원문 보기
the stimulus checks economic salvation or economic slavery i'm gonna explain this to you in three simple fast steps step number one let's go over the incentives and it starts with a chart going from zero percent of the wages the average wages all the way up to a hundred and twenty percent and this is a chart of the current unemployment benefits with the cares act it's increased substantially before the unemployment benefits averaged about 40 percent of the average wage now with the cares act the new benefits in some states go over 120 percent and in two-thirds of the states the new benefit program is higher than the average wage and then in one third of the states it's lower but still even in the lowest state which is new hampshire the highest state is maine by the way but even in the lowest state of new hampshire it's still around 85 to 90 percent up from an average of 40 percent so it doesn't take an economist to figure out that this could incentivize people not to go back to work and i don't want to make this a moral video it has nothing to do with that whether you should or shouldn't take a stimulus check that is not what this video is about this is just about outlining the incentives of paying people more to stay home than they would make at work and how that plays out on a macro level but these are just statistics there's tons of anecdotal evidence which would also point to people flat out not wanting to go back to work because they're being paid more to stay home as an example let's go straight to a recent cnbc interview with jeff gunlock the the the cares act with its uh uh ppp sort of aspect of payroll check protection it actually gives people many people a lot more money for not working than what they had when they were at their job before they lost their job or got furloughed i mean a lot of people are making 25 more i have family members who have pointed this out to me who said this is this is amazing i've lost my job but i'm making more money by not working thanks to the 600 per week bonus in the unemployment benefit and that just makes that just makes the cost structure reopening these businesses really prohibitive so not only do the stimulus checks get people asking themselves why they're working in the first place it also increases the cost structure for a lot of these small businesses more on that in step number two but i also want to throw in some of my own anecdotal evidence i'm on an email list for expats in ecuador like most of you know i own property all over the world that includes ecuador so i'm on this email list and i see them going back and forth and they're talking about getting stimulus checks the people these these retirees that are living on the coast of ecuador they're americans but they're getting stimulus checks as well it's it's really getting crazy and i go through the comments of some other youtubers who are doing constant videos on how to get stimulus checks just to see what the general attitude is and going through those comments it's staggering how many people are not only making more money being at home but also trying to come up with strategies how they can never go back to work again work the system to make sure they're getting paid without having to work and i know this could be just a small section and most hard-working americans don't want the funny money they want to get out there be productive and work but there's a percentage of the population who's going to try to work the system and this creates unintended consequences that we'll get into later on in the video but the main takeaway from step number one is to understand going back to monday's video we have to produce or someone has to produce stuff in order for us to consume stuff the producing has to come first and also we're getting into this mindset where we can just print up as much money as we like we don't have to worry about inflation whatsoever so why not just print up the money sit back not work import all of our stuff that we consume from other countries while we don't have to do any of the work when you have fewer people wanting to go to work when you have the cost structure of businesses increasing and you have a general attitude within the population that money printing has no negative consequence the net takeaway is that fewer goods and services actually get produced right here in the united states step number two the producers get rich and the consumers get poor this is where we start to figure out if the stimulus checks are an economic salvation or economic slavery and we address peter schiff calling me out on his video yesterday so we know that we have to produce to consumer someone has to produce to consume so in the united states we can print as much money as we want there is no downside so these stimulus checks will keep going out no problem whatsoever and this creates a higher cost structure because now businesses are actually competing with the government to see who will pay the employee the most the net result is less is produced here in the united states but in order to consume someone has to produce the goods and services this takes us to peter schiff pointing out that i might have missed a couple things on monday's video what george missed out on is what happens to that society when it can no longer import those goods right that's when consumer prices really skyrocket because consumer prices were being limited by all the goods that were being shipped into the economy that were not being produced but because those goods were there that was increasing the supply of goods so that was keeping some type of lid on the price of those goods but once those goods are no longer available because they can no longer be imported because the currency has imploded of that economy that's what's going to happen and that's why our trade deficit is so important right that trade deficit is what is keeping us afloat but you have to look at the other side of the deficit and that is the countries that are financing it the countries that are exporting the stuff and taking our ious how much longer are they going to do that you know i would say that the the days are numbered of course peter schiff nails it so let's go into further detail and explain exactly what he's talking about let's say as an example the united states produces all of the goods it consumes in this economy we have xyz business and we have community one two and three maybe different cities so xyz business sends the goods it produces to each community and the community sends their dollars back to xyz business the problem right now is the employees at xyz business are pissed because the government is saying listen we'll pay you more than xyz business to stay home so these employees are asking themselves why on earth should i go back to my job when i can stay home with my family enjoy life and get paid even more so xyz business loses its employees they go bust in the united states says don't worry about it we'll just get our goods from other people who are willing to produce them maybe even at a lower cost so what ends up happening is community one two and three still gets their stuff but instead of getting the stuff they need to consume from xyz business now they're just gonna get it from china and japan they say no problem we'll manufacture all the stuff you need to consume consume consume so china and japan send us the stuff they manufacture that's an import and in return all we need to do is export to them these little green pieces of paper that we can just create by pressing a button on a keyboard no problem why on earth would we make all our stuff that we need to consume when we've got these fools outside of the united states in china in japan that'll do all the work for us we can just sit back and enjoy life but we've got to also think through what happens to the dollars we export to other countries they take those dollars and they don't want to just stuff them under their mattress they are going to buy u.s assets that's right so as the dollars go to japan and china they come right back to the government let's say because the japanese and the chinese are buying treasuries or u.s denominated debt with the dollars we export to them for the stuff we need to consume in other words we're going into debt in order to consume products from other countries but to make matters worse they're taking those dollars and they're buying up not only our debt but also our equities our real estate our businesses so if this continues to happen for a long period of time you have fewer and fewer assets being owned by americans and more and more and more u.s assets being owned by foreigners but this isn't where the story ends insert insolvent sam who of course could be your uncle and he is holding a sign that says inflation or bust and you can see why because insolvent sam has racked up so much debt that there's no way he can ever pay it back so the only solution is to either default which he does not want to do or create inflation so he can pay the debt back with cheaper dollars but the chinese guy and the japanese guy look at this and say wait a minute we're holding these treasuries these dollar denominated assets and if we get paid back with cheaper dollars that is no bueno we're not getting paid back what we lent to insolvent sam in the first place so the chinese guy and the japanese guy look at your drunk insolvent uncle sam and they say listen dude no moss we're not taking your green pieces of paper anymore and you may be thinking to yourself george that is absolute crazy talk that is never going to happen but i'd like to remind you back in the 1970s the united states government had to issue carter bonds those were bonds denominated in currencies other than the u.s dollar why because none of our creditors wanted us dollars and we became like argentina or colombia or turkey or any of these countries that have to borrow in currencies other than their own so you can just imagine the interest rate that we're going to have to pay now when we go from issuing carter bonds to issuing drunk insolvent uncle sam bonds i also want to point out that if we continue to run these massive trade deficits or if the trade deficits increase because the stimulus checks are creating an environment where businesses have to compete with the government for the employees they need to produce goods and services it could result in inflation long term why because if we get to a point where the chinese guy and the japanese guy just don't want to take any more of our dollars or treasuries they produce less stuff for the united states if there's less stuff or goods and services in the united states with more currency units it's of course inflationary for consumer prices step number three what is the end game right about now your friend and family member fred is watching this video and saying george you don't know what you're talking about you're just too doom and gloom and tinfoil hat foreign countries will always be more than happy to produce the goods we consume right here in the united states they'll always take our dollars and they will always buy our debt what i would say to your friend and family member fred is fred i think you're suffering from a little bit of recency bias you think that whatever has happened in the past will continue to happen in the future indefinitely maybe maybe not let's look at some facts if the united states continues to consume more and more stuff produced from countries xyz and abc those countries will take the dollars they get from the production and buy u.s assets a very simple visual we've got a trade deficit imports on the left exports on the right the imports grow and grow and grow taking a bigger percentage of what we consume in the united states to a point where we could be totally reliant on foreigners for our consumption a great example right now would be medical masks or pharmaceuticals almost all made in china and india so again they take those dollars they buy more and more u.s assets to a point where they could own the majority of everything in the united states the majority of equities u.s corporate debt treasuries and real estate to illustrate how alarming this trend is let's check out a chart from my good friend lynn alden and yes she is a genius just like wiley coyote so if you're not following her on twitter make sure you do so as soon as you get done watching this video but this chart from lynn alden herself is the net international investment position well it's actually not her chart let me be clear it's from an article that she wrote for seeking alpha and we'll go to that in just a moment but bottom line the niip net international investment position shows how many american assets foreigners owned and how many foreign assets americans own and you can see this trend playing out going back to 2010 it was pretty equal now foreigners own 40 trillion dollars u.s 29 trillion dollars so the niip has gone down dramatically it's now negative 11 trillion dollars which is almost 50 percent of the united states gdp let's go right to lynn's seeking alpha article for even more detail due to persistent trade deficits as the world reserve currency meaning more wealth flows out of the country each year then comes into the country we lost creditor status and entered debtor status starting in the 1980s in other words foreigners now own more american assets than americans own of foreign assets so this takes us back to the original question are stimulus checks in economic salvation or will they put us into economic slavery to be very specific let's look at the definition of the word slave a person who has legal property of another and is forced to obey them that last part i think is crucial so if the stimulus checks create an environment where fewer people are going back to work that means we're producing less stuff right here in the united states that increases the trade deficit which means we're becoming more and more reliant on foreigners for the goods and services we consume at the same time they're getting those dollars and they're buying more and more u.s assets it gets to the point where our ability to consume is completely controlled by foreigners and those foreigners own absolutely everything so does that make us slaves by the definition i just gave i'll let you be the judge for more content that'll help you build wealth and thrive in a world of out of control central banks and big governments check out this playlist right here and i'll see you on the next video
Comments 0