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Now The Dogma Dangers and Modern Monetary Theory

 Now The Dogma Dangers and Modern Monetary Theory


The Dogma Dangers and Modern Monetary Theorythis is the rich dad stock cast with andy tanner the show that kicks 401ks in the asphalt and teaches you to be the master of your own stock investing domain and heres your host greg arthur Music welcome welcome to the show this show is going to be a little different because were going to off talking about a kind of a crazy word dog what do i mean by that when we blindly adopt a religion a political system uh even literary dharma we become automatons we cease to grow as people and one of the dangers we have at rich dad is we have such a strong leader such a strong voice that very often when we listen to that no matter what is said to us we interpret that as dogma we interpret that as the one and final truth even though in this case im talking about robert kiyosaki even though robert will constantly tell us theres two sides of every coin and you need to be on the edge so that you can learn and uh his favorite quote from einstein is something to the effect of a genius is a person who can hold two opposing thoughts in their head at the same time and those are those are serious concepts to grasp if youre going to continue to grow as a person and in this case as an investor and more specifically a stock investor at richted we have dogma such as cash flow is better than capital gains we have dogma that debt is good and while i believe those and in most cases theyre true theyre not always going to be true and so we have to recognize the dangers of dogma and the reason i bring dogma up on this show is is the main man andy tanner if you could see him he has a poster about dogma behind him i actually do yeah i wonder why you brought that up i actually do have a poster dogma yeah why are you telling what the poster says its very famous actually you know steve jobs left stanford early to go a business and its kind of ironic that theyd have a college dropout to come back to give the command commencement speed of a school that he left but he had been diagnosed with cancer pancreatic cancer and you think about your mortality you know i had my balance with that and you know we all have have connections to that idea and one of the things he said um uh is he said dont be trapped by dogma and like you said once we put on some glasses um you know dogmatic glasses we tend to see the world through that lens and it can distort uh reality sometimes and and so i thought it was a great phrase he gave you dont be tracked by dogma dont let the opinions of others drown out your own inner voice youll have the courage to follow your own heart and intuition it somehow already knows what you know what you want to be and uh you know the quote s out says your time is limited so dont waste it living someones elses life you know dont be trapped by dogma so youre right theres a theres theres a lot of dogma that i spew out you know everyone listen to andy and i would encourage you to question uh everything question what andy says question what other people say and i think that gives you a chance to grow because you can always go back to what you originally believed nothing wrong with you know poking your head in a different room and checking it out so i think thats a great setup i see now now we thought through i see why you said it that way because the the topic we were thinking about talking about today is modern monetary theory right yes which which rich dad has a little dogma around that theory yeah it does theres a little dog around that and uh for good reason and so uh this is this is probably a as as important podcast that you could listen to right now as any others will be out there if nothing more if it does nothing more than say you know what its time for me to study some new things and its time for me to understand some new things so um you know the way i would a discussion on this greg was would be in school is at rich dad we often ask what you learn about money in school and the answer that uh truthfully is not much yeah big fat zero not much in american history for in a civics class you might learn about the branches of government you know the president is the executive and the congress is legislative and the supreme court is the judicial and one creates the law and one in forces one interprets and all this but theres a couple of things that are that happen that affect every person listening and that is uh policy and while i always say you cant predict the future perfectly policy and demographics can give you a big you know keen eye on the future for example if they say at and a half everyone has to withdraw take distributions out of their 401k that schedule you know thats going to have ramifications down the road for the stock market if you get million people withdrawing right so you look at policy you say how this can affect us so today you know you talk about modern monetary theory mmt for short youre going to be talking about something called monetary policy and uh thats not something that i think you know is taught in high school uh very well at all so uh you know moneys something we deal with every day its something we need it buys the food that we eat it buys the medicine we have the the school for our children the education they get the piano lessons you know money isnt the most important thing in life but it is a necessity of life without money uh a person is destitute and even if theyre destitute they still need to get money from a government to survive so to understand the policies behind money is a big deal so so i think what were what we need to do is explain what it is this mmu and then really kind of explain the difference between mmt and capitalism yes and then i think if were being honest and you and i have not purposely talked about this determine are we really more mmt or are we more capitalism and what direction what direction do we seem to be going as a society yeah yeah very important um and i actually have a lot to say on that on those discussions lets begin here what is money and if we ask that question greg if its monetary policy lets with monetary comes from the word money what is money so you know earlier you said money may not be the most important thing and i agree with that but i do think money might be the most important tool because it affects everything in terms of functionality and practicality a person has their hierarchy needs maslow and weve got to have food to eat and that means got to find it somewhere and in our society its tough to to grow everything in your backyard or collect the herbs in the mountains right yeah yeah yeah yeah i hunt at my local kroger store you hunt your hunter gather at the yeah the supermarket i hunt and gather exactly especially in the ice cream section the money is a medium of exchange its an object that is generally uh accepted to pay debts its an object that also helps us measure the value of things if everyone can come together and say you know gee you know a couple of eggs is worth a couple of strips of bacon thats barter but what money does is it creates something that says well this is something we can use as a meeting exchange so i dont have to barter itll speed things up itll make it easy because im a chicken farmer i have to bottle for everything thats not an efficient way to do it so money is would be this medium of exchange and also a way for us to say well you know whats this chicken worth well this chickens worth you know four dollars or whatever it is and so that thats a good foundation to with in currency uh has to do with with something that flows like an electric current or a river current and so currency gets passed and it moves right you have this piece of currency and you throw in the economy and like a river it will wind its way to the path of least resistance and it creates a flow and when you look at monetary policy the gross national product or gross domestic product rather is not a function of volume maybe as much a little bit of that how much water is there but how fast is it moving and so if our gdp grows uh what that means is more money was changing hands the money was moving faster i gave you a because i did you did something well for me and then you give that to something because they did something well from you and they give that and they give the government taxes each transaction so they love money going fast right so thats thats a real important thing to ponder is what is money its this medium exchange its an object that a society generally agrees to to say hey we can we can replace barter with this and so heres the interesting thing what is uh if if modern monetary is different what is a past monetary theory and the idea was is that you would have some gold and gold has been a good one now youve had cali sticks where you know tally stick is nice because you can break it in half and you have to come together and match the woods of the grain of woods and you notch your tally stick and feathers and seashells and stones and whatever but gold has been a a very historically golds been kind of a big deal its fungible its hard to get its scarce it doesnt rust its pretty nice nice medium and almost every society is has recognized gold almost i i havent studied as much as others but i think everyone listening can agree that you know you have this thing says good as gold you know its good as gold and and uh and thats a big deal so the term good as gold is is you know its good as is gold its right i mean its its solid so the idea that the modern monetary theorists reject is they say this is a myth but they say look the way it worked was is you had a a bunch of gold that was hard to carry around so you made a deposit you know at the vault or at the bank and they said okay greg arthur has you know ounces of gold and they give you a little receipt that says here is all the gold you have maybe youve made a bunch of deposits over time and then you come to me and you say hey andy um you know i want to buy your you know your car that you have for sale i said great its you know one ounce of gold please you say well look i can go get you the gold i have a thing that says this receipts bear bearer of this receipt payable on demand i can go get the gold and just give you my receipt and then you can get the gold anytime you want and so theres a paper transaction and you have these notes called you know treasury notes where you could say you know a silver certificate for example in the 50s and it looked like a regular you know looked like our greenback and it saved fifty dollars and say you know silver certificate uh this is redeemable on demand you know five dollars you know fifty dollars of silver you know redeemable by the bear on demand and so there was this idea that these certificates were representative of something else that was valuable you follow that yeah absolutely and the reason they were valuable is because they represented a commodity that had what we will call intrinsic value does that make sense yes it was simply a representation of something else and and thats kind of what a lot of uh you know the libertarians people that vote for sound money say uh hey you know we should have a money that is inherently valuable money that means something the idea of printing money a fiat which means out of nothing the word fiat out of nothing currency where you just print it and its kind of like this idea lets say that you go valet your car and you give a valet you get a valet stub well that valet stuff represents ownership or you go to the cloakroom they give you a little ticket they take your coat well you couldnt go out and print a bunch of valet stubs because you know you only have one ferrari greg you know you cant you cant just print another one and say well this is also a ferrari so the idea is is that something that is a certificate the word certify right it certifies that theres something behind it a deed represents ownership of a house a stock for certificate represents ownership in a company so any paper asset anything weve printed on paper should be a certification of something behind it and so maybe i pay you in stock or maybe i say look ill trade you your house for mine lets switch deeds um you know the the idea that the paper should have something behind it is a very difficult thing for a brain to escape um so i dont know how you feel about that but i feel very solid i mean the us dollar ed out backed by gold yeah and and thats kind of an idea of the people right i mean if everyone around says yeah i agree id like to have some gold uh golds valuable im okay with that right and theres this general acceptance of this piece of paper represents some gold so what now we can trade the pieces of paper around knowing that gold is our our friend well in as you know uh nixon took us off that gold standard and theres an interesting history before that in new jersey bretton woods new jersey after world war ii they got all the nations together and said look we need to have a like we said we need to have something in the world that we all agree on and they said well you know what the us dollars backed by gold lets make the us dollar you know the the currency in which we trade oil now we have a petro dollar right and and uh everyone said the us is strong currency we want to trade oil gold whatever lets do it in us dollars well in richard nixon pulled us off that and since then what is money now and and what is it so with that foundation i think its easier now to understand what modern monetary theory is and one of the guys that they call the father of modern monetary theory is getting warren mosler and he was a bond trader and you know worked in the debt markets probably more in the equity markets and he had an epiphany one day with fiat currency and ill just ask you this question uh greg this is a softball over the playing home run whats the problem with running up too much debt that you have to pay it back yeah and as long as you can pay it back no problem so you said you know debt is your debt is kind of the rich dad dogma debt is good and the reason debt is good is a it helps us get stuff before we have to earn money for it its quick and b its a lever in other words i can own assets without having to earn the money to owe the asset i can own the asset now and have the asset pay for itself rather than saving up to buy the assets so its an accelerator and anyone whos serious about the wealth game learns about leverage so you say whats wrong with debt and you hit it debt it only hurts when you cant pay it back if you have a bond that goes from triple a to a double a plus to b you know bb plus and and that goes to triple b and this with this a junk bond what that really means is is we dont think the chance of that getting paid back are as good as an a bond right so the problem with debt is default so this guy warren mosler was trading some foreign bonds you know we have us bonds but theres bonds for spain and bonds for italy and you know the greece bonds were in the news few years ago and hes in this firm and and if you can get some arbitrage or you can get these right its a huge thing its like look theyre not going to default on these bonds because they can print money to pay them off how can a country a sovereign country default on their obligations when they can print money to pay them off all right let me stop you right there all right yeah so earlier if your money was based on gold you couldnt just print it to pay it off thats right you had to mine gold you had rules yeah you had exactly there had to be some value created first before right so now what hes saying is since gold is no longer needed you dont have to have the gold before you can print the money print away so their idea is that the idea of a deficit is no longer a scary thing in other words if we look at the us deficit right now a year ago well five a year ago coronavirus five months ago uh we had maybe approaching a trillion dollar deficit right around in there okay coronavirus hits okay well lets go out and borrow a bunch more now our deficit is over three trillion which is just astounding uh historically and that amount of money and to to have a trillion dollar deaths in the first place is you know huge and insane it seems and to say look you can triple that deficit from one trillion to three these numbers are astonishing and it doesnt matter and the reason the reason it doesnt matter is well just print it and whoever bought a us bond will not default because and theyre still double a plus rating theyre not triple anymore but double a plus rating saying yeah uh we can turn on the printing press and you know pay back these guys any time so here we get to borrow all this money you know we we dont have the taxes to to pay it back we borrow this money and we have this huge deficit how much we spend as opposed to how much you earn we can just print we can just borrow more essentially to just keep borrowing and borrowing borrowing and theres no ramification the deficit because we can print money paid off so let me ask you a question because we ed this with saying we didnt learn about money in school yeah one thing we did learn in school was supply and demand yes the more supply there is the less demand there is right and that is a dogma weve been taught since we were in diapers youre telling me i think youre telling me go ahead dont worry about the supply and demand thing just fly away and the demand still isnt going to get corrupt well no and this is their theory and thats like a perfect timed question greg because thats what you would ask you know if you were in one of warren moslers classes youd raise your hand and ask that and hed probably say great question lets talk about it so lets with this idea that lets say you and i are in a classroom with people ill use warren moslers own example lets say were in a classroom with people and we all decide that this dollar that we have is represented by gold and so we can trade dollars for whatever we want and its kind of like the people are in charge of what we think is valuable we all like gold so this has intrinsic value in that it represents something else its representative of something else that everyone agrees is valuable right and the government just kind of okay let you guys do your commerce and if you guys like gold were fine with it the government kind of sits there and watches us do business and say knock yourselves out and do commerce and invent stuff and innovate have a company well the way warren mosler literally teaches this not figuratively he literally says well heres my business card whats it worth and if im not interested in his business its worth nothing right right but heres where the demand comes from the demand now comes this is very important the demand now comes from authority and declaration rather than genuine belief of value in other words he says look heres heres where it becomes where these how do you get demand out of his business card your very question how do you make people demand these dollars how do you create a demand for this he says heres my business card no intrinsic values just a piece of paper but guido is out in the hall guidos out there and hes got a submachine gun and anyone that walks out here without handing him their exit ticket my business card uh they get shot thats literally how he teaches this okay so theres a penalty and the government can basically says look um you have to pay taxes so if you want to get rich and you can do your gold stuff and all that but you got to pay taxes you know what we dont care about gold anymore as a government we dont care about it we just care about us dollars so you if you want to live in this country and you want to do business then you better go out and get some us dollars because thats what were going to collect taxes from and if you dont have us dollars to give us these ones weve printed out of nothing if you dont go out and get a bunch of those or or use those well then two things happen youre in jail number one for not paying your taxes and b that allows us to have a monopoly on where it comes from which can make it more scarce than gold think about that you cant go like you and i ca like when zimbabwe blew up their currency people were going in the mountains theyre panning for gold guy finds a gold hes rich he went out did some work found something valuable and he can now go buy some bread with this goldie dug up because its valuable right uh the governments saying look we dont even care we dont want any barter at all no gold no nothing look were in charge of printing these us dollars and this is what you have to pay taxes in and if youre going to pay taxes then it has to be in us dollars so you better go find some and they can turn it off and print zero to where you couldnt find any and that would create huge demand for those that are already printed right and so they say look we can have authority to print a monopoly on wealth create on on currency creation a monopoly on currency creation you cant even go digging up the mountains you cant even find it anywhere else if youre going to live in our country and pay taxes these are the pieces of paper you have to pay him with and so you know you cant its tough to argue with that because if that were the case and guido is in the hall and he does have that gun uh absolutely those those uh theres gonna be a demand for those business cards uh for sure and what happens then is now instead of a persons ability to gain resources to create wealth that the government can now say well turn on the spigot well turn off the spigot and well decide how much money is out there and if we think theres not enough demand for our dollar well quit printing them and all of a sudden you go from a population of million to when they have babies now theres more people theres less money available and the government pulls their arms say well do we think theres enough demand for it theres not we wont print anymore and when we collect taxes well burn the tally sticks well just burn them in fact after we collect this we can go burn and put this currency in the shredder and say now theres even less for you guys to fight over to pay your taxes so yes sir you just talked about the power here really is the government gets the monopoly on money thats one of the things that inherently bothers me about it is that can we agree that theres a possibility that that empowers the government more than the people absolutely or the fed i should say but well yeah yeah well okay thats my next question if you if for the government to have monopoly this is a twopart question yeah one it sounds like the fed goes away because now the governments in charge of it well the fed is quasi government right and and whats weird about the fed is theyre kind of a government agency and kind of not um you know there might be called quasi government you know can the president tell the federal jury chairman what to do now the congress has oversight so theres some government control they have oversight and like last week jerome powell had to go and testify before the senate and then same week testify the i say and explain what hes doing and hes an appointee but how much power i mean thats a great question right and and the federal reserve probably doesnt go away because of how this money is printed and distributed there has to be some government branch or authority to declare monetary policy so the fed probably doesnt go away uh they just gain more power is is what happens okay but their power comes from being able to hold the monopoly yeah the reality is with shadow banking the fed makes a very small percentage of the actual dollars out there in the world so does this theory even work when you add digital to it and the paper itself isnt even printed and it does it does you know this gets into the weeds a little bit you have an m1 money supply an m2 money supply you have the actual money thats printed and then the electronic equivalent you know people are like freaking out because in part of the coronavirus bill the democrats wanted to experiment with crypto a us cryptocurrency im like you already got that you have a digital currency since you had a credit card right yeah every time you do an ach youre you know theres no dollars moving there so what happens is is the the shadow bankers can only create like lets say that uh you want to talk about fractional reserve lending where its really worth getting that yeah where someone deposits a hundred dollars and they can land loan out a certain like percent of that and then that gets deposited somewhere and they can run out of that right so now the banks are making money and not the government but but the fed yeah which is fine with the government they want banks to make money but they can change that one of the powers the federal reserve have is to tweak that reserve requirement thats one of their powers so they still retain control over that because they can declare the rules by which fractional reserve lending can happen okay and most people think its exponentially growing its not it actually diminishes when it changes thats one of the big misnomers is they think if its a fraction reserve that they can you know loan out uh nine dollars for every dollar they have no they can take a large percent of it and loan it out and then as soon as thats deposited that can be nine percent loaned out so ten times down the road the amount does shrink but it does create money and it does create uh deposits and and uh yeah that is part of my creation but the fed can control that you know with they have the power to tweak the the reserve rate and so and so heres heres the issue when you think about this in terms of dogma like you said theres theres several camps you might find yourself in you can say well printing money isnt going to work its not going to work modern monetary theory is flawed it doesnt work um i dont know whether it does or not im not willing to to say oh no its got to be backed by gold and you know im a diehard libertarian thats where i feel you know rahrahrah sound money im more afraid im not really afraid of it not working im actually more afraid that it would work because if it works the transfer of power to the government and to the fed is unprecedented because now you have human beings in charge of policy kind of think of it you know its its like the reason people like crypto so much is its blockchain right its not controlled as much by people um here if its backed by gold its kind of well we all agree its valuable but the modern monetary theorists say look a dollar has no intrinsic value only what we declare that it that it need how many of these we decide to be out there you know were going to control the spine demand so if you look at you know it historically and youre honest um in the year you know we melting down and so they print money and silver goes to silver goes to an ounce because everyone thought that the mmt the printing of the money was going to hyperinflate us it was zimbabwe and all this type of stuff another view of hyperinflation if you want to control people and you want the government really get control like in venezuela hyperinflate on purpose because if you take control of peoples money now theyre dependent on you for food right so its a way to gain control but what really happened in if you look at the consumer price index um you know theres uh oh who is it cant remember the famous economist nobel prize guy hell even show this on on fred on the st louis fed site you see money creation going exponential consumer price index is steady and so you have years now about eight years now of massive money printing trillions of dollars uh doubling and tripling the money supply no inflation so they say well it all went into the stock market well yeah it all did and it propped up the stock market this can create a detachment from fundamentals i guess is what im saying is if all sudden the fed s printing money to buy stocks just to buy stocks for the sake of creating demand for stocks is there any underlying value in those stocks and so i see a lot of problems that not that it wouldnt work but that do you really want to have that much power so that brings us full circle back to education is what what this podcast i think would really be about today greg is uh do most people even understand this conversation and do most people understand that this currency this mmt theory is being enacted more and more and more are they aware of what it is did they learn about it in school can they talk intelligently about what fiat currencies are in that jargon of money out of nothing and are we just asleep at the wheel with distractions of of other things on cnn and nbc msnbc and fox you know all that noise were behind the scene were doing modern monetary theory what was funny is everyone thought that was a bernie sanders thing oh were gonna have free school were gonna have free health care were gonna have tuition free stuff well how are you gonna pay for it well simple well borrow the money well how are you going to pay it back well simple well print okay and and why couldnt you because now your deficit is never a problem anymore now you can run deficit and if you talk to them theyll say all right well look at japan their debt to gdp ratios its been there for years their economys no inflation no inflation so you basically say look deficits are no longer a worry and thats so hard for us to understand and the reason its hard for us to wrap our head around it is you and i dont get to do that in our business we dont get to do that in our household and what the what the mmt people say is well yeah you cant do it because you cant print but we have authority to print that you dont have therefore we forget to play by different rules so you know the the the red deep republicans and the libertarians are going to say well you know if i ran my business like the government id be bankrupt in a week and you would but they play by different rules so how can you impose the rules of basketball into a football game you cant and the mmt guys will say look at japan look at the mmt we did look at the money we printed years ago it saved our economy they all theyll say ben bernanke saved us and uh if he had what would have happened if they wouldnt have printed that money greg what would have happened to the financial markets if they said look these guys deserve to fail probably a great depression they did use this poorly so now this power of the government they get to decide who lives and who dies they get inside who gets bailed out and who doesnt they get to borrow whatever kind of money they want and and i just i dont trust men to do that i dont trust men that theyll always make those great decisions because globally now yeah i can tax the uf citizens as government greenbacks well globally you look at china and you say hey china you have all these things that are made in china all these little things with taxes made in china okay whos going to buy them from you if you want to be a net exporter and have a trade deficit and export out more than you import uh okay thats fine but whos going to buy your stuff well the wealthy countries wheres the wealthiest country in the world united states all right you want to do business with us better do it in us dollars then better so now you know i dont know how long term that works and what if they out printing us and now its a contest of whose currency is the least ugly girl in the beauty contest which is really why the dollar is strong its what you want what do you want you want you want uh euros right now i dont but you want you want pesos right now i dont a sing dollar might be something i want maybe i want to sing dollar and so this idea of detachment from basic fundamental value is hard for people to get their their head around me i im not in the dogma that says this isnt going to work were going to have hyperinflation its going to melt down our money um i dont know what im worried about is the transfer of power that much power in one entity to control the money system to that degree and the the flippant saying look we dont care about deficits thats not going to matter i worry about that so i i got a bunch of questions for you but one like you mentioned with the mmt the the federal reserve stays in charge so i dont know that you really shifted any power i think they already have it they certainly are doing it now greg um we look everything that the mmt theorists believe in were doing so it isnt like were thinking about changing we have yeah and the first yeah we are um richard duncan whos a friend of mine uh he calls it he says capitalisms dead he says its called creditism and really think about this we talk you mentioned supply and demand well you can actually create demand by enabling people to buy think about this why why dont why dont you have a you know square foot home and ferraris well its because you might not be able to write a check for that right now right i know i cant buy you know ferraris right now you know and feel good about living in a square foot home so think about this greg what would happen to the home prices if you created a law that said debt is bad you cant go into debt for a house what would that do to the supply or to the demand for housing uh the no more mortgages you got to pay cash if you want a home got to pay cash for it no ones going to do it why they they couldnt right so the demand for housing is born out of ability to buy a house if you take away their credit and their ability to buy a house then theres no demand for housing so if you want people to buy houses what do you do you drop interest rates down you print money and you give them the ability to buy the house on credit and when they buy that house on credit well it shows up as a liability on their balance sheet but that borrowed money becomes real money in the contractors asset column in the banks asset column in the electricians asset column so you take credit in one thing where you have desert but you create assets for everybody else that are real right and so has it worked and and think about this has credit ism worked in the real estate market has have has wealth gone up has quality of life gone up and are people happier in homes rather than slums absolutely so the idea of eliminating creditism in getting stuff and paying for it later is a is a sound idea its a sound idea now think about this what if you remove student loans what would happen to tuition if you you could not borrow to go to school yeah no more student loans what would happen to tuition well itd have to drop to be pennies it would drop it would drop so part of the reason i believe that tuition is increased is now youve empowered unemployed unexperienced noncredit people with no credit rating at years old to borrow well if you give people that kind of buying power now the demand isnt just in their heart the demand is actually real they can pay for it thats going to be more people going to college thats going to be more competition to get into usc and the tuition goes up and the hollywood people got to bribe the admissions people to get their kids in right so creditism does work um and when you enable people to buy what they want and this is just expanding from real estate into tuition into the stock market and other things and if you have credit expanding your empower people to buy more things and as long as they pay it back its fine theres nothing wrong with the student loan if you pay it back because you get a better education you have you have more you have a degree youre going to get a better job youre going to pay it back just like a house youre going to as long as you can pay it its fine well the same theyre gonna make the same argument with printing money its interesting discussion right yeah yeah but excuse me you gave examples of first we said theres no real inflation but then we gave examples of inflation caused by the whatd you call it criticism yeah and and heres whats amazing heres whats amazing about that power and why the mmt people like it is you get to you dont just say well its general inflation if you get to choose where the printed money goes not only can you print how much every money you want you get to choose what goes up what goes down i have the feeling that the rich are going to get richer because those in power theyre going to take all this money and use it to buy stocks which will take the stocks where higher inflation well if you own stocks thats fantastic okay you just got to where i want to go on the show all right mmt the the governments printing all the money they want yep and when the stock market crashes they flood the stock market with money right thats exactly what happened in coronavirus exactly and theyre doing that because the government is really run by the rich the elite people and theyre protecting their own butts itd be hard to argue that so mmt theory here if you wanted to put your money your time your energy your thoughts into the the best possible place you should be putting everything towards the stock market because its going to be protected by the people running this mmt crap yeah its hard to argue with that to to say that there could be a even bigger boom before i mean the bust would be a bust would be if mmt doesnt work long term and it it falls to pieces right it just its so crazy or something unforeseen happens but as long but they have shown a pretty much a commitment that theyre going to prop up this stock market right and its going to have volatility uh because thats how rich make money they get on the short side down alongside up the biggest message is is our well heres thing i say greg the biggest message what percentage of the population just in the united states let alone globally what percentage population even knows what were talking about right now and has it top of mind less than one percent less than far less than one percent less than one out of a thousand less than a tenth of a percent but its not that theyre stupid its that its so hard to take something like this and relate it to your daytoday life like like it almost has no value in my data i mean clearly it does the example they cant see it though you cant see it at all thats not on the radar yep when you made that statement that they put the money into the stock market to keep it propped up all of a sudden my bells went off of how i can actually use this for my own personal gain because now i see the stock market not as the casino and gambling i see it now as oh you really can almost project that eight to ten percent growth every year because these money monopoly people at mmt are making sure and well that knowledge helps me personally i think it does i think i think it helps me i know that i i dont know that id say well its going to be percent i dont know if i can guarantee that but i will tell you this greg right now in my with my instructors my team uh the guys that i work with our top priority is the fed and paying attention to what they do because this market is is manipulated by the fed now they say that their mandate is not stocks they say that um and they say look our mandate is full employment which you can do by flooding the mark with money hey you can create jobs and grow lets say you want to create a bunch of jobs borrow a bunch of money and rebuild all the highways you want to create jobs borrow a bunch of money make tuition free you want to create a bunch of jobs uh make health care free to people but its paid with debt and deficit spending so imagine that you can pay all the doctors you want and increase the health care hire all the signs you want solve cancer make people smarter and all these doctors get well paid because its being paid for with borrowed money and the and the consumers dont have to go out and earn money they could its just free its just government its fascinating its very attractive to voters because its you know free lunch its oh i get education i get health care i get all the stuff government pays for it through the deficit and they print money to pay off the the loans and it just expands so you said something else there that sorry no no its a great discussion yeah yeah but you just you just showed the government interest really is in the healthcare field their their mandate is not their mandate is full employment and price stabilization thats their dual mandate we want full employment and we want we can we can get full employment by borrowing buying bonds which lets them borrow more and have programs but you see once again that the power of the government now instead of capitalism saying look i have great health care come to me with your dollars and go out and work hard and labor so you can have talk like robert kiyosaki his his personal physician and i dont know what she charges for visit but i bet its 5gs he doesnt need insurance so go on be rich she can have top quality health care what bernie sanders would say is no everyone deserves that so lets borrow the money so you see the transfer of government control over your life now they decide i get that but to me the government its very clear the government wants everyone educated and in college the government wants everyones medical needs met probably for their own selfish reasons so they get reelected but for whatever reason whatever reason and the government is using this mmt theory so what are the two safest places to put your money education and the medical field because the governments gonna keep those propped up as they keep the stocks propped up its like a double safety net you you you know the the fear is in the dogma is will it work and bad systems can work for example whats one of the things like whats way heinous um egypt uh egypt has the hebrews enslaved for two thousand years thats two millennia of a system that worked for the egyptians great and finally you know freedom works its way into things right freedom from bondage so whats interesting is is the human being has to trade decide if they want freedom or security if you want freedom you have to take your own responsibility with that that comes with making choices and consequence if you want security your risk is youll be subservient to the power if you give government health care control then theyll then the quality of your health care will no longer be based on supply and demand itll be based on what they say it is stocks janet yellen former fed chair like you talk about practical knowledge i would learn about the stock market you know i i would really be more on education now than decision i know that people are hungry for practicality oh andy like everyone wants a piece of information like okay this is what i do oh theyre going to put money into health care ill buy those stocks its not that simple no and i do get that and i did oversimplify that but what im trying to show is to the there is a practical reason to understand what what youre talking about yes yes all of my decisions right now are through the lens of of monty printing mmt and the federal reserve and and you know people say andy unemployments higher than it was in the depression uh manufacturing is down consider you have something called a producers index a manufacturing index where if youre going to be a manufacturer and you use debt to borrow money to get raw materials you better manufacture them knowing that theyll be sold well because of all the money stopping and the currency stopping in the business shutting down these manufacturers say im not going to build stuff right now because im not going to build stuff that i dont think can be sold right so every number i see every number i see says run from the stock market as fast as you can but one number mmt im not gonna fight that so even though as a fundamental analyst i see horrific numbers in every category you can imagine except tech horrific numbers knowing that the government can pump money into a market makes me say im not going to fight that even though i think the fundamentals might not be there im not going to fight this so learning fundamentals on three levels the sovereign level which weve been talking about sovereign power okay the corporate level how well the companys doing right now thats in the you know pooper and then individual fundamentals right right there cant i i just if if the people listening can hear this youre at a crossroads youre at a very important time in history was a big deal because we had the ability to mmt but see now were doing it and now we have a global pandemic that has put us in such a strain that thats where were going were going to do it before it was like vote for bernie sanders get your health care free now its like no coronavirus is here governments got to step up and do stuff if it hadnt wed be in oh wed be in a if they hadnt printed this trillion can you imagine the mess wed be in two three trillion has an impact how do you fight that as a trader thats why im interested in stocks you know thats why im interested how you gonna fight two trillion dollars three trillion dollars when the deficit was only a trillion before thats so much money infused yeah in this economy so utah he taught us a bunch on the show he taught us the basics of mmt yeah you also taught us you know where money originally came from and if i was to take the two of those i would say to where money came from really was focused on the fundamentals it was and where it is now with mmt its really technical does that change the way as a stock trader you study stocks do you now give the technical side more uh no weight than the fundamental when youre at all ive always as technicals have always told the truth no matter because i mean fundamentals you can get overvalued like the tech like the dotcom bubble is the same thing the dotcom bubble was why did the prices get so high of these tech stocks in the dotcom bubble if theres no value behind splinter man money being pumped in what caused these tech companies get insanely high money pumped in so this is old stuff right you had to trade your chart because your chart told the truth even though the the the fundamentals did not justify those high dot coms the fact was they were high werent they and they were justified by the supply and demand the technical movements the charge caused charts to go up supply and demand so even though the companies themselves werent not impressive in their balance sheets the amount of money being thrown at them and speculation did drive them higher and uh and so thats why i dont lean more on one on the other i need to understand them both because if i see fundamentally the value isnt there but i see technically money is going to be poured in i cannot use those fundamentals but if i see that the fundamentals are awesome and the stock price is really really low oh my gosh im buying that company im warren buffett im buying value im buying it because i think someday that money will follow the the the problem is it screws up commerce doesnt it because whats valuable now is it valuable you know is the healthcare cost high because its really high quality healthcare or is the healthcare cost high simply because we can put a bunch of money at it and since now everyone can buy it it drives the price up higher not because its valuable because everybody has access yeah absolutely you know it it is theory it is not modern monetary fact it is modern monetary theory we dont know what the facts are but ill tell you what were gonna find out greg and by the way all this money we printed ing in like march its spent uh july i i ill give a prediction right here therell be another trillion dollars uh package of borrowed money congress will pass it by july because two things are happening number one all the money we printed now has been spent its in the economy so that helped keep it circulating right everything stopped no moneys being spent no one had any give them a bunch of money then theyll spend it again thats going to stop again in july and if they dont do another stimulus package and coronavirus is not going away its its actually i mean arizona where you live youre the new you new york now down there bro oh yeah new york theyre st its ing to happen in phoenix uh where they dont whos whos got whos gonna get the villain later now who gets the ventilator so im just going to say it one more time theres nothing more important than a listener of this podcast to be into google study it on your own google warren mosler right google these mnt guys and and learn about it but also you know google the ed griffins and and google the the peter schiffs and google the robert kiyosakis to say hey you cant print money out of nothing it doesnt work and get to the edge where you understand both sides which which is probably how we should would end this is one of the things robert always says is your job isnt always to try to change the government but your job is to understand the rules and once you know the rules you now you can make the money you couldnt have ended it better greg um i dont agree with mmt at all i dont im not a proponent of it im more of a capitalist i like the idea of value being intrinsically part of my currency i im very much a libertarian in that view but the reality of it is is i need to play the game by the rules that im given and if the rules say were going to dump money in the stock market then i have to seriously look at getting exposure to stocks to benefit from that and thats why you stand on the edge of the coin so you can see both without your emotions as best i can yeah the problem is the coins always in the air flipping and i get dizzy and i and you know you and i are the same greg and that were students you know someone listening this podcast what i hope they get out of is like okay this is thought provoking i want to study i wouldnt want them to say dont dont let anything i say become dogma please like im a student just like everybody else ive have made money ive lost money you know im ive never been in mmt anymore than anyone else on wall street has you know theres this idea that theyre smarter than me i dont believe that anymore right im as smart as i want to make myself so the the message is not well should i buy stocks or should i not the message is if you would if you get educated there will be a practical application for you to make better decisions because if you dont know what the fed is and you dont understand mnt and thats what we doing and you trade on the fundamentals youre probably going to be pulling your money out and missing you know big ups or and if you dont know how to hedge you could get killed by big downs its certainly going to cause more volatility we know that thats the other thing robert says the greatest asset is the knowledge you put into your mind i think it is um asset number one knowledge and maybe asset a close second is each other were your community can be a great asset your community can be a liability too hey eddie thank you so much once again i really appreciate you love these shots every week greg i hope people are getting gained something from these important topics me too i know i do im glad im bald so i dont pull my hair out but i know i dont be sleeping tonight either so awesome girl thanks bye you '
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