WEBVTT - The US Literally Cannot Repay This Debt, We’re In A Debt Doom Loop | James Lavish 0:00:00.240 --> 0:00:04.320 Everybody can feel that things have changed and are changing rapidly, 0:00:04.480 --> 0:00:08.159 especially after the COVID lockdowns. They have the sense that 0:00:08.320 --> 0:00:11.119 something is not the same as it used to be. 0:00:11.320 --> 0:00:13.720 The FIT is trying to fight inflation, yet it's not 0:00:13.760 --> 0:00:17.960 really working. It's coming down the inflation rate. And really 0:00:18.000 --> 0:00:19.920 what it all has to do with, and it all 0:00:19.960 --> 0:00:22.720 comes down to, is the manipulation of money. 0:00:22.960 --> 0:00:26.639 My bond is paying me five and it's costing me three, Like, 0:00:26.680 --> 0:00:29.000 all right, man, that's two percent spread, Like I'm doing 0:00:29.040 --> 0:00:31.160 pretty good. Or if the S and P five hundred 0:00:31.240 --> 0:00:34.560 is making me eight or ten percent and inflation is 0:00:34.600 --> 0:00:36.440 at three or four, like I'm doing pretty good. 0:00:36.560 --> 0:00:36.720 Right. 0:00:36.800 --> 0:00:40.640 But if you're a consumer, go home and do the 0:00:40.680 --> 0:00:43.720 work and add up all your expenses and compare them 0:00:43.720 --> 0:00:46.200 to last year and the year before and the year 0:00:46.200 --> 0:00:48.440 before that. It's a lot of work. It's easier just 0:00:48.479 --> 0:00:49.960 to listen to what the pundits tell you. 0:00:50.040 --> 0:00:52.480 And then if we think about the dollar, we also 0:00:52.520 --> 0:00:54.720 have to think about it and measured against other things. 0:00:54.920 --> 0:00:57.120 So if I'm looking at only in dollars, like my 0:00:57.240 --> 0:00:59.360 house is worth, you know it's three hundred and eighty 0:00:59.360 --> 0:01:01.240 thousand dollars. A couple years ago. Now it's four hundred 0:01:01.240 --> 0:01:02.800 and eighty thousand for like a media in US home. 0:01:03.480 --> 0:01:07.160 But it went down in oil barrels per oil, or 0:01:07.200 --> 0:01:10.120 it went down in ounces per ounces of gold, and 0:01:10.160 --> 0:01:12.399 it went down in bitcoin terms as well. And if 0:01:12.400 --> 0:01:14.640 you think about it again, back to the Bology's point, 0:01:14.800 --> 0:01:18.520 measured in bitcoin, we are seeing hyper inflation. 0:01:18.200 --> 0:01:20.880 And a dollar bitcoin is seen as a risk asset. 0:01:21.080 --> 0:01:23.200 We talked before about how we're kind of in a 0:01:23.240 --> 0:01:25.559 gambler's economy like there, we have a lot of people 0:01:25.600 --> 0:01:28.240 out there we just feel like they're getting behind and 0:01:28.440 --> 0:01:31.400 they're gambling to try to catch back up or get 0:01:31.440 --> 0:01:34.800 ahead and taking a lot of risk. And so bitcoin 0:01:34.880 --> 0:01:36.600 is seen that way in a lot of ways. And 0:01:36.720 --> 0:01:38.520 eyes are the mean coins, and we see the mean 0:01:38.560 --> 0:01:40.880 coins take off. It's because people are just risking money. 0:01:40.880 --> 0:01:43.240 They're like, come on, I hope that I can I 0:01:43.280 --> 0:01:44.880 can catch up the inflation. 0:01:46.760 --> 0:01:49.160 All right, So James, welcome back to the show. 0:01:49.200 --> 0:01:50.720 By the way, thank you for having me. 0:01:50.800 --> 0:01:53.000 Glad we can do this in person. I love doing 0:01:53.000 --> 0:01:56.960 it in person, so you know for the audience. You're 0:01:57.560 --> 0:02:00.440 my partner. We have the Bitcoin Opportunity Fund. You're a 0:02:00.480 --> 0:02:03.560 hedge fun guy, you write the newsletter The Informationist, which 0:02:03.560 --> 0:02:06.640 is amazing information on the macro space. But you're sort 0:02:06.680 --> 0:02:09.639 of known, or maybe in my mind, you talk a 0:02:09.720 --> 0:02:11.840 lot about like the debt doom loop that we're in. 0:02:12.720 --> 0:02:15.400 Sort of how not just the US government and the 0:02:15.400 --> 0:02:18.000 Federal Reserve, but really all the nations and central banks 0:02:18.040 --> 0:02:20.400 of the world are sort of in this proverbial rock 0:02:20.440 --> 0:02:23.440 in the hard place that keeps getting closer and closer 0:02:23.440 --> 0:02:25.600 and closer, right, And so we're in this like debt 0:02:25.600 --> 0:02:28.880 doom loop. I want to frame that up and what 0:02:28.919 --> 0:02:33.120 does that mean? How does that progress? Like over what 0:02:33.160 --> 0:02:35.760 time frame? But then I want to bring it down 0:02:35.760 --> 0:02:38.800 into like more practical terms, So like if I'm a 0:02:38.840 --> 0:02:41.240 business owner, like what does that mean to me? Right, 0:02:41.280 --> 0:02:43.120 if I'm an if I'm trying to manage money for 0:02:43.200 --> 0:02:45.560 my family or like make sure I don't go broke, 0:02:45.720 --> 0:02:47.680 what does that mean to me? So then like how 0:02:47.680 --> 0:02:50.520 do we think about measuring that looking at cycles and 0:02:50.600 --> 0:02:52.680 what do we do about that? So let's start up 0:02:52.680 --> 0:02:54.720 with the frame up the debt doom loop for us? 0:02:55.000 --> 0:02:57.720 Sure, Well, first of all, thank you for having me again, Mark. 0:02:57.760 --> 0:02:58.720 Always good to be here. 0:02:59.120 --> 0:03:02.560 I'm on vacation and even my son and the audience. 0:03:02.639 --> 0:03:05.680 Yeah, we got we have someone in the audience, all right, But. 0:03:06.680 --> 0:03:09.480 It's always good to have people on vacation in your hometown. Yeah, 0:03:09.680 --> 0:03:13.800 so I know that coming from Vegas. But the debt 0:03:13.840 --> 0:03:17.160 doom lop, well, you know, I mean, I do talk 0:03:17.200 --> 0:03:21.480 about this a lot, and the reason is because everybody 0:03:21.520 --> 0:03:25.040 can feel that things have changed and are changing rapidly, 0:03:25.200 --> 0:03:31.680 especially after the COVID lockdowns and uh, and they they 0:03:31.880 --> 0:03:35.000 have the sense that something is not the same as 0:03:35.080 --> 0:03:39.080 it used to be. And they you've seen the price 0:03:39.120 --> 0:03:43.520 of skyrocket, You've seen homes skyrocket and price and then 0:03:43.560 --> 0:03:46.119 get really I liquid, So they're not moving. Interest rates 0:03:46.120 --> 0:03:48.920 are up. The FED is trying to fight inflation, yet 0:03:48.960 --> 0:03:52.680 it's not really working. It's coming down the inflation rate, 0:03:53.680 --> 0:03:57.480 meaning prices are still going up and and it's confusing 0:03:57.520 --> 0:03:58.120 a lot of people. 0:03:58.280 --> 0:04:00.640 And really what it all has to do with, and it. 0:04:00.680 --> 0:04:03.720 All comes down to, which you and I talk about extensively, 0:04:04.120 --> 0:04:08.120 is the manipulation of money. And that manipulation of money 0:04:08.440 --> 0:04:11.960 has been necessary because we've gotten ourselves in this situation 0:04:12.080 --> 0:04:15.080 where and this has all developed central banks, like we're 0:04:15.120 --> 0:04:18.120 talking about, they've all gotten themselves in a situation where 0:04:18.120 --> 0:04:22.080 they're borrowing and borrowing and borrowing so much money that 0:04:22.240 --> 0:04:26.040 they wind up having to manipulate their interest rates and 0:04:26.080 --> 0:04:27.360 their currencies in order. 0:04:27.279 --> 0:04:28.520 To keep up with that borrowing. 0:04:29.040 --> 0:04:31.760 And just before the show, you were talking about how 0:04:32.360 --> 0:04:34.919 you know, debt is kind of stealing from the future, 0:04:35.000 --> 0:04:37.760 and I think about it much in a similar way. 0:04:38.200 --> 0:04:40.480 I think of it more of like it's borrowing from 0:04:40.480 --> 0:04:44.280 the future and you can use it properly. And you know, 0:04:44.560 --> 0:04:47.719 so if you're an individual and you want to have 0:04:47.760 --> 0:04:50.960 a business, but you don't, you know, you're kind of 0:04:50.960 --> 0:04:52.760 stuck in your job. You don't really have enough money. 0:04:52.760 --> 0:04:55.240 Maybe you've got you want to start a restaurant. It's 0:04:55.240 --> 0:04:57.000 going to cost you one hundred thousand dollars to start it, 0:04:57.440 --> 0:04:59.360 but you only have ten thousand dollars in the bank. 0:05:00.000 --> 0:05:02.880 And you're like, well, I can continue to work and 0:05:03.040 --> 0:05:07.080 grind away and keep putting money away, or I can 0:05:07.480 --> 0:05:10.839 use that ten thousand dollars as a leverage for a 0:05:10.960 --> 0:05:14.960 loan that I can then pull that money into the now, 0:05:15.480 --> 0:05:18.440 borrow it from a bank, and start the business right away. 0:05:18.839 --> 0:05:22.560 Start buying the materials I need, and the cookware and 0:05:22.560 --> 0:05:26.760 and the ovens, and all and hiring people, start paying salaries, 0:05:27.080 --> 0:05:29.480 and then you open up the restaurant and suddenly you're 0:05:29.600 --> 0:05:34.000 generating income right away, you're generating productivity. Well, that's borrowing 0:05:34.040 --> 0:05:36.719 from the future. And if you do it responsibly. 0:05:36.920 --> 0:05:37.360 Restaurants. 0:05:37.960 --> 0:05:40.240 I use this example because it's really easy for people 0:05:40.279 --> 0:05:42.440 to visualize not maybe not the best. 0:05:42.640 --> 0:05:44.640 Yeah, don't do the restaurant, but don't do the restaurant. 0:05:44.760 --> 0:05:48.560 But but if you do it responsibly, that's great. You 0:05:48.760 --> 0:05:52.400 you you've built a business, you're producing, You're you're adding 0:05:52.440 --> 0:05:58.160 productivity into the into the national GDP. Right, but we've 0:05:58.160 --> 0:06:02.080 gotten ourselves in a situation now. Mark that the entire nation, 0:06:02.279 --> 0:06:05.440 all of the western nations and developed nations, they're all 0:06:05.560 --> 0:06:12.000 using debt ad nauseum to paper up inefficiencies, whether it's 0:06:12.200 --> 0:06:15.200 it's energy and efficiencies or it's just capital and efficiencies, 0:06:15.480 --> 0:06:20.240 and they're using that borrowing to close that gap. So, 0:06:20.360 --> 0:06:24.920 for instance, right now, are our federal government is borrowing 0:06:25.040 --> 0:06:29.839 just about two trillion dollars a year, meaning they're above 0:06:29.880 --> 0:06:32.680 and beyond what they have to borrow to pay down 0:06:33.160 --> 0:06:37.440 past debt. So we're running two trillion dollar deficits at 0:06:37.440 --> 0:06:40.360 a time that we're not even in a recession. So 0:06:40.480 --> 0:06:44.800 the irresponsibility that's coming out of Washington is monumental. It's 0:06:44.839 --> 0:06:48.400 absolutely incredible, and it's it's mind numbing for people like 0:06:48.480 --> 0:06:52.600 you and me who have been in business, running businesses, 0:06:52.640 --> 0:06:55.479 and you look at that, it's just it's not only 0:06:55.600 --> 0:06:58.479 is it irresponsible, it's it's putting us on. 0:06:58.480 --> 0:06:59.800 A path that's irreversible. 0:07:00.360 --> 0:07:03.040 And so why is that, Well, because we're running these 0:07:03.080 --> 0:07:06.320 deficits at a time that we're not even officially in 0:07:06.560 --> 0:07:12.000 World War arguable, but we're not in hot conflict right 0:07:12.000 --> 0:07:16.920 now somewhere, and so we're borrowing those two trillion dollars 0:07:17.680 --> 0:07:18.200 from who. 0:07:18.880 --> 0:07:21.720 So we just have to keep borrowing and borrowing and 0:07:21.760 --> 0:07:24.239 borrowing and add to that national debt. 0:07:24.760 --> 0:07:27.480 And so what happens, Well, we've seen the debt grow 0:07:27.600 --> 0:07:32.760 from just when we talk about the debt spiral. 0:07:33.720 --> 0:07:35.160 You and I talked about. 0:07:34.880 --> 0:07:39.560 This almost almost two years ago on this and I 0:07:39.600 --> 0:07:42.320 wrote a piece on it two years ago August about 0:07:42.360 --> 0:07:45.040 how we are entering a debt spiral where we just 0:07:45.040 --> 0:07:48.120 can't get out of it, and meaning the US government. 0:07:48.600 --> 0:07:49.320 So what is that? 0:07:49.440 --> 0:07:52.480 To frame it up, Well, the debt spiral means that 0:07:52.800 --> 0:07:56.760 we have accumulated so much debt that it requires more 0:07:56.800 --> 0:08:00.120 debt to pay down that old debt and eventually to 0:08:00.120 --> 0:08:01.720 pay that interest on that debt. 0:08:01.960 --> 0:08:02.600 And we're there. 0:08:03.240 --> 0:08:07.360 So of those two trillion dollar deficits, we're running one 0:08:07.480 --> 0:08:10.840 trillion dollars that we're spending a year is on interest 0:08:11.040 --> 0:08:14.080 on our past debt. So we're bumping up against when 0:08:14.160 --> 0:08:16.480 I wrote that piece, where we had thirty one point 0:08:16.520 --> 0:08:19.960 four trillion dollars of debt, and now we're just below 0:08:20.040 --> 0:08:24.360 thirty five trillion in just two years and not even. 0:08:24.600 --> 0:08:27.760 And so we're now at the point where we're spending 0:08:27.800 --> 0:08:31.360 a trillion dollars on interest alone on that debt, and 0:08:31.400 --> 0:08:35.000 we're spending so much money that we can't close that gap. 0:08:35.640 --> 0:08:37.679 So what do I mean by that? 0:08:37.880 --> 0:08:40.559 Well, if the. 0:08:41.080 --> 0:08:44.959 US government was a company on the New York Stock Exchange, 0:08:45.000 --> 0:08:47.280 which it's not, I understand because we have the money printer, 0:08:47.360 --> 0:08:50.320 but just put that aside for a second, we would 0:08:50.400 --> 0:08:52.600 consider it a zombie company. 0:08:52.880 --> 0:08:56.040 And why is that? Well, if you look at. 0:08:55.800 --> 0:08:59.440 The national debt and how much we spend, so are 0:08:59.480 --> 0:09:02.600 the amount of money we take in each year in revenues. 0:09:02.880 --> 0:09:05.319 You know the in fact, I can pull it up here. 0:09:05.360 --> 0:09:09.520 The CBO just updated their estimates for twenty twenty four, 0:09:10.160 --> 0:09:13.480 so and their estimates are that we're going to take 0:09:13.520 --> 0:09:16.720 in twenty eight point five trillion dollars in GDP. Okay, 0:09:16.800 --> 0:09:20.320 so that's the national productivity. And off of that, we 0:09:20.360 --> 0:09:22.880 have a tax base, as you will know, that is 0:09:22.960 --> 0:09:26.199 going to be four point nine trillion dollars estimate. Okay, 0:09:26.240 --> 0:09:29.200 so we're going to the US government has four point 0:09:29.280 --> 0:09:32.959 nine trillion dollars of revenue. We of course the government 0:09:33.000 --> 0:09:36.640 is not creating anything, they're just taking from our productivity. 0:09:36.760 --> 0:09:40.120 But they're on the other side of that. The flip 0:09:40.160 --> 0:09:42.240 side of that is they're spending six point nine trillion 0:09:42.320 --> 0:09:45.480 dollars and there's your two trillion dollar deficit, which is 0:09:45.960 --> 0:09:50.560 now seven percent of GDP. That's a bad number. Okay, 0:09:50.640 --> 0:09:54.240 So why is it a zombie Why would it be considered. 0:09:53.880 --> 0:09:54.680 A zombie company? 0:09:55.520 --> 0:10:01.400 Well, the most important to frame up how to think 0:10:01.480 --> 0:10:03.800 about those deficits. You have to think about all those 0:10:03.840 --> 0:10:06.360 expenses that you may be able to cut in order 0:10:06.400 --> 0:10:09.520 to fix it. But the issue here is that our 0:10:09.640 --> 0:10:14.280 mandatory expenses, which are Social Security, Medicare, and Medicaid, add 0:10:14.320 --> 0:10:16.679 up to about four point one trillion dollars. Remember these 0:10:16.679 --> 0:10:18.839 are not numbers for me. This is from the Congressional 0:10:18.840 --> 0:10:23.240 Budget Office that puts out this estimate every single year, 0:10:23.320 --> 0:10:25.960 and they do that kind of as a wake up 0:10:26.000 --> 0:10:30.040 call the Congress and say, hey, this is we need 0:10:30.080 --> 0:10:34.800 to fix some of our policies here because we're we're 0:10:34.800 --> 0:10:37.800 on a bad path. But anyway, so we're spending four 0:10:37.800 --> 0:10:41.000 point one trillion. Remember remember we're taking four point nine, 0:10:41.520 --> 0:10:45.200 so you've got eight hundred trillion dollars left. Well, our 0:10:45.240 --> 0:10:47.800 defense spending is nine hundred and fifty billion this year 0:10:48.920 --> 0:10:51.280 that we know of. It could be there, could have 0:10:51.320 --> 0:10:53.360 a lot of other expenses tucked in other places. 0:10:53.440 --> 0:10:55.400 And to put that number in relation, not to cut 0:10:55.400 --> 0:10:59.000 you off, but the US spends more on its military 0:10:59.040 --> 0:11:04.480 than the next ten nations combined. So it's not just 0:11:04.600 --> 0:11:07.600 military spending. It's like our military spending is more than 0:11:07.720 --> 0:11:11.359 the next ten nations all put together. So it's an astronomical, 0:11:11.520 --> 0:11:12.600 astronomical number. 0:11:12.679 --> 0:11:12.880 Right. 0:11:12.920 --> 0:11:15.000 So now you've got so you've got four point one 0:11:15.120 --> 0:11:17.960 plus nine hundred and fifty, you're already over five trillion 0:11:18.000 --> 0:11:21.040 dollars of spending. Then you've got your the net interest 0:11:21.160 --> 0:11:23.120 because the net interest on your debt. You've got your 0:11:23.120 --> 0:11:25.760 debt that's over a trillion dollars of interest expenses. You 0:11:25.800 --> 0:11:28.520 get some back from inter government agencies, let's call it 0:11:28.600 --> 0:11:32.959 nine hundred billion dollars. Well, your total mandatory expenses now 0:11:32.960 --> 0:11:37.240 are over six trillion dollars. And that doesn't even take 0:11:37.240 --> 0:11:42.360 into account the disgustioning expenses. So your deficit's two trillion dollars. 0:11:42.400 --> 0:11:46.880 So now you've got to borrow money. You have to 0:11:46.920 --> 0:11:51.280 issue more debt to pay down debt that's maturing because 0:11:51.440 --> 0:11:53.679 you don't have the money to pay it down, so 0:11:53.760 --> 0:11:58.920 you're borrowing more, which means that when you're running these deficits, 0:11:59.000 --> 0:12:02.320 mark this this is inflationary. This is money that they're 0:12:02.360 --> 0:12:07.640 basically just printing and putting into the economy and continuing 0:12:07.679 --> 0:12:11.040 to grind the economy on a nominal basis. And so 0:12:11.480 --> 0:12:16.040 all we're watching inflation just continue to rise and so 0:12:17.120 --> 0:12:21.160 and as that's occurring, the FED is raising interest rates, 0:12:21.640 --> 0:12:24.240 which is making the interest payments on that past debt 0:12:24.280 --> 0:12:27.280 more expensive, which means that they that the government has 0:12:27.280 --> 0:12:29.880 to issue more debt, which means that they have to 0:12:30.120 --> 0:12:33.760 pay more interest on more debt. And so you get 0:12:33.760 --> 0:12:36.160 into what's called a debt spiral, and there's really no 0:12:36.240 --> 0:12:39.480 way out. It's like, you know, if you're you're you're 0:12:39.520 --> 0:12:42.640 trying to meet your expenses, you're using credit cards, and 0:12:42.960 --> 0:12:45.680 sooner or later you those credit cards max out because 0:12:45.679 --> 0:12:46.280 you're you're not. 0:12:46.440 --> 0:12:48.920 Making enough money, you're borrowing it, but. 0:12:48.920 --> 0:12:51.679 You're paying interest on that, and then sooner or later 0:12:51.720 --> 0:12:53.720 you're going to have to take on another credit card 0:12:54.440 --> 0:12:57.600 just to pay the interest on the last credit card. 0:12:57.920 --> 0:13:00.360 And that's the debt spiral. And so we saw it 0:13:00.360 --> 0:13:04.120 happen with Greece and a number of other nations in 0:13:04.160 --> 0:13:07.120 the last twenty years, and that's where we're at. 0:13:07.960 --> 0:13:10.800 So basically, the debt can't be paid down because of 0:13:10.840 --> 0:13:14.520 the situation that you framed up. Another reason why, though, 0:13:14.600 --> 0:13:17.400 is because of the nature of the monetary system in 0:13:17.480 --> 0:13:21.199 nineteen seventy one, going from like maybe arguably before nine 0:13:21.200 --> 0:13:22.960 seventy one, but going from like an equity based system, 0:13:23.000 --> 0:13:25.400 a gold system, to a debt based system. So the 0:13:25.440 --> 0:13:27.880 debt also has to grow from that perspective as well. 0:13:28.280 --> 0:13:30.240 So we have sort of two reasons why it can't 0:13:30.280 --> 0:13:33.760 go down. We're spiraling out of control. The deficit, the 0:13:33.840 --> 0:13:35.679 amount of debt they're taking on is growing at an 0:13:35.679 --> 0:13:39.920 alarming rate. I think it's about a trillion dollars per quarter. 0:13:40.200 --> 0:13:43.360 Almost the last check, it's about a trillion dollars every 0:13:43.480 --> 0:13:44.079 hundred days. 0:13:44.160 --> 0:13:48.000 Yeah, which is just about a quarter. I mean, it's 0:13:48.040 --> 0:13:51.880 just an insane amount. And that is what's causing all 0:13:51.880 --> 0:13:54.000 this to happen. Okay, so that's the debt doom loop. Now, 0:13:55.200 --> 0:13:57.920 there's a lot of people who have been calling for 0:13:57.960 --> 0:14:00.000 this to all come to an end for a long time. 0:14:00.040 --> 0:14:03.439 I'm Peter Schiff, Harry Dents written a number of books 0:14:03.480 --> 0:14:04.800 about it. You know, we can go on and on 0:14:04.800 --> 0:14:09.079 and on, but it seems like they never see, they 0:14:09.320 --> 0:14:12.040 fail to take into account how many more tricks up 0:14:12.040 --> 0:14:14.960 the sleeve that you know, these central bankers can come 0:14:15.040 --> 0:14:19.640 up with. But at the same time, it does seem 0:14:19.720 --> 0:14:21.840 like the walls are closing in the rock and the 0:14:21.840 --> 0:14:25.040 hard place is getting closer and closer together. I mean, 0:14:25.240 --> 0:14:26.840 how do you think about that? How do you project 0:14:26.840 --> 0:14:27.120 that out? 0:14:27.200 --> 0:14:29.000 Well, I mean you hear a lot of people. You 0:14:29.040 --> 0:14:32.080 hear people say, well, why don't they just cut expenses? Right, 0:14:32.200 --> 0:14:34.000 I mean, clearly, if we're. 0:14:33.880 --> 0:14:35.840 Spending too much, just stop spending so much. 0:14:36.160 --> 0:14:37.200 Well, you just heard. 0:14:37.040 --> 0:14:40.280 Where are we going to cut Well, in twenty twenty, 0:14:40.320 --> 0:14:42.920 we were spending about what four point six I think 0:14:42.920 --> 0:14:44.880 it was four point six trillions. We've gone from four 0:14:44.920 --> 0:14:47.600 point six to almost seven trillion in just a couple 0:14:47.600 --> 0:14:51.400 of years. And like, the world wasn't catastrophic in twenty twenty, Like, 0:14:51.480 --> 0:14:53.240 why couldn't we just go back to like spending in 0:14:53.280 --> 0:14:53.760 twenty twenty. 0:14:54.680 --> 0:14:56.880 There's a number of reasons, but a lot of it 0:14:56.920 --> 0:14:59.560 has to do with when we had the lockdowns that 0:14:59.640 --> 0:15:03.120 pulled the a string that caused disruptions in a lot 0:15:03.160 --> 0:15:05.560 of areas that they didn't expect. And one of the 0:15:05.600 --> 0:15:08.280 areas that it caused disruption is well, they printed so 0:15:08.360 --> 0:15:11.680 much money because there's so much to dig into in 0:15:11.720 --> 0:15:14.720 the treasury market. But just for suffice to say that 0:15:14.760 --> 0:15:19.800 the treasury market got it was dysfunctional, and so the 0:15:19.840 --> 0:15:22.160 whole reason we print money is to keep the treasure 0:15:22.240 --> 0:15:25.600 market going right. So the Fed printed money, it expanded 0:15:25.640 --> 0:15:29.400 the m to the money supply. That caused that, Plus 0:15:30.720 --> 0:15:34.360 the problems with the supply chains caused inflation, and so 0:15:35.040 --> 0:15:40.720 that caused the need to adjust some of the benefits 0:15:40.760 --> 0:15:44.320 for retirees, so security, and that's a whole nother problem 0:15:44.400 --> 0:15:50.000 that we can talk about, but so security that those 0:15:50.160 --> 0:15:54.560 benefits were adjusted higher from the cost of living at 0:15:54.600 --> 0:15:59.240 the same time that boomers were retiring en mass because 0:15:59.240 --> 0:16:00.520 they were like, you know what, I don't need to 0:16:00.560 --> 0:16:03.160 be in the workforce anymore. My house is worth so 0:16:03.240 --> 0:16:06.360 much money. Now I've got these retirement benefits, I've got 0:16:06.360 --> 0:16:09.720 my pension, I've got the Social Security and Medicare Medicaid. 0:16:09.800 --> 0:16:12.920 I'm set. I'm going to retire. So now they're paying 0:16:12.960 --> 0:16:14.080 out at a. 0:16:13.880 --> 0:16:17.320 Much higher rate than they expected, and so this has 0:16:17.440 --> 0:16:22.560 caused a massive gap in those in that line item. Yeah, 0:16:22.600 --> 0:16:26.440 that exactly, So that line item jumped higher. So so 0:16:26.520 --> 0:16:29.120 what do they do if they you heard what we said, 0:16:29.560 --> 0:16:34.880 the mandatory expenses signed into legislation or defense or interest 0:16:34.920 --> 0:16:36.320 on your debt, you're not going to You're not going 0:16:36.400 --> 0:16:38.040 to default on your debt if you if. 0:16:37.880 --> 0:16:39.560 You issue in your own currency. 0:16:40.560 --> 0:16:45.000 But where are they going to cut? So that's not 0:16:45.200 --> 0:16:50.440 really possible. And number one, there's there's really no incentive 0:16:50.720 --> 0:16:53.440 to do it. We can talk about Republicans or Democrats 0:16:53.520 --> 0:16:55.800 or which parties were that's spending, it doesn't matter. They're 0:16:55.840 --> 0:16:58.760 all in the same game. They spend to get re elected. 0:16:59.240 --> 0:17:03.080 It's just we hear Jeff Booth talk about it all 0:17:03.080 --> 0:17:05.359 the time. If you want to, if you want to 0:17:05.359 --> 0:17:08.399 find where the problem is, look at the incentives, and 0:17:08.440 --> 0:17:09.400 the incentive. 0:17:09.000 --> 0:17:09.960 Is to get re elected. 0:17:10.000 --> 0:17:11.760 So if the incentive is to get re elected, the 0:17:11.800 --> 0:17:14.680 incentives to then spend money, make sure you take care 0:17:14.680 --> 0:17:18.840 of your constituents, those who are donating to your campaigns, 0:17:19.080 --> 0:17:24.199 make regulations good for those companies and those constituents, and 0:17:24.240 --> 0:17:26.399 then just work it around so you can get re elected. 0:17:26.480 --> 0:17:29.720 And that all points to spending more money. So we 0:17:29.760 --> 0:17:32.240 don't like right now, Mark, we don't even have a 0:17:32.280 --> 0:17:32.879 debt ceiling. 0:17:33.440 --> 0:17:34.160 We paused it. 0:17:34.640 --> 0:17:36.920 There's no debt ceiling, so we could just keep spending 0:17:37.280 --> 0:17:40.080 and Congress has no limit and that's not going to 0:17:40.080 --> 0:17:42.080 come up again until January. So we go right through 0:17:42.080 --> 0:17:44.320 this election just spending ad nauseum. 0:17:44.520 --> 0:17:48.080 So in the last debt ceiling debate, Biden himself, when 0:17:48.080 --> 0:17:50.680 he was still able to talk to someone coherently, had said, 0:17:51.680 --> 0:17:54.280 we have to raise the debt because the US can't default. 0:17:54.720 --> 0:17:56.960 The US is never defaulted, so we need to get 0:17:56.960 --> 0:17:59.480 more debt to pay the existing debt. I mean, he 0:18:00.359 --> 0:18:01.199 basically said it. 0:18:01.280 --> 0:18:01.640 Right there. 0:18:02.160 --> 0:18:03.639 But it's not I mean, it's it's certainly not a 0:18:03.640 --> 0:18:05.800 political thing. That's a math thing, right, And so it's 0:18:05.840 --> 0:18:07.840 like we owe the money, the money's got to be paid, 0:18:07.840 --> 0:18:09.320 and we've got to print the money. Now, there's certainly 0:18:09.320 --> 0:18:11.920 a lot of pork, as we call it, right, that's 0:18:11.920 --> 0:18:14.400 that's certainly getting funded as well. But at the same time, 0:18:14.400 --> 0:18:17.080 it's a math problem that we're in. And unless the 0:18:17.119 --> 0:18:20.199 government wants the default, then this is the path that 0:18:20.200 --> 0:18:22.399 we're on. And so when I say default, default to 0:18:22.480 --> 0:18:25.879 the old people that are owed entitlements, right, lou Gramman 0:18:25.920 --> 0:18:29.840 talks about you know, other nations they can't print dollars, 0:18:29.920 --> 0:18:31.920 so they aren't a tough problem. But the US doesn't 0:18:31.920 --> 0:18:35.480 owe dollars either. The USO's like medical services for example. Right, 0:18:36.040 --> 0:18:40.439 Although we do know that the homeless, homeless population half 0:18:40.480 --> 0:18:44.520 of the population are now baby boomers, so we do 0:18:44.640 --> 0:18:50.399 know that those entitlements are being cut somewhat skeeping up, 0:18:50.840 --> 0:18:55.320 they're not keeping up for sure, and so those entitlements, 0:18:55.320 --> 0:18:57.800 those promises that were made to the VA, the veterans, 0:18:57.800 --> 0:18:59.400 and to those old people, they're not being met, which 0:18:59.400 --> 0:19:02.119 is why the homeless population is sort of being grown 0:19:02.119 --> 0:19:04.520 from that. Okay, so that's sort of the that sort 0:19:04.560 --> 0:19:08.960 of sums up the problem. Now, correct me if I'm wrong, 0:19:09.000 --> 0:19:11.119 But I mean the US is the cleanest shirt in 0:19:11.160 --> 0:19:13.480 the dirty laundry, so to speak. So we can basically 0:19:13.520 --> 0:19:16.480 take this sort of problem and extrapolate it to. 0:19:16.440 --> 0:19:17.160 The rest of the world. 0:19:17.200 --> 0:19:20.240 I mean, Japan, the ECB, Europe, I mean, they're in 0:19:20.280 --> 0:19:21.760 worse situations than the US. 0:19:22.280 --> 0:19:24.960 Yeah, I mean we'll go into what you said when 0:19:25.000 --> 0:19:27.479 Biden the last time you talked about the debt, uh, 0:19:28.200 --> 0:19:31.919 the debt spiral. Well, just this last debate, he was 0:19:31.920 --> 0:19:34.800 talking about how well he's got a solution for you know, 0:19:35.280 --> 0:19:39.160 fixing social Security and his solutions to raise taxes, raise 0:19:39.200 --> 0:19:40.080 taxes on the rich. 0:19:40.359 --> 0:19:42.440 Oh, they don't pay their fair share. 0:19:42.560 --> 0:19:44.720 Now of course, if you but even if you took 0:19:44.880 --> 0:19:47.080 if you raise taxes on the on the seventy one 0:19:47.119 --> 0:19:49.600 trillionaires we have in the United States or billionaires you 0:19:49.600 --> 0:19:52.040 have in the United States, you know you would get 0:19:52.200 --> 0:19:52.520 it like. 0:19:52.440 --> 0:19:55.640 A that was like a Biden moment there, right, A thousand. 0:19:55.400 --> 0:19:59.960 Trillions, a million trillionaires. So but if you raise tax 0:20:00.160 --> 0:20:05.040 on our billionaires, the seventy one of them that last count, 0:20:05.200 --> 0:20:09.160 you would be able to tax. What if you tax 0:20:09.200 --> 0:20:11.960 them one hundred percent, you have five trillion dollars. The 0:20:12.040 --> 0:20:14.640 problem is where we have a social security hold that's 0:20:14.640 --> 0:20:19.040 one hundred and seventy two trillion dollars. What's so important 0:20:19.080 --> 0:20:23.679 about that is that you're talking about unfunded liabilities on 0:20:23.800 --> 0:20:27.240 top of debt. We're talking about something that's approaching a 0:20:27.320 --> 0:20:30.840 quarter of a quarter of quadrillion dollars two hundred and 0:20:30.880 --> 0:20:37.600