Speaker 1: Hello, and welcome to another episode of the Mark Maas Show,
Speaker 1: where we're always talking about the decentralized revolution deglobalization.
Speaker 2: If you don't know what that means. The world is.
Speaker 1: Changing and we can see it changing everywhere. And I
Speaker 1: have a big show for you today so you can
Speaker 1: understand what's going on and more importantly, where we're going.
Speaker 1: And I want to talk about something that every government,
Speaker 1: every empire makes a mistake, they make at the end
Speaker 1: every single time. I want to break this down so
Speaker 1: you know what's coming, the dangers of this, and of
Speaker 1: course what we can do to counteract this. And so
Speaker 1: I want to talk about Biden's price controls backfiring and
Speaker 1: why they always fail. So we're going to cover the
Speaker 1: Biden administration's latest attempt at price controls. We're going to
Speaker 1: look back at failed attempts by governments to set price controls.
Speaker 1: I want to dive down deep into a moment in
Speaker 1: recent history when another country attempted the very same price
Speaker 1: controls that the Biden administration is imposing. And then I'm
Speaker 1: going to help set expectations in our current market environment
Speaker 1: to let you know what I think is about to
Speaker 1: happen and what we're gonna do about it. So We've
Speaker 1: got a lot to cover in this episode. I'm excited
Speaker 1: about this one, so make sure you.
Speaker 2: Tune in the whole time. Now, if you have to
Speaker 2: leave early, don't worry. I got your back.
Speaker 1: Just check me out on the podcast. Just search the
Speaker 1: Mark Mall Show on your favorite podcast player, or you
Speaker 1: can go to YouTube and go to the Market Disruptors
Speaker 1: YouTube channel where you can watch me and listen to
Speaker 1: me at the same time. Now, one thing, just real quick, please,
Speaker 1: if I can ask a small favor if you're listening
Speaker 1: on the podcast app, if you can just like and
Speaker 1: review the show, that means the world to me.
Speaker 2: More people would.
Speaker 1: See the show and I'd be much appreciated there. All right,
Speaker 1: So we're talking about, like I said, the inevitable, and
Speaker 1: it's inevitable because all throughout history, every government basically runs
Speaker 1: the same pattern. It's been documented a couple of times.
Speaker 1: There's uh, there's research on the average empire and the
Speaker 1: average democracy, which both interestingly run about a two hundred
Speaker 1: and fifty year time span. On the empires, they run
Speaker 1: it through like a six cycles. Democracy runs at eight cycles.
Speaker 1: But they're both about the same and it's something sort
Speaker 1: of like in the first stage, you have the eruption
Speaker 1: or the frenzy, and so you know, after a revolution
Speaker 1: comes this eruption, this frenzy. There's this new energy, this excitement.
Speaker 1: There's this birth of this new country or civilization or
Speaker 1: whatever it is at the time. So you have that
Speaker 1: next after that eruption, that frenzy, that excitement happens, then
Speaker 1: we start to have the growth. So then we start
Speaker 1: to have sort of the commercial growth happening there. So
Speaker 1: we're starting to see businesses sprouting up, growing, We're starting
Speaker 1: to see productivity things like that. Then that leads to
Speaker 1: wealth and influence because now we're creating, we're producing, we're
Speaker 1: providing value, we're exchanging, we have specialization of trade, and
Speaker 1: we have prosperity. But after that then we go to
Speaker 1: the age of like intellectualism. And so after you've taken
Speaker 1: care of your base needs, you have the money, you
Speaker 1: turn towards other things that are non economically driven. And
Speaker 1: so those typically go into like I said, you know, education,
Speaker 1: arts and things like that. And so we can certainly
Speaker 1: if you're listening along, if you're playing along, you can
Speaker 1: just see how the United.
Speaker 2: States has kind of fallen through this.
Speaker 1: And so then you kind of this age of intellectualism
Speaker 1: and this rise of these this technocrossy, which is, you know,
Speaker 1: these experts that want to tell you what to do.
Speaker 1: And then we go into what's known as the age
Speaker 1: of like speculation and sort of waste and gambling. Right,
Speaker 1: and so when you saw last year, about two years ago,
Speaker 1: there was you know, sixty eight million dollars for a
Speaker 1: JPEG piece of art from people, or there was an
Speaker 1: eighteen million dollar piece of invisible art. I don't even
Speaker 1: know if they got they got delivery of it or not.
Speaker 1: Maybe they got scammed because it's invisible.
Speaker 2: They don't know. You know, you see you know, three hundred.
Speaker 1: Five hundred million dollar yachts, five hundred million dollars houses
Speaker 1: and condos. I mean, it's insane we have that. Then
Speaker 1: we go into this age of dependence where people then
Speaker 1: become dependent on the government because they just can't afford
Speaker 1: to live on their own for whatever reason. Again, this
Speaker 1: traces back through all of history. You can see in
Speaker 1: the Roman Empire we had like the bread and circuses
Speaker 1: where the government had to kind of take care of
Speaker 1: the people so they wouldn't revolt. Of course you see this,
Speaker 1: yes in the United States today, where more and more
Speaker 1: people are depending on the government. As a matter of fact,
Speaker 1: we have more people dependent on the government today for
Speaker 1: housing and food than we did during the Great Depression,
Speaker 1: and so we have this high level dependence. You know,
Speaker 1: all this talk today of UBI universal basic income that
Speaker 1: we need to produce.
Speaker 2: And after dependence comes.
Speaker 1: Well, like slavery, after you become so dependent you can't leave.
Speaker 1: Then comes what they actually call bondage. And then you
Speaker 1: have this period of bondage, which is now the government
Speaker 1: has total control because you've given them everything, they have
Speaker 1: total control everything. And after bondage, we finally then have
Speaker 1: revolution again. All right, So this has been documented very
Speaker 1: well through thousands of years of history, and it typically
Speaker 1: follow about a twohun fifty yar time frame. Now if
Speaker 1: you're playing along, Yes, the United States was founded about
Speaker 1: two hundred and fifty years ago, and not just the United.
Speaker 2: States, but really even sort of Europe.
Speaker 1: I mean we had the French Revolution as well about
Speaker 1: two hund fifty years ago, and so we're starting to
Speaker 1: see this developed world starting to go down this path.
Speaker 2: Now.
Speaker 1: One of the things that's also part of this is
Speaker 1: as we kind of go from this period of abundance
Speaker 1: to dependence and then into bondage. Is one of the
Speaker 1: last things that the governments do in this bondage period,
Speaker 1: which is having control of everything, is trying to control
Speaker 1: the flow of money or what.
Speaker 2: We call capital controls.
Speaker 1: So they want to control how much money is moving
Speaker 1: in the economy, moving between people.
Speaker 2: More specifically, though, they want to control money moving in
Speaker 2: and out of the economy.
Speaker 1: So you can look at China for example, they don't
Speaker 1: have open capital markets. As a matter of fact, most
Speaker 1: countries in the world don't. You can hear obviously many
Speaker 1: stories and maybe you know them if you've been a
Speaker 1: migrant or immigrant. You know people escaping Russia or Iran
Speaker 1: or South Africa and having to basically leave all their
Speaker 1: assets with them. I've done an interview with yan Jan Pittzer.
Speaker 1: He's the co founder of swan Bitcoin. My good friends
Speaker 1: at swan biccoin. If you want to pick up bitcoin,
Speaker 1: go check them out. But he talks about how his
Speaker 1: family had to leave Russia and when they had to leave,
Speaker 1: I want to say, they were only allowed to bring
Speaker 1: like four hundred dollars was like.
Speaker 2: The max they could get out of their bank account.
Speaker 1: Don't fact fact check me on that it was something
Speaker 1: to that effect, but they could only bring a little
Speaker 1: bit of money. Growing up as a kid, one of
Speaker 1: my best friends family had come from South Africa, and
Speaker 1: coming from South Africa, they had to leave their money
Speaker 1: in South Africa too.
Speaker 2: I did an.
Speaker 1: Interview about two weeks ago with Rand Owner on a
Speaker 1: show called Crypto Banter, and he was talking about how
Speaker 1: his family he grew up in South Africa, but his
Speaker 1: family had to leave Iran and when they left, they
Speaker 1: had to flee for their lives. They were pretty affluent
Speaker 1: there and they had to they had to flee for
Speaker 1: their lives. And so they got all the gold that
Speaker 1: they owned and they melted it down and it went
Speaker 1: into like a barrel, and they went to the evacuation
Speaker 1: site to get on the plane to fly out. And
Speaker 1: they get to go to the point to get on
Speaker 1: the plane and the guy you know loading him says,
Speaker 1: hang on a second, like, you can't bring that barrel
Speaker 1: of gold. That's not going to go on the airplane.
Speaker 1: You got two choices. You can either leave it here
Speaker 1: or you can stay here.
Speaker 2: And so they left it there. They had to go.
Speaker 1: They d going to South Africa fleeing for their lives
Speaker 1: where they lived six years in tense. But the point
Speaker 1: is is that nations will always control the flow of capital,
Speaker 1: and like I said, and how those thing interact and
Speaker 1: what we're talking about today is a part of.
Speaker 2: This capital controls.
Speaker 1: But it's specifically about price controls, all right, So that's
Speaker 1: specifically what we're talking about, the price control aspect of things.
Speaker 1: And you can see how it's always there. Now, I
Speaker 1: want to tell you a story first so you can
Speaker 1: start to understand how all of these things come about, right,
Speaker 1: And really it's all summed up in one mental model,
Speaker 1: and that is the mental model of unintended consequences. Now,
Speaker 1: unintended consequences are when you do one thing trying to
Speaker 1: get one result or affect one outcome, but you get
Speaker 1: a whole bunch.
Speaker 2: Of other variables that popped up.
Speaker 1: It's sort of like if you watch mainstream TV, which
Speaker 1: probably none of you guys are, but if you watch
Speaker 1: mainstream TV's it's sort of like this dumpster fire of
Speaker 1: pharmaceutical commercials where especially if you're like watching ESPN or something,
Speaker 1: it's just like one like prescription med after another. It
Speaker 1: seems like, and at the end they tell you all
Speaker 1: the side effects that they could have. So you have heartburn,
Speaker 1: you could take this pill for heartburn, but you know
Speaker 1: it might give you headaches and fevers and sweats and
Speaker 1: you might die, right, And so those are unin tending consequences.
Speaker 1: They're trying to fix one thing, like heartburn, but instead
Speaker 1: they have to warn you that all.
Speaker 2: These other things could happen.
Speaker 1: But what was interesting about that is, if you remember,
Speaker 1: I'm sure you do, during the pandemic, you weren't allowed
Speaker 1: to talk about the vaccine at all.
Speaker 2: You could never talk that there could even potentially ever
Speaker 2: be one side effect of it. Never one.
Speaker 1: The reason why this is important is because in a
Speaker 1: complex system, when you affect, when you try to change
Speaker 1: one thing, you affect others. Now, I'm going to tell
Speaker 1: you a story about how this works, and I'm going
Speaker 1: to talk about price controls, capital controls, and what we're
Speaker 1: expecting and what we can do about them. But I
Speaker 1: gotta take a quick break. If you're just tune in,
Speaker 1: you're listening to the Mark Mass Show. We're talking about
Speaker 1: how price controls are at the end of every empire
Speaker 1: and democracy, and we're seeing the same things and what
Speaker 1: to do about it. I'll be back with more a minute.
Speaker 1: Don't go away, all right, Welcome back. If you just
Speaker 1: tune in, you're listening to the Mark Maas Show. We're
Speaker 1: talking about price controls, what happens at the end of
Speaker 1: an empire, at the end of a country, capital controls,
Speaker 1: price controls, and how the Biden administration price controls are backfiring,
Speaker 1: why they always fail, and what we can do about them.
Speaker 2: I want to just tell you a story real quick.
Speaker 1: Like I said, it was about the law of unintended consequences,
Speaker 1: and so when we try to change one thing and
Speaker 1: it has all these other outcomes and effects that we
Speaker 1: didn't intend on.
Speaker 2: So there's a story. It's called the cobra effect.
Speaker 1: Now, the cobra effect is a story from India, which
Speaker 1: has a problem with king cobra snakes and as you're
Speaker 1: probably aware, king koba snakes are very poisonous. Now, there
Speaker 1: was a problem and that there was too many of
Speaker 1: these king cobras and they were affecting the population. It
Speaker 1: wasn't safe, people were dying, etc. Things like that were happening.
Speaker 1: So the Indian government decided they would come up with
Speaker 1: a plan the plan would be is that what we'll
Speaker 1: do is we'll incentivize and it always starts with incentives.
Speaker 1: Will incentivize people to go kill these cobra snakes and
Speaker 1: bring them to us, and for every snake they turn
Speaker 1: in that we'll pay them for them.
Speaker 2: And so they did.
Speaker 1: And so people started, you know, going and killing snakes
Speaker 1: and bring them. And some people that were a little
Speaker 1: bit smarter and more ambitious than others decided, hey, here's
Speaker 1: a good idea. What we'll do is we'll start raising
Speaker 1: the snakes on our own. We'll start breeding them. So
Speaker 1: we'll just start set up our cages and we'll raise them.
Speaker 1: And they did, and they started raising them by the
Speaker 1: dozens and the hundreds or however many they were, and
Speaker 1: then they would bring in boxes at a time and
Speaker 1: just dump them on the counter and get paid out
Speaker 1: for it. It didn't take very long for the government
Speaker 1: to realize that this wasn't exactly what they had intended
Speaker 1: to happen, and so they said, hey, we're canceling this
Speaker 1: program altogether.
Speaker 2: We're no longer going to pay you for the king cobras.
Speaker 1: Well, then all these farms, all these people that were
Speaker 1: growing the cobras just to sell them to the government
Speaker 1: are like, well, what the heck are we to do with
Speaker 1: all these snakes? Then the answer was obviously nothing, so
Speaker 1: they let them all go. After the program was ended,
Speaker 1: India ended up with more snakes than they had originally
Speaker 1: had in the beginning. And that is the law of
Speaker 1: on intended consequences. Specifically, when you're working in a complex
Speaker 1: system like a society and you're creating incentives, people are
Speaker 1: always going to optimize for those incentives.
Speaker 2: Now we can see the same thing.
Speaker 1: Happening with price controls because it affects incentives and the
Speaker 1: law of unintended consequences. And so, as I said, we
Speaker 1: know that all throughout history it's always this last stage
Speaker 1: that the government's going to go to is trying to
Speaker 1: do that. Now we know we have dozens of examples
Speaker 1: I want to run through with you, but one of
Speaker 1: them might be, for example, like rent control. Now I
Speaker 1: live in southern California. I've been investing in southern southern
Speaker 1: California real estate for decades. I owned apartment buildings in
Speaker 1: Los Angeles, and Los Angeles has rent control, so I've
Speaker 1: had to deal with this before. Now, basically, what they
Speaker 1: say is that you can't raise your rent anymore. So
Speaker 1: me as an owner of a building, as a landlord,
Speaker 1: I can no longer raise my rent, which on the
Speaker 1: surface sounds pretty good if you think about it only
Speaker 1: from a first order effect. Unfortunately for most well unfortunately
Speaker 1: for us, all of us, and for the world, most
Speaker 1: people only think through first order effects, but didn't think
Speaker 1: through what happens to the second order and the third
Speaker 1: order and the fourth order effects. What we do know
Speaker 1: is that when they have imposed things like rent control,
Speaker 1: what we see is that we actually have a shortage
Speaker 1: of housing. As a matter of fact, every single time
Speaker 1: we see something like price controls, it leads to shortage
Speaker 1: of housing. Now why would that happen, Well, it's pretty simple.
Speaker 1: There's a couple of things. One, if I move into
Speaker 1: this cool apartment and I love my location and it's
Speaker 1: in this trendy area whatever, and I get my rent
Speaker 1: locked in, I no longer have to worry about the
Speaker 1: price of inflation. My rents locked in now. Once I'm
Speaker 1: in there, I don't ever want to let that go.
Speaker 1: As a matter of fact, as we can see after
Speaker 1: study after study after study that once somebody moves into
Speaker 1: a rent control apartment, they are very unlikely to ever leave,
Speaker 1: and a lot of times we'll pass that to a
Speaker 1: friend or a family member if they do want to leave,
Speaker 1: And so right off the bat, it takes all of
Speaker 1: this inventory off the market. Typically, in like lower income housing,
Speaker 1: there's a lot of turnovers, there's always opportunities to move,
Speaker 1: but in this type of a scenario, it takes all
Speaker 1: of that off the market. Another problem with this is
Speaker 1: that me, being an owner of a building there, I
Speaker 1: want to keep up with the maintenance on it. If
Speaker 1: you let the building get too far away, it can
Speaker 1: become very expensive. So, being the greedy landlord that I am,
Speaker 1: I want to maximize my profits. In order to maximize
Speaker 1: my profits because I'm so greedy, I want to keep
Speaker 1: the building up to date. Now, I would imagine you,
Speaker 1: if you were a renter, would like to be in
Speaker 1: a building that maintenance was up to date. I would
Speaker 1: imagine that you probably wouldn't want the roof leaking, right,
Speaker 1: probably wouldn't want the sidewalks crack.
Speaker 2: You wouldn't want that.
Speaker 1: But see, I wouldn't want that either as an owner,
Speaker 1: because if I let the ceilings leak, that's going to
Speaker 1: cause all kinds of other problems that it's going to cost.
Speaker 2: Me way more money.
Speaker 1: I'm much better off just to fix the roof right
Speaker 1: now instead of having to deal with the consequence later.
Speaker 1: But the problem is, if they cap the amount of
Speaker 1: price I could charge for the rent, I don't have
Speaker 1: the money to put into the maintenance. And if you
Speaker 1: know typically what I'd want to do is I'd want
Speaker 1: to fix it up. I'd want to Hey, let's paint it,
Speaker 1: Let's give it a new facelift, let's put a new
Speaker 1: roof on it, let's.
Speaker 2: Add a pool.
Speaker 1: But in order to add those things, it costs me
Speaker 1: more money, and so I might need to raise the
Speaker 1: rent in order to offset that. But if I can't
Speaker 1: raise the rent, then guess what.
Speaker 2: No maintenance.
Speaker 1: So now I'm forced to be a slumlord and you're
Speaker 1: forced to live in squalor.
Speaker 2: That's no good.
Speaker 1: So one, it takes away inventory. Two it forces things
Speaker 1: to fall into deterioration. The law of entropy takes over
Speaker 1: things that are left on their own fall to disorder.
Speaker 1: Now it's easy to maybe see that in the light
Speaker 1: of real estate, for example, but one of the things
Speaker 1: that I was looking at is what the Biden administration
Speaker 1: put through in what they call the Inflation Reduction Act
Speaker 1: the IRA. Of course, you know, you hear me talk
Speaker 1: about this all the time. How insane it is they
Speaker 1: call these things. They label these things is like almost
Speaker 1: the opposite of what they really are. And so somehow,
Speaker 1: by printing trillions of dollars, we got this massive amount
Speaker 1: of inflation. And so they create this Inflation Reduction Act,
Speaker 1: which is supposed to reduce inflation, hence the name, and
Speaker 1: they're going to do that by, yes, printing trillions of
Speaker 1: more dollars. Now, a logical person might go, well, wait
Speaker 1: a minute. Wasn't it the trillions of dollars that cause
Speaker 1: the inflation in the first place, So how could printing
Speaker 1: more trillions of dollars actually reduce the inflation? And if
Speaker 1: you ask that question then you would be right, but
Speaker 1: they would call you an idiot, So don't ask that question.
Speaker 1: But they have a better plan what they'll do, because,
Speaker 1: of course, yes, you're right, the trillions of dollars will
Speaker 1: add towards more inflation, but not if they cap the prices.
Speaker 1: M that sounds like a pretty good plan. So one
Speaker 1: of the things that we're going to do, and it
Speaker 1: was in this Inflation Production Act.
Speaker 2: By campaign on this.
Speaker 1: Hard is he is going to make drugs more affordable.
Speaker 1: Not the drugs on your street, but healthcare drugs, right, pharmaceuticals.
Speaker 1: He wants to make them more affordable. And so through
Speaker 1: the HAHS, they want to negotiate prices for the drugs
Speaker 1: to be cheaper. They want manufacturers of these drugs to
Speaker 1: sell them for cheaper. They want to tell them how
Speaker 1: much they can sell them for. Okay, Well, that sounds
Speaker 1: good on the surface. Again, that's a first order effect.
Speaker 1: But what if it costs more to make the drug
Speaker 1: than what I can sell it for. Well, then I
Speaker 1: guess I won't make it, because businesses are in the
Speaker 1: business of making money. Right, But what else happens? Could
Speaker 1: it possibly lead to higher rates of death? Could it
Speaker 1: possibly lead to lower quality of living? Well, these are
Speaker 1: some questions that we're gonna dig into. And I have
Speaker 1: the facts. I got the receipts, I.
Speaker 2: Got the data.
Speaker 1: We're gonna dig into this. I'm gonna break this down.
Speaker 1: We're gonna look at some other examples throughout history. We're
Speaker 1: gonna look at other countries that are doing the same thing.
Speaker 1: And then I'm gonna tell you, unfortunately what's inevitable. But
Speaker 1: the best part is what we can do about this.
Speaker 2: So I got a lot to cover. I gotta take
Speaker 2: a very quick break though.
Speaker 1: If you're just tuned in, you're listening to the Mark
Speaker 1: Moss Show, we're talking about the unintended consequences of price
Speaker 1: caps and what the Bide administration is doing.
Speaker 2: We be back with more in a minute. Don't go away,
Speaker 2: I've we hear back all right, welcome back.
Speaker 1: If you're just tune in, you're listening to the Mark
Speaker 1: Moss Show, We're talking about how price controls are always
Speaker 1: at the end of every empire, and I'm giving you
Speaker 1: exactly the play by play of what's happening now. We're
Speaker 1: talking about how the Biden administration put forward this IRA
Speaker 1: Inflation Reduction Act, and one of the first things they
Speaker 1: want to attack is the prices of drugs, prescription drugs,
Speaker 1: and we can already see how IRA drug price controls
Speaker 1: are already impacting its members research and development decisions. Specifically,
Speaker 1: seventy eight percent are expected to cancel early stage pipeline projects,
Speaker 1: sixty three percent plan to shift research and development away
Speaker 1: from certain medicines. Ninety five percent are expected to develop
Speaker 1: fewer new uses for medicines because of the limited time
Speaker 1: available before being subject to government price setting. So because
Speaker 1: they can't make as much money, they're not going to
Speaker 1: spend as much time doing research and development. If we
Speaker 1: don't do as much research and development, then we don't
Speaker 1: have breakthroughs in medicine.
Speaker 2: If we don't have breakthroughs in medicine, then a lot
Speaker 2: of the gains that we've seen.
Speaker 1: Like for example, tripling life expectancy over the last hundred years,
Speaker 1: starts to go away. Now we've seen this time and
Speaker 1: time again. Right, We've seen studies come out that show this,
Speaker 1: But at the same time, we constantly, for some reason,
Speaker 1: have more people wanting more and more of it. But
Speaker 1: I want to run through some of the effects that
Speaker 1: we've seen throughout history so we can start to understand this. Now,
Speaker 1: this isn't new for the United States. I talked about
Speaker 1: it being at the end of the Empire, but we've
Speaker 1: actually seen it many times in the United States. We
Speaker 1: saw in nineteen seventy one to nineteen seventy four then
Speaker 1: President Richard Nixon used price controls, of course to control inflation.
Speaker 2: Then they in pry.
Speaker 1: Impose both price controls and wage controls, because of course,
Speaker 1: if you make more money, that's a problem.
Speaker 2: That's inflationary.
Speaker 1: As a matter of fact, most people haven't realized that yet,
Speaker 1: but the Federal Reserve, the central banks, they hate you.
Speaker 1: They're trying to bring inflation down, and you making more
Speaker 1: money is a problem for them. For some of you,
Speaker 1: having a job is a problem for them. As a
Speaker 1: matter of fact, they want to bring unemployment up, which
Speaker 1: means they hope their goal is for millions of more.
Speaker 2: Americans to actually lose their job. That's what they want.
Speaker 2: That's their goal.
Speaker 1: And they want to cap how much you can get
Speaker 1: paid at your job, and how much then those manufacturers
Speaker 1: where the companies can sell those products for. So we
Speaker 1: saw that, like I said, nineteen seventy one to seventy four,
Speaker 1: they did that. Now, at first it did seem to
Speaker 1: slow the rate of inflation because people didn't have as
Speaker 1: much money, businesses were not having as much money.
Speaker 2: But then it ultimately backfired. As a matter of fact,
Speaker 2: it led to shortages.
Speaker 1: And if you're even caught up a little bit on
Speaker 1: economics one oh one, you know that all prices are
Speaker 1: the equilibrium between supply and demand, and so they can
Speaker 1: affect the supply the demand side a little bit, but
Speaker 1: eventually that leads to shortages, which then brings the supply
Speaker 1: side down. And if the supply side drops faster than
Speaker 1: the demand, guess what happens.
Speaker 2: Prices go back up.
Speaker 1: And that's exactly what happened. In the Nixon administration. We
Speaker 1: saw shortages that happened for goods that were needed like
Speaker 1: meat and gasoline and building materials. Now, these shortages led
Speaker 1: to rationing, so in the seventies they were literally rationing gasoline.
Speaker 1: You had to go only to the gas station on
Speaker 1: certain days. It led to black markets for these types
Speaker 1: of goods to be sold, and eventually they had to
Speaker 1: cancel it. They had to lift these price controls in
Speaker 1: nineteen seventy four because things had gotten so bad, but
Speaker 1: the damage was already done. The controls that had led
Speaker 1: to shortages rationing in black markets also had discouraged innovation.
Speaker 1: Of course, no one was investing, no one was building more.
Speaker 1: Why would I build a factory to bring more supply
Speaker 1: that could help bring the price down. Why would I
Speaker 1: do that invest into that spend that time after energy,
Speaker 1: money risk if I know that I can't make a
Speaker 1: profit anyway because they're going to cap the prices, and
Speaker 1: so of course they don't. And so then after that
Speaker 1: was ended, we saw that the period from nineteen seventy
Speaker 1: four to nineteen eighty four was a period of very
Speaker 1: high inflation because then the prices were lifted, so then
Speaker 1: people could sell them for what they needed to, which
Speaker 1: means prices went up. So the Consumer Price Index is
Speaker 1: measured by CPI rows an average of seven point eight
Speaker 1: percent per year.
Speaker 2: During this period.
Speaker 1: Now that was an average of it during that year,
Speaker 1: so it was obviously much higher.
Speaker 2: We can see this throughout history.
Speaker 1: France seventeen ninety three, the National Assembly was the ruling
Speaker 1: body of France during the revolution. They imposed price controls
Speaker 1: on a wide range of goods, including at that time apples.
Speaker 1: This meant apple farmers weren't allowed to sell their apples
Speaker 1: for more than a certain price. Now, of course they
Speaker 1: were unpopular for people wanting to sell apples, and apple
Speaker 1: farmers were less willing to produce apples if they couldn't
Speaker 1: get a fair price for them, and if they didn't
Speaker 1: want to produce more apples, then we didn't have any apples.
Speaker 1: This is one of the things the price controls on
Speaker 1: apples that we can trace back that actually attributed or
Speaker 1: actually say contributed to the French Revolution. When people don't eat,
Speaker 1: people aren't happy, When people don't make money, people aren't happy.
Speaker 1: When people aren't happy, they tend to go to the streets.
Speaker 1: We see it in France all the time. As a
Speaker 1: matter of fact, we see it in France right now.
Speaker 2: We can go on.
Speaker 1: We can see that all of this led towards, you know,
Speaker 1: this continued divide between rich and poor. It changed the
Speaker 1: taxation system, It led to this monarchy class that kind
Speaker 1: of grew up that the people weren't happy about this
Speaker 1: sort of us versus them, We the people versus the rich,
Speaker 1: and we.
Speaker 2: See the same thing happened in our states today.
Speaker 1: As a matter of fact, I saw a post from
Speaker 1: Wall Street Silver on Twitter came out and showing that
Speaker 1: the combined net worth of the fifty richest members of
Speaker 1: Congress is four point eight billion dollar dollars. So members
Speaker 1: of Congress, public servants that are there as a public
Speaker 1: servant to do a service, that are making public servant wages,
Speaker 1: they have a combined networth of four point eight billion dollars.
Speaker 1: So they have an annual salary of one hundred and
Speaker 1: seventy four thousand. At that rate, they would have to work,
Speaker 1: you know, twenty seven thousand years to earn that much money. Obviously,
Speaker 1: well some of them look like they've been alive for
Speaker 1: twenty seven thousand years, but they haven't been. And so
Speaker 1: how the heck did they get that much money? Well,
Speaker 1: we can see that at the highest positions of our
Speaker 1: government on both sides of now they're abusing their powerful
Speaker 1: financial gain. Now again we can go back through history
Speaker 1: some more. We can see China nineteen fifty three to
Speaker 1: nineteen eighty. The Chinese government imposed all types of price
Speaker 1: controls on a wide range of goods and services that
Speaker 1: led towards shortages. It was the centrally planned economy, Mao's
Speaker 1: great lea forward, trying to bring the country forward, that
Speaker 1: constantly caused these types of things to go. Everyone should
Speaker 1: work on steel, So then in the backyard of everybody's
Speaker 1: houses they had smelting pots and they were making steel,
Speaker 1: which led to massive amounts of pollution and massive amounts
Speaker 1: of waste being all over the ground. Then mouths the
Speaker 1: great idea was to cut down the forest, or his
Speaker 1: idea was to go kill all the sparrows because they
Speaker 1: were eating the crops.
Speaker 2: And then we got overran.
Speaker 1: By bugs and constantly was trying to affect one thing
Speaker 1: that caused much bigger problems. And of course one of
Speaker 1: the biggest problems was, yes, a lack of goods, and
Speaker 1: specifically a lack of food. For example, the price of
Speaker 1: grain was set at zero point three yu wan per kilogram,
Speaker 1: which was below the cost of the production, which then
Speaker 1: led to a shortage of grain, and then the government
Speaker 1: had to ration it. Now we know through Maus greatly Forward,
Speaker 1: Thank you communism, Thank you socialism. About I think about
Speaker 1: fifty million people died during that time. Communism and socialism
Speaker 1: is hard to say exactly, but somewhere have been responsible
Speaker 1: for about.
Speaker 2: One hundred million deaths. One hundred million.
Speaker 1: When you go back through the Bullshek Revolution of the
Speaker 1: early nineteen hundreds in Russia, through Germany and into Maus
Speaker 1: Greatly Forward, we had about one hundred million people died.
Speaker 1: Many of them tens of millions of them directly, you know,
Speaker 1: murdered as they were opposing the governments. But the majority
Speaker 1: of them died from starvation because of the centrally, these
Speaker 1: horrible centrally planned ideas that always tried to control the economy,
Speaker 1: which always led to price inflation, which always led to
Speaker 1: price controls, which always led to shortages, which always led
Speaker 1: to people starving to death.
Speaker 2: It's sad. It's just the history, though. You have to
Speaker 2: know this.
Speaker 1: We saw Venezuela two thousand and three to the present.
Speaker 1: The government's been improsing in price controls on all types
Speaker 1: of goods and services. Venezuela, which was one of the
Speaker 1: richest countries in the world at the early part of
Speaker 1: the century, that has massive amounts of natural resources like oil,
Speaker 1: but yet they just can't seem to get them out
Speaker 1: of the ground. We see that their current inflation rate
Speaker 1: is almost four hundred percent. They're still trying to impose
Speaker 1: price controls. If you're just tuning in, you're listening to
Speaker 1: the Mark Mos Show. We're talking about what happens at
Speaker 1: the end of every empire and the end of every democracy,
Speaker 1: which is capital controls and price controls, and where that's going.
Speaker 2: Now.
Speaker 1: I gotta take a quick break, but when I come back,
Speaker 1: I'm going to talk about what the future holds for
Speaker 1: us in the United States and most of the developed
Speaker 1: world for that matter. What I think happens, probably the
Speaker 1: most probable case in what we can do about it.
Speaker 1: You don't want to miss this, so don't go away,
Speaker 1: but I'm taking a quick break.
Speaker 2: Don't go don't wait. Beer back, all right, welcome back.
Speaker 2: If you just tune in, you're listening to the Markmas Show.
Speaker 2: We've been talking.
Speaker 1: About the inevitable end when you look back to history,
Speaker 1: the inevitable end of an empire, of a democracy, how
Speaker 1: it follows a predictable path. The last path is always
Speaker 1: capital controls and price controls. How we're seeing that to
Speaker 1: the Biden administration is imposing these capital controls through things
Speaker 1: like the Inflation and Reduction Act, trying to reduce inflation
Speaker 1: by cappying the prices. And I went through the historical
Speaker 1: lens of how these always lead to shortages, which unfortunately
Speaker 1: throughout history has always led to mass deaths.
Speaker 2: And I'm certainly hoping that's not the case.
Speaker 1: Hopefully we could learn from the past so we don't
Speaker 1: have to continue to repeat those same mistakes. You know,
Speaker 1: the quote is that those vote don't learn from history
Speaker 1: are bound or actually is they doomed to repeat it?
Speaker 1: Michael is, of course, if we can wake up enough
Speaker 1: people to this. If people can understand what's going on,
Speaker 1: if we can look back to history and bring those
Speaker 1: lessons forward, maybe, just maybe we can spread the word
Speaker 1: to other people and we can change the collective mindset. Look,
Speaker 1: it doesn't take a majority to prevail. It only takes
Speaker 1: a small, a right minority. It takes you and I,
Speaker 1: as Samuel Adams said, spreading brush fires in the minds
Speaker 1: of men. We don't need the masses. The masses are
Speaker 1: always wrong, and so we need to know this. And
Speaker 1: so that's why I'm talking about this.
Speaker 2: Now. What I would ask for.
Speaker 1: You is to go discuss these ideas with somebody else.
Speaker 1: Stop talking about the weather, Stop talking about the TV
Speaker 1: show that you saw, Talk about real subjects.
Speaker 2: Talk about things that are going on in the world.
Speaker 1: Talk about the direction in the world is going and
Speaker 1: what we could and should be doing about it.
Speaker 2: Maybe also get involved a little bit.
Speaker 1: Get involved, talk to your friends, family, your coworkers, yes,
Speaker 1: of course, but maybe even involved in your local government.
Speaker 1: Because where we're going isn't pretty. Now let me paint
Speaker 1: you a picture. So let's take a look ahead. Whether
Speaker 1: you're in Europe, in China, well, obviously, even if you're
Speaker 1: in Venezuela's a little bit too late for you. But
Speaker 1: if you're in the developed world Canada, of the US,
Speaker 1: you know, North America, Australia, Europe, et cetera, this is
Speaker 1: where this is what your future holds, Okay, because at
Speaker 1: the end of every democracy and empire, this is what happens.
Speaker 1: So we have inflation raging obviously now in the United States,
Speaker 1: you know, Jerome Palwat, the head of the FED, is
Speaker 1: saying that they're bringing under control.
Speaker 2: They're not quite sure.
Speaker 1: There might be one or two more rate increases left,
Speaker 1: but it thinks he's got under control. Meanwhile, we see
Speaker 1: inflation is raging still in the UK and Europe really
Speaker 1: really hard.
Speaker 2: But it's happening in the developed world. China's happening.
Speaker 1: And I just told you earlier in Venezuela four hundred percent.
Speaker 1: So we have this massive problem with inflation.
Speaker 2: Now. The inflation problem is not going away. I've been
Speaker 2: very vocal.
Speaker 1: I've been telling you for a year that it might
Speaker 1: be some of the lowest inflation we'll see for the decade.
Speaker 1: Even when it was six seven, eight nine percent, I
Speaker 1: was saying that. Now, yes, I know, Mark, you're like Mark,
Speaker 1: but it's down, you're wrong. Look, nothing goes up or
Speaker 1: down in a straight line, so we have waves of inflation.
Speaker 1: So when you look back into the seventies, you look
Speaker 1: back into the forties when we had these periods of
Speaker 1: high inflation, you see that inflation sort of comes in waves.
Speaker 2: But you also know that nothing, no.
Speaker 1: Stock or asset price ever goes up in a straight
Speaker 1: line or even down in a straight line. So on
Speaker 1: its way down, it's bouncing. On its way up, it's bouncing,
Speaker 1: et cetera. And so inflation will come in waves, and
Speaker 1: we'll have periods of high inflation and disinflation, but we
Speaker 1: have more inflation. Why well, there's two main reasons why
Speaker 1: we're going to have higher inflation. Number one is because
Speaker 1: of as I talk about, the decentralized revolution or deglobalization.
Speaker 1: You see this the rise of the bricks. The bricks
Speaker 1: are rising up to challenge the dollars dominance, and they
Speaker 1: don't want to be cool. They don't want to be
Speaker 1: cooperative working together, They want to be competitive or coercive.
Speaker 1: Presidency challenged the Bricks coalition at the meeting they had
Speaker 1: just a week or two ago, saying that it's time
Speaker 1: for the bricks to rise up and challenge the G seven.
Speaker 1: So rather than being co competitive or I'm sorry cooperative,
Speaker 1: they want to be competitive. Now what does that mean. Well,
Speaker 1: that means that they want to be more restrictive on
Speaker 1: free trade. They want to impose tariffs and regulations on
Speaker 1: certain things. China and the US have been having this
Speaker 1: sort of trade war going on for a number of years.
Speaker 1: The US has completely cut them off of high level
Speaker 1: computer chips microchips. They just cut us off of two
Speaker 1: main commodities that we need for our ev sector, gaylium
Speaker 1: and geranium. As these things happen, it continues to push
Speaker 1: prices up. We see that the US now wants to
Speaker 1: bring or re on shore manufacturing, which is a good thing,
Speaker 1: but that's going to push the prices of everything up.
Speaker 1: Things get more expensive as we start to get more
Speaker 1: instability and insecurity around the world. You know, ships are
Speaker 1: getting hijacked, it's getting dangerous to move things.
Speaker 2: That's going to.
Speaker 1: Push the prices of things up. So we have massive
Speaker 1: inflation ahead. We also have massive because of a deglobalization
Speaker 1: of decentralization. We also have massive inflation ahead because all
Speaker 1: the governments are broke. So just like in Venezuela. As
Speaker 1: I said, we're at four hundred percent inflation.
Speaker 2: We're at Turkey.
Speaker 1: The Turkish layer has lost ninety five percent of the
Speaker 1: US dollar in the last five years because they're printing
Speaker 1: too much money. But it's the fate of all the countries.
Speaker 1: As I said at the beginning, the third inevitable in
Speaker 1: life now is that there is going to be money printing.
Speaker 1: And so as these governments continue to print more money,
Speaker 1: it's going to continue to cause more inflation. And there's
Speaker 1: no way to print less because we're in a based
Speaker 1: monetary system, which means we constantly have to be filling
Speaker 1: this up. Think about it this, because we're in a
Speaker 1: debt based monetary system.
Speaker 2: What does that mean exactly? So you hear this.
Speaker 1: Reference like money printer, go burr, it's not really how
Speaker 1: it works. The central banks don't actually print money. What
Speaker 1: they do is they set the monetary policy for the
Speaker 1: banks to create the money. Now, the banks create the
Speaker 1: money by issuing a loan. So when you go to
Speaker 1: the bank to get a business, a house, a car,
Speaker 1: a boat, a bike, loan, that money is then created
Speaker 1: into existence. So what does that mean exactly? What it
Speaker 1: means is that the dollars are a liability. The debt
Speaker 1: is the asset and the asset. The debt is the
Speaker 1: asset because it's backed by the house, the car of
Speaker 1: the boat. So the dollars of the liability that we're
Speaker 1: created to pay for the asset, which is the collateral.
Speaker 1: But what happens if that collateral, if the asset prices
Speaker 1: start to plunge, Well, all of a sudden, the debt
Speaker 1: is the dollars. The lie abilities are no longer backed
Speaker 1: by the debt because the collateral has fallen, which then
Speaker 1: means I get margin called we have to bring in
Speaker 1: more capital. But in a liquidity event, how does that work.
Speaker 1: It starts to create a doom loop. It starts to
Speaker 1: create this waterfall, this event where the collateral has falling
Speaker 1: so fast that it can't be covered. The banks, the
Speaker 1: governments of the world cannot let this happen.
Speaker 2: It can't happen, it won't happen.
Speaker 1: And so the only way to prevent that from happening
Speaker 1: is to make sure asset prices continue going up and
Speaker 1: not down. And so they need inflation. I'm just letting
Speaker 1: you know this is not going away. They have to
Speaker 1: print the money because of the acid prices always have
Speaker 1: to be going up because we're in a debt based system.
Speaker 1: It's also inflation is going up because of the deglobalization
Speaker 1: and the decentralization is happening right now. The other thing
Speaker 1: that we have is because of the debt levels going
Speaker 1: so high, so as the government has to continue to
Speaker 1: print more money, deficit level spending, spending more than bringing in.
Speaker 2: As a matter of fact, in the US, we've now
Speaker 2: reached or.
Speaker 1: We've had to double the deficit spending, and that is
Speaker 1: inflationary as well. So we're in this doom loop where
Speaker 1: we can't stop won't stop printing now. In this event,
Speaker 1: the only way forward is this what's called financial repression,
Speaker 1: and that means that we need inflation. The governments need
Speaker 1: inflation to be really high, and they want inflation to
Speaker 1: be high and bond yields to be low, and in
Speaker 1: that gap is how they can steal from you. So
Speaker 1: remember debt to GDP is a ratio debt divided by GDP.
Speaker 1: So I can bring debt down or I can bring
Speaker 1: GDP up. One way I bring GDP up is just
Speaker 1: with inflation. I used to sell ten iPhones at one
Speaker 1: thousand and I sell ten iPhones at two thousand, my.
Speaker 2: GDP went up.
Speaker 1: Congratulations, even though I didn't increase the economic output. And
Speaker 1: so this financial repression high inflation, to bring the debt
Speaker 1: to GDP ratio down the GDP up is the goal.
Speaker 1: But the problem is in that type of environment, when
Speaker 1: bond yields are low and inflation is high, then people
Speaker 1: don't want to be trapped in that system, which is
Speaker 1: why capital controls always fall into place at the end.
Speaker 1: And with capital controls come price controls. All right, this
Speaker 1: is the future, this is what we're facing. It's you
Speaker 1: have to be prepared for it.
Speaker 2: So what do we do about this? Well, we want to.
Speaker 1: Be inside assets that aren't in that system. So this
Speaker 1: would be non financial assets. I like bitcoin, That's what
Speaker 1: I talk about it all the time.
Speaker 2: Also, you can.
Speaker 1: Think about gold, you can think about real assets like
Speaker 1: scarce property such as waterfront property or other types of
Speaker 1: trophy assets. You can think about fine art, collectibles, cars.
Speaker 1: You can think about energy intensive assets again like gold,
Speaker 1: other commodities, things like that. This is why you see
Speaker 1: nations like China just bought their fifth lithium mind while
Speaker 1: they're dumping US treasuries. They don't want the dollars, they'd
Speaker 1: rather have the commodities, and that's the plan that I'm
Speaker 1: taking as well.
Speaker 2: I'd love to know what you have to think.
Speaker 1: Hit me up on social media at one Mark Moss.
Speaker 1: If you just tune in, you're listening to the Mark
Speaker 1: Maas Show talking about the inevitable fate of the United States,
Speaker 1: Europe and every other developed nation in the world.
Speaker 2: That's a lot.
Speaker 1: If you're listening on your podcast, please like and review
Speaker 1: this episode. I'd love that if you could do that,
Speaker 1: and that's what I got. Thanks so much for listening.