Read_867 - The danger of the collective "we"

[00:00:00] Speaker A: The US economy is quickly turning into a banana republic completely dependent on the Federal Reserve intervening in markets. Their intervention has gotten to the point where they are the only game in town. Actual value creation and productivity from businesses does not matter anymore. The only thing that matters is whether or not the Fed is printing money and how much of it the best in Bitcoin made Audible I am Guy Swan and this is Bitcoin Audible. [00:00:49] Speaker B: What is up guys? Welcome back to Bitcoin Audible I am Guy Swan, the guy who has read more about Bitcoin than anybody else you know. And this show is brought to you by the Jade plus Hardware wallet, which I finally got mine yesterday and I'm literally going through it right now. I've just what I've been working on for like the last 30 minutes playing around with it and getting to know the features and stuff. I'm about to reset it and restore it from like Seed qr. [00:01:17] Speaker A: Anyway, I got a bunch of little. [00:01:18] Speaker B: Fun stuff that I want to do and I've got a I'm putting some videos together so stay tuned on that. And don't forget that you can get. [00:01:23] Speaker A: 10% off with my code goth. [00:01:26] Speaker B: I have an affiliate link down in the show notes and then also you have got to check out the Bitkit wallet if you do not have a non custodial lightning wallet that just works. [00:01:36] Speaker A: Seamlessly between bitcoin on chain and lightning. [00:01:40] Speaker B: Bitkit is one of the best out. [00:01:42] Speaker A: There and I love its design. [00:01:44] Speaker B: If you just search bitkit you can find it. But I'll also have a link in the show notes if you're lazy like me. All right, so we have a short little read and I don't even remember. [00:01:53] Speaker A: Why this came back up. I saved this. [00:01:55] Speaker B: I think somebody shared it on Nostr or Twitter, who knows. But it's another of Marty's bent and. [00:02:02] Speaker C: This one's actually all the way back from 2020. [00:02:05] Speaker B: But there was an element of it. [00:02:07] Speaker A: Not only was it a great conversation. [00:02:08] Speaker B: But there was also an element about this article is it was just kind of wild to read it five years later and see how prescient like or how relevant it still is. I mean obviously to just the general like financial situation and where we are in the monetary cycle but also just how the legacy like the establishment treats. [00:02:34] Speaker A: The debt and tries to pretend it doesn't matter. [00:02:36] Speaker B: Granted it we've also shifted a little bit. I think people are becoming more aware or at least so fed up that. [00:02:45] Speaker A: They are sick of the same and. [00:02:47] Speaker B: They are trying to they're reaching out. [00:02:50] Speaker A: Hoping that there is something different out there. [00:02:52] Speaker B: And I think that's kind of the. [00:02:53] Speaker A: Phenomenon that is the Orange man who just set Ross Ulbricht free, by the way. [00:02:59] Speaker B: Hell yeah, I think I'm probably going to do an episode on that, but that literally just happened. But anyway, this will be a short one, but a really good one one of Marty's Bents and when I stopped to read it a few weeks ago, whenever it came up I got halfway through it and I was so amped up and wanting to do a rant that I was like, okay, this is going to be an episode, so I hope you enjoy Marty's Bent. And then guys, take the follow, so let's dive right in. [00:03:25] Speaker A: And it's titled the Danger of the Collective we Marty's Bent issue 754 I've finally been making my way through Ludwig von Mises human action. I've been exposed to Mises ideas, essays and books via mises.org for many years now, but never got around to diving into human action. Over the weekend I read a few chapters with my morning coffee and came to this footnote that succinctly debunks the terrible notion that public debt isn't a problem because it is money we owe ourselves. The most popular of these doctrines is crystallized in the phrase a public debt is no burden because we owe it to ourselves. If this were true, then the wholesale obliteration of the public debt would be an innocuous operation, a mere act of bookkeeping and accountancy. The fact is that the public debt embodies claims of people who have in the past entrusted funds to the government against all those who are daily producing new wealth. It burdens the producing strata for the benefit of another part of the people. It is possible to free the producers of new wealth from this burden by collecting the taxes required for the payments exclusively from the bondholders. But this means undisguised repudiation. This line of thinking has always driven me crazy simply because of the mere fact that actions have consequences. Hand waving about public debt and writing it off as inconsequential does not make any sense to any self respecting human. In the six sentence footnote above, Mises handily debunks this terrible line of thinking and I am using today's issue to spread the message to you freaks. We owe it to ourselves is one of the most destructive thoughts to ever enter the economic mainstream. This line of thinking completely ignores the concept of individuals. An individual with unique circumstances, income, time preference, and personal debt levels. What we really describes is those at the helm of the political and banking system at any given point in time, and they are using the mythical we as a scapegoat so that they can paper over systemic problems without having to make necessary but politically unpopular policy changes. This continual scapegoating and normalization of this line of thinking has put us in a very precarious situation. The US economy is quickly turning into a banana republic completely dependent on the Federal Reserve intervening in markets. Their intervention has gotten to the point where they are the only game in town. Actual value creation and productivity from businesses does not matter anymore. The only thing that matters is whether or not the Fed is printing money, that is inciting the creation of public debt via treasury issuance and how much of it value now flows from the ether of the Fed's servers to the stock market. The structural stability and cash flows of the companies that make up the stock market matter very little in this type of environment. The Fed is doing such a great job of distorting markets, it has totally priced out both Warren Buffet and Stanley Druckenmiller. These guys used to rely on value to invest. There can be no value when the Fed provides a never ending bid. The Fed literally just ended value investing. Quoth the raven June 8, 2020 Be. [00:07:08] Speaker B: Careful out there freaks. [00:07:10] Speaker A: There are many men out there who will parrot the debt is money we owe ourselves without acknowledging that we isn't a static entity, but a collection of individuals at different points in their lives with different income levels, education levels, balance sheets, time preferences and personal beliefs. Thinking that all of the individuals that make up the mythical we align perfectly in all of these areas is legitimately stupid and arguably malicious. This type of thinking devalues individual sovereignty and completely distorts markets and the pricing of goods within them. This distortion benefits very few individuals, those who hold the financial assets being distorted. These policies are producing a gorge between the rich and the poor at the moment in our country, saying that creating public debt via treasury issuance incentivized by QE has no effect on markets because the Fed's purchasing policies net to zero completely neglects again arguably maliciously, what actually happens during this process. These actions most certainly do not net to zero. The Fed buys the Treasuries along with other assets with newly printed money from its servers and gives that to banks and other institutions who take that newly printed money and lever it up in the markets, causing a positive EV for those on the opposite side of these transactions with the Fed. This process hurts American citizens in two ways. As described above, it creates a transfer of wealth from taxpayers to the owners of financial assets. And to pour salt in the wound, it increases their eventual tax burden. When there is an inevitable shortfall on the public debt accrued during this process, it's completely f ed up and it needs to stop. Anyone championing these policies are either woefully ignorant or overtly malicious. Fix the money, Fix the world. Final thought. I already want to have another child. [00:09:22] Speaker B: Well, first off, Marty, I am right there with you. I am super excited to have another kid. And we have a little girl on the way right now, as of this recording. What day is this? [00:09:32] Speaker A: It is January 23rd. [00:09:34] Speaker B: So she is due in like three weeks, basically. And all you other bitcoiners out there need to get, get. You need to get your act together. [00:09:43] Speaker A: And you need to multiply. [00:09:44] Speaker B: But to get to the actual point of this article, the whole we owe it to ourselves. I think I addressed this partially in the Debt Doesn't Matter video, one of. [00:09:58] Speaker A: The two SATs series. [00:10:00] Speaker B: But Amises, I think one of the best ways to, like, there's two huge things, like massive things wrong with that statement, the idea that we owe it to ourselves. And one of the things that I think I really like, the way Mises. [00:10:16] Speaker A: Put it says if this were true, that a public debt was not actually a burden because, quote, unquote, we owe it to ourselves. Well, then the wholesale, quote, unquote, the wholesale obliteration of the public debt would be an innocuous operation, a mere act of bookkeeping and accountancy. I mean, think about what that statement applies. [00:10:37] Speaker B: We owe it to ourselves. Suggesting that it just doesn't. [00:10:41] Speaker A: Doesn't matter. [00:10:42] Speaker B: I mean, that's the only. [00:10:44] Speaker A: There's no other value or purpose of that statement. It is meaningless in any other sense. And the entirety of its use is to suggest that if we just go endlessly into debt, it doesn't matter because quote, unquote, we owe it to ourselves. [00:11:00] Speaker C: Functionally, it is useful in no other. [00:11:03] Speaker B: Way because just as Mises said, if. [00:11:06] Speaker C: That were true, why would we record it? [00:11:10] Speaker B: Think about it. [00:11:10] Speaker C: If you go into your refrigerator and you eat six of the eggs that you bought, do you go create. [00:11:17] Speaker A: Do you go like, make a spreadsheet and say, well, I owe myself six eggs and I better pay myself back. In fact, I'm going to give myself a reasonable interest rate and I'm going. [00:11:28] Speaker C: To go, I'm going to owe seven. [00:11:29] Speaker A: Eggs at the end of this month. [00:11:31] Speaker C: Why would nobody write, nobody would ever do that. That's Retarded. And Marty correctly points out that the dangerous word, the nonsensical word that completely. [00:11:43] Speaker B: Destroys any meaning in this statement is. [00:11:47] Speaker A: The word we suggesting that you and I are the same person. This would be exactly the same as your neighbor borrowing your car. And when you go to them in. [00:12:02] Speaker C: Order to get your car back, they. [00:12:05] Speaker A: Say they don't have it anymore. [00:12:07] Speaker C: And you rightfully start to freak out. [00:12:10] Speaker A: And they say, no, it doesn't matter, man. [00:12:13] Speaker C: It's no big deal. We owe it to ourselves. Why don't you take one for the team, man? It's no big deal. Every single debt is one person owes it to somebody else. You can't just put them in the same bucket and say, oh, we just owe it to ourselves, as if the two people on different sides of this agreement are literally the same person. I mean, seriously, what kind of retarded crap is that? [00:12:40] Speaker B: If somebody rents your car, is it. [00:12:42] Speaker C: Really that the two of you. [00:12:43] Speaker B: That we're renting it from ourselves? [00:12:46] Speaker C: If I have sex with someone I'm in a relationship with, is it actually intercourse or is it that we're having sex with ourselves? Like, holy crap, man. It's so. It is a. Like grown adults, like people in charge, people with power, who guide and influence and have control over hundreds of millions and billions of dollars. These words come out of their mouths with all seriousness that should forever make you afraid of government ever being in charge of anything, because that's an utterly retarded statement. It's one of those things that's just so profoundly dumb and nonsensical that it becomes extremely diffic to even explain it to someone, because the notion of explaining it feels so stupid and convoluted because you can't dumb the idea down any to make it understandable. It's just as stupid as you could possibly get. And it's really hard not to agree with. What Marty is hinting at is that it's not stupidity. It's either such a profound stupidity as to be phenomenal, like just almost fantastical. [00:14:03] Speaker A: In the fact that it merely exists. [00:14:06] Speaker C: But it seems far, far more likely that it is explicitly malicious. And when it comes out of somebody's. [00:14:13] Speaker A: Mouth, nine times out of ten, they. [00:14:15] Speaker C: Know that it is utter horseshit. [00:14:18] Speaker A: And they are simply expecting that the. [00:14:20] Speaker C: People that worship the state and believe that authority is where you find all the answers to all your questions will. [00:14:26] Speaker A: Simply swallow it and regurgitate it every single time it comes up in conversation. And then they will have their mindless. [00:14:33] Speaker C: NPC army to repeat the stupid things. [00:14:36] Speaker A: That come out of their mouths. [00:14:37] Speaker C: As if this is the answer to everything and as if government has a. [00:14:41] Speaker A: Magic wand and doesn't actually exist in. [00:14:43] Speaker C: This universe, but it's a parallel world where there's magical wizards and people can just accountants their way into wealth and that there's a never ending flow of food and happiness and accomplishment and prosperity that can be achieved at absolutely no cost as long as we let the right person in government, government with the right amount authority, fudge some numbers in a spreadsheet somewhere. [00:15:09] Speaker A: There are very, very few reasonable explanations for this. [00:15:14] Speaker B: I think the main one, the main one that makes people regurgitate this, which they would not recognize, they would not realize that they actually think this. [00:15:26] Speaker A: But it is a blind religious devotion to authority that there are certain people in certain groups and unless it comes from those groups, then it cannot be the truth. And if it does come from those. [00:15:40] Speaker B: Groups of people from that perceived authority. [00:15:42] Speaker A: Or that institution or bureaucracy or regulator or politician or quote unquote expert, well then it has to be the truth, no matter how ridiculous it sounds. [00:15:52] Speaker B: That I believe is the most common. [00:15:54] Speaker A: The second is just a profound stupidity. [00:15:58] Speaker B: Or a thoughtlessness that is so unbelievably. [00:16:02] Speaker A: Potent as to basically be indistinguishable from a profound stupidity. [00:16:07] Speaker B: And then the last is just outright maliciousness. It is just evil and lying for the sake of lying because you expect. [00:16:15] Speaker A: Everyone to swallow it and then get. [00:16:17] Speaker B: Away with whatever fraud or remarkable theft. [00:16:21] Speaker A: That you are attempting to pull off here. [00:16:23] Speaker B: I think that's pretty much it. And just another thing that Marty brought brings up in this piece was, and I like the Quoth the Raven comment from Twitter as well, just because basically talking about how the Fed ends up. [00:16:39] Speaker A: Running the entire show, how the money. [00:16:43] Speaker B: Printing machine ends up in a place where it becomes the dominant source of capital flow and the economy itself stops being the guide as to where resources. [00:16:57] Speaker A: Are allocated in the economy. There's no longer skin in the game. [00:17:00] Speaker B: Decisions for value transfer because most of. [00:17:03] Speaker A: The money is literally coming through the. [00:17:05] Speaker B: Financial system from the Fed or the. [00:17:09] Speaker A: Bond market, which just ends up being from the Fed. [00:17:12] Speaker B: And this goes right in line with the fiscal dominance theory, or it's not even a theory, it's just like we've reached the fiscal dominance zone where in Lyn Alden and Sam Callahan's piece full steam ahead. [00:17:27] Speaker A: By the way, if you haven't read. [00:17:28] Speaker B: That or listened to it, it's like. [00:17:31] Speaker A: Two episodes, two reads ago or something. [00:17:32] Speaker B: Like that on this show was basically. [00:17:35] Speaker A: Talking about how the fiscal situation of. [00:17:36] Speaker B: The US Government is so bad that. [00:17:39] Speaker A: If they raise interest rates in order to try to prevent inflation or try to bring down inflation, well then it just causes more inflation because of the interest and the rollover in the debt that the United States government has to engage in, which means the Fed needs to monetize the debt or somehow the. [00:17:56] Speaker B: Debt is going to be monetized because the government's not going to go into. [00:17:59] Speaker A: Default and the Fed is simply going to have to do. [00:18:01] Speaker B: They're just going to lose their independence. [00:18:03] Speaker A: They, they were never independent anyway, but. [00:18:05] Speaker B: They'Re going to lose the apparent appearance of independence because they're just going to. [00:18:09] Speaker A: Have to directly fund or indirectly, like they usually do in a completely fake way by propping up the market rather than directly buying the bonds. [00:18:16] Speaker B: But essentially some form or fashion of monetizing the US Debt because interest pay. [00:18:23] Speaker C: Interest payments have skyrocketed and they're already. [00:18:25] Speaker B: Struggling to keep people to keep actual buyers of the government debt. [00:18:31] Speaker C: And that's explicitly another reason why they. [00:18:33] Speaker A: Have to jack up the interest rate. [00:18:34] Speaker B: Because there's almost no market for the. [00:18:36] Speaker A: Bonds, or at least long term bonds. [00:18:38] Speaker B: Everybody just wants to hold short term. [00:18:40] Speaker A: Stuff, which causes a significant long term imbalance in how the government is actually. [00:18:45] Speaker B: Funding itself and causes incredible volatility and unreliable, a lack of reliability in actual. [00:18:50] Speaker A: Monetary and fiscal policy. But the debt is so bad that if they raise interest rates, they end. [00:18:58] Speaker B: Up paying trillions more in interest on the debt itself, which means there's still. [00:19:05] Speaker A: Just a flood of new money into the system and thus inflation. [00:19:10] Speaker B: Whereas the alternative is that if they try to keep interest rates down, which. [00:19:15] Speaker A: They do by buying up bonds off the market in order to artificially push the interest rates down, also happens to flood a ton of new money into the system. So it's inflation if they do and it's inflation if they don't. And it's all because of this debt. [00:19:30] Speaker C: That we just owe to ourselves. [00:19:32] Speaker A: And there's not really a good way out of this. Like the situation is really just kind of horrible. [00:19:39] Speaker B: Like I don't even think Doge and Trump and like, I think it will probably be a short term significant shift in a lot of different ways. But I don't think there's any systemic fix on the near horizon for how bad our financial situation is. And our market is the stock market. [00:20:00] Speaker C: Equities, assets, like so much of it. [00:20:03] Speaker B: Is really just meaningless. [00:20:05] Speaker A: Like it doesn't reflect anything real, any. [00:20:08] Speaker B: Actual value or any actual expected return. [00:20:13] Speaker A: Or benefit from some project or from. [00:20:16] Speaker B: The resources being used in so many different ways. [00:20:19] Speaker A: It's just the shifting of resources up. [00:20:22] Speaker B: The financial ladder to take advantage of. [00:20:26] Speaker A: Where the new money comes into the system. [00:20:28] Speaker B: And so resources just get pushed up. [00:20:30] Speaker A: There for no freaking reason. [00:20:31] Speaker B: And they just. It's just this huge funnel from the poor and the middle class up to. [00:20:38] Speaker A: The wealthy, up to all of the people that are close, as close as they can possibly get to the spigot. [00:20:43] Speaker B: And it means it is exactly how and why we have ended up renting. [00:20:47] Speaker A: Everything, renting our entire lives on the. [00:20:49] Speaker B: Continent that our forefathers conquered. [00:20:52] Speaker A: Some wild times, man. Bitcoin couldn't get here fast enough. [00:20:58] Speaker C: All right, we're good. [00:21:01] Speaker B: We're 21 minutes. I think this was a good episode. Short little read from Marty's Bent. I like, I love reading Marty's Bent. When I remember to come back to it, he's always got some fun stuff. And this one, this one got me riled up. So shout out to Marty, shout out to Odell, shout out to their. Their whole crew, TFTC and Rabbit Hole recap. You guys aren't checking those out. What the hell are you doing? And also have a link in the show notes so that you can follow Marty's Bent newsletter. And don't forget to check out the BitKit Lightning wallet or on chain and Lightning Wallet. It is non custodial. [00:21:39] Speaker A: So when someone tells you that lightning. [00:21:40] Speaker B: Only works if it's custodial, show them your BitKit wallet because that is a crock of shit. [00:21:45] Speaker A: Link to that will be in the show notes. [00:21:46] Speaker B: And I also found out what my affiliate link and code give you with the jade plus. Sorry I had no info last time, but it is a 10% discount with the code Guy GUI and I actually just was recording a video today. I'm gonna do like a walkthrough and like unboxing and just like set up for the J because I am exploring it finally today. [00:22:09] Speaker A: So stay tuned. [00:22:10] Speaker B: I'll probably have some stuff on socials for that. All right, guys, thank you so much for listening. I will catch you on the next episode of Bitcoin Audible. And until then, everybody take it easy, guys. [00:22:35] Speaker A: Much of the social history of the western world over the past three decades has involved replacing what worked with what sounded good. Thomas Sowell.