TRANSCRIPT 🔗
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Unfortunately, normal life happens to be boiling over with lies and nonsense generally accepted as true.
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And so I thought it might be fun to dedicate a series to breaking down the most egregious ones.
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This will be the Inflation Edition.
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First up, and one of my favorites, everything should always get more affordable.
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And this is really simple to understand.
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If there's a static amount of money and we produce more things, which is the fundamental march of technology and the only reason we go to work in the first place, there should be more things against the same amount of money.
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And thus, all of it should be more affordable.
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Nothing that we do in a voluntary economy is to functionally and purposefully make things crappier.
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The only people who do that are thieves, arsons, scammers and politicians.
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And if they are ever outweighing the rest of us, then we have a very, very big problem.
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The only reason everything always gets more expensive over time is because the government and central banking system are printing trillions of new dollars and issuing trillions in new debt every single year.
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That's it. That's the whole reason.
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And ironically, the very reason why you have to have debt to ever own anything of value in the first place.
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Number two, corporations being greedy cannot cause real inflation.
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If there are five identical houses for sale in the economy
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and there are only $500,000 available in that economy,
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then the average house price will be $100,000.
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If one of those sellers raises their house to or you know what happens They just don sell the house Can sell things for prices that people literally can pay and then make a ton of money
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The new money has to be created first, which is exactly why when you make debt cheaper artificially by issuing a ton of it into the economy, you make prices go up.
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If you issue $500,000 more in debt, well then the houses are going to be $200,000 a piece
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because they're just going to keep bidding up until people can't afford the debt anymore.
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And they'll stop thinking about the price and they'll wonder how much debt they can handle.
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So you start with an economy where everyone can own a house outright based on the price that they
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can afford to pay. And
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you end up in an economy where everyone is in debt based on the amount of
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debt they can handle to be the one who gets the house. So just by changing the money supply,
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you went from an economy where everyone owned their house to one where everyone owns only half
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of their house and everyone is in debt paying to the banks. And to add, ownership shifted from the
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people who had saved and worked the hardest over to people who got the debt the fastest.
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Isn't it funny how you actually disincentivize the very thing that maintains society?
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Hmm. Number three, inflation only hurts the economy. Inevitably, you will have some
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pseudoscience economist who will tell you that, oh, if the government spends money or you inflate
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money, well then they will pay their people and then those people will pay people and those
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will then take it and they will buy their cell phone plans and they will pay it and
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they will spend it on and it will be passed forward throughout the economy.
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Guess what?
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That's what all money does ever.
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That's the only thing it does.
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It never does anything other than that.
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Just saying that oh it moves from one person to another What do you think happens with the money that already there Never anything other than exactly what you just explained That doesn mean anything it doesn say anything it doesn give anybody a benefit You can just as easily say that I will shoot you in the head and take your money
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and then, but I'm gonna go spend it on my Verizon and Netflix bill.
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As if you were gonna eat your money or something.
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The question is always about who gets the resources.
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You should get the resources.
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If I shoot you in the head and steal your money and then go spend it,
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that's not good for the economy.
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that means that I got all the resources that you were owed
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because you're the one that did something.
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I was the one who just killed somebody.
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Creating money out of thin air is just fraud.
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It's just counterfeiting.
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And it is not a coincidence that the people who are trying to convince us
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that it's good for the economy are the counterfeiters.
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Do you know what inflation does?
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It makes people poorer.
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It makes society poorer.
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That is it.
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That's the only thing that it does.
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It makes things more expensive.
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And specifically, it makes the people who earn a particular wage
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or a particular amount have to pay more to get the same standard of living.
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That's it.
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And to pour salt on the wound, it does so at the direct benefit of everybody who already
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owns everything, who's rich, and who has great political connections.
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And number four, GDP is not a useful metric.
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It certainly doesn't measure real growth, it doesn't measure quality, it doesn't measure
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value, and it doesn't measure living standards.
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If you just print a shit ton of money and give it out to people so that they can spend
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it as quickly as they possibly can and make everything worse and everything more expensive,
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The GDP will still grow up.
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And there's actually a really great joke
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that explains it better than I can.
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Two economists are walking down the sidewalk.
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They come upon a dog turd.
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The first economist says to the second economist I give you a hundred dollars if you eat that dog turd And the second economist says oh hell yeah And he eats the dog shit and gets a hundred dollars They walk a little bit further down and they run into another dog turd The second economist I give you if you eat that dog turd And the second economist says oh hell yeah And he eats the dog shit and gets They walk a little bit further down and they run into another dog turd The second economist says I give you if you eat the dog turd
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And the first economist says, oh, heck yeah. And he eats the dog turd and gets his $100 back.
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They walk in silent thought for a couple of minutes before the second economist says,
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you notice nothing ever really changed except that you have your original $100 and we both
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a dog crap. And the first economist says, oh, but we raised the GDP by $200. The scary thing is the
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first economist is actually right, which is why if you're using the GDP as a measure of value or
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standard of living, you can actually turn society into a bunch of people just eating canine excrement
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and be tricked into thinking that everything got better.
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How much is that doggy in the window? I do hope that doggy is for sale.
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I will probably be doing a lot more of these because unfortunately normal life just happens
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to be overflowing with examples of nonsense and obvious lies.
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So if you found this interesting, please subscribe and follow and like the content.
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It's a huge help and let people know about the channel because it's new and I'm still
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building it up.
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Or maybe you think I'm wrong.
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Or let's say you're an economist who got years worth of indoctrination being told that
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if you write numbers on a special napkin or fudge numbers in the right spreadsheet somewhere
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that free steak dinners will leap out of the ground onto everybody's tables,
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then please leave a comment below so that I can ignore you.
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I hope everyone else has a wonderful day.
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And until then, I am Guy Swan, and that is my two sets.