Are We Headed Toward Next GREAT DEPRESSION ?

Are We Headed Toward Next GREAT DEPRESSION ?


so your first talking point is we could be heading for a great depression talk about that and the significance of what of what bitcoin’s gonna play in that yeah man i’m i’m like i’m curious what you think about that before i start going do you do you think we’re at the precipice of some sort of big systemic crisis here do you think they’re just going to print their way out of it and we’re going to i think they’re going to try to print their way out of it i don’t think the government’s ever going to get out of debt like never ever ever ever uh it’s not happened at the levels that they’re going at um let me just grab the m1 money supply chart because that’s probably relevant um i’m sure you already know what this is but for the viewers that don’t this is worth just throwing up on the screen too so if you’re not familiar this is this is 2019 ending here and then this is all the money that was printed in 2020.

So you know what happened right there when that parabolic rise started yeah talk about that so in 2019 i mean we’re seeing the stock market just continue to go up and up and up over uh trump’s presidency and you know with you know lowering tax rates and and printing money and stimulus and all that stuff but really presidents don’t have much of an impact on the stock market it’s really the the central bankers and the federal reserve and the and the manipulation of the interest rates that controls the stock market so when when 2019 um september 2019 um there was this thing that happened which was like a real big crack showed up in the financial markets to show that everything that did that they did over the last 10 years to try to paper over the 2008 uh subprime mortgage collapse didn’t work so in 2008 the regulators globally cr came together and created these basel accords which are kind of like a set of regulations that that are like stress tests for the for the central banks and the systemically important banks like the big huge banks and these things are like you’ve got to have a certain amount of reserves backing the money in your depo in your accounts for your customers so much risk with your commercial banking um you’re going to meet a certain amount of uh expected 30-day withdrawals for for uh you know normal activities so that the banks basically can’t be too over levered like they were in 2008 which which ended up causing the whole thing to melt down right the banks if everybody hasn’t watched the big short obviously it’s a great sort of dramatic take on what happens pretty much truly what happened yeah that’s on netflix too still i think yeah it is and and they in and they basically discovered that there’s this kind of fraud happening on wall street where the ratings agencies like standard and poor’s were just taking fees from the big banks to make these extremely toxic risky derivatives products that they would then go and sell to other banks and to pension funds and to other investors and they would they would mix toxic assets with good assets so they take like triple a rated stuff like government bonds right you think the us debt is a triple a rated asset it’s not going to bankrupt you know but they would stack that in with toxic like subprime mortgages and bets derivative bets synthetic bets on subprime mortgages so it creates this toxic basket that everybody thinks is good and then they sell it to each other and then banks have this thing called the repo market it’s an overnight lending window where banks can borrow money from each other and not just borrow money but these derivative instruments so i’m trying not to get too deep into it to confuse people but just say that these banks are gambling with each other and they’re they’re lending each other base money so this m2 money or m1 money supply here there’s layers of money in the system there’s m0 which is base layer money you think that that’s the seed of money it’s real dollars it’s stuff that the federal reserve and the treasury creates and then banks can fractionally lend it out to each other and to people and then take loans on it and fractional reserve that up into the m1 money supply so that like a hundred dollars of base money a thousand dollars of m1 and m2 money and go ahead so sorry i’m just going to jump in here and just kind of like uh distill it down a little bit because i’m going to keep it at the basics level um so when i look at this chart i’m looking at the billions of dollars that have been printed and this is you know where the cursor is right now it’s uh january 2020 so let’s say the start of 2020 says january 6 here as i drag the cursor across here you can see all the years we’re at 2010 20 2005 2000 all the way down to 1980.

They have printed a ton of money about a third it looks like because i went from four thousand to seven thousand billions of dollars is what it says here yeah it’s trillions it’s trillions of dollars yeah like this is insane like you cannot fathom what kind of effect this is going to have on the marketplace the stock like it doesn’t look like it’s had much of you know like much of a effect from the user’s end like you know you still go to the gas station and gas pretty much costs the same you want to buy a loaf of bread is pretty much the same everything’s kind of like you know you don’t really notice it but the thing that most people understand is that the value like the purchasing value of your dollar keeps going down over time because they keep making more money they keep printing it out of thin air which which is one of the problems that um bitcoin solves because there’s a limited supply there’s only ever going to be 21 million of these things i heard somewhere that because one of the one of the things that i’ve heard people protest is well what happens when they run out of mining bitcoin and i think somewhere i came across the stat where they’re saying that um because of each having event every four odd years or so they’re legitimately going to be mining this stuff until uh like 2150 or something like that yeah there’s not really a risk that bitcoin’s gonna run out of like security the miners are big pretty well paid security guards for the bitcoin network and it’s the biggest like most secure network on the planet has more computing power than the nsa and the cia and the government of china and the america and google and facebook all put together there’s more there’s more decentralized computing power securing bitcoin than ever anything else on the planet so that’s a really well paid uh system of of compute power and there’s also transaction fees inside of every bitcoin transaction so there’s kind of like a a mathematical formula that that shows that the fees are going to replace the block reward probably in around 10 years or so so we’re not really going to have to worry about it because the miners are still going to want to process bitcoin transactions because they’re they’re not going to be paid bitcoin from the the block reward anymore but they’re gonna be paid bitcoin in every block with fees from people like you and me who are using bitcoin and paying fees to the miners right so satoshi created this uh this this system of game theory incentives with putting 50 bitcoins bounties in every block when it was launched because there was no fees no one was using it so there was no fees there so he had to reward people somehow so he created the way to issue the whole supply over 100 years via block rewards and then we got to the point now where it’s like the fourth epoch of bitcoin where the having is not for another three years and there’s 6.25 bitcoin now being issued in every block that’s enough to like incentivize it to be the biggest computing network on the planet and as the fees as the price of bitcoin goes up and as millions and millions of more people come onto the bitcoin network the fees will eventually replace the block reward and as as bitcoin price goes up so do the fees so that’s why bitcoin like that’s why i’d say that in the next 20 years or so most of the block reward bitcoins are gonna be already issued and then at that point it’ll be fees securing the network more so than the block reward for the next hundred years or whatever that makes sense okay so let’s go back to that point of we could be heading for the great depression um so not charged man like what do you think’s gonna happen and my view is the government’s never gonna get out of debt they’re gonna keep printing money i feel like that the great depression should have happened already you feel like it’s long overdue but it never seems to come right so what’s your what’s your position on that well like we’re seeing a show up in that chart that you just showed like they don’t really have many tools left in 2008 they they had the tool of printing money and that’s what they did they printed four or five trillion dollars and did the quantitative easing the bailouts of wall street and and all the big corporations that were taking too much risk and and got bailed out by the taxpayer and then they kept this this overnight uh lending window open but they weren’t using it so they were trying to say we’re not doing quantitative easing anymore the markets are healthy look the basil the basal the basil three requirements are getting put in the banks have stress tests they’re passing them so then in in september 2019 right before that tick in the chart the banks stopped lending to each other and the and the interest rate shot up to eight to ten percent and while the prime rates like the the central bank rate was like point five percent and they tried to raise the interest rate a little bit because the only thing to stop um to stop printing money what they have to do is they have to raise the interest rates because then they can like when the rates go higher people will borrow less like the banks will borrow less and they’ll do less risky derivative stuff because it’s actually more expensive to take bets but when the rates are low it encourages a lot of a lot of like risky stuff to happen in the markets and 2010 2008 gave uh gave all the bankers basically the permission to take as much risk as they wanted because they knew that when they blew up the system they get bailed out and so what did they do in 2019 when the rates went up a smidge like 0.25 percent they tried to raise them a little tiny bit the banks just started to blow up they started to stop landing thing that caused the whole credit crunch in 2018 2008 so they quickly said like we’re gonna give you as much money as you want okay the overnight window is open anybody can take money and they started printing hundreds of billions of dollars of base money like the m0 money that can then be fractionally reserved into bill trillions of dollars through lending and through the the money multiplier so it took a few months to see it but then it’s not just the federal reserve printing money that caused that parabolic rise that’s part of it but it’s also the federal reserve is more like sinister like in the way that they’re just printing money directly into the bank accounts through the overnight repo markets and it’s continuing ongoing quantitative easing now what this does is like it doesn’t let banks fail it doesn’t let companies fail it just lets them continue to do the same risky toxic behavior that caused the 2008 collapse and caused the march crisis when when we saw everything drop like crazy in march it’s because they they didn’t actually get to the point where they could pass the stress tests so they tried they had 10 years to get up like the proper liquidity reserves and proper risk management protocols and everything and then when the date came that they had to actually put them put them in in place the whole thing fell apart and the they had to print six trillion dollars to bail everybody out and they’ve suspended all requirements for any systemically important bank to have to meet any of the stress tests so they don’t need to even have any percent reserves anymore so literally the money in your bank how long can it go on yeah you know before the whole thing collapses on itself well that’s the thing that that that’s why like we could be heading for great depression 2.0 because this does not make any sense that this is that money itself can just be printed and inflated 25 like this and a parabolic like scale and that it wouldn’t cause some kind of hyperinflation like this is what happened in weimar germany like they got they got they got ahead of themselves with the money printing i think we’re headed for that type of level of hyperinflation like you see in argentina or venezuela or lebanon or something like that that happened over the last few years because we got a like there’s there’s a few tools they have left there’s countries in the world where the interest rates have actually gone negative and they’ve been toying with that in europe and japan for a while so we could see negative interest rates before we see hyperinflation because they do have a few tools left in the tool belt to like what we’re seeing actually today with all the stock shenanigans going on with gamestop those are some more tools that they have they can actually like before we see great depression or or uh like hyperinflation here’s some things they can do they can print another 10 trillion dollars right like that’s not going to cause hyperinflation it’s just going to continue to allow them to kick the can down the road for another few years they can print 10 more trillion dollars they can they can lower interest rates into the negative territory they can write off half your student loan debt they can give everybody um zero percent mortgages to stimulate people to go buy and lower the the um down payment requirements for for a year say they can do some sort of um stimulus like they’ve been doing like direct payments into people’s bank accounts and like you know they could double everybody’s credit cards like if you’ve got a ten thousand dollar limit on your credit card they could say all like this is like a jet debt jubilee sort of thing where you everybody now has an expert go in and just take money from people like just to you know deny them access to their bank accounts and liquidate balances right like we’ve seen was it cyprus or greece that did that yeah cyprus and greece did that cyprus greece did a uh the sovereign default on their debt and all the all the wealthy people that had like a lot of money in banks just woke up to half their money was just gone so so like that’s another that’s one that’s a darker path we can go down is like okay the the one thing they can do to stop a global depression is to switch to modern monetary theory and like do a lot of debt forgiveness and stimulation but they’re kind of already like to the point where the biggest metric you want to look for that is the uh debt to gdp ratio and and like we’re at like 130 debt to gdp gdp to debt i’m sorry debt gdp and that’s the highest it’s ever been in history like before the big difference between now and before and other times during the depression and world war ii and things like that is that they had they didn’t use up any of these tools yet like they didn’t do massive stimulus they didn’t do interest rates low like back then the interest rates were so high that they could actually taper the interest rates down to like three percent or something and that would help the economy but now they’ve used nearly everything in the tool belt and and they’ve jacked up the gd like they’ve jacked up the debt rate so high that it’s 130 percent or something debt to gdp where that’s that’s bigger than it was in during world war ii so there’s not even a really systemic global emergency happening like could you imagine if there was a world war breakout or something right now they don’t have the ability to lower the interest rates much more at all they don’t have the ability to print more money it’s because then that would put us to a 200 percent that the gdp and that’s just like it’s already uncharted territory we’re at the precipice right now of some huge systemic shift and it’s going to either be a good thing or a bad thing yeah so i’m hoping it’s the good thing i’m hoping it’s not great depression but man it’s uh well okay so let’s move on so i mean like what he’s basically saying there is if you take all the ingredients of what’s going on in the economic world today and you put it in a blender and turn that thing on you’re basically going to pour yourself a nice shake okay that’s what we’re dealing with you

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Charles Lamm

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