1789: Heresy Financial with Joe Brown, Securing Your Financial Future, FED & Quantitative Easing (QE) , REPO Market, Yield Curve Control, Universal Basic Income

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Welcome to episode 1789. 1789 and today our guest will be Joe Brown with Heresy Financial. I am in the airport here in Houston on my way back home to Palm beach after a great weekend speaking at the Rebel Capitalist Live event. I will be sharing some, if not all of that speech with you here on the show and I think you'll really enjoy it because it included my predictions for this year and several years beyond. I think some of those will definitely surprise you. Be sure to get your tickets for our Creating Wealth Virtual event coming up in just a couple of weeks. Go to jasonhartman.com and right at the top of the front page you can get your tickets for our Creating Wealth Virtual event. It's all on Zoom. So super convenient. And it's over two days and we will probably actually be adding a follow up implementation session to that event for free. So be sure to get your tickets today@jasonpartman.com let's hear from Joe and I think you'll enjoy this interview. It is my pleasure to welcome Joe Brown. You may have seen his videos on YouTube. He does a great job explaining complex financial topics and making them simple. After about five years in the financial services industry, he witnessed too many people paying too much in fees for the typical bad advice that you get from the Wall street folks. And so he's now the founder of Heresy Financial, and he just wants to equip people with more control to protect their wealth and not be vulnerable to these crazy things we have going on in the marketplace. So it's a great pleasure to have them. Joe, welcome. How are you?

Thank you very well. Thanks for having me, Jason. I'm excited to be here.

And you're coming to us from my old hometown, the greater Phoenix area, right?

Yep. Phoenix, Arizona, where it's warm and sunny all year round.

That's right. That's right. Well, hey, you know, maybe we'll just start by asking you, what are you thinking about nowadays mostly? Are you thinking about rates going up, you know, or. And more tapering? And by the way, I think the tapering term is quite misused or misleading because it's just a difference from the crazy activity they have been engaging in at the Fed. But why don't you take it away with whatever is on your mind nowadays and we'll start there?

Yeah, absolutely. If you look at the past couple of years, five, six years or so, with what the Federal Reserve has been doing, you know, it's all, it's all mixed up with politics. Right. And so when Yellen was chair of the Fed, she was tightening or, I'm sorry, she was continuing to try to get there. Same thing with Bernanke before. They were continuing to try little things like, hey, we're going to try raising interest rates, we're going to stop lowering interest rates or we're going to start, we're going to stop buying assets, we're going to start selling assets. And if you plot, look at the times that they tried to tighten or at least pull back on the easing. The markets couldn't handle it every time they tried. And then suddenly you had a newcomer come into the White House who the market then started to price in tax Cuts and Jobs Act. And so that gave the Federal Reserve room to say, hey, the economy is going to have this extra revenue basically from my taxes going down. And so we have room to pull some of that money out of the economy without it crushing the economy. So that's when taper.

So this is, this is Trump you're referring to, obviously, right? Yeah.

Correct. Yeah. So this is when they released, if you look at their, the Fed's balance sheet, that's when they really started to taper their balance sheet. Back in that day, taper meant sell assets off of their balance sheet. Well, that quickly got to the point where they're tightening. They could, they couldn't keep that up end of 2018, markets had a taper tantrum, so they had to reverse course. Fast forward nine months to September of 2019. We had a repo market collapse. Overnight. Lending dried up. In order for financial institutions to get their hands on cash, the repo market, they were paying exorbitant rates. Federal Reserve had to step in and start injecting cash into the repo market to prevent a systemic financial collapse. That's when QE Infinity started.

Go ahead. Right, okay. And just let me stop you there. And please remember what you were going to say next. But I just want to make sure we explain repo a little bit. You know, banks, financial institutions, lending to each other, and it's the repurchase market. And it's super interesting to me when I put on my conspiracy hat that right after that market was completely about to collapse, the economy, possibly, I mean, the global economy, like it was a serious deal. Then suddenly we get this Covid thing, you know, that. That just. The timing seems too unusual to me, but that's a rabbit hole. Anyway, what. What do you want to say about the. And the meaning, the power, the importance of that?

Yeah, absolutely. Well, in terms of malevolence or incompetence, usually they have the same results. So I'm always okay attributing things to incompetence because look at the results. It doesn't matter either way. And to be honest, the incompetence that's demonstrated from bureaucrats makes me skeptical of malevolence at the scale that they could actually plan out and go through with a plan that would result in the same things as just pure incompetence. So that's kind of my take on, you know, the planning things. I think it was very, very convenient, though, that that happened. Like you said, the repo market, it's a pawn shop, basically. So financial institutions don't have enough cash on hand usually to make it through to the next couple of days. They have a lot of assets on hand, and then some other ones have a lot of cash on hand. So they go to each other every night and they say, hey, I've got some assets, but I need some cash. I will sell this asset to you in exchange for some cash so I can pay my bills overnight. And then it's a repurchase market. Repo market, repurchase agreement. I promise that I will repurchase that asset from you with cash, that cash at a later point. Well, in the end Of September of 2019, there was not enough cash in the system. Everybody had a ton of assets, a ton of collateral, a ton of US Treasuries. Nobody had cash. Everybody was going to each other trying to get cash, but nobody had it. And so that's when the Federal Reserve stepped in and said, okay, well, we'll just print money and we'll, we'll inject it into the repo market so that everybody can have cash. So that you don't have a Lehman event where somebody just collects because nobody had the cash to lend. And that's when QE Infinity started, but they weren't able to do or that's when not QE started because they were doing just short term QE short term bills. And they didn't have the excuse to start monetizing a ton of government debt at that time. And so Covid gave them the excuse to start monetizing a ton of government debt, which they needed to do because the market was not able to sustain the weight of the government's debt. And so they had to take a lot of that off the economy's hands by printing money. So now we're at the point where they've been spending the last year and a half, two years, expanding the money supply more than they ever have. At a time when the government is more indebted than it's ever been, at a time when rates are at the lowest they've ever been, at a time when the economy is the most over leveraged it's ever been. It's got the most debt from corporations and the government at a time when that debt is the cheapest in history, right on the backs of the largest monetary expansion in US history. So we're at this point now where that has triggered some very high inflation numbers. All the people saying deflation have been proven wrong, or if they don't know it yet, they've been just burying their head under the sand because they don't realize how expensive life has gotten for almost every single American. And because of this, the Federal Reserve is in a very different place than they were in 2018. In 2018, they were under a lot of political pressure to stop tanking the markets. That is all the political pressure they were getting was stop tanking the markets. And so they reversed course. Right now the pressure on the Federal Reserve is get inflation under control because all they've been focusing on is full employment and inflation has started to run out of control. And so their pressure right now is get inflation under control. So they are taping tapering, but it's a different taper than what it used to be. Used to be taper meant taper their balance sheet. That means sell assets. That means give the economy back an asset and take cash that's deflationary, that withdraws, that contracts the money supply.

And now it just means buy less.

Buy less. Because they were buying 120 billion a month, that's expanded money supply by $120 billion a month. And now they're tapering their purchases until they get to zero. So November, which was right on schedule, they bought $75 billion worth of assets. December, they'll probably purchase a similar amount. And they are planning right now to stop purchasing by March.

Okay, so these are still extraordinary numbers right now. And if by March they go from 75 billion a month to zero, what is that going to do? That's scary. That might just change a lot of things, right?

Yeah. Especially considering the fact that they're saying they have to get to zero purchases before they start raising interest rates. And they want to raise interest rates, let's say three times during 2022. It'll only be a quarter of a percent at a time. But when you consider the fact that we have got the most over leveraged economy in history with the lowest interest rates in history, that means all the debt that governments and corporations have on their books, they're just taking on new debt to pay off that old debt. Well, what happens when that debt service goes from paying rolling over at 0% or 1% to 2% or 3%? Because it's a huge change. Many will not be able to afford the increase in interest rates. And so the question is not a matter of if the Fed will spark a crash, will cause the stock market to crash, will cause some economic pain. The question is when and how much before they reverse course.

And I want people to understand something. It's obviously simple math, I'm about to say, but just, you know, when people talk about rates, like Joe said, he said, oh, it'll just be a quarter percent, you know, 25 basis points. Right. But you know, when you're talking about an overall three rate increase of one and a half percent on a base that say for mortgage rates is 3%, that's a 50% increase. I mean, that is shocking. Okay? It is absolutely shocking. So there would have to be a lot of adjustment in the economy to be able to handle a 50% increase in mortgage rates. Now most people, when I say something like that, and Joe, please comment on this, would think, well, Jason, that means the real estate market's gonna crash. Well, I don't totally disagree that prices would decline. However, and it's kind of interesting because I think they've put themselves in this strange catch 22 spot where all the people that have these incredible negative interest rate mortgages, and it'll still be negative interest rates at four and a half percent coming from 3 if inflation is 7%. Right. But you know, they're trying to tame inflation, but they're not going to let go of those mortgages. Those mortgages are going to be, as I've been teaching for 17 years, the mortgage is the asset when it comes to the property. Right. Because you're getting paid to borrow that money. And so people are going to hoard those mortgages, which means they're not going to sell their properties. And that is going to further exacerbate the housing shortage problem. Now the, the builders will, you know, very slowly they're starting to satisfy a little more demand, catch up a little bit. But that problem is, is huge. There's a, you know, 5 million homes lying ahead. So it's kind of interesting. And at the same time though, when you talk about housing affordability, this would cause huge upward pressure on rents and rents are already skyrocketing. But can you imagine if no investors want to buy houses because rates are now 50% higher. So there's no more investors buying, there's only home buyers and there's limited inventory because the people with all those cheap, you know, 2.75% and 3% mortgages that they've been given away in the past couple of years, they won't sell, they'll just remodel, stay put, figure it out, right? To keep that mortgage. It's like what happens in these anemic markets of rent controlled cities where everybody hoards their house, they've got such cheap rent that they can't move, they just don't move. It makes the economy, the real estate market just like non existent. Nobody moves because they got these great rent control deals. So you know, how do you see that playing out? What do you, what are your thoughts about that?

Yeah, those are all very good points, very great points. And a lot of people still have the, you know, the, the memories of the pain from the financial crisis. And the reality is the fundamentals are they're just. There's nothing similar about it other than prices going up and to the right. But the causes behind it, the mechanics, the fundamentals are complet there. There are so many more, you know, in most basic terms, there are a lot more people that want a place to live than there are places to live. And that's not going to change anytime soon. Supply chains are even, even if supply chains were fixed today, it would take years for supply to catch up with demand. Now factor in supply chains. You're, you're talking, you're talking a very long time before that fixes. Like you're saying interest rates going up, that's going to lock people into, instead of wanting to move and sell their houses, they're going to want to keep that, keep that really low payment. And add on top of that the fact that when, when I'm talking about the Federal Reserve tightening and causing a crash, that pain is potentially so severe that they will have to reverse course so quickly that you don't see any sort of impact on the real estate market. Real estate moves so slow compared to everything else. You're not watching the ticker tape of your home on a daily basis. If, if stocks crash 20%, 30%, you don't see something like that trickle over into real estate for months at the, at the shortest. And so you're going to see the economic pain show up so severe so quickly that the Federal Reserve will have to back, step, backtrack, reverse course. And it's, it's, it's, that's not going to have time, that pain's not going to have time to work its way through a slow market like real estate. And when they do reverse course, it's going to be upward pressure on real estate. Because when you talk about the what, what they have to do every time there's a crisis. So look at, look at interest rates from the time that Volcker got a handle on inflation back in 1980. Look at the federal funds rate. It just goes down and to the right and you'll see it, you can even plot a line basically over it where interest rates will drop in order to deal with some sort of recession. And then they'll climb back up and hit the line, they'll drop and it'll climb back up and hit the line and then it'll drop. And there is every time a shorter amount that interest rates can be pushed back up before they have to be pulled back down again. This time it's probably about three interest rates. Interest rate hikes at a 25 basis points each. And when they then have to drop interest rates and start printing money again to handle the next crash, they're not going to just be able to bring short term interest rates down to zero. They're going to have to do a lot more than that in the financial crisis. They were trying to print a trillion dollars. Everybody was like, well that's way too much. Look what they printed over the last two and a half years. A trillion dollars is nothing. If you're not presenting a bill that's at least a trillion dollars, it's not even worth talking about. And so the next time, this is how things happen that you plant, when you b. Plant the seeds for risk and collapse is much greater next time. Therefore, the bill has to be exponentially larger as you move forward.

Just like a drug addiction, folks, you know, it's, it's got the same traits. They can't, they've just got it. You've got to have a bigger dose every time to feel the same thing, right? And that's when you have a zombie economy. But you know, Joe, the interesting thing about that is people would argue we've been doing that for decades and decades and decades. And with all the doom and gloomers, like I just had Doomberg on my show yesterday, for example, right. And you know, of course I've had Peter Schiff on years ago. And the question really is how long can they kick the can down the road? Isn't it?

One more time?

Yeah, just one more. Is that your number?

That's my answer. Yeah, one more time. And here's why. They've got this one last time where they can trigger a short term amount of deflation in the market before they step back in. When they have to step back in from the economic pain, they can't drop interest rates more than they just raised them, which is barely anything. So short term interest rates will go to zero, but that won't move the needle because they're not dropping them by that much. That means they're going to have to drop long term interest rates. The only way you can push down long term interest rates is to do something called yield curve control. That's where you're targeting an interest rate at the end of the curve and you're not targeting an asset amount. So right now they've been purchasing $120 billion per month. And whatever the effect is on interest rates they're okay with, it's going to flip. They're going to say we need 30 year treasuries to be at 1% or half a percent. That means no matter how many other people around the world sell a 30 year treasury, they have to buy enough of them to keep interest rates at half a percent. Doesn't matter the amount. And so it's fundamentally different. Yield curve control is fundamentally different than quantitative Easing, it's targeting a percent instead of an asset purchase amount and even that. So one of the biggest things that people miss when they're talking about the stimulus effect from this last two and a half years was from mortgages. All of the homeowners that refinance their homes got a cash out refinance and got 25,000, $50,000 $100,000 cash in their bank account and dropped their mortgage payments. So where they have more cash flow each month. The amount of stimulus that the economy got from mortgage rates being dropped is what has caused a lot of the last two years to happen. And the Fed knows this. That's why they buy mortgage backed securities as part of their asset purchases to keep mortgage rates down. So what are they going to do to stimulate the economy? They're going to, they're going to yield curve control, not only Treasuries but also mortgages. Mortgages will be pegged to 2% or 1%, maybe even lower. The amount of cash that, that will flood into the system will break it because you can't do anything past that. They're going to also finance Universal Basic Income. They tested it out this time with stimulus checks. They tested out with the advanced tax credit, child tax credit payments.

And you remember the media saying, oh, they can't get the payments to everybody. People don't have an address, a checking account. Well somehow they know how to frickin tax everybody. So you know, I don't know, I don't get it. Right. That was fake news to usher in the central bank digital currency in my opinion. And so is UBI because UBI and the digital dollar are like this. They're one and the same. They're going to say we got to have that. You've got to use a central bank digital currency or a digital dollar or whatever you want to call it, because that's the way we're going to give you your UBI. And so this is, this is the road to serfdom right here, folks.

Well, I'm glad you brought that up because that's, that's exactly how you have to roll something like this out Other otherwise people will opt out. And so when everybody's hurting from this crash that's going to probably start in 2022 and they have to step in to rescue the economy again. They're going to say everybody needs money. But last time when we gave you money you bought Bitcoin. Last time when we gave you money, you bought gold. Last time when we gave you Money you bought IPOs and meme stocks and NFTs and they're going to say we want this money to do the right thing and stimulate the economy. So download this app. You get an account directly with the Fed, it's not through your bank. That's what a CBDC is. That's the only difference. It bypasses the banks. You get an account with the Fed and they're going to give you money. The problem is that money can only go to other Fed wallets. And so as a business, if you want to get some of that, business, if you want to get some of that, if you're selling food, you want to get some of that new money that they're printing, you as a business will have to open an account at the Fed and you're only going to be able to spend that money on what's pre approved. So they'll say you can buy food, you can buy clothes, you can pay your rent, you can buy a car and then when things get hot. This is not, this is no conspiracy, Joe.

Wait, there's more. I mean, you can only spend it within one mile of your home. You can only spend it during non curfew hours. You can only spend it on certain things. If your social score is bad, we're going to cut off your Internet access. You can't spend it on that. I mean you could spend it on the Internet, you could have Internet, but you have to somehow figure out how to pay for it some other way. Right? You know, that'll, that'll be the thing so that people can't quite get the pitchforks out. But you know, look, if this is your government money, we're just giving you this money. We're going to dictate how you're going to spend it. Like your parents with your allowance, right? Yeah, go ahead.

Absolutely. 100%. The sky's the limit on the controls there because all the data and all the transactions are completely centralized then under one roof. And so even you've seen the Federal Reserve get a lot more political over the last couple of years. And they're saying, hey, we need to do monetary policy that is inclusive monetary policy geared towards environmental friendliness. And so you might get a credit in your account that can only be spent on solar panels. You might get a credit in your account that can only be spent on businesses that are registered with the Fed owned by people of certain nationalities or belong to certain groups in order to, It'll always be in order to stimulate certain areas of the economy in order to achieve fair and equal distribution of Monetary policy. And there will be a lot of people, you can make a case that that's a better way to do inflation, that's a better way to do money printing. Because the way they've done it before, all that money has concentrated in the hands of a very percentage wise of very few people who it kind of flows downhill towards. You know, we can get into the problems of that, but absolutely there will be, this will be the way. And it's not conspiracy theory. It's not something that is just an idea. China's doing this right now. You can't spend your CBDC money on gold. You can't spend it on bitcoin. Even before they outlawed Bitcoin, you couldn't spend it on bitcoin. The nominee for the Office of the Comptroller of the Currency, I can't remember her name. Omarova.

She's nuts. She is absolutely just a dyed in the wool communist. I mean. Yeah, it's crazy.

Well, her paper that she wrote a few years ago just got published on what a central bank digital currency would look like. And it is everything that we're talking about. It is complete financial repression. We're going to give people money and it will be coded to only be able to be used towards what we think is good in order to stimulate those areas of economy. And if other areas are getting overheated too much money, we're going to dial that back and not let money even to the point where they would allow the Fed to short stocks that look like they're in a bubble. And so that you don't get, don't get these bubbles. Imagine the money printer with an unlimited money printer, unlimited pocketbook being able to short. You can never margin call the Fed and they can short as much as they want to suppress the price of any asset.

You know what's interesting too in saying people can't buy gold or bitcoin or whatever, right. They can literally stop people from being investors and stop people from creating a sound financial future and keep them as these guinea pigs or hamsters on a wheel, right? Where they're just constantly waiting for the next payment to come so they can spend it on their, you know, through their phone. It's. Yeah, it's crazy.

Yeah.

Well, Joe, do you care to make a couple predictions? You know, I'd love to know your, your thoughts about what the inflation rate is going to be. You know, just interest rates, employment, you know, stocks, real estate, anything like that that you care to take out your crystal ball for. We'd love to Hear it?

Yeah. I think 2022 is the year where we see a crash start to take place. I don't know whether it's the beginning or the end of the year. We start to see the effects of the t. I think the so new money takes a long time to work its way throughout the economy. And so we're over the last six months or so, we've been seeing the results of the big spike in the money supply that happened at the beginning of COVID So they're going to be able to dance victory laps because inflation will start slowing down. I think towards the beginning of 2022, we're going to see inflation numbers hit 6%, 5%, 4%. They're going to start running victory laps. But we have to remember this is right at the time where they're tightening. Right as the results of all that money printing are coming to a which means that they are overdoing it. They're going to spark a crash. We're going to see the stock market start to crash in 2022 and they're going to have to step back in. And at towards the end of 2022 probably is when we're going to see. It'll make early 2020 look like child's play. The amount of money printing, the amount of stimulus rates dropping, pulling out all the stops to rescue the economy, and that's when they're going to overdo it. That's the last thing. And that's when it'll sell, start to spill over into hyperinflation and you're never going to be able to get the dollar will fail after that. I don't know whether that takes two years, five years, but that's the. After this next crash and then their stimulus as a result of this coming crash, that's what causes the economy to overdose on easy money.

What is your definition of hyperinflation? There's no real definition. Right, but what is Joe Brown's.

The most commonly accepted definition of hyperinflation is 50% a month.

That's a month, folks. Not per year. Per month.

Yes. Yeah. Right.

Wow.

Yeah. 50% per month. And at that point, that's when everybody's basically just trying to use other currencies. And so other countries like Lebanon is going through real hyperinflation right now as much as possible. The people who can control it try to use dollars and euros and the people who are in government jobs still get the Lebanese lira, Lebanese pound. And so you have financial repression take place any place the government can Control. They try and make you use the dollar to prevent the dumping as fast as possible. But by that point it's just a matter of time. Everybody will use alternate forms of money as much as they can, and it becomes a lot more difficult to get your hands on alternate forms of money, especially if you don't already have that. And so 2022, I think we see the crash here and then the stimulus as a result of that, I think tips us over into hyperinflation. There's one more time to kick the can down the road because of where we are with interest rates and inflation right now.

Yeah, really crazy times we're in. But it sounds like you think real estate will fare through that fairly well given what we talked about a few minutes ago.

Yeah, I mean, I study history. So if you look at Weimar Germany, the people who got rich during the hyperinflation were the people who had mortgages on their land. And people were number one. They had land, so they had farms, they had animals, they were still able to sell something that people needed. And so as prices went up, they were paying off their fixed rate mortgages and they got rich from it. Now that planted the seeds for what happened a couple years later with the rise of Hitler and blaming a certain people group because they got rich during a very hard time. And so you sow seeds for other problems after that. But when you have real assets, especially with fixed rate debt to purchase them, the inflation wipes away the pain of paying off that debt and then you're left with the asset that just has to go up in price to compensate for the printing.

But who gets hurt are all the people that bought those mortgage backed securities and those mortgage bondholders too, because they just get wiped out. They get paid back in the cheaper dollars. So be on the right side of that trade folks, be the debtor. Yeah, interesting.

And if you want to know the right side of the trade, last thing they'll say is the people with the power will always make the decision that is most beneficial to them. And if you believe the government is in power, they've got the most debt. And so the debtors are going to be benefited, not the lenders. If you believe that corporations are wielding the government, corporations are the most over leveraged, they have the most debt in history. They're going to make themselves be the winners and again, not the lenders. So no matter which way you slice it, being a lender is probably on the wrong side right now. And being a debtor, being a borrower is probably the Right side.

Yeah, no, being the borrower, you get that. You get to play your small part in the cantillion effect. So that's, that's pretty cool. Hey Joe, one more thing before you go. If you've just got one more minute, you know, I want to play devil's advocate with the, the debt issue. You know, if our debt is what, 130% of GDP or something like that now, and we're going to get to Japan territory maybe eventually. You know, I've always compared in my mind that to a household or an individual, right? And you know, I kind of think about that. I mean, of course the debt is structured differently, blah, blah, blah. You know, a household can't print its own money. It's. We, you know, we all get that. But you know, how much debt can a country take, right? Well, especially if you have the reserve currency, it's theoretically unlimited. Right? But you know, even if it's not, you know, a typical person, if they make $100,000 a year when mortgage rates were higher, they might own a $300,000 house with a mortgage and they'd have maybe a couple of 40, $50,000 cars. And those are leveraged as well with five year car loans or three year leases or whatever. And maybe they got some student loan debt. And so, you know, when you look at these debt to GDP ratios, I've always wondered, you know, my famous question, which, by the way, one of my listeners said that you said it on another show. I love that he sent me a vox and said, hey Joe, sounds like you. And, and the question is compared to what? Right. You know, you know, nobody really knows how much a country with a large and sustainable, you know, I know it's built on a house of cards economy can really take on in debt. Like what is that number? You know, is it 100% of GDP? Is it just, you know, okay, you've got, your GDP is 20 trillion. You got, you know, 40, you've got 20 trillion in debt or even 40 trillion at 200%. I don't know, for an individual, that'd be quite palatable.

Yeah, absolutely. If you want, we could spend an entire hour talking about this. But I will briefly go over it. So I'll give you two scenarios. One scenario is thought experiment. Half the people on Earth become engineers and half the people on Earth learn software development. Everybody on Earth all at once is developing robots and AI within about five years. It doesn't matter. Every single need that humans want is completely taken care of by robots that anticipate our needs, they make themselves, and then they make the things that make the things that we want and anticipate what we're going to want down the road. Money is irrelevant. Everything is free for everybody and all your needs and wants are covered. It's vacation retirement for all of human humanity forever. That's the thought experiment that points out a drastic increase in productivity can cancel out a lot of financial irresponsibility to the point where it can become zero to infinite. Right? You can just completely cancel out money. Now, that's not what's happening, and that's probably not what's going to happen. And so then you have to ask, okay, well, what's the other extreme? The other extreme is we don't have a number. There's no number on debt to GDP or anything like that. Whether it's 90%. Some experts have said Reinhart and Rogoff in the book this time is different. They study 800 years of financial history. Some people say it's 100%, some people say it's 120%. The reality is somewhere in there, we don't know if it's 90%, 100%, 120%. Somewhere in there, there's a transition that's made from that debt being real debt to it transitioning to just money printing. Because right now, what the government has we're transitioning for, it's not real debt. It's not paid back. The amount of austerity, the amount of taxes, the length of time, and the increase in productivity that would be necessary to have that debt be real. Deb. Which means it's paid off is most likely not possible given our technical limitations on productivity. So we're transitioning to where it's not debt, it's monetized debt, which is a fancy way of saying it's all funded by money printing. When you look at it through the lens of all government spending. And it's all just money printing. And all debt is really just money printing, even if it's through the banking system that's fractional reserves. So that's money printing. That means we have an inflationary monetary system and every dollar that comes into existence only has purchasing power as a result of the percentage of purchasing power that it took from all previously existing money. If you take a pizza that has eight slices, cut it up into 16 slices, you got double the amount of slices, but you have the same amount of pizza. If you double the amount of money, you've got the same amount of stuff, but it's now all Just represented by double the money. So if something cost $100 before, now it costs $200. Twice the money, same amount of wealth. And so when you get to the point where money printing becomes the financing tool, all you're doing is redirecting purchasing power. You're not creating new purchasing power, you're redirecting it. And because money printing happens from the top down, from centralized over the entire system, you have a misallocation of resources because you don't have all the decisions being made at the bottom level where they're made most efficiently and effectively, you have them being made at the top level. So you have massive misallocations of resources because there's an unlimited purchasing power at the top. And that redirects resources in a way where there's waste, misallocation, malinvestment that causes destruction of wealth. And so when you, when you get to this point, you have to transition. It's not debt, it's not a percentage, it's money printing. And then you have to look at the point we have a top down command and control economy where they're redirecting resources through the directing of purchasing power.

Couldn't agree more. And all the individuals at the bottom level of that that are going way far out on the risk curve to try and get some yield to not be debased by the inflation that surely follows. So yeah, it's an absolutely crazy time. Joe, give out your website.

Just follow me on YouTube. Heresy Financial is my channel. Heresy is a word that means an opinion that is profoundly at odds with what is generally accepted. I'm on Twitter as well, Arsy Financial. And so you can find me both those places.

The name of your channel, Heresy Financial and your company reminds me of, I think that was George Orwell's quote that said, in times of universal deceit, telling the truth is a revolutionary act. You shouldn't be considered heresy. You're telling the truth. Everybody else is the heretic, you know.

Well, most times throughout history, what was considered heresy ends up being becoming truth. Like Galileo discovering that the earth went around the sun, not the other way around. He was a heretic. Turns out it was true. So time is on the side of truth.

Yeah, absolutely. All right, Joe, well, thanks so much for joining us. Talk to you soon.

Thank you for having me.

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