1 00:00:00,800 --> 00:00:04,600 Speaker 1: What's up? Everybody. Welcome to financial heresy, where we talk 2 00:00:04,960 --> 00:00:07,760 Speaker 1: about how money works so that you can make more, 3 00:00:08,280 --> 00:00:14,080 Speaker 1: keep more, and give more. Everybody right now is concerned 4 00:00:14,120 --> 00:00:18,279 Speaker 1: about the second piece of that keeping more, because as 5 00:00:18,320 --> 00:00:21,800 Speaker 1: people are finding out right now, the money that you 6 00:00:21,880 --> 00:00:26,520 Speaker 1: have in the bank might not actually be there, which 7 00:00:26,600 --> 00:00:31,920 Speaker 1: is crazy for most people that are realizing that, finding 8 00:00:31,920 --> 00:00:35,080 Speaker 1: out how banks work right now, or just being exposed 9 00:00:35,080 --> 00:00:37,040 Speaker 1: to a little bit of how banks work. So today 10 00:00:37,200 --> 00:00:40,360 Speaker 1: that's what we're talking about. How do banks actually work 11 00:00:40,720 --> 00:00:44,760 Speaker 1: and what causes them to fail and more importantly, why 12 00:00:44,840 --> 00:00:50,080 Speaker 1: the way that they work makes that failure almost inevitable. 13 00:00:50,960 --> 00:00:54,200 Speaker 1: So today, in order to understand how banks work, we're 14 00:00:54,240 --> 00:00:56,480 Speaker 1: going to take a little bit of a trip through 15 00:00:56,560 --> 00:01:01,440 Speaker 1: time through about how banks started off, kind of the 16 00:01:01,520 --> 00:01:05,119 Speaker 1: history of banking and how that evolution led to where 17 00:01:05,160 --> 00:01:08,360 Speaker 1: we are today. Some of the things that got embedded 18 00:01:08,360 --> 00:01:13,120 Speaker 1: into the structure of our financial system, like fractional reserve 19 00:01:13,200 --> 00:01:18,760 Speaker 1: banking and maturity mismatch that increase the risk exposed, you know, 20 00:01:18,800 --> 00:01:22,200 Speaker 1: basically for the entire system, how you have things like 21 00:01:22,360 --> 00:01:26,960 Speaker 1: privatized profits but socialized losses. And then we're going to 22 00:01:27,040 --> 00:01:30,960 Speaker 1: take out our crystal ball we're going to look forward 23 00:01:31,080 --> 00:01:36,600 Speaker 1: to the future see where these signposts are pointing on 24 00:01:36,760 --> 00:01:39,600 Speaker 1: where the banking system will go, not only in the US, 25 00:01:40,080 --> 00:01:43,080 Speaker 1: around the world as well, because we've seen these things 26 00:01:43,120 --> 00:01:46,279 Speaker 1: happen around the world throughout different cultures, different governments, different 27 00:01:46,280 --> 00:01:51,520 Speaker 1: times throughout history, and history tends to rhyme it. You 28 00:01:51,160 --> 00:01:56,040 Speaker 1: can study history, see the patterns that unfold, and then 29 00:01:56,080 --> 00:01:58,680 Speaker 1: you can start to recognize, Hey, if similar things start 30 00:01:58,720 --> 00:02:01,200 Speaker 1: to happen now that we've seen happened before, maybe we 31 00:02:01,240 --> 00:02:03,880 Speaker 1: have an idea of how this might play out. So 32 00:02:04,960 --> 00:02:10,320 Speaker 1: how banks really work and why they fail. First, let's 33 00:02:10,480 --> 00:02:14,240 Speaker 1: start off with our caricature of a very small, isolated economy, 34 00:02:14,520 --> 00:02:18,160 Speaker 1: our gold standard economy, desert island economy, where you have 35 00:02:18,480 --> 00:02:21,680 Speaker 1: ten people that get shipwrecked on an island. You've got 36 00:02:21,720 --> 00:02:25,720 Speaker 1: each one has one gold coin, and so they they've 37 00:02:25,720 --> 00:02:28,160 Speaker 1: got to live there now, and so they start they 38 00:02:28,200 --> 00:02:32,200 Speaker 1: start working. They start you know, gathering coconuts, catching fish, 39 00:02:32,320 --> 00:02:35,800 Speaker 1: building huts, collecting, you know, finding spring water, you know, 40 00:02:35,880 --> 00:02:38,560 Speaker 1: doing all these sorts of things to try and survive. 41 00:02:39,200 --> 00:02:41,360 Speaker 1: And let's say over the course of the next year, 42 00:02:42,320 --> 00:02:48,000 Speaker 1: they've created you know, multiple huts for each person. You know, 43 00:02:48,040 --> 00:02:51,800 Speaker 1: they've created some games out of bamboo. They've created some 44 00:02:51,880 --> 00:02:55,799 Speaker 1: water and food storage systems, and you know, they started 45 00:02:55,800 --> 00:02:59,120 Speaker 1: smoking fish that it would last longer, and so all 46 00:02:59,160 --> 00:03:01,760 Speaker 1: these things that have priests their quality of life there 47 00:03:01,800 --> 00:03:05,400 Speaker 1: on this island. Now, each one of them has different needs. 48 00:03:05,480 --> 00:03:11,760 Speaker 1: Everybody has different skills abilities, and so the person who 49 00:03:11,800 --> 00:03:14,280 Speaker 1: builds huts, you know, they get paid to build huts 50 00:03:14,280 --> 00:03:16,919 Speaker 1: for people. And the person who is good at getting coconuts, 51 00:03:16,960 --> 00:03:19,960 Speaker 1: they get paid to get coconuts for people, and so 52 00:03:20,040 --> 00:03:21,760 Speaker 1: on and so forth. You know, everybody kind of just 53 00:03:22,040 --> 00:03:25,280 Speaker 1: landed with a job that they could, you get paid 54 00:03:25,400 --> 00:03:28,519 Speaker 1: enough to be able to buy the stuff that they need. 55 00:03:28,560 --> 00:03:31,560 Speaker 1: And so they're all working together, but they're buying and 56 00:03:31,600 --> 00:03:35,160 Speaker 1: selling from each other using these gold coins. What's important 57 00:03:35,200 --> 00:03:37,800 Speaker 1: to recognize about this whole process so far is that, 58 00:03:37,960 --> 00:03:40,960 Speaker 1: number one, the money supply has never changed. You don't 59 00:03:41,000 --> 00:03:44,880 Speaker 1: have the ability to forge gold coins on this island, 60 00:03:44,880 --> 00:03:49,120 Speaker 1: and so it's a perfectly fixed money supply, and so 61 00:03:49,200 --> 00:03:52,160 Speaker 1: the gold the money supply hasn't changed at all. But 62 00:03:52,320 --> 00:03:55,480 Speaker 1: it's very evident, it's very clear that the quality of 63 00:03:55,560 --> 00:03:59,640 Speaker 1: life has absolutely changed. If you are to buy a 64 00:03:59,720 --> 00:04:04,040 Speaker 1: co conut today, on this island. You know, after a year, 65 00:04:04,680 --> 00:04:06,800 Speaker 1: it costs you way less in terms of like labor, 66 00:04:06,840 --> 00:04:08,280 Speaker 1: Like what do you have to do to get the 67 00:04:08,280 --> 00:04:10,720 Speaker 1: amount of money that it would cost to get a coconut. Well, 68 00:04:10,840 --> 00:04:13,480 Speaker 1: coconuts are extremely abundant now, so they're very cheap, so 69 00:04:13,520 --> 00:04:16,840 Speaker 1: it's easy to get a coconut. However, when you first 70 00:04:16,880 --> 00:04:19,440 Speaker 1: landed there, it was like they were scarce and they 71 00:04:19,440 --> 00:04:21,920 Speaker 1: were hard to get, and nobody had any and so 72 00:04:22,080 --> 00:04:24,440 Speaker 1: it was like, you know, a very expensive thing in 73 00:04:24,560 --> 00:04:26,839 Speaker 1: terms of what you would have to produce in order 74 00:04:26,880 --> 00:04:29,680 Speaker 1: to get your hands on a coconut. And so the 75 00:04:29,760 --> 00:04:33,040 Speaker 1: price for coconuts has dropped. In fact, the price of 76 00:04:33,080 --> 00:04:35,560 Speaker 1: anything has dropped. There's way more huts now than there 77 00:04:35,560 --> 00:04:38,320 Speaker 1: were earlier. We have better tools, so we can make 78 00:04:38,360 --> 00:04:41,200 Speaker 1: them easier than we could before. Fish as well, I mean, 79 00:04:41,279 --> 00:04:44,640 Speaker 1: like everything has gotten cheaper because we have more of it. 80 00:04:44,640 --> 00:04:47,160 Speaker 1: It meets our needs better, it's easier to get in 81 00:04:47,240 --> 00:04:50,119 Speaker 1: terms of labor, so the cost of everything has gone down. 82 00:04:50,520 --> 00:04:53,200 Speaker 1: In fact, that's the only way it can work if 83 00:04:53,240 --> 00:04:57,000 Speaker 1: the money supply is fixed, is that as the stuff increases, 84 00:04:57,320 --> 00:05:01,880 Speaker 1: the abundance and the accessibility to wants and needs increases 85 00:05:02,160 --> 00:05:05,040 Speaker 1: the price of all that goes down, and the price 86 00:05:05,160 --> 00:05:08,159 Speaker 1: of it going down is just a reflection of what 87 00:05:08,240 --> 00:05:10,599 Speaker 1: does it take for me to get the stuff that 88 00:05:10,640 --> 00:05:13,120 Speaker 1: I want or need? Does it take more now or 89 00:05:13,200 --> 00:05:17,120 Speaker 1: less now than it used to? And it clearly takes 90 00:05:17,400 --> 00:05:21,200 Speaker 1: less of me to do something to get what I 91 00:05:21,240 --> 00:05:24,240 Speaker 1: want than it did before when we first got to 92 00:05:24,279 --> 00:05:28,120 Speaker 1: the island, and that is reflected in the price being cheaper. 93 00:05:28,520 --> 00:05:32,200 Speaker 1: And so since the money supply can't change, then the 94 00:05:32,240 --> 00:05:33,880 Speaker 1: price of the money or the value of the money 95 00:05:33,880 --> 00:05:36,520 Speaker 1: relative to everything else is going to be pure signal. 96 00:05:36,560 --> 00:05:40,240 Speaker 1: It's going to just reflect the actual value of those 97 00:05:40,279 --> 00:05:45,560 Speaker 1: things again, relative to each other. It's also important to 98 00:05:45,560 --> 00:05:49,000 Speaker 1: recognize that since the money supply doesn't change, it it 99 00:05:49,080 --> 00:05:52,200 Speaker 1: still doesn't change regardless of the transactions that happen. So 100 00:05:52,440 --> 00:05:55,760 Speaker 1: when somebody saves, when somebody spends, when somebody borrows, when 101 00:05:55,800 --> 00:05:59,360 Speaker 1: somebody invests, like it's just money changing hands from one 102 00:05:59,400 --> 00:06:02,559 Speaker 1: person to an other. The money supply cannot increase because 103 00:06:02,560 --> 00:06:06,279 Speaker 1: nobody can forge gold coins. There's no gold ore to 104 00:06:06,400 --> 00:06:08,440 Speaker 1: dig out of the ground and mint into a coin. 105 00:06:08,920 --> 00:06:13,440 Speaker 1: And you know, unless somebody loses a coin, like buries 106 00:06:13,480 --> 00:06:15,080 Speaker 1: it and forgets where they bury it or they throw 107 00:06:15,080 --> 00:06:16,839 Speaker 1: it in the ocean or something like that. Then the 108 00:06:16,839 --> 00:06:20,480 Speaker 1: money supply doesn't decrease either, and so the money supply 109 00:06:20,560 --> 00:06:22,960 Speaker 1: is going to stay the same regardless of the financial 110 00:06:23,040 --> 00:06:29,240 Speaker 1: transactions that take place. Now, it's true that historically this 111 00:06:29,360 --> 00:06:32,360 Speaker 1: kind of a system is pretty rare. Most of the time. 112 00:06:32,440 --> 00:06:34,600 Speaker 1: What happens is people just say, Okay, I'm going to 113 00:06:34,680 --> 00:06:37,400 Speaker 1: take all my gold coins. I'm gonna trust a third 114 00:06:37,520 --> 00:06:40,240 Speaker 1: party to hold my gold for me, and they're gonna 115 00:06:40,279 --> 00:06:42,240 Speaker 1: give me a paper receipt that says I can go 116 00:06:42,240 --> 00:06:44,520 Speaker 1: get that gold at any time. And then those paper 117 00:06:44,560 --> 00:06:49,360 Speaker 1: receipts are the things that trade as money in the economy. 118 00:06:49,839 --> 00:06:52,440 Speaker 1: So on this island, there's ten pieces of gold coins. 119 00:06:52,640 --> 00:06:55,960 Speaker 1: They give them to a banker and get ten pieces 120 00:06:55,960 --> 00:06:59,000 Speaker 1: of paper in return, and now those ten pieces of 121 00:06:59,040 --> 00:07:02,120 Speaker 1: paper are the ones that are trading back and forth 122 00:07:02,279 --> 00:07:06,760 Speaker 1: as money. It's important to recognize that nothing has changed 123 00:07:06,880 --> 00:07:09,880 Speaker 1: yet in this financial system. It's still a limited supply. 124 00:07:10,040 --> 00:07:12,840 Speaker 1: There's nothing different about spending money, saving money, borrowing money, 125 00:07:12,880 --> 00:07:16,679 Speaker 1: anything like that. The only difference is that the banker 126 00:07:16,760 --> 00:07:21,200 Speaker 1: now has the potential for fraud, to forge money like 127 00:07:21,360 --> 00:07:25,240 Speaker 1: counterfeit money, whereas before, when it was just gold that 128 00:07:25,280 --> 00:07:28,000 Speaker 1: people are trading, it would have been very difficult in 129 00:07:28,000 --> 00:07:31,280 Speaker 1: this situation to create a fake gold coin. And so 130 00:07:31,440 --> 00:07:33,760 Speaker 1: now that money is the money that is being used 131 00:07:33,800 --> 00:07:37,600 Speaker 1: as just paper, it is much easier to just create 132 00:07:37,640 --> 00:07:39,440 Speaker 1: a new piece of paper that looks just like the 133 00:07:39,480 --> 00:07:44,120 Speaker 1: other ones that everybody just accepts as being money. All right, 134 00:07:44,160 --> 00:07:45,960 Speaker 1: So how does debt work then, because this is where 135 00:07:46,080 --> 00:07:49,080 Speaker 1: this is kind of the where the foundation starts to 136 00:07:49,080 --> 00:07:52,200 Speaker 1: get laid for a modern panking and financial system. In 137 00:07:52,240 --> 00:07:55,520 Speaker 1: the old system gold before we put it with the bank. 138 00:07:55,920 --> 00:08:01,000 Speaker 1: When Johnny borrows money from somebody, he he's borrowing money 139 00:08:01,040 --> 00:08:03,720 Speaker 1: that can no longer be spent by that person because 140 00:08:04,440 --> 00:08:07,200 Speaker 1: you can't duplicate magically gold coins. So if I borrow 141 00:08:07,240 --> 00:08:11,080 Speaker 1: money from Sally, Sally can't spend that money. I can 142 00:08:11,120 --> 00:08:12,520 Speaker 1: spend it now because I borrowed it from her, but 143 00:08:12,520 --> 00:08:14,760 Speaker 1: she can't. So the money supply didn't change. It just 144 00:08:14,760 --> 00:08:17,160 Speaker 1: went from her hands to my hands. And then when 145 00:08:17,160 --> 00:08:19,840 Speaker 1: I pay her back when I want to, I have 146 00:08:19,920 --> 00:08:23,960 Speaker 1: to earn extra income spend less so I can save 147 00:08:24,240 --> 00:08:26,680 Speaker 1: so I can give it back to her. Even if 148 00:08:26,720 --> 00:08:30,360 Speaker 1: I default and I can't pay her back, it's still 149 00:08:30,360 --> 00:08:33,760 Speaker 1: ten pieces of gold trading in the economy. That did 150 00:08:33,840 --> 00:08:36,840 Speaker 1: not change, and so the money supply stays the same. 151 00:08:37,120 --> 00:08:39,720 Speaker 1: But now that we all turned in our gold to 152 00:08:39,800 --> 00:08:44,880 Speaker 1: the banker, the bank has the ability to print extra dollars, 153 00:08:45,000 --> 00:08:49,000 Speaker 1: print extra paper that say the redeemable for gold, even 154 00:08:49,040 --> 00:08:54,000 Speaker 1: if they are not. And so, well, okay, I took 155 00:08:54,080 --> 00:08:57,800 Speaker 1: you took. I took a step forward, one step too fast. 156 00:08:58,200 --> 00:09:00,439 Speaker 1: We have to talk about interest rates as well. So 157 00:09:00,760 --> 00:09:05,040 Speaker 1: when Johnny borrows from Sally, there's an interest rate because 158 00:09:05,040 --> 00:09:07,080 Speaker 1: it's debt. Because Sally's like, Hey, I could spend this 159 00:09:07,120 --> 00:09:08,920 Speaker 1: money on something that I want right now. So if 160 00:09:08,920 --> 00:09:11,319 Speaker 1: I'm going to forego my spending to lend this to you, 161 00:09:11,480 --> 00:09:13,360 Speaker 1: I want to be compensated for that. So maybe I 162 00:09:13,480 --> 00:09:16,160 Speaker 1: charge a four percent interest rate. And then Johnny says, nah, 163 00:09:16,160 --> 00:09:17,920 Speaker 1: that's a little steep, and so he goes to somebody 164 00:09:17,960 --> 00:09:19,959 Speaker 1: else and they give him a three percent interest rate. 165 00:09:20,480 --> 00:09:23,520 Speaker 1: So when the savings pool is large and multiple people 166 00:09:23,640 --> 00:09:27,280 Speaker 1: have savings, then the borrow work can kind of have 167 00:09:27,360 --> 00:09:30,960 Speaker 1: them compete against each other. There's multiple people of savings, 168 00:09:30,960 --> 00:09:33,520 Speaker 1: and so he can go get the best rate. And 169 00:09:33,600 --> 00:09:36,199 Speaker 1: that's an example of the savings pool is large, so 170 00:09:36,320 --> 00:09:39,920 Speaker 1: the interest rates go down, and they stimulate borrowing, stimulate spending, 171 00:09:39,960 --> 00:09:42,160 Speaker 1: stimulate risk taking. Because the savings pool is large, you 172 00:09:42,200 --> 00:09:44,400 Speaker 1: can take risk, you can try and grow. And then 173 00:09:44,520 --> 00:09:47,600 Speaker 1: what happens though, if the situation, you know, continues like 174 00:09:47,640 --> 00:09:50,800 Speaker 1: that until everybody has spent money, and maybe one person 175 00:09:50,840 --> 00:09:54,920 Speaker 1: has saved, but everybody else has spent. Now the situation 176 00:09:55,000 --> 00:09:57,920 Speaker 1: is the opposite. Everybody needs money, needs to borrow money, 177 00:09:58,080 --> 00:10:00,320 Speaker 1: and only one person has money to lend out, and 178 00:10:00,360 --> 00:10:03,360 Speaker 1: so they'll say, hey, does anybody want to borrow for me? 179 00:10:03,400 --> 00:10:05,800 Speaker 1: At ten percent? And half the people raise their hand, 180 00:10:05,840 --> 00:10:07,959 Speaker 1: and he says, okay, what about twelve percent? And two 181 00:10:07,960 --> 00:10:10,160 Speaker 1: people raise their hand. He says okay, what about fifteen percent? 182 00:10:10,200 --> 00:10:12,160 Speaker 1: And one person still raises their hand, and so he says, okay, 183 00:10:12,160 --> 00:10:15,000 Speaker 1: I'll lend to you then, And so interest rates go 184 00:10:15,160 --> 00:10:18,880 Speaker 1: up when the savings pool is low. It's a natural 185 00:10:18,960 --> 00:10:22,679 Speaker 1: mechanism based on the auction, just the supplying demand of 186 00:10:22,840 --> 00:10:28,920 Speaker 1: money versus everything else. And then it incentivizes all the 187 00:10:28,960 --> 00:10:33,160 Speaker 1: economic actors to save because there's no money to spend. 188 00:10:33,720 --> 00:10:35,840 Speaker 1: If you try and borrow, you're going to get crushed 189 00:10:35,880 --> 00:10:37,720 Speaker 1: from the interest rate so might as well save so 190 00:10:37,760 --> 00:10:42,320 Speaker 1: you can make money on lending, and that regrows the 191 00:10:42,520 --> 00:10:46,679 Speaker 1: savings pool. And so there are these built in mechanisms 192 00:10:46,720 --> 00:10:49,880 Speaker 1: to sound money to a limited supply of money. That 193 00:10:49,960 --> 00:10:54,480 Speaker 1: will stimulate spending when people are saving too much, and 194 00:10:54,520 --> 00:10:57,560 Speaker 1: then it'll stimulate saving when people are spending too much 195 00:10:57,640 --> 00:11:01,200 Speaker 1: through the natural interest rate. That will ebb and flow 196 00:11:01,480 --> 00:11:05,920 Speaker 1: as kind of an equalizer effect on money and spending 197 00:11:05,920 --> 00:11:09,360 Speaker 1: and saving and debt. Now we move to the system 198 00:11:09,360 --> 00:11:12,280 Speaker 1: where everybody gave their money, their gold to the banker 199 00:11:12,440 --> 00:11:15,120 Speaker 1: and got paper receipts instead. The banker looks out of 200 00:11:15,160 --> 00:11:17,839 Speaker 1: this and he realizes, Hey, I can just create as 201 00:11:17,880 --> 00:11:20,600 Speaker 1: many of these pieces of paper as I want. There's 202 00:11:20,600 --> 00:11:24,079 Speaker 1: no cost to me doing that. I just take a 203 00:11:24,120 --> 00:11:25,600 Speaker 1: piece of paper and write down on it, Hey, you 204 00:11:25,640 --> 00:11:27,520 Speaker 1: can come get gold for me at any time. So 205 00:11:27,559 --> 00:11:31,120 Speaker 1: he says, I want to start a lending service, so 206 00:11:31,320 --> 00:11:35,480 Speaker 1: everybody lends. So everybody doesn't think twice about the banker lending. 207 00:11:35,559 --> 00:11:38,480 Speaker 1: They just don't realize that he's not lending his own money. 208 00:11:40,240 --> 00:11:42,240 Speaker 1: And so he looks out and he says, okay, if 209 00:11:42,360 --> 00:11:45,040 Speaker 1: this guy wants to go borrow from somewhere in the economy. 210 00:11:45,160 --> 00:11:48,360 Speaker 1: Right now, most people are offering you know, three percent, 211 00:11:48,520 --> 00:11:52,480 Speaker 1: four percent. So if I want to attract business, then 212 00:11:52,840 --> 00:11:54,800 Speaker 1: I need to offer a little bit less, let's say 213 00:11:54,800 --> 00:11:58,760 Speaker 1: two percent. And if I offer two percent loans, everybody 214 00:11:59,080 --> 00:12:01,880 Speaker 1: I will get all the business. Everybody will come borrow 215 00:12:02,000 --> 00:12:04,880 Speaker 1: from me. And he's okay with that because he's not 216 00:12:05,080 --> 00:12:07,439 Speaker 1: taking on any cost to lend. It's not like he's 217 00:12:07,520 --> 00:12:09,840 Speaker 1: lending out his own money. There's no opportunity costs there, 218 00:12:09,880 --> 00:12:12,560 Speaker 1: there's no real cost. It's just him taking a piece 219 00:12:12,559 --> 00:12:14,760 Speaker 1: of paper and writing on it, Hey, you can come 220 00:12:14,800 --> 00:12:17,520 Speaker 1: get gold from me at any time, and he hands 221 00:12:17,520 --> 00:12:20,000 Speaker 1: it out to somebody. And so he offers these loans 222 00:12:20,040 --> 00:12:22,560 Speaker 1: at two percent, and just like he thought, everybody comes 223 00:12:22,600 --> 00:12:25,400 Speaker 1: to borrow from him. Now this does a couple of things. 224 00:12:25,720 --> 00:12:28,760 Speaker 1: Number One, new money has just been created out of 225 00:12:28,760 --> 00:12:32,680 Speaker 1: thin air. Instead of ten pieces of gold trading before, 226 00:12:32,880 --> 00:12:35,000 Speaker 1: or ten pieces of paper for the ten pieces of 227 00:12:35,000 --> 00:12:38,800 Speaker 1: gold trading as money before, now there's eleven, twelve, thirteen 228 00:12:39,000 --> 00:12:42,040 Speaker 1: pieces of paper trading as money. So it increases the 229 00:12:42,040 --> 00:12:46,880 Speaker 1: money supply. When the money supply increases, usually it increases 230 00:12:46,960 --> 00:12:50,600 Speaker 1: quick like that. That's faster than the pace at which 231 00:12:50,600 --> 00:12:52,920 Speaker 1: you can create new stuff because the money comes into 232 00:12:52,960 --> 00:12:57,480 Speaker 1: existence immediately, but it takes time to create new stuff, 233 00:12:57,679 --> 00:13:00,960 Speaker 1: new wealth, new goods, new services, new products, and so 234 00:13:01,160 --> 00:13:03,240 Speaker 1: it will have an effect of pushing up prices because 235 00:13:03,240 --> 00:13:05,920 Speaker 1: the first person who gets their money that new money 236 00:13:06,040 --> 00:13:08,120 Speaker 1: will be able to go spend it at the current 237 00:13:08,200 --> 00:13:11,720 Speaker 1: level of prices. But that's income or that's a that's 238 00:13:11,960 --> 00:13:15,920 Speaker 1: purchasing power that he wouldn't have had otherwise because he 239 00:13:15,960 --> 00:13:19,000 Speaker 1: only took on that debt because the interest rate was lower. 240 00:13:19,440 --> 00:13:22,800 Speaker 1: He thought the savings pool was abundant. Before he would 241 00:13:22,800 --> 00:13:24,440 Speaker 1: have had to borrow at four percent, and he would 242 00:13:24,440 --> 00:13:26,720 Speaker 1: have said no, because he would have said, the savings 243 00:13:26,760 --> 00:13:29,240 Speaker 1: pool is not abundant enough. That's too high of a 244 00:13:29,280 --> 00:13:31,320 Speaker 1: cost for me. I don't want to do that. But 245 00:13:31,400 --> 00:13:35,080 Speaker 1: at two percent, it stimulated, it incentivized him to get 246 00:13:35,120 --> 00:13:38,640 Speaker 1: that debt and to spend that because the signal being 247 00:13:38,640 --> 00:13:41,319 Speaker 1: sent out to the economy was, hey, there's lots of money, 248 00:13:41,400 --> 00:13:43,840 Speaker 1: so go take risks and go spend. It's time of growth, 249 00:13:44,679 --> 00:13:47,960 Speaker 1: even though the reality was the opposite. So he goes 250 00:13:47,960 --> 00:13:50,440 Speaker 1: and spends and then as that new money, well, that's 251 00:13:50,440 --> 00:13:53,199 Speaker 1: a that's income for whoever he bought that thing from 252 00:13:53,240 --> 00:13:56,559 Speaker 1: let's say he bought a roof or new shoes. That's 253 00:13:56,679 --> 00:13:59,560 Speaker 1: income for the shoemaker that that shoemaker would not have had. 254 00:13:59,760 --> 00:14:02,400 Speaker 1: So maybe the shoemaker was not being reckless and the 255 00:14:02,440 --> 00:14:05,360 Speaker 1: shoemaker didn't go and get new debt, but the shoemaker 256 00:14:05,400 --> 00:14:08,040 Speaker 1: still got an increase in income as a result. So 257 00:14:08,080 --> 00:14:10,920 Speaker 1: the shoemaker thinks, I'm doing all the right things here. 258 00:14:11,360 --> 00:14:16,079 Speaker 1: I'm being responsible, but my income has gone up. Therefore 259 00:14:16,160 --> 00:14:18,760 Speaker 1: things are good. I'm doing the right things, I'm being productive, 260 00:14:19,080 --> 00:14:22,600 Speaker 1: and i can go spend some extra money. He wasn't 261 00:14:22,680 --> 00:14:25,880 Speaker 1: taking on any risks himself. He wasn't doing anything crazy, 262 00:14:26,080 --> 00:14:27,960 Speaker 1: but he was just looking at his own business and thinking, 263 00:14:28,000 --> 00:14:30,240 Speaker 1: I'm working hard and now I'm making more money. That 264 00:14:30,320 --> 00:14:32,520 Speaker 1: means I'm better at this, and that means now I 265 00:14:32,560 --> 00:14:34,160 Speaker 1: can go spend this money on something that I want 266 00:14:34,200 --> 00:14:36,880 Speaker 1: to spend this money on. And so he goes out 267 00:14:36,880 --> 00:14:39,640 Speaker 1: and does the same thing. So all throughout the system, 268 00:14:39,640 --> 00:14:43,160 Speaker 1: now incomes start going up as a result of the 269 00:14:43,240 --> 00:14:46,600 Speaker 1: new money that went into the system. But remember this 270 00:14:46,680 --> 00:14:51,200 Speaker 1: was all based on debt, and so at some point 271 00:14:51,240 --> 00:14:55,360 Speaker 1: this trend where prices go up as the incomes start 272 00:14:55,400 --> 00:14:58,360 Speaker 1: going up from the new money that enters circulation. It 273 00:14:58,440 --> 00:15:02,360 Speaker 1: has to inevitably versus itself because the debt starts to 274 00:15:02,360 --> 00:15:05,400 Speaker 1: get paid off. At some point that first person who 275 00:15:05,480 --> 00:15:08,080 Speaker 1: took out the debt, maybe it's a year term, and 276 00:15:08,160 --> 00:15:10,640 Speaker 1: so in a year they pay off. They take some 277 00:15:10,720 --> 00:15:12,600 Speaker 1: of the income that they've earned and they pay off 278 00:15:12,640 --> 00:15:15,720 Speaker 1: that debt. Well, now when they pay off that debt, 279 00:15:16,240 --> 00:15:20,520 Speaker 1: money has left circulation because let's say the money supply 280 00:15:20,560 --> 00:15:24,800 Speaker 1: went from ten to eleven. Now, when he earns that 281 00:15:24,920 --> 00:15:26,960 Speaker 1: extra dollar to pay back his debt and then he 282 00:15:26,960 --> 00:15:29,600 Speaker 1: pays it back, the money supply went from eleven down 283 00:15:29,640 --> 00:15:32,640 Speaker 1: to ten, and so the money supply shrinks then. And 284 00:15:32,680 --> 00:15:35,000 Speaker 1: now the next person in line that was gonna have 285 00:15:35,240 --> 00:15:38,240 Speaker 1: some income now doesn't have that income, so they have 286 00:15:38,320 --> 00:15:42,040 Speaker 1: to decrease their expenses as well. So the whole trip 287 00:15:42,120 --> 00:15:45,400 Speaker 1: up gets unwound as the debt gets paid off. Now 288 00:15:45,600 --> 00:15:49,200 Speaker 1: you might also have defaults. You might have people realize, hey, 289 00:15:49,200 --> 00:15:52,520 Speaker 1: there's not there's more paper in circulation than we know 290 00:15:52,600 --> 00:15:55,480 Speaker 1: the bank has in gold. So you might have everybody 291 00:15:55,480 --> 00:15:57,120 Speaker 1: to do a bank run and run up to the 292 00:15:57,160 --> 00:15:59,800 Speaker 1: bank and say give me my gold. And then everybody 293 00:15:59,800 --> 00:16:02,400 Speaker 1: realizes there's only ten pieces in there, so some people 294 00:16:02,680 --> 00:16:05,120 Speaker 1: get stuck with nothing, some people get their gold back. 295 00:16:06,640 --> 00:16:09,640 Speaker 1: But essentially what you have here's a system where money 296 00:16:09,680 --> 00:16:12,640 Speaker 1: gets lent into existence, prices go up. That's the boom, 297 00:16:12,920 --> 00:16:15,440 Speaker 1: and then something triggers the bust to start. But it 298 00:16:15,480 --> 00:16:18,200 Speaker 1: always does start from one trigger or another, and then 299 00:16:18,320 --> 00:16:23,520 Speaker 1: everything unwinds. The deleveraging occurs, and the crash happens the bust, 300 00:16:24,440 --> 00:16:27,800 Speaker 1: and so that's the boom bust cycle that happens as 301 00:16:27,800 --> 00:16:30,760 Speaker 1: a result of the money supply increasing and then shrinking 302 00:16:31,160 --> 00:16:36,080 Speaker 1: due to the manipulation of credit of interest rates, so 303 00:16:36,600 --> 00:16:41,920 Speaker 1: that that pattern has taken place literally countless times throughout history. 304 00:16:43,160 --> 00:16:45,720 Speaker 1: But instead of outlawing it, what happened a couple hundred 305 00:16:45,800 --> 00:16:48,280 Speaker 1: years ago is that countries start to nationalize it. So 306 00:16:48,280 --> 00:16:51,560 Speaker 1: they said, okay, banks can still do this, but you 307 00:16:51,600 --> 00:16:53,240 Speaker 1: have to be like licensed, and you have to do 308 00:16:53,240 --> 00:16:55,800 Speaker 1: it underneath the central bank. And then if there's a 309 00:16:55,880 --> 00:16:58,200 Speaker 1: run on the bank, the central bank will be there. 310 00:16:58,240 --> 00:17:01,000 Speaker 1: So if everybody comes to get the gold you and 311 00:17:01,080 --> 00:17:03,000 Speaker 1: you don't have enough, you just turn to the central 312 00:17:03,000 --> 00:17:04,800 Speaker 1: bank and say, hey, central bank, give me some gold, 313 00:17:04,960 --> 00:17:06,680 Speaker 1: and the central bank will be able to do that 314 00:17:06,720 --> 00:17:11,040 Speaker 1: for you. And so obviously this didn't solve the problem 315 00:17:11,119 --> 00:17:16,040 Speaker 1: because then you get a national like a nationwide bank run. Yes, 316 00:17:16,119 --> 00:17:18,840 Speaker 1: you have a longer boom, but then you have a 317 00:17:18,880 --> 00:17:21,480 Speaker 1: bigger bust. And so that's when we get things like 318 00:17:21,880 --> 00:17:25,040 Speaker 1: the first the forgotten Great Depression in nineteen twenty and 319 00:17:25,080 --> 00:17:29,919 Speaker 1: then the Great Depression in nineteen twenty nine, and Germany, 320 00:17:29,960 --> 00:17:33,680 Speaker 1: the Vimar Republican Germany collapsing through hyperinflation. So you see, 321 00:17:34,720 --> 00:17:37,280 Speaker 1: through trying to scale the system up and fix it, 322 00:17:37,280 --> 00:17:39,640 Speaker 1: through scaling it and making it bigger, you just make 323 00:17:39,720 --> 00:17:43,879 Speaker 1: the problem worse because it can build up for so 324 00:17:43,960 --> 00:17:48,600 Speaker 1: much longer. Now, the other thing about this, so we've 325 00:17:48,640 --> 00:17:52,480 Speaker 1: talked about how that fractional reserve that's called fractional reserve banking, 326 00:17:52,880 --> 00:17:55,439 Speaker 1: and that's where you have, you know, ten pieces of 327 00:17:55,440 --> 00:17:58,520 Speaker 1: gold in the vault, but you've issued fifteen pieces of 328 00:17:58,520 --> 00:18:00,440 Speaker 1: paper that I'll say you can come and get gold 329 00:18:00,440 --> 00:18:04,040 Speaker 1: at any time. Eventually, the deleveraging occurs where people pay 330 00:18:04,040 --> 00:18:06,520 Speaker 1: off the debt or there's a bank run where people 331 00:18:06,560 --> 00:18:10,439 Speaker 1: go to get their gold and it's not there. And 332 00:18:10,480 --> 00:18:14,359 Speaker 1: that's a result of fractional reserve banking. Now, the next 333 00:18:14,400 --> 00:18:17,280 Speaker 1: thing that causes a problem here because you could technically 334 00:18:17,320 --> 00:18:21,359 Speaker 1: do fractional reserve banking without maturity mismatch. So a maturity 335 00:18:21,440 --> 00:18:24,320 Speaker 1: mismatch is where you give somebody a piece of paper 336 00:18:24,320 --> 00:18:28,280 Speaker 1: that says you can come get your gold at any time. However, 337 00:18:29,320 --> 00:18:32,760 Speaker 1: the way that you have produced that piece of paper 338 00:18:33,720 --> 00:18:36,720 Speaker 1: is maybe as a one year loan, so you gave 339 00:18:36,760 --> 00:18:40,760 Speaker 1: a loan to somebody for you know, a year, but 340 00:18:40,920 --> 00:18:43,560 Speaker 1: everything that you have in deposit could be collected on 341 00:18:43,600 --> 00:18:47,400 Speaker 1: at any time. This is a maturity mismatch. And so 342 00:18:47,560 --> 00:18:51,880 Speaker 1: this is how banks operate today. This is where you 343 00:18:51,920 --> 00:18:54,879 Speaker 1: put your dollar in the bank and they say this 344 00:18:54,920 --> 00:18:56,719 Speaker 1: is a checking account, this is a savings account, so 345 00:18:56,920 --> 00:18:59,440 Speaker 1: you are allowed to come get your dollar at any time. 346 00:19:00,080 --> 00:19:01,920 Speaker 1: But what they do is they turn around and they 347 00:19:02,000 --> 00:19:04,920 Speaker 1: loan that dollar out to somebody in an auto loan 348 00:19:05,040 --> 00:19:09,320 Speaker 1: or a credit card loan or a mortgage, and if 349 00:19:09,400 --> 00:19:12,159 Speaker 1: you try and go get your dollar back, they have 350 00:19:12,240 --> 00:19:15,080 Speaker 1: to give you some of their small reserves they've held 351 00:19:15,119 --> 00:19:18,000 Speaker 1: a little bit from everybody. But if everybody tries to 352 00:19:18,080 --> 00:19:21,359 Speaker 1: go get their dollars, well they're all loaned out. And 353 00:19:21,400 --> 00:19:23,359 Speaker 1: it's not like the bank can just turn around and 354 00:19:23,400 --> 00:19:26,639 Speaker 1: tell everybody that they loaned the money out to to 355 00:19:26,680 --> 00:19:28,920 Speaker 1: give it back. It's like, no, that's a thirty year mortgage. 356 00:19:29,119 --> 00:19:30,360 Speaker 1: They're not going to be able to give you seven 357 00:19:30,440 --> 00:19:33,400 Speaker 1: hundred thousand dollars today that they use that to buy house. 358 00:19:33,440 --> 00:19:35,439 Speaker 1: They don't have it. So the bank can't just go 359 00:19:35,520 --> 00:19:38,920 Speaker 1: collect on those loans because those loans don't mature until 360 00:19:39,000 --> 00:19:42,239 Speaker 1: a year or ten years or thirty years. But the 361 00:19:42,320 --> 00:19:49,480 Speaker 1: deposits that are that are redeemable on demand our mismatch. 362 00:19:49,600 --> 00:19:53,560 Speaker 1: This is called maturity mismatch or maturity transformation. They take 363 00:19:53,640 --> 00:19:56,560 Speaker 1: something that is on demand and they transform it into 364 00:19:56,600 --> 00:19:59,320 Speaker 1: something that is, you know, five years, ten years, thirty 365 00:19:59,359 --> 00:20:02,880 Speaker 1: years on the road. And so this mix of fractional 366 00:20:02,920 --> 00:20:08,440 Speaker 1: reserve banking and maturity transformation is a really deadly concoction 367 00:20:09,240 --> 00:20:15,200 Speaker 1: because it produces so much instability that it makes bank 368 00:20:15,280 --> 00:20:20,760 Speaker 1: runs basically inevitable, makes bank failure basically inevitable at some point. 369 00:20:21,880 --> 00:20:24,880 Speaker 1: So this is exactly what happened with Silicon Valley Bank. 370 00:20:24,960 --> 00:20:27,119 Speaker 1: By the way, it's not like they were engaging in 371 00:20:27,200 --> 00:20:29,800 Speaker 1: any risky trades. They were doing the exact same thing 372 00:20:29,800 --> 00:20:32,200 Speaker 1: that all banks do. They were investing, they were loaning 373 00:20:32,200 --> 00:20:35,000 Speaker 1: money to the US government, they were buying treasuries. Those 374 00:20:35,000 --> 00:20:37,119 Speaker 1: are supposed to be the safest test sets in the world. 375 00:20:38,200 --> 00:20:41,080 Speaker 1: But when you take deposits and you say you can 376 00:20:41,119 --> 00:20:43,439 Speaker 1: come get your money at any time, and then you 377 00:20:43,480 --> 00:20:45,639 Speaker 1: loan it out and you buy something that won't mature 378 00:20:45,720 --> 00:20:48,240 Speaker 1: for a year, three years, five years, ten years, twenty years, 379 00:20:48,280 --> 00:20:51,159 Speaker 1: thirty years, well, eventually you're going to run into a 380 00:20:51,240 --> 00:20:54,040 Speaker 1: problem if people come and try and get their money 381 00:20:54,080 --> 00:21:00,480 Speaker 1: because you don't have it. So this one thing one 382 00:21:00,560 --> 00:21:05,960 Speaker 1: solution would be to eliminate maturity mismatch, meaning on demand 383 00:21:06,000 --> 00:21:11,320 Speaker 1: deposits can't be used to go to go into a 384 00:21:11,400 --> 00:21:13,840 Speaker 1: one year or three year, a five year type of loan. 385 00:21:15,600 --> 00:21:19,760 Speaker 1: On demand deposits can only go into assets that are 386 00:21:19,920 --> 00:21:24,520 Speaker 1: able to be liquidated at market value at any time. 387 00:21:24,840 --> 00:21:28,160 Speaker 1: The problem is, if it's an asset and it has 388 00:21:28,200 --> 00:21:30,639 Speaker 1: some sort of market value, that market value will fluctuate, 389 00:21:30,800 --> 00:21:33,840 Speaker 1: which means that you run into the exact same problem. 390 00:21:33,880 --> 00:21:36,720 Speaker 1: It's like, would you want them to buy stocks with 391 00:21:36,760 --> 00:21:38,520 Speaker 1: your money if you put a dollar in the bank, 392 00:21:38,520 --> 00:21:41,040 Speaker 1: would you want them to turn around and buy Apple shares? No, 393 00:21:41,240 --> 00:21:44,320 Speaker 1: Because if they put one dollar into Apple and then 394 00:21:44,440 --> 00:21:46,160 Speaker 1: Apple goes down and you try to go get your 395 00:21:46,520 --> 00:21:49,679 Speaker 1: dollar and they sell Apple for ninety cents and they 396 00:21:49,680 --> 00:21:51,480 Speaker 1: can only give you ninety cents. You would not be 397 00:21:51,600 --> 00:21:55,560 Speaker 1: very happy about that. You wanted your dollar, And so 398 00:21:55,760 --> 00:21:59,560 Speaker 1: there are certain ways you can kind of with our 399 00:21:59,560 --> 00:22:02,320 Speaker 1: current banking system, it just seems like it's probably not 400 00:22:02,400 --> 00:22:06,119 Speaker 1: possible to solve this problem. Now you might think, okay, well, 401 00:22:06,119 --> 00:22:09,720 Speaker 1: what about things like CDs absolutely certificate of it. That's 402 00:22:09,800 --> 00:22:12,600 Speaker 1: that's not maturity transformation. If you give the bank your 403 00:22:12,640 --> 00:22:14,919 Speaker 1: money for a year and then they know, hey, I 404 00:22:14,960 --> 00:22:17,560 Speaker 1: have to give this back in a year, they can 405 00:22:17,560 --> 00:22:19,280 Speaker 1: do whatever they want with it during that year. As 406 00:22:19,280 --> 00:22:21,040 Speaker 1: long as they know whatever they do with it, they'll 407 00:22:21,080 --> 00:22:23,399 Speaker 1: be able to produce what they promised at the end 408 00:22:23,840 --> 00:22:27,400 Speaker 1: of that year. And so there's no maturity transformation there 409 00:22:27,400 --> 00:22:34,080 Speaker 1: because there's no there's no mismatch with the timing, and 410 00:22:34,119 --> 00:22:39,520 Speaker 1: so there's no risk of you coming before they were 411 00:22:39,560 --> 00:22:42,320 Speaker 1: expecting to get your money back. It was a one 412 00:22:42,400 --> 00:22:46,120 Speaker 1: year term, so that that can solve part of it. 413 00:22:46,160 --> 00:22:50,359 Speaker 1: But the problem is most money in the system needs 414 00:22:50,359 --> 00:22:54,200 Speaker 1: to be liquid because people are constantly spending it. Most 415 00:22:54,240 --> 00:22:57,720 Speaker 1: dollars are in bank accounts where people get them and 416 00:22:57,720 --> 00:23:01,120 Speaker 1: then spend them within two weeks to four weeks. There 417 00:23:01,240 --> 00:23:04,440 Speaker 1: is not in terms of like the average bank account, 418 00:23:05,160 --> 00:23:09,400 Speaker 1: the turnover of dollars within the average month is almost 419 00:23:09,400 --> 00:23:12,280 Speaker 1: one hundred percent. Yes, you do have a lot of 420 00:23:12,359 --> 00:23:16,040 Speaker 1: money that sits there for a long time and doesn't move, 421 00:23:17,000 --> 00:23:20,439 Speaker 1: but that is concentrated in the hands of very few people. 422 00:23:20,840 --> 00:23:23,280 Speaker 1: When you and so if you're looking at the mean, 423 00:23:24,000 --> 00:23:26,640 Speaker 1: then you might be you might have a distorted view 424 00:23:26,640 --> 00:23:28,920 Speaker 1: and you might think, oh, there's a lot of money 425 00:23:28,960 --> 00:23:32,080 Speaker 1: that you would be able to engage in non maturity 426 00:23:32,119 --> 00:23:35,919 Speaker 1: transformation transactions with, But it's not true. It's in a 427 00:23:35,960 --> 00:23:38,840 Speaker 1: few bank accounts with the few richest people. When you 428 00:23:38,880 --> 00:23:42,960 Speaker 1: look at the average person, like the median bank account, 429 00:23:43,000 --> 00:23:45,960 Speaker 1: most dollars that flow through bank accounts, the turnover in 430 00:23:46,280 --> 00:23:48,920 Speaker 1: the average bank account is almost one hundred percent within 431 00:23:48,960 --> 00:23:52,600 Speaker 1: the course of two to four weeks. Most Americans, if 432 00:23:52,600 --> 00:23:56,240 Speaker 1: they got an unexpected expense would not be able to 433 00:23:56,240 --> 00:24:02,879 Speaker 1: pay it within two to four weeks. Unfortunately, no savings, debt, 434 00:24:03,200 --> 00:24:06,960 Speaker 1: things like that. So you get this situation then where 435 00:24:07,000 --> 00:24:10,280 Speaker 1: you have banks who historically you are supposed to be 436 00:24:10,320 --> 00:24:14,120 Speaker 1: able to have this business where you say okay, well, 437 00:24:14,160 --> 00:24:17,359 Speaker 1: everybody understands how it works. Now you give me your money, 438 00:24:17,840 --> 00:24:20,760 Speaker 1: I will pay you in order for you to give 439 00:24:20,800 --> 00:24:23,200 Speaker 1: me that money. So you're giving me a deposit and 440 00:24:23,240 --> 00:24:25,200 Speaker 1: I'm going to pay you one percent, two percent, whatever 441 00:24:25,200 --> 00:24:29,359 Speaker 1: it is. And you understand that I'm only able to 442 00:24:29,400 --> 00:24:32,080 Speaker 1: pay you for this money because I'm turning around and 443 00:24:32,119 --> 00:24:35,160 Speaker 1: I'm doing something with it. So you understand that there 444 00:24:35,240 --> 00:24:38,000 Speaker 1: is risk because I'm loaning it out or I'm buying 445 00:24:38,040 --> 00:24:40,520 Speaker 1: an asset, or I'm doing something with this to make 446 00:24:40,600 --> 00:24:43,119 Speaker 1: a little bit more money than what i'm making you. 447 00:24:43,920 --> 00:24:45,680 Speaker 1: I'm gonna pay you two percent, but I'm going to 448 00:24:45,760 --> 00:24:47,880 Speaker 1: make three percent, so I'm going to keep the one 449 00:24:47,960 --> 00:24:52,119 Speaker 1: percent difference. So me as a bank, that's how I'm 450 00:24:52,160 --> 00:24:55,880 Speaker 1: able to operate as a business. I'm making money on 451 00:24:55,960 --> 00:24:58,920 Speaker 1: your money, and you understand that there is a risk. 452 00:24:59,000 --> 00:25:02,919 Speaker 1: And so if I want to stay in business, number one, 453 00:25:02,920 --> 00:25:05,199 Speaker 1: I have to engage in profitable trades. And number two, 454 00:25:05,240 --> 00:25:08,639 Speaker 1: I have to engage in conservative trades where I'm not 455 00:25:08,720 --> 00:25:11,879 Speaker 1: risking losing a lot of money. And then number three, 456 00:25:11,920 --> 00:25:14,560 Speaker 1: I have to be transparent with that about that with 457 00:25:14,680 --> 00:25:17,639 Speaker 1: you so that you understand what's happening, because if you 458 00:25:17,720 --> 00:25:21,000 Speaker 1: understand what I'm doing with your money, how I'm paying 459 00:25:21,040 --> 00:25:25,199 Speaker 1: you on your money, and the conservative nature and the 460 00:25:25,280 --> 00:25:28,560 Speaker 1: high degree of certainty of the profits, the small profits 461 00:25:28,600 --> 00:25:31,399 Speaker 1: on the money, then you are going to be a 462 00:25:31,480 --> 00:25:35,200 Speaker 1: lot more likely to just allow me to continue doing 463 00:25:35,240 --> 00:25:37,600 Speaker 1: what I'm doing with your money. You're not going to 464 00:25:37,680 --> 00:25:41,520 Speaker 1: be concerned about, Hey, you know, I don't know what 465 00:25:41,560 --> 00:25:43,199 Speaker 1: they're doing. Maybe they don't have it, so I'm going 466 00:25:43,280 --> 00:25:45,640 Speaker 1: to go get it and then cause a bank run 467 00:25:45,680 --> 00:25:48,160 Speaker 1: to happen where everybody tries to go get their money 468 00:25:48,160 --> 00:25:51,320 Speaker 1: at the same time. So me as a business, I'm 469 00:25:51,320 --> 00:25:53,560 Speaker 1: going to be transparent. I'm gonna be conservative, I'm gonna 470 00:25:53,640 --> 00:25:56,960 Speaker 1: be careful about not taking on xcess risk. I'm gonna 471 00:25:56,960 --> 00:25:59,080 Speaker 1: be looking for small profits. I'm going to share that 472 00:25:59,119 --> 00:26:02,479 Speaker 1: with you. And then if for some reason I do 473 00:26:02,560 --> 00:26:06,679 Speaker 1: something wrong, well, then what happens. I lose money, I 474 00:26:06,720 --> 00:26:08,359 Speaker 1: can't pay you what I said I was going to 475 00:26:08,440 --> 00:26:10,399 Speaker 1: pay you. You go to get your money and I 476 00:26:10,440 --> 00:26:13,920 Speaker 1: shut down, bank run happens. That's bad for me, that's 477 00:26:14,000 --> 00:26:17,640 Speaker 1: really bad for you. Nobody will do business with me anymore. 478 00:26:18,000 --> 00:26:21,280 Speaker 1: That's just the reality of what this would do if 479 00:26:21,640 --> 00:26:24,560 Speaker 1: I run a bank like this. Nobody's gonna let me, 480 00:26:25,000 --> 00:26:28,280 Speaker 1: nobody's gonna trust me to hold their money anymore. And 481 00:26:28,320 --> 00:26:32,639 Speaker 1: so back before central banking, yes you had bank failures happen, 482 00:26:33,040 --> 00:26:35,440 Speaker 1: but there was skin in the game and so they 483 00:26:35,520 --> 00:26:40,960 Speaker 1: didn't actually happen that often. And when they did happen, 484 00:26:41,119 --> 00:26:44,080 Speaker 1: Number One, people learned their lesson to be more careful 485 00:26:44,119 --> 00:26:47,800 Speaker 1: with who they let entrusted their money to, and so 486 00:26:47,840 --> 00:26:51,639 Speaker 1: it made the system stronger because only the most conservative, 487 00:26:51,680 --> 00:26:55,080 Speaker 1: most careful, best at getting profits type of people would 488 00:26:55,080 --> 00:26:58,119 Speaker 1: be trusted to be bankers, because that's the only people 489 00:26:58,160 --> 00:27:01,800 Speaker 1: people would trust for their money once they got burned. 490 00:27:01,960 --> 00:27:04,360 Speaker 1: And then number two, all the bad actors eventually get 491 00:27:04,400 --> 00:27:08,000 Speaker 1: weeded out of the system because they fail. And so 492 00:27:08,080 --> 00:27:11,680 Speaker 1: you had privatized profits, but you also had privatized losses. 493 00:27:12,040 --> 00:27:13,879 Speaker 1: Only the people with skin in the game were the 494 00:27:13,920 --> 00:27:16,280 Speaker 1: ones who won, and the people's skin in the game 495 00:27:16,320 --> 00:27:20,240 Speaker 1: with the ones who could lose. When you scale it 496 00:27:20,320 --> 00:27:24,480 Speaker 1: up to the system we have today, however, banks still 497 00:27:24,520 --> 00:27:28,800 Speaker 1: operate with the privatized profit model. They use your money 498 00:27:28,840 --> 00:27:32,480 Speaker 1: to go take risks and they make money, and as 499 00:27:32,480 --> 00:27:35,840 Speaker 1: long as they're being conservative, then they'll keep on chugging along. 500 00:27:36,119 --> 00:27:38,239 Speaker 1: But if they accidentally take too many risks, or they 501 00:27:38,280 --> 00:27:40,840 Speaker 1: do something wrong, or something happens, even if it's outside 502 00:27:40,840 --> 00:27:44,520 Speaker 1: of their control. Well, then the system is so scaled 503 00:27:44,640 --> 00:27:49,560 Speaker 1: up now that when depositors like tech companies are at risk, 504 00:27:50,000 --> 00:27:55,160 Speaker 1: the government steps in and they socialize the losses. And 505 00:27:55,200 --> 00:27:58,680 Speaker 1: so we've heard a lot about the government saying it's 506 00:27:58,720 --> 00:28:01,720 Speaker 1: not the taxpayers that are on the hook, it's the 507 00:28:01,760 --> 00:28:03,600 Speaker 1: other banks that are on the hook that will pay 508 00:28:03,720 --> 00:28:07,440 Speaker 1: higher fees for this bailout. Well, where are those fees 509 00:28:07,480 --> 00:28:10,800 Speaker 1: going to come from. They're going to come from your 510 00:28:10,880 --> 00:28:14,080 Speaker 1: checking account, your savings account. Your fees are going to 511 00:28:14,160 --> 00:28:16,760 Speaker 1: go up, or the rate that they're paying you on 512 00:28:16,800 --> 00:28:21,000 Speaker 1: your money will go down. So these are taxpayers. It's 513 00:28:21,040 --> 00:28:24,480 Speaker 1: not going to come directly through taxes. No, But it's 514 00:28:24,480 --> 00:28:28,400 Speaker 1: the American citizen that has a bank account, which everybody does, 515 00:28:28,960 --> 00:28:32,440 Speaker 1: and that American citizen is a taxpayer. So the taxpayers 516 00:28:32,440 --> 00:28:34,480 Speaker 1: are on the hook that way. Now, let's say it 517 00:28:35,080 --> 00:28:38,360 Speaker 1: that bailout happens through an increase in the money supply 518 00:28:38,640 --> 00:28:42,240 Speaker 1: by the Federal Reserve, which so far at least through 519 00:28:42,280 --> 00:28:44,680 Speaker 1: a loan, that is where it's coming from right now. 520 00:28:44,680 --> 00:28:50,040 Speaker 1: Bridge loans from the Fed to fund the FDIC. If 521 00:28:50,080 --> 00:28:54,760 Speaker 1: that's how it stays, then the American people as a 522 00:28:54,800 --> 00:28:57,920 Speaker 1: whole lose out on the deflation that would have happened. Otherwise, 523 00:28:58,400 --> 00:29:01,520 Speaker 1: you don't stimulate new inflation because you're not actually creating 524 00:29:01,520 --> 00:29:04,640 Speaker 1: new money. You're just stopping that old money from being destroyed. 525 00:29:05,200 --> 00:29:08,440 Speaker 1: And so Americans pay for it through the prices staying 526 00:29:08,520 --> 00:29:12,600 Speaker 1: higher instead of being able to enjoy the lower prices 527 00:29:12,600 --> 00:29:16,240 Speaker 1: that would have happened as a result. And so because 528 00:29:16,280 --> 00:29:19,720 Speaker 1: the system is so scaled up, people are happy to 529 00:29:19,800 --> 00:29:21,960 Speaker 1: let the banks run away with the profits until the 530 00:29:22,040 --> 00:29:25,160 Speaker 1: losses pile up and until the risk takes place, and 531 00:29:25,200 --> 00:29:28,000 Speaker 1: then the government comes in and socializes the losses, makes 532 00:29:28,000 --> 00:29:33,080 Speaker 1: the entire economy bear the burden of the loss, bails 533 00:29:33,080 --> 00:29:36,600 Speaker 1: out the banks, and then so that people can keep 534 00:29:36,680 --> 00:29:40,200 Speaker 1: their keep their deposits, so that the people who had 535 00:29:40,200 --> 00:29:43,479 Speaker 1: those deposits, the companies, the individuals, whoever it is, so 536 00:29:43,520 --> 00:29:46,920 Speaker 1: that they don't suffer. But then you have public outrage, 537 00:29:46,960 --> 00:29:51,560 Speaker 1: which is quite honestly, very understandable, right because these banks 538 00:29:51,600 --> 00:29:55,200 Speaker 1: were making money hand over fist, but taking on risk 539 00:29:55,360 --> 00:29:58,200 Speaker 1: that they shouldn't have. They were engaging in fractional reserve banking, 540 00:29:58,360 --> 00:30:02,520 Speaker 1: which I call fraudulent reserve bank king maturity mismatch, and 541 00:30:02,760 --> 00:30:05,400 Speaker 1: these things are guaranteed to make a bank fail if 542 00:30:05,400 --> 00:30:08,240 Speaker 1: people try and go get their money. It's just guaranteed 543 00:30:08,240 --> 00:30:13,040 Speaker 1: to happen. And so if we have a system that 544 00:30:13,520 --> 00:30:20,360 Speaker 1: allows private profits of banks, we must allow them to fail. 545 00:30:21,880 --> 00:30:25,480 Speaker 1: If we allow them to fail, they will be more 546 00:30:25,560 --> 00:30:28,880 Speaker 1: conservative because they'll have to bear the brunt of their 547 00:30:28,920 --> 00:30:33,040 Speaker 1: own failure. And the individuals who lose their deposits then 548 00:30:33,280 --> 00:30:36,680 Speaker 1: will be much more careful about where they go next time, 549 00:30:37,760 --> 00:30:41,200 Speaker 1: and the system will become stronger overall because only the 550 00:30:41,240 --> 00:30:44,960 Speaker 1: best will attract deposits and the worst will get weeded 551 00:30:44,960 --> 00:30:48,880 Speaker 1: out of the game. So, if you allow private profits, 552 00:30:48,920 --> 00:30:52,920 Speaker 1: you have to allow private losses. It's the only way 553 00:30:52,920 --> 00:30:59,080 Speaker 1: to have a functioning system. However, if you are going 554 00:30:59,120 --> 00:31:05,520 Speaker 1: to socialize the losses, the society will implode if you 555 00:31:05,600 --> 00:31:10,720 Speaker 1: continue to allow the privatized profits. Now, it doesn't happen immediately, 556 00:31:10,920 --> 00:31:15,640 Speaker 1: but eventually individual citizens, societies get tired of this. They 557 00:31:15,680 --> 00:31:20,360 Speaker 1: look around and people realize. They'll say, I don't understand 558 00:31:20,480 --> 00:31:24,480 Speaker 1: the intricacies of the system, which might be very true 559 00:31:24,560 --> 00:31:29,280 Speaker 1: because the system can be complicated, but that does not 560 00:31:29,480 --> 00:31:33,400 Speaker 1: mean that they don't see that they are bearing the 561 00:31:33,440 --> 00:31:37,600 Speaker 1: burden and paying for the mistakes of the rich, paying 562 00:31:37,600 --> 00:31:40,560 Speaker 1: for the mistakes of the banks. So the bank's got 563 00:31:40,640 --> 00:31:43,280 Speaker 1: to keep all those profits for all those years, and 564 00:31:43,400 --> 00:31:47,800 Speaker 1: now the people are paying the price, and eventually that 565 00:31:47,840 --> 00:31:50,360 Speaker 1: comes to an end. And so you either allow the 566 00:31:50,400 --> 00:31:54,480 Speaker 1: privatized profits and the privatized losses, or if you socialize losses, 567 00:31:55,000 --> 00:31:59,800 Speaker 1: you socialize the profits, you eliminate the ability for those 568 00:31:59,800 --> 00:32:07,480 Speaker 1: banks to be private, profitable businesses. So now that's where 569 00:32:07,520 --> 00:32:11,520 Speaker 1: I'm looking forward, looking ahead, and that's where it looks 570 00:32:11,560 --> 00:32:15,000 Speaker 1: like this is going. When you see the Federal Reserve 571 00:32:15,080 --> 00:32:17,400 Speaker 1: step in, and you see the Treasury step in, and 572 00:32:17,440 --> 00:32:19,320 Speaker 1: you see the FDIC step in, and the White House 573 00:32:19,320 --> 00:32:22,320 Speaker 1: step in and say, okay, we're going to guarantee all 574 00:32:22,360 --> 00:32:26,680 Speaker 1: the deposits at Silicon Valley Bank, even though ninety percent 575 00:32:26,760 --> 00:32:31,320 Speaker 1: of them were above the threshold of being guaranteed, because 576 00:32:31,360 --> 00:32:34,240 Speaker 1: they didn't want these tech companies to lose all their 577 00:32:34,240 --> 00:32:37,200 Speaker 1: money and then all those jobs and all these billionaires 578 00:32:37,240 --> 00:32:39,280 Speaker 1: who were donors to all these political parties. They didn't 579 00:32:39,320 --> 00:32:41,600 Speaker 1: want the fallout from that. So they said, okay, we're 580 00:32:41,600 --> 00:32:43,680 Speaker 1: gonna just step it up and we're going to completely 581 00:32:43,720 --> 00:32:46,800 Speaker 1: socialize this and say, Okay, nobody loses their money here 582 00:32:47,160 --> 00:32:53,680 Speaker 1: other than the investors in the bank you have, you 583 00:32:53,720 --> 00:32:57,160 Speaker 1: have the same exact situation. Then start to spread to 584 00:32:57,200 --> 00:32:59,680 Speaker 1: other banks, and you have people say okay, well I'm 585 00:32:59,680 --> 00:33:02,080 Speaker 1: going to take my money out of this bank though, 586 00:33:02,120 --> 00:33:05,200 Speaker 1: because I don't have any tech billionaires at my bank, 587 00:33:05,600 --> 00:33:07,240 Speaker 1: and so if my bank fails, They're not going to 588 00:33:07,280 --> 00:33:09,120 Speaker 1: build that bank out, so I'm just gonna put it 589 00:33:09,120 --> 00:33:11,920 Speaker 1: with the big bank, and then you have that bank 590 00:33:12,040 --> 00:33:15,600 Speaker 1: run start to have a domino effect work. It's way 591 00:33:15,640 --> 00:33:18,720 Speaker 1: throughout the economy where people start moving all their money 592 00:33:18,840 --> 00:33:21,160 Speaker 1: to the banks that they perceive as too big to 593 00:33:21,240 --> 00:33:23,960 Speaker 1: be allowed to fail. And I say too big to 594 00:33:23,960 --> 00:33:26,680 Speaker 1: be allowed to fail, because too big to fail people 595 00:33:26,720 --> 00:33:28,240 Speaker 1: think that means that the bank is so big that 596 00:33:28,280 --> 00:33:30,800 Speaker 1: the bank can't fail. No, it means too big to 597 00:33:30,920 --> 00:33:34,040 Speaker 1: be allowed to fail, so the government will bail them out. 598 00:33:35,160 --> 00:33:39,200 Speaker 1: And so you have this effect where all of the 599 00:33:39,280 --> 00:33:41,760 Speaker 1: small banks, regardless of what they were doing with the money, 600 00:33:41,960 --> 00:33:45,240 Speaker 1: start to fail anyway. So then you have like Yelling 601 00:33:45,320 --> 00:33:47,480 Speaker 1: the other day, came out and said all right, we're 602 00:33:47,480 --> 00:33:49,400 Speaker 1: going to have to look for a way to guarantee 603 00:33:49,400 --> 00:33:54,360 Speaker 1: all deposits at all banks. Well, the only reason you'd 604 00:33:54,360 --> 00:33:57,040 Speaker 1: have to guarantee all deposits at all banks is if 605 00:33:57,080 --> 00:34:03,160 Speaker 1: those deposits are not actually there. And a very easy 606 00:34:03,320 --> 00:34:09,000 Speaker 1: fix for this whole thing would be to separate deposit 607 00:34:09,080 --> 00:34:15,520 Speaker 1: banking from the financial system here and centralize it. You 608 00:34:15,560 --> 00:34:18,880 Speaker 1: could still have it with you have it be a 609 00:34:18,920 --> 00:34:23,360 Speaker 1: distributed ledger system like it is today with multiple banks, 610 00:34:24,160 --> 00:34:28,799 Speaker 1: but deposit only where the bank doesn't need to offset 611 00:34:28,840 --> 00:34:31,440 Speaker 1: it with an asset to loan it out. You separate 612 00:34:31,440 --> 00:34:34,480 Speaker 1: it from the system so that it's not appearing on 613 00:34:34,640 --> 00:34:38,560 Speaker 1: balance sheets as a profit or a loss for these institutions, 614 00:34:39,640 --> 00:34:42,480 Speaker 1: and you have the funding to run the infrastructure paid 615 00:34:42,480 --> 00:34:46,959 Speaker 1: for via printing money, basically just operating the plumbing of 616 00:34:47,040 --> 00:34:51,959 Speaker 1: the deposit banking system. This is basically the phase two 617 00:34:52,080 --> 00:34:55,360 Speaker 1: of a central bank digital currency. It's not full fledged, 618 00:34:55,560 --> 00:34:58,400 Speaker 1: but it's phase two. It's not even phase one. Phase 619 00:34:58,400 --> 00:35:00,520 Speaker 1: one is the infrastructure that the FED is rolling out 620 00:35:00,520 --> 00:35:04,239 Speaker 1: in July for instant payments. But phase two is going 621 00:35:04,280 --> 00:35:07,239 Speaker 1: to be a separate deposit banking from the system, and 622 00:35:07,280 --> 00:35:10,920 Speaker 1: so you won't have a system. And I believe This 623 00:35:11,000 --> 00:35:14,400 Speaker 1: could very easily happen within the next year after Phase 624 00:35:14,480 --> 00:35:18,680 Speaker 1: one goes through some trial testing. By the end of 625 00:35:18,680 --> 00:35:20,520 Speaker 1: this year, this could happen. I'm not saying it will, 626 00:35:20,560 --> 00:35:24,319 Speaker 1: I'm saying it could. Where you have deposit banking just 627 00:35:24,400 --> 00:35:27,560 Speaker 1: completely separated from the system, so that when you put 628 00:35:27,600 --> 00:35:31,480 Speaker 1: your money in a bank account, you are not loaning 629 00:35:31,560 --> 00:35:35,000 Speaker 1: your dollar to an institution that has to turn around 630 00:35:35,000 --> 00:35:37,600 Speaker 1: and go try and make money with it and try 631 00:35:37,680 --> 00:35:41,200 Speaker 1: and not lose it, and try and be profitable with it. Instead, 632 00:35:41,280 --> 00:35:45,040 Speaker 1: you are just adding that number to a ledger, and 633 00:35:45,160 --> 00:35:49,840 Speaker 1: that number is just there. It's not alone, it's not debt, 634 00:35:49,920 --> 00:35:52,360 Speaker 1: it's not moving around, it's not going anywhere, it's not 635 00:35:52,400 --> 00:35:55,600 Speaker 1: being used for anything. It is just a number that 636 00:35:55,760 --> 00:36:00,439 Speaker 1: is there. And so that dollar sits there until you 637 00:36:00,560 --> 00:36:04,160 Speaker 1: spend it, and it goes onto somebody else's ledger, onto 638 00:36:04,239 --> 00:36:08,399 Speaker 1: somebody else's into somebody else's account, and again it just 639 00:36:08,640 --> 00:36:12,360 Speaker 1: sits there. And this would be separated from money market funds, 640 00:36:12,360 --> 00:36:14,960 Speaker 1: this would be separated from investing, This would be separated 641 00:36:15,040 --> 00:36:20,320 Speaker 1: from all the typical banking practices, so that regular checking 642 00:36:20,360 --> 00:36:24,279 Speaker 1: accounts and savings accounts are not going to have the 643 00:36:24,320 --> 00:36:28,279 Speaker 1: problem of fractional reserve banking anymore of maturity mismatch of 644 00:36:29,080 --> 00:36:32,520 Speaker 1: making banks be at risk of bank runs. Now, that 645 00:36:32,600 --> 00:36:34,680 Speaker 1: means a couple of things. Number One, it means that 646 00:36:34,719 --> 00:36:37,000 Speaker 1: banks won't be able to make money that way anymore. 647 00:36:37,360 --> 00:36:40,280 Speaker 1: So either banks will have to make money doing things 648 00:36:40,440 --> 00:36:44,799 Speaker 1: like you know, the their investment banking. It'll make they'll 649 00:36:44,840 --> 00:36:48,080 Speaker 1: have to make money doing you know, with like loans. 650 00:36:49,120 --> 00:36:54,759 Speaker 1: But it also means that some of the institutions might 651 00:36:54,840 --> 00:36:59,920 Speaker 1: just get absorbed by the Federal Reserve as hey, we're 652 00:37:00,320 --> 00:37:04,160 Speaker 1: just going to have you be infrastructure for running deposit banking, 653 00:37:05,520 --> 00:37:09,360 Speaker 1: and and it would become like a banking This is 654 00:37:09,440 --> 00:37:13,319 Speaker 1: also like a quasi nationalization of banking, which again has 655 00:37:13,360 --> 00:37:19,000 Speaker 1: happened many times throughout history. And they just operate the 656 00:37:19,040 --> 00:37:22,040 Speaker 1: plumbing of the system. They are the infrastructure. Then instead 657 00:37:22,040 --> 00:37:28,600 Speaker 1: of private businesses, they're like public utilities. And and so 658 00:37:28,640 --> 00:37:31,600 Speaker 1: I think there's a very real possibility that we get 659 00:37:31,600 --> 00:37:34,080 Speaker 1: this ledger based system instead of a debt based system 660 00:37:34,120 --> 00:37:36,480 Speaker 1: where when you give the money the dollar to the 661 00:37:36,480 --> 00:37:39,400 Speaker 1: bank right now, that's technically a loan, they owe you 662 00:37:39,520 --> 00:37:43,240 Speaker 1: that dollar back. And so we have a debt based 663 00:37:43,520 --> 00:37:47,279 Speaker 1: banking system. It's very possible that even within the next 664 00:37:47,400 --> 00:37:51,240 Speaker 1: year we transition away from that, and at least for deposits, 665 00:37:51,800 --> 00:37:55,799 Speaker 1: we transition over to just straight ledger based where that 666 00:37:55,840 --> 00:37:58,880 Speaker 1: money is not getting used for something else. It's just 667 00:37:59,560 --> 00:38:02,200 Speaker 1: on a ledger. It's just there. It's just and you 668 00:38:02,239 --> 00:38:04,040 Speaker 1: can do whatever you want with it. You could loan 669 00:38:04,120 --> 00:38:06,440 Speaker 1: it out, you could invest it, you could spend, you 670 00:38:06,440 --> 00:38:09,880 Speaker 1: could do something else with it. But checking accounts and 671 00:38:09,960 --> 00:38:14,960 Speaker 1: savings accounts would be separated from the institutional the institution 672 00:38:15,000 --> 00:38:18,040 Speaker 1: of banking as we've known it for decades and centuries 673 00:38:19,200 --> 00:38:22,239 Speaker 1: to the point where it is separate. And whether that's 674 00:38:22,239 --> 00:38:27,239 Speaker 1: paid for through complete nationalization and taxpayer money, whether it's 675 00:38:27,480 --> 00:38:31,440 Speaker 1: paid for through printing of money by kind of absorbing 676 00:38:31,480 --> 00:38:34,800 Speaker 1: it into the FED, whether that's paid for by changing 677 00:38:34,840 --> 00:38:38,280 Speaker 1: the laws about what banks can and have to do 678 00:38:38,719 --> 00:38:42,320 Speaker 1: with that sort of money. I don't know the details, 679 00:38:42,360 --> 00:38:45,200 Speaker 1: but it's very likely that the way that it looks 680 00:38:45,760 --> 00:38:50,840 Speaker 1: is separate, so that there is no more rehypothecation of dollars, 681 00:38:51,160 --> 00:38:55,120 Speaker 1: that there's no more fractional reserve banking associated with deposits 682 00:38:55,120 --> 00:38:59,440 Speaker 1: and maturity mismatch. So we'll see I hope that explanation 683 00:38:59,480 --> 00:39:01,799 Speaker 1: i'll help helps you understand what is going on right 684 00:39:01,840 --> 00:39:07,440 Speaker 1: now and makes clear why I am so certain that 685 00:39:07,480 --> 00:39:10,920 Speaker 1: at some point a full blown central bank digital currency 686 00:39:10,960 --> 00:39:15,160 Speaker 1: will be tried here in this country, because there are 687 00:39:15,239 --> 00:39:19,080 Speaker 1: so many things pointing that direction and I think it's 688 00:39:19,120 --> 00:39:22,239 Speaker 1: the biggest risk that our country faces. But unfortunately, it 689 00:39:22,280 --> 00:39:26,960 Speaker 1: looks like we are barreling forward towards that end. So 690 00:39:27,000 --> 00:39:30,400 Speaker 1: we'll see. I'll keep you updated. Thank you so much 691 00:39:30,600 --> 00:39:34,879 Speaker 1: for hanging in there through another episode. Really appreciate you. 692 00:39:35,280 --> 00:39:36,080 Speaker 1: See you next week.