people weren't.
Speaker 1: I think what has happened, though, is that the government statistics,
Speaker 1: so like the c p I, which is a consumer
Speaker 1: consumer price index but I call it the Changing Propaganda Index,
Speaker 1: they can't hide the inflation as much as they used to,
Speaker 1: so the average person. I'm seeing articles on mainstream financial
Speaker 1: media talking about how the CPI is totally wrong. And
Speaker 1: you know, ten years ago, we never would have seen
Speaker 1: anything like this, calling government statistics basically total Yeah. Yeah, So, UM,
Speaker 1: I want to talk more about the cp I. I
Speaker 1: know we're expecting some numbers to come out tomorrow. I
Speaker 1: want to dig into that, and UM, I have I
Speaker 1: have a couple of questions that I want to ask
Speaker 1: about that. Of course, UM, you know we need to
Speaker 1: dig in. Uh, you're listening to the Marketma show. We're
Speaker 1: talking about, of course, bitcoin and cryptocurrencies and the technological
Speaker 1: revolution that we're witnessing. UM. Right now we're talking with
Speaker 1: Jason Barack. We're talking about the Federal Reserve, the Central Bank,
Speaker 1: we're talking about you know, the government spending and whatnot.
Speaker 1: And the reason why is because, um, if you really
Speaker 1: want to understand bitcoin and what's happening there, you kind
Speaker 1: of have to understand what's happening on the global macroeconomic scale.
Speaker 1: I think that kind of it's one of the big
Speaker 1: reasons why this all matters. UM. So I'm in the
Speaker 1: studio with Jason Barrack. You can find him on Twitter
Speaker 1: at Jason E. Barack. UM. I think you can find
Speaker 1: him on YouTube at Wall Street for Main Street as
Speaker 1: as well. So we're gonna come back. We're gonna talk
Speaker 1: about this new CPI number it's expected to come out,
Speaker 1: these inflation numbers, what's happening with that so we can
Speaker 1: make sure we're focused on our money and hopefully making
Speaker 1: more of it. So we're gonna be right back with
Speaker 1: Jason in a second. Don't go away, Hey, everyone, welcome back.
Speaker 1: You are listening to the Mark Moa Show, and we're
Speaker 1: talking about bitcoin, and we're talking about cryptocurrencies, and we're
Speaker 1: talking about the decentralized revolution, each and every week, and
Speaker 1: that's what we talked about each over week, over and
Speaker 1: over and over. But we want to understand what's going on,
Speaker 1: not just from a technical perspective or you know, what's
Speaker 1: trending or whatever. We want to understand it from a
Speaker 1: deep fundamental level, like what is really uh what what's
Speaker 1: really working behind the scenes. And in my opinion, the
Speaker 1: financial system is facing a reset about every eighty years,
Speaker 1: we see this financial revolution, the end of this long
Speaker 1: term credit cycle kind of come to an end. We're
Speaker 1: seeing the Federal Reserve running out of tools. I mean,
Speaker 1: they basically have two tools. They have interest rates, and
Speaker 1: they have money supply. Interest rates are at zero or
Speaker 1: negative in most parts of the world, and we have
Speaker 1: too much debt and their backs up against the wall.
Speaker 1: And so I'm in the studio with Jason iraq Um.
Speaker 1: He's kind of an expert in this type of stuff,
Speaker 1: and so we're kind of talking about that to help
Speaker 1: you understand what's going on a little bit better. Um
Speaker 1: not Jason, you you had mentioned right before the break
Speaker 1: about the c p I, which is the consumer price index,
Speaker 1: which is what the government uses to measure inflation, which
Speaker 1: is um you know, it's fine for them, But I
Speaker 1: think most of us measure inflation when we fill up
Speaker 1: our gas in our car, or we have to go
Speaker 1: to the grocery store and buy some food, UM, or
Speaker 1: buy a house. I think we've measured it that way.
Speaker 1: But um, rumors are that there's a cd P I
Speaker 1: that is probably gonna be very bad, meaning it is
Speaker 1: going to be very high, and they're already starting to
Speaker 1: put out some warnings. I saw some headlines today saying, um, hey,
Speaker 1: it may come out and be really bad, but it's
Speaker 1: not as bad as it looks like. Have you seen
Speaker 1: some stuff like that. Yeah, I've seen a political spin
Speaker 1: from the Biden administration already talking about that. I mean,
Speaker 1: whatever the headline number is, the the honest truth is,
Speaker 1: it doesn't matter. And I'll give you some concrete examples
Speaker 1: of that. So I didn't interview on George gam channel
Speaker 1: a couple of months ago talking about the difference in rents.
Speaker 1: So any normal consumer price index, they wait rent, but
Speaker 1: they don't accurately measure what people are paying for rents.
Speaker 1: So they don't go to the National Realtors Association, they
Speaker 1: don't go to Zillo, they don't survey a respected group
Speaker 1: of real estate agents. They don't do any of that.
Speaker 1: And by the way, there was an article that came
Speaker 1: out a couple of weeks ago in the USA today.
Speaker 1: It was a headline. It was one of their main
Speaker 1: stories that in small cities across the United States, this
Speaker 1: is a record, first time in history, rents are up
Speaker 1: in a year. On that yeah, over thirty percent, over
Speaker 1: thirty percent. But in the consumer Price Index, the current
Speaker 1: Consumer Price Index, they use something and this is a
Speaker 1: fictional This is a fictional formula called owners equivalent rent.
Speaker 1: It was only up i think earlier this year two
Speaker 1: point four percent, so it is off over fifteen over
Speaker 1: fourteen x. So aren't those two different measurements? Though they
Speaker 1: have the owner's equivalent right and they have rent. Aren't
Speaker 1: they two measurements? No, it's they do not accurately. So
Speaker 1: the CPI also measures for healthcare insurance. Instead of like
Speaker 1: serving people saying, my premiums are up, I'm getting less coverage,
Speaker 1: my co pays are up. You know, going through the
Speaker 1: actual on line item expenses of people's health care insurance monthly,
Speaker 1: all the different expenses are up um, their co pays
Speaker 1: are more money, their premiums or more money, paying more
Speaker 1: for prescription medications, all these doctors business, all these things
Speaker 1: right or are up Instead. What the consumer's price Index
Speaker 1: does is it just measures Medicare and Medicaid reimbursements that
Speaker 1: are sent over from the government. So these are intentionally
Speaker 1: made to under report inflation. This has been going on
Speaker 1: since the nineteen seventies and eighties. George Gammon did it,
Speaker 1: did a video on this, I want to say, like
Speaker 1: June or July of this year, talking about how the
Speaker 1: Federal Reserve chairman in the seventies when the stagflation started,
Speaker 1: before Paul Vulker, it was Arthur Burns. He started drastically
Speaker 1: changing the consumer Price Index, and it's only gotten worse
Speaker 1: every five or ten years. They keep on changing the formulas.
Speaker 1: You've had people in Congress talk about it. The cost
Speaker 1: of living adjustments mark hit the highest amount I think
Speaker 1: in forty years they hit five points something five. I
Speaker 1: did a video on this about four or five months ago.
Speaker 1: But that's tens of billions of dollars more in payouts
Speaker 1: the funeral government's going to have to pay because the
Speaker 1: cost of living adjustments said that the real inflation was
Speaker 1: much higher than the consumer price index. So it's in
Speaker 1: the government's incentive to cheat, to lie for It's in
Speaker 1: their incentive for two reasons. So one obviously is what
Speaker 1: you just said, which a lot of people probably don't
Speaker 1: catch on too. But um, if they keep that cost
Speaker 1: of living low by manipulating that number, they don't have
Speaker 1: to they don't have to increase the amount of payouts
Speaker 1: like for Social Security. So if the cost of living
Speaker 1: goes up, they have to pay out more money. So
Speaker 1: if they can keep that are officially low, they don't
Speaker 1: pay out as much. I think that's one, and then
Speaker 1: I think the other reason, and you can tell me
Speaker 1: if I'm right here, But you know, the other reason
Speaker 1: is just if they can say that they don't have
Speaker 1: enough inflation, they can keep printing more money. Right if
Speaker 1: inflations running out, hi, they have to pull back, so
Speaker 1: it kind of gives them those to two levers. That
Speaker 1: that is definitely part of Well, they said they wanted
Speaker 1: a minimum the official FED stance a couple of years ago,
Speaker 1: before stagflation became really obvious to everyone. In the last
Speaker 1: like twelve months or so, the FED was officially saying
Speaker 1: that they had to have around two percent inflation, and
Speaker 1: the official numbers weren't there. But again, and I'll go
Speaker 1: back to what I said earlier in past segments, it's
Speaker 1: all about the wealth effect. The FED doesn't want to
Speaker 1: talk about this publicly anymore because they created a nation
Speaker 1: of speculators and large wealth disparity. They've made the rich richer,
Speaker 1: they've made the poor, the working class, the middle class.
Speaker 1: They made our standard of living much more difficult. So
Speaker 1: our dollars are purchasing power is going less and less.
Speaker 1: So now the Fed publicly, if you look at the
Speaker 1: speeches and the stuff they say, they don't want to
Speaker 1: talk about the wealth effect anymore. Even though that that
Speaker 1: was a sheal FED policy, there was articles that op eds.
Speaker 1: Ben Berniki wrote an op ed in the Washington Post
Speaker 1: in November talking about the wealth effect. Your listeners can
Speaker 1: go back and look it up and read. It's on
Speaker 1: the Fed's website to talking about all the benefits of
Speaker 1: the wealth effect and asset price inflation and how it
Speaker 1: won't cause consumer price inflation. They won't have the money
Speaker 1: supply which has gone bonkers here in the United States.
Speaker 1: The Austrian true money supply, I think in the last
Speaker 1: like two and a half years, is up six point
Speaker 1: five trillion. Kyle bassett Um. The way the broad money
Speaker 1: supply is measured is up in the last like eighteen months,
Speaker 1: So the total money supplying credit available has gone up,
Speaker 1: and that's lee and the real economy is not producing
Speaker 1: nearly as many goods as it was prior to the pandemic.
Speaker 1: So you have more currency and credit chasing the same
Speaker 1: or fewer amounts of goods, and that's why we have
Speaker 1: such bad stag stag inflation on many different items. It's
Speaker 1: not the supply chach. It's there are supply chain problems,
Speaker 1: but there's so much current seen credit and it's chasing
Speaker 1: the same or fewer goods, right, which is in the past.
Speaker 1: High prices where the solution for high prices. So when
Speaker 1: prices go up, two things happen. One people buy less
Speaker 1: of those goods, and two people make more of those goods.
Speaker 1: But when you have massive amounts inflation and prices go up,
Speaker 1: one the people just keep buying because they've been given
Speaker 1: so much stimulus, and too because of the inflation, it's
Speaker 1: harder for people to make more good so that it's
Speaker 1: the opposite kind of going against you, and so high
Speaker 1: prices don't here the high prices well Mark also to
Speaker 1: out to your points there, you also have politicians, bureaucrats,
Speaker 1: regulators telling business owners they can't produce, telling them they
Speaker 1: can't hire employees, telling them they can't produce, giving them
Speaker 1: all these extra rules, regulations, red tape to maintain their
Speaker 1: business and try to meet consumer demand. So it's it's
Speaker 1: an enormous headache trying to be a business owner right now. Yeah,
Speaker 1: I mean and and and it only further exascerbates the problem,
Speaker 1: which is people wanting to quit their jobs to become
Speaker 1: full time traders and again stopped making goods and services
Speaker 1: that would actually help the situation and instead continue to
Speaker 1: um just trade and produce no value to the world.
Speaker 1: I agree, But unfortunately for and if you have to
Speaker 1: look at this from a US federal government tax perspective,
Speaker 1: if you work in the Treasure Department, they don't care
Speaker 1: how the tax revenues are produced. So if the government
Speaker 1: in the past, if they have to invest trillions of
Speaker 1: dollars in an infrastructure plan and they return on investment
Speaker 1: for that spending might be very low. The government might
Speaker 1: not collect how much tax revenues. If the government doesn't
Speaker 1: have to spend trillions of dollars and all of a sudden,
Speaker 1: bitcoin goes to a million dollars, two million dollars. You
Speaker 1: have people trading cryptocurrencies and f t s, you have
Speaker 1: tons and tons, and you talked about this on your
Speaker 1: show earlier. Taxable events, right, every time people buy something
Speaker 1: with crypto, every time people trade crypto, all these things
Speaker 1: are taxable events and the i R S. This is
Speaker 1: why on your tax forms if you're an American here,
Speaker 1: this is why there's so many questions lately asking um,
Speaker 1: are you being paid in cryptocurrency or bitcoin? Are you
Speaker 1: trading cryptocurrency? And it's only going to get worse going forward,
Speaker 1: the taxes on assets, the government going after crypto, trying
Speaker 1: to monitor people. So it's going to be a very
Speaker 1: dangerous time for people here in the United States if
Speaker 1: you own assets and you own a business. Yeah, yeah,
Speaker 1: that's true. They're they're trying to seal off all the whole,
Speaker 1: all the holes, prevent any escape hatches, and they want
Speaker 1: to try to collect every ounce of revenue they can.
Speaker 1: You're listening to the Mark Mo Show. We're talking about bitcoin, cryptocurrencies,
Speaker 1: the decentralized revolution. I'm in this studio with Jason Barack.
Speaker 1: We're talking a bigger picture about the FED, the central
Speaker 1: bank in the government and what that is going to
Speaker 1: do to cryptocurrencies. Don't go away, We'll be right back. Everyone.
Speaker 1: Welcome back. You're listening to the Mark mo Show. We're
Speaker 1: talking about bitcoin, We're talking about cryptocurrencies, We're talking about
Speaker 1: the decentralized revolution. You know, there's so many angles to
Speaker 1: talk about bitcoin from up and talking about it for
Speaker 1: seven years, and I don't find a shortage of things
Speaker 1: to talk about. Because there's the philosophical side, and there's
Speaker 1: the technological side, there's the monetary history side, the game
Speaker 1: theory side, and we can go on and on and on.
Speaker 1: But one of the things I like to spend a
Speaker 1: lot of time to talking about is why why doesn't
Speaker 1: even matter? Um solutions are supposed to come to problems,
Speaker 1: And we have a lot of problems in the financial
Speaker 1: system today where at the end of a long term
Speaker 1: credit cycle, the reserve system, the dollar system is starting
Speaker 1: to crack um and and the ship is starting to
Speaker 1: kind of sink, so to speak. Now, I'm so I'd
Speaker 1: like to take a look at those the kind of
Speaker 1: bigger macro side I'm in the studio with Jason Barack.
Speaker 1: You can find them on Twitter at Jason ib iraq,
Speaker 1: and we trade a lot of messages back and forth.
Speaker 1: He's an expert in these things, and so I thought
Speaker 1: i'd bring them on. And Um, Jason, you were making
Speaker 1: the case before, how um, you know fift of the
Speaker 1: g d P is kind of fake. Um, they're basically
Speaker 1: taking money and spending money on themselves, but it doesn't
Speaker 1: go back into being a productive piece of the economy.
Speaker 1: But you're also talking about how they need asset prices
Speaker 1: to continue going higher because of the capital gains taxes
Speaker 1: that they're making and how much of a big piece
Speaker 1: of the budget that is. And if asset prices go down,
Speaker 1: cap gains taxes go down, and then their budget goes down,
Speaker 1: that's a big problem. But what about, um, what about
Speaker 1: all those asset prices staying high because they're collateral and
Speaker 1: so the whole system is so levered up that you know,
Speaker 1: the real estate and the stocks, etcetera makeup collateral. And
Speaker 1: if the markets start dropping, collateral starts drying up, it
Speaker 1: could turn into this entire cascading effect. What do you
Speaker 1: think about that? Well, yeah, you start getting margin calls.
Speaker 1: Look what happened in the last week with the VIX.
Speaker 1: The VIX hit thirty early Monday morning, and then it
Speaker 1: was monkey hammered back down with manipulation from one of
Speaker 1: the four or five or six different plunge protection teams.
Speaker 1: Within about forty hours, it was knocked back down to twenty.
Speaker 1: And that's because of the leverage short volatility trade that's
Speaker 1: over three trillion in size according to volatility hedge fund
Speaker 1: manager Christopher Cole. That means that when the VIX starts
Speaker 1: going up, all these portfolio managers at investment banks that
Speaker 1: trade tons of bonds on leverage between seven x or more.
Speaker 1: Some of them are ten x or more leverage. The
Speaker 1: family offices like archegos, and there's a lot more family
Speaker 1: offices that copycatted the same or similar traits to our
Speaker 1: chegos and hedge funds that are over leveraged. So yeah,
Speaker 1: that would cause temporary deflation. But Mark, I've been in
Speaker 1: the financial industry now for my fifteenth year, will be
Speaker 1: next year in two working different jobs in the financial industry,
Speaker 1: and I could tell you that FED policy they will
Speaker 1: not allow deflation for long periods of time anymore. There
Speaker 1: will be rules changes, there will be bailouts, there will
Speaker 1: be goal posts moving, there will be secret bailouts, there
Speaker 1: will be press release manipulation, announcing as many liquidity programs
Speaker 1: as possible to prevent these asset prices from staying too
Speaker 1: low for too long. So in two thousand eight, two
Speaker 1: thousand nine, we had low asset prices, we had UM
Speaker 1: low asset prices and quote unquote deflation according to the
Speaker 1: government statistics, with UM money and credit dropping for maybe
Speaker 1: six to eight months. In February and Arch of we
Speaker 1: had deflation for six to eight weeks. So perspective here,
Speaker 1: we had deflation in an over leverage system, where in
Speaker 1: my opinion, mark the entire system, now, the global financial system.
Speaker 1: We're over three hundred trillion now in total government debt
Speaker 1: and and UM corporate debt, and it's it's just keeps growing.
Speaker 1: It seems to grow now by twenty trillion now every
Speaker 1: twelve to eighteen months, twenty trillion or more globally, so
Speaker 1: even more debt is added. And yet the current debt
Speaker 1: can't be paid back, the current debt can barely be serviced.
Speaker 1: So this system is a Ponzi scheme. But the government
Speaker 1: can't tax deflation. So that's why the government one of
Speaker 1: the main reasons why they won't allow deflation, even though um,
Speaker 1: if you're an Austrian school economists, that might have been
Speaker 1: the cure. But the current system, the people in power,
Speaker 1: the policy makers at these central banks, they won't allow
Speaker 1: deflation for a long period of time without changing the roles, bellouts, manipulation,
Speaker 1: all these and things. So what does that mean? They
Speaker 1: won't allow deflation. I mean they won't allow the markets
Speaker 1: to ever drop again. Because I know a lot of people,
Speaker 1: including myself, uh, we're expecting you know, this big, this
Speaker 1: big market crash to come. I've started to kind of
Speaker 1: change my mind on that, maybe to kind of what
Speaker 1: you're what you're saying, But what what do you mean?
Speaker 1: They won't allow asset deflation, so they won't allow it, Uh,
Speaker 1: the caveatists for long periods of time. So look at
Speaker 1: the desperation, all the crazy announcements the FED had to
Speaker 1: make during the span of February and March to try
Speaker 1: to restart bond markets all over the globe, to try
Speaker 1: to restart credit markets in the US and all over
Speaker 1: the globe. Wall Street banks wanted to restart selling junk bonds,
Speaker 1: collateralized loan obligations, leverage loans, all these credit and derivatives products.
Speaker 1: Wall Street love selling this crop. The bond salesman on
Speaker 1: Wall Street, the hedge fund guys that go on Real
Speaker 1: Vision TV and and talk about their ball on trades
Speaker 1: blah blah blah, their leverage bond trades and out which
Speaker 1: they are. They love selling this stuff. And during a
Speaker 1: deflationary period they can't sell the stuff. So there's a
Speaker 1: bunch of different reasons why the federal government, the Federal Reserve,
Speaker 1: the US Treasury does not want to allow deflation for
Speaker 1: long periods of time, and they're going to change. They'll
Speaker 1: change the rules a whole bunch of times. Unfortunately, the
Speaker 1: average person, mark the retail investor, the average person does
Speaker 1: not want to hear that the rules could change next week,
Speaker 1: a couple of weeks from now. After that they can
Speaker 1: change a month from they could keep changing. The average
Speaker 1: person does not want to hear the goalpost move. They
Speaker 1: moved again. The average person does not want to hear this.
Speaker 1: When I talk to investors and other people, they want
Speaker 1: a easy solution to a very difficult problem that unfortunately,
Speaker 1: right now does not have a solution. And the problem
Speaker 1: is the policymakers, these politicians, bureaucrats, regulators, central banksters, they
Speaker 1: are doing really stupid things and it's continuing. And that's
Speaker 1: why you have all these traders. They're gambling that they're
Speaker 1: going to get a bail up. They're gambling that the
Speaker 1: FED is going to change the rules, and they're not
Speaker 1: going to go to prison. They're not gonna lose their
Speaker 1: jobs if they have a margin call and their hedge
Speaker 1: fund gets shut down. Okay, twelve months, eighteen months from now,
Speaker 1: they're going to restart. It's gonna go right back to
Speaker 1: selling junk bonds. And that's why corporate debt has doubled
Speaker 1: since two thousand nine. Corporate debt has doubled, cash flows
Speaker 1: haven't doubled. The money hasn't been um invested properly by corporations,
Speaker 1: has been used share by backs on debt and increasing dividends.
Speaker 1: And by the way, dividends marker um. The average retail
Speaker 1: investor doesn't think about this. Dividends for an American investor
Speaker 1: are triple taxed, so corporations pay their corporate profit. Corporations
Speaker 1: pay taxes on their dividends before they pay them to shareholders,
Speaker 1: and the shareholders pay their dividends, so the average person
Speaker 1: does not think about any of this. The government loves
Speaker 1: asset price inflation and that's why the policies like this.
Speaker 1: So so we can have we can have deflation, we
Speaker 1: can have deflation, but it will not last at this point.
Speaker 1: I'd be shocked if it lasts for more than three
Speaker 1: or four months at this point, because that's how ridiculous
Speaker 1: the system is. The system is a currency and credit
Speaker 1: Ponzi scheme with government debt in corporate debt. So you're
Speaker 1: basically saying, if we see a dip in the markets,
Speaker 1: um it would be very short lived, which would then
Speaker 1: be met with an enormous amount of central bank manipulation
Speaker 1: to push the markets back up to new all time highs.
Speaker 1: So if the FED does not want to do that,
Speaker 1: then the FED. If the FED does not want to
Speaker 1: do that to help the U. S. Treasury with capital
Speaker 1: gains taxes, then what the Fed's gonna have to do
Speaker 1: is they're gonna have to buy either They're gonna have
Speaker 1: to cover all those lost capital gains taxes that the
Speaker 1: Treasury was bringing in. The FED would have to mount
Speaker 1: the FEDS trapped. They don't want to make this the
Speaker 1: fedest trapped. The balance sheet is not going to go
Speaker 1: down significantly really ever again unless the US government drastically
Speaker 1: cut spending or the US loses world reserve currency status
Speaker 1: in the near future. Yeah, got it. So the FED
Speaker 1: would have to cover the losses all these capital gains
Speaker 1: taxes that the and and trust me the Treasury now
Speaker 1: and i've and I've seen President. Have you been to
Speaker 1: the DC Blockchain something yet here in d C? You
Speaker 1: should come if they have an in person one at
Speaker 1: Georgetown and listen to people from the U. S. Treasury,
Speaker 1: listened to people from the Fellow Reserve, listen to people
Speaker 1: from the Securities and Exchange Commission and seef TC speak
Speaker 1: at the event. They've owned bitcoin for years. They love bitcoin.
Speaker 1: They buy bitcoin for family members, but they want to
Speaker 1: tax the crap out of it too. They want to
Speaker 1: tax and regulated, which is which is fine. They can
Speaker 1: tax it, just pump it to the moon. Hey, that's that,
Speaker 1: thanks so much man. So uh you heard it from
Speaker 1: from Jason Jason Barack. Find them on Twitter at Jason E.
Speaker 1: Barack UM. If you like this kind of content from him,
Speaker 1: you can follow him on Wall Street from main Street
Speaker 1: on YouTube as well, And uh, that's it. I don't know,
Speaker 1: the markets aren't. The Fed can't let the markets crash.
Speaker 1: That means more stimulus. That means your dollar is going
Speaker 1: to continue to lose purchasing power. That means you need
Speaker 1: to continue to find ways to maintain or increase your
Speaker 1: purchasing power, which, of course bitcoin is my favorite option.
Speaker 1: And that's it for today. Thanks for listening.