Speaker 1: What happens when the government's debt can't be repaid, Well,
Speaker 1: it's different than when it's your personal credit card versus,
Speaker 1: of course, the government's debt, but it's also sort of
Speaker 1: the same thing, meaning if the debt can't be repaid,
Speaker 1: then there has to be some sort of an agreement,
Speaker 1: like it's a for example, on personal debt, you might
Speaker 1: negotiate with the lender for smaller payments spread over a
Speaker 1: long timeframe, maybe some sort of like a debt restructuring,
Speaker 1: or sometimes it's just like sorry, I just can't pay.
Speaker 1: It's not great default, or sometimes it's something in between.
Speaker 1: But what happens when you look at all the debt
Speaker 1: and you look at the ability to pay it back
Speaker 1: and you realize there's just no way, and you realize
Speaker 1: it can't even be paid back. And with about thirty
Speaker 1: four trillion dollars of debt for the US government about
Speaker 1: three hundred trillion dollars a debt for governments around the world,
Speaker 1: that's the realization that many are starting to have. So
Speaker 1: in this video, I'm going to go over how the
Speaker 1: US got into this debt mess, the speed at which
Speaker 1: it's growing, what the government projects it to get to
Speaker 1: and the only four ways out of this mess. Now,
Speaker 1: for those of you that don't know me, my name
Speaker 1: is Mark mas. I've been an entrepreneur for over twenty
Speaker 1: five years. I've invested and made millions in tech, real estate, bitcoin,
Speaker 1: and a whole range of other sectors. Over the years.
Speaker 1: I speak at some of the largest financial conferences in
Speaker 1: the world, but through this channel, I've been able to
Speaker 1: reach more people than I ever could in any of
Speaker 1: those rooms, and I'm thrilled. And on this channel we
Speaker 1: just hit five hundred thousand subscribers. So if you're new here,
Speaker 1: click that subscribe button and let's just get into the video.
Speaker 1: All right, So talking about the debt that can never
Speaker 1: be paid back, the first thing is we have to
Speaker 1: understand first of all, what is the debt and how
Speaker 1: does it get paid back. Then we'll get into like
Speaker 1: what does that mean for our portfolios and all that,
Speaker 1: But first thing, let's just talk about the debt and
Speaker 1: how do we pay it back. So the first thing
Speaker 1: is if we want to understand the debt, let's first
Speaker 1: understand the ability to pay it back. And we want
Speaker 1: to look at the money supply. Now this is the
Speaker 1: United States. We'll look at the global money supply as well.
Speaker 1: But if I borrow money, if I have debt, I
Speaker 1: have to pay it back with money, right, So the
Speaker 1: first thing is let's take a look at the money.
Speaker 1: So what we see here is the FED, the Central
Speaker 1: Bank of the United States, the Federal Reserve, and the
Speaker 1: money supply. And what you can see I put some
Speaker 1: trend lines here. It had been going at this trend
Speaker 1: right here, at this even pace. Then it started it
Speaker 1: sort of picked up to the next trend line, and
Speaker 1: then it started getting steeper, and then it started getting steeper,
Speaker 1: and now the money supply is growing at this insane
Speaker 1: alarming rate right almost going parabolic. You can see that
Speaker 1: right here. However, as parabolical as that is, that's about
Speaker 1: twenty trillion dollars, which it sounds like a lot, but
Speaker 1: not in comparison to the debt. So that's what we're
Speaker 1: looking at. Now. If I take out debt in US dollars,
Speaker 1: what do we have to pay the debt back with
Speaker 1: US dollars? So we have about twenty trillion of US dollars. Okay,
Speaker 1: Now this is the debt clock, and this kind of
Speaker 1: keeps track of how the debt's been going up. You
Speaker 1: might have seen this before. There's a whole lot of
Speaker 1: data on here. I'm not going to go through all
Speaker 1: of that, but the main thing I want to look
Speaker 1: at right here is this. You can see this in
Speaker 1: real time, like ticking higher, higher, higher, or over thirty
Speaker 1: four almost thirty five trillion dollars in debt. So right
Speaker 1: off the bat, like we owe thirty five trillion dollars,
Speaker 1: but we only have twenty trillion dollars to pay it back.
Speaker 1: That sounds like a problem, and you would be right,
Speaker 1: it certainly is. Now if we look at the government debt,
Speaker 1: we looked at the money supply is growing, we can
Speaker 1: also look very similar and the debt. The debt had
Speaker 1: been on this trend line barely even moving forever, and
Speaker 1: then the debt started going higher, and then the debt
Speaker 1: started going higher. Look at these trend lines changing, and
Speaker 1: now the debt is almost going straight up. As a
Speaker 1: matter of fact, we're adding about the United States adding
Speaker 1: about one trillion dollars every quarter every ninety days. To
Speaker 1: put this into perspective, the US government added about a
Speaker 1: trillion dollars from the inception of the country all the
Speaker 1: way to like the eighties and now we're doing that
Speaker 1: every single quarter. Now, this is government debt again, this
Speaker 1: is government debt, thirty five trillion dollars. But then we
Speaker 1: also have all the people, me and you, all the
Speaker 1: individuals that owe debt as well. And we can see
Speaker 1: this is what we call household debt, not public debt,
Speaker 1: but househ debt. And we're at about almost eighteen trillion
Speaker 1: dollars there, thirty five trillion plus eighteen trillion, and we
Speaker 1: only have twenty trillion dollars of all the money to
Speaker 1: pay it back. It sounds like a problem, and it is,
Speaker 1: but it even gets worse because that's just the United States.
Speaker 1: But of course there's a whole world out there. So
Speaker 1: if we look at the whole world, what we see
Speaker 1: is that the entire global debt is three hundred trillion.
Speaker 1: As a matter of fact, it's even higher than that.
Speaker 1: So over three hundred trillion dollars in debt. But do
Speaker 1: we have enough money to pay it back? Now, if
Speaker 1: we look globally, there's a problem. Part of the problem
Speaker 1: is that how much money is there even in the world,
Speaker 1: And that's a question that we really can't even answer.
Speaker 1: But we can get a couple of measurements and take
Speaker 1: a look at it, and we can see that it's
Speaker 1: difficult to give a specific answer, so we'll see different
Speaker 1: numbers if you look at it. We'll take the high number.
Speaker 1: We can see that the value of notes and coins
Speaker 1: in circulation, so the money that we have is about
Speaker 1: eight point two trillion. That's just the dollar bills, the coins,
Speaker 1: et cetera. Eight point two trillion across twenty major countries
Speaker 1: plus the Euro Area, so not just the United States,
Speaker 1: but globally. That's about the money supply. Now we can
Speaker 1: go a little bit higher. Like I said, let's go
Speaker 1: on the high ends. We can get the benefit of
Speaker 1: the doubt. Here. We can see the global M one supply,
Speaker 1: not just US dollars, but the global IN one supply,
Speaker 1: which includes all the money in circulation plus travelers checks
Speaker 1: plus deposits like checking and savings accounts, was about forty
Speaker 1: eight trillion, So let's call it fifty trillion dollars against
Speaker 1: remember three hundred trillion debt. But if we want to
Speaker 1: go even higher, we could say that the M two
Speaker 1: supply is about eighty two trillion. Let's take that number,
Speaker 1: so we have about eighty two trillion dollars. Some estimates
Speaker 1: are maybe even as high as one hundred trillion. Whatever,
Speaker 1: we have one hundred trillion dollars in money to pay
Speaker 1: back three hundred trillion dollars in debt, and you start
Speaker 1: to understand the magnitude of the problem that we have.
Speaker 1: Here's a graphical four format so you can understand a
Speaker 1: little bit better. This giant section of the pie chart
Speaker 1: right here, that's the global debt, and this little sliver
Speaker 1: area right here that's the amount of money that we have.
Speaker 1: So we don't have near enough money to pay off
Speaker 1: near the debt. So that's the problem. So how does
Speaker 1: that get paid back? We're going to dig into that.
Speaker 1: So the first before we get into how does that
Speaker 1: get paid back? And what does all this mean? First
Speaker 1: we have to kind of project, well, how much more
Speaker 1: will the debt even grow? And of course we can
Speaker 1: just look right at the government for these answers. The
Speaker 1: first thing you have to understand is that we are
Speaker 1: in a debt based monetary system. So you know, we
Speaker 1: talk about the Federal Reserve and the printer go burgh
Speaker 1: those types of things, which is a funny meme, it's
Speaker 1: not actually how it works. Right. Money is created through
Speaker 1: debt expansion. When you get a loan for a house,
Speaker 1: of car, boat, et cetera. That money is created out
Speaker 1: of thin air. Corporations get money from debt, Governments get
Speaker 1: money from debt, and so in this debt based monetary system,
Speaker 1: it has to always be growing or the whole whole
Speaker 1: thing falls apart. So it has to expand, and all
Speaker 1: money comes from debt. And so understanding that key fact,
Speaker 1: let's take a look at some of these projections. So
Speaker 1: here's for the United States, which of course is the
Speaker 1: US dollar, and it doesn't matter where you live in
Speaker 1: the world. US dollars the reserve currency the world's with.
Speaker 1: This matters. Now, what we can see is this is
Speaker 1: US public debt and as it's projected to increase. So
Speaker 1: we can see here in the year two thousand, here
Speaker 1: we are about twenty twenty three, and here we are
Speaker 1: twenty fifty, and what we can see is the payments
Speaker 1: on the debt going up from one percent to five percent.
Speaker 1: We can see the deficit going higher and higher higher,
Speaker 1: no deficit in two thousand. We actually had a surplus,
Speaker 1: surprise surprise to five percent of deficit in twenty fifty,
Speaker 1: and we can see the percentage of debt. This is
Speaker 1: the alarming one, going from thirty eight percent debt to
Speaker 1: GDP up to one hundred and seventy five percent projected.
Speaker 1: And so basically what we're looking at is the debt
Speaker 1: will continue to go higher at an ever, ever faster rate.
Speaker 1: The CBO again put out this chart that shows this
Speaker 1: in another format. So here we are right here with
Speaker 1: a record amounts of debts, as a matter of fact,
Speaker 1: more than or about where we were in World War
Speaker 1: one world War two, and this is what it's projected
Speaker 1: to do. That's from the government's own admission. This is
Speaker 1: not me making this up. Now. If we want to
Speaker 1: look at this globally again, that's the United States. If
Speaker 1: we look at this globally, what we can see is
Speaker 1: something similar. And we are right about here right now,
Speaker 1: and that is where it's expected to go. We'd already
Speaker 1: don't have near enough dollars to pay back the debt
Speaker 1: that we owe in the first place, and the debt
Speaker 1: is expected to go a whole lot higher. So where
Speaker 1: do we go from here, Well, there's four ways out.
Speaker 1: Radialio broke this down very well in his book talking
Speaker 1: about this sovereign debt crisis, which is basically what we're in.
Speaker 1: And they said, there's four ways that we can get
Speaker 1: out of this. Number one, we can have austerity, and
Speaker 1: that basically means the government goes on a budget. I mean,
Speaker 1: so let's cut spending by whatever, far fifty percent, let's
Speaker 1: increase the taxes. So we cut spending, we bring in
Speaker 1: more revenue, and we'll save our way out of it.
Speaker 1: Of course that doesn't work. The people that are on
Speaker 1: the doll the people that get benefits from the government,
Speaker 1: they certainly don't want that to happen. Sometimes you might hear, well,
Speaker 1: we owe the debt to ourselves, right, we could just
Speaker 1: not pay it back. Well, not really. So we obviously
Speaker 1: owe a lot of other government's money China, etc. Probably
Speaker 1: won't like that if we decide not to pay them back.
Speaker 1: But we owe it not to ourselves. We owe it
Speaker 1: to the people of the United States. So if you
Speaker 1: have a retirement account for our one K mutual fund,
Speaker 1: a lot of your money is probably in the government's
Speaker 1: hand and they owe that money to you. And so
Speaker 1: if they decide not to pay that back, that's your
Speaker 1: retirement money that's gone. Even more. It's not that they
Speaker 1: can always just print the money, right, because they owe
Speaker 1: people medical services, right, and so this is a big problem.
Speaker 1: Number Two, they can do a debt restructuring. Hey, look,
Speaker 1: we're way over our skis on this. There's no way
Speaker 1: that we can pay this back. We'll pay you back
Speaker 1: fifty cents on the dollar, ten cents on the dollar,
Speaker 1: something like that, maybe extended out the way. And this is,
Speaker 1: of course, the most likely scenario is we'll just print
Speaker 1: the money. And of course this is what governments around
Speaker 1: the world are doing. They'll continuing to expand the money
Speaker 1: supply the debt because they're continuing to print money. Now,
Speaker 1: the reality is that it's not one of these, it's
Speaker 1: really probably all three. So for example, they're going to
Speaker 1: increase the taxes, they're going to restructure the debt for
Speaker 1: longer refinance it, and they're going to print money at
Speaker 1: the same time, and they're continue to use all three
Speaker 1: of these. But there's the fourth way, and it's sort
Speaker 1: of like betting on a miracle, and the miracle is
Speaker 1: we could have a productivity miracle. Now, a lot of
Speaker 1: times people talk about this, like if we could just
Speaker 1: come up with like free unlimited energy, for example, nuclear fission,
Speaker 1: if we could come up with that, then we'd have
Speaker 1: this productivity miracle and we could grow out of it.
Speaker 1: You have to understand that we have remembered the ratio
Speaker 1: is debt two GDP. It's a nominated denominator. So we
Speaker 1: could either bring the debt down or we could bring
Speaker 1: the GDP up. So if we have a productivity miracle,
Speaker 1: we could grow our way out of it. Hype ethically,
Speaker 1: but maybe we actually can. Are we on the verge
Speaker 1: of a productivity miracle that could potentially see us do this?
Speaker 1: And the answer is maybe we are. So what am
Speaker 1: I talking about specifically? Of course AI? We have an
Speaker 1: AI driven boom that is completely changing the landscape of
Speaker 1: the entire world from everything that we know, from how
Speaker 1: we get information to how we work, to whether we
Speaker 1: have a job or not, what type of job you'll have,
Speaker 1: which new businesses are growing, and even potentially saving governments
Speaker 1: from reckless spending by having a productivity miracle. So obviously
Speaker 1: I'm talking about, like I said, the growth of AI,
Speaker 1: and we've seen how fast this is growing. Some ways
Speaker 1: we can look at this just from a chart is
Speaker 1: look at VideA. If you haven't be paying attention in
Speaker 1: video you're not paying attention at all. And what we
Speaker 1: can see is that in Vidia has basically shot up
Speaker 1: like a what is this like a meme stock, a
Speaker 1: crypto stock. I mean, it's basically gone straight up for
Speaker 1: no reason. There's no fundamental reason if we try to
Speaker 1: analyze it like a typical stock, why it's gone up
Speaker 1: like this. But it's gone up like this because of
Speaker 1: the AI boom that's going on. So is business has
Speaker 1: become more productive, meaning I can get more work done
Speaker 1: in my business without hiring additional people. That means my
Speaker 1: profitability goes up. Right, doesn't mean you have to have
Speaker 1: mass layoffs. But let's say that now there's a lot
Speaker 1: more higher level jobs from coders and things like that.
Speaker 1: So now maybe people are making more money again, that
Speaker 1: pushes the GDP up and maybe, just maybe we could
Speaker 1: grow faster to move the GDP up faster than the
Speaker 1: debt's growing. The question is this actually realistic? Well, I've
Speaker 1: studied the data, I've studied the math, and maybe, but
Speaker 1: there's also a big danger as we transition into that.
Speaker 1: I want to break all of that down for you,
Speaker 1: but real quick, before I get into that data, I
Speaker 1: just want to let you know, I got a sponsor
Speaker 1: for this week's show. I want to let you let
Speaker 1: you know about them real quick. I'm talking about iber America.
Speaker 1: Here's their stock ticker right here. And the reason why
Speaker 1: this company is probably a good one sponsor for this
Speaker 1: video is because they are at the forefront of the
Speaker 1: AI boom. I've talked about before, the different commodities, whether
Speaker 1: that's lithium or cobalt. We talked about copper, how copper's
Speaker 1: being used in the AA boom. One thing that's being
Speaker 1: used in the air boom, and you can see from
Speaker 1: this chart right here is ten, Yes, the old metal tin.
Speaker 1: And you probably don't realize how much ten goes into
Speaker 1: the data centers and more specifically the microchips like Nvidia
Speaker 1: uses when they put them onto a circuit board, they
Speaker 1: have to solder them and that all requires ten. And
Speaker 1: so you can see ten is also going up like
Speaker 1: in Vidia like a meme stock as well, and that's
Speaker 1: because of the demand now we have at this iber
Speaker 1: America basically is going to be Europe's largest ten mine
Speaker 1: in the world. Now why does this matter, Well, it
Speaker 1: matters because the majority of ten around the world right
Speaker 1: now is coming from countries that we would say are
Speaker 1: non friendly. As a matter of fact, China, Indonesia, and
Speaker 1: Peru make up seventy five percent of the supply of ten.
Speaker 1: You already know we're trying to de couple from China.
Speaker 1: We can't depend on them anymore. Indonesia we can't. We
Speaker 1: have such heavy sanctions on them because of their environmental policies.
Speaker 1: And Peru has massive disruption in their mining sector. You
Speaker 1: can see. Foreign investments need to understand that there's massive
Speaker 1: political risk in Peru. And so most of the supply
Speaker 1: of ten comes from non friendly countries, and here we
Speaker 1: have one in Europe. Now. The key to understand this
Speaker 1: also is that the only way to get access to
Speaker 1: ten is different than most commodities. You can't just buy
Speaker 1: it through an ETF. The only way you can get
Speaker 1: exposure to ten is by buying one of the producers.
Speaker 1: And you don't want to buy a producer in Peru
Speaker 1: or China or Indonesia, and so maybe in a European
Speaker 1: company might be a better way. Now, real quickly, just
Speaker 1: got to get back to the video, but real quickly.
Speaker 1: The team is stellar. David Young, he's been head of
Speaker 1: natural resources at Carlisle Group, which is the fifth largest
Speaker 1: private equity firm. He managed over four billion dollars of
Speaker 1: resources at there we have Gene McBurnie. He was the
Speaker 1: CEO of can Accordingenuity, which is the second largest Canadian
Speaker 1: investment bank, co founder of GMP Securities which is an
Speaker 1: investment dealer, massive, massive talent. Here, we also have Hatch
Speaker 1: Consulting which is is on board to get the production
Speaker 1: back on track. We'll talk about that production in a second.
Speaker 1: And lastly, real quick before we get back to the
Speaker 1: AI boom, we know that Iber America, while at the
Speaker 1: forefront of this AI boom supplying the ten that we need,
Speaker 1: they basically have done something by going and acquiring this
Speaker 1: mine in Spain in Europe, and they bought it. And
Speaker 1: the reason why they bought it is the company that
Speaker 1: had it before mismanaged it. And part of the mismanagement
Speaker 1: was also just the cycle of it. The AI boom
Speaker 1: wasn't there, neither was ten and they were able to
Speaker 1: buy a mine here that was worth seventy eight million
Speaker 1: dollars and they bought it for only six million. So
Speaker 1: what happens in the siicylity of commodities, So they bought
Speaker 1: a seventy eight million dollar asset for only six million dollars,
Speaker 1: and the buyer, iber America, is only an eighty million
Speaker 1: dollar market cap. So an eighteen million dollar market cap
Speaker 1: is buying an asset for seventy eight million dollars. What
Speaker 1: do you think potentially happens with this company as ten
Speaker 1: continues to take off? Now, the good thing too, is
Speaker 1: this is all happening right now at the time of
Speaker 1: this video. As a matter of fact, they're closing on
Speaker 1: this deal in the next two weeks. And their goal
Speaker 1: is they have the time, they have the money, and
Speaker 1: they have the know how to put this back into
Speaker 1: production right right now, right at the time that AI
Speaker 1: is completely blowing up and they have the ten. Okay, now,
Speaker 1: enough with that sponsor check them out if you want.
Speaker 1: But let's get back to can this AI productivity miracle
Speaker 1: help us grow out of this? Okay? So let's look
Speaker 1: at this from a couple areas. So the first thing
Speaker 1: that we can see is when we've looked at something
Speaker 1: like this in the past, it gives us an idea.
Speaker 1: I always use history. History is our guide to the future. So,
Speaker 1: for example, when we had the Internet boom, what'd the
Speaker 1: Internet do? The Internet increased our efficiency. Now instead of
Speaker 1: having to drive somewhere for a meeting, I just go
Speaker 1: on zoom right, instead of having to drive to a
Speaker 1: store pickup stuff, and I can click a button and
Speaker 1: have it shipped to me. So internet was also something
Speaker 1: that really created this productivity boom. And what we can
Speaker 1: see here in two thousand, this is a chart here
Speaker 1: of corporate profits, I meaning corporations making more money. When
Speaker 1: corporations make more money, that increases the GDP. Right, So
Speaker 1: right here is when the tech boom happened. This is
Speaker 1: the year two thousand, the dot com boom. And look
Speaker 1: at this trend line. So this is the corporate profits.
Speaker 1: We're on this trend line right here. Then it started
Speaker 1: ticking up a little bit because in the eighties we
Speaker 1: started getting you know, computers and some of the businesses
Speaker 1: and things like that. So productivity started picking up here.
Speaker 1: But right here where the two thousand dot com happened.
Speaker 1: Look at the new trend line that started up. See
Speaker 1: how much faster corporate profits went up, how much faster
Speaker 1: GDP started going up. And now you can see since
Speaker 1: twenty twenty we are on a straight line. So the
Speaker 1: precedent shows that technology does increase efficiency, which boost corporate profits,
Speaker 1: which then brings up GDP. Okay. Another way, we can
Speaker 1: take a look at this specifically that's historically, but we
Speaker 1: can also look at this from AI. So this is
Speaker 1: some of the projections. What we can see is that
Speaker 1: the AI market cap we're right here right now, it's
Speaker 1: been growing pretty slowly. But you have to remember this
Speaker 1: is all still pretty new. What do we less than
Speaker 1: two years or a year and a half into sort
Speaker 1: of since open ai was introduced, But it's projected to
Speaker 1: grow at a three or thirty three percent compounded annual
Speaker 1: growth rate. That's amazing. It's enormous and if you're not
Speaker 1: using in your business, you totally should. In our business,
Speaker 1: we use it all over the place already a thirty
Speaker 1: three percent compound and annual growth rate. And so that's
Speaker 1: how fast the aiboom is going to continue to grow,
Speaker 1: and it's going to continue to cause all other things
Speaker 1: to happen, and a lot of it is in the
Speaker 1: demand of the commodities and things like that. Now, there
Speaker 1: is some downsides to this, and I don't want to
Speaker 1: go deep into this right now. I can make another
Speaker 1: video if you want, But typically when we have this
Speaker 1: pulse of productivity, maybe some people lose their jobs. Now
Speaker 1: those people can go find higher pain, but there is
Speaker 1: some danger in the short term. And again we have
Speaker 1: historical precedence for this. If you want me to break
Speaker 1: that down on a video, let me know. In the
Speaker 1: commons down below, we can make a whole separate video
Speaker 1: on that. But what we do know is this AI
Speaker 1: and the tech trend is very very strong. Now. We
Speaker 1: know that technology happens in about fifty year cycles and
Speaker 1: it drives financial markets. So what's driven financial markets the
Speaker 1: last fifty years, Well, it was personal computers, telecom and internet.
Speaker 1: What drove it before that? It was for gmge What
Speaker 1: drove it before that, well it was steel railways. What
Speaker 1: we drove for that oil? Right, And so what we
Speaker 1: know is the next fifty years is going to be
Speaker 1: dominated by AI and crypto part of this fifty year
Speaker 1: technological boom, and maybe, just maybe it could grow our
Speaker 1: way out of this. It's a miracle. Maybe. Now, if
Speaker 1: you want to know more about these fifty year cycles,
Speaker 1: I did a whole video on it. We'll go ahead
Speaker 1: and link it up here if you want to watch that.
Speaker 1: But let me know what you think about the video.
Speaker 1: Can we grow our way out of this as a
Speaker 1: miracle or is it just smoking dreams? Let me know
Speaker 1: own the comments down below for Subscribertion. I subscribed like
Speaker 1: the video if you liked it. If you don't, you
Speaker 1: can give me a thumbs down. That's okay, but at
Speaker 1: least tell me why in the comments down below. And
Speaker 1: that's what I got to your success. I'm out.