Peak Prosperity - Inflation, Taxation, Then Deflation Will Destroy Prosperity. Guaranteed.

Episode Date: August 23, 2024

The Harris-Walz ‘plan’ for taxes and the economy are guaranteed to lead to ruin. But they make for great policies rooted in envy and resentment – the twin sources of fuel for all Communist-Marxist movements throughout history. Please take heed and move your wealth out of harms’ way.

Nothing in this program should be considered investment advice. It is for educational purposes only. Please hit pause and read this disclaimer in full. Kamala Harris's proposed tax and economic policies are an absolute disaster. The following is the audio version of a video released at peakprosperity.com. Visit peakprosperity.com to watch the video and to find other insightful content such as articles, discussion forums, and exclusive subscriber-only content. Hello, everyone. Dr. Chris Martin here with an episode of Finance U, where we're going to help you understand the world's events.

So let's talk about this. This is absolutely unbelievable what Kamala Harris is proposing. And by the way, I'm here as a representative of Peak Financial Investing. You can get to it at peakfinancialinvesting.com. Now, what are we going to do with Kamala Harris's proposals here? Because these things are absolutely ruinous. And let's start here. The proposals, her economic proposals just came out. A 28% corporate tax rate, that'll bring it up from 20%, so that's a fairly big hike. A 44.6% capital gains tax, 25% tax on unrealized gains. That's if you have more than a certain level of assets, of course. We'll get to that in just a second. Price controls, no tax on tips, up to 6K child tax credit. That's meaningless noise in this larger thing, but let's not forget about the price controls. Now, a lot of what's going on here is really these are continuations of Biden's tax policies, which I covered a while ago,

these were proposed back in March of 2024. So and they put capital gains at the top of this thing where, yeah, they're talking about hiking capital gains to 44.6 percent. But this was a really astonishing assault on all kinds of we'll call it centers of wealth right the 1031 transfer for real estate transactions talking about doing away with that the depletion and allowance for oil wells the hitting carried interest which is hitting all the big money out of Wall Street that's's all the hedge funds, private equity, stuff like that, etc. I mean, this was just a full-on assault.

But this part, the increased taxes on investments up to 44.6%, very bad, just alarming. And you know why it's so alarming? Because this happened in an election cycle, you want to explain to me how somebody can propose massive tax increases on primarily their own donor base during an election cycle. And I can only think of two reasons. One, there wasn't going to be an election, so don't worry about it. Or two, they already know the outcome of the election, so don't worry about it. This is bizarre.

Or they're just dog whistling to their base. And this is a big, powerful thing we have to understand in this context, because the former base in the United States was the base that had the money. Here, they're just throwing rocks at the donor base with the money and saying, we don't care about you anymore. And the only way that makes sense to me is if what you actually have instead is a new base of people who you are actually dog whistling to, a new base that you are going to be bringing in, you know, some sense of this is who you care about now. Okay? The primary motivating animus forces,

the emotional content of communism and socialism, not, not the good socialism like Iceland practices. That's actually pretty decent what they do there. Um, but the kind of socialism that we're talking about here in the United States, it's primary motivating emotional forces are envy and resentment. And that's how I'm interpreting these tax proposals here.

They're really just there to stoke envy and resentment and create more class conflict and warfare between people, right? Remember, the whole point of this whole thing is to create what's called rats in a cage. If you have two groups of people and they're in a cage and you're shocking them, they will fight each other rather than notice who is administering the shocks, right? That's just part of life. It's called rats in a cage. If you're not familiar with that, I call that framing. There's a whole body of work I've done around rats in a cage,

and it's an actual psychological experiment and known feature of social animals, that if they inescapably are shocked they will turn on each other because they have to do something to displace that aggression the fear the anger that they feel so fear anger resentment envy pretty much those are the currencies of this administration and by the way here's what that looks like on a chart even during the worst of the worst years, let me get my pointing tool out here. We're here under Carter where capital gains hit 40% and there was a lot of malaise going on in the economy at that point in time. This is going to be the highest proposed capital gains tax rate in all of history, higher than in the 20s, 30s, 40s during the war, 50s, 60s, 70s when they were

fighting inflation like crazy, the highest ever, ever proposed. And by the way, when it started out so innocently way back here, it was a 12.5% tax maxed out, right? Wow. So this whole thing is about this, which I just love the irony of this. So this is AOC wearing a multi thousand dollar dress in a gala thing attended by trillions of dollars under a tent with satin dripping from festoon. They didn't even have any room for the walls. They had so much satin. Wearing a dress that says tax the rich. unironically too like this is they mean this like this is there's no like this was a this is a good statement in her mind i'm over here going uh okay um you know you might as well be pita chowing down a hot dog uh at this point it's just it's bizarre i don't understand how these people operate. But the soak the rich is actually the game here.

So this is back from that Bloomberg article I showed you back from March. And then we'll get to Kamala specific proposals next. Said back here, they said that the budget proposal would it's in a budget proposal to the like, oh, we're having a budget proposal. We need a budget. Let's just throw like a huge blob of tax increases in the budget let y'all chew on that during an election year very bizarre uh the budget proposal would increase the capital gains tax rate they say here to equalize the taxation of investment and wage income ah you know what it's not that we're overtaxing wage income it's that we're undertaxing capital that's like it would never occur to government to go, well, let's equalize those things.

And by the way, on the surface, I'm actually okay with that idea that if I work hard for money or I let my money work hard for me, those probably ought to be taxed at about the same rate. But instead of saying, well, you know, income's taxed at close to around 40%, let's jack up the base rate of capital gains to the same number instead of bringing the other one down. We should bring the other one down. Because you know what? Very editorially, this is very simple. We could easily, easily cut government spending. Whole departments could go away. Department of Education.

You could ax that whole department and nobody except the people who work there would notice. Nothing would happen. The sun would still come up. The birds would still sing. Kids would would notice. Nothing would happen. The sun would still come up. The birds would still sing. Kids would still learn. Nothing would happen. Nothing. Just exit.

And I bet you instant savings. Now, I could do that with a bunch of departments as well. So I'm a big fan of less spending in government. But at any rate, Biden, they say here carrying on, quote, is proposing to increase the 3.8 percent Medicare tax to 5 percent. Oh, but for those earning at least $400,000 to shore up the program's trust fund. I love government humor. That's funny. There's no trust fund. There's a big stack of IOU saying we borrowed this money. We promise to pay it back. There's no trust fund. The trust fund has funds in it held in trust there is zero trust

or funds in the medicare trust fund anyway uh carrying on that would mean the richest taxpayers would pay a combined 44.6 federal rate on investment income and other earnings the plan also, in green, calls for taxing assets when an owner dies, ending a benefit that allowed the unrealized depreciation to go untaxed. Allowed. It's so beneficent of them. Oh, my goodness. You've worked really hard your whole life. You die and you just want to pass that along to your children.

No, you had unrealized depreciation in there. We let that go untaxed. We're going to have to tax children. No, you had unrealized depreciation in there. We let that go on tax. We're going to have to tax that. Now, we're going to get to that. Well, let's get to it right now, because they never inflation adjust this stuff, right? So let's just look here. I live in Massachusetts. Let me bust this out. This is in Massachusetts. This is house prices, median house prices. And from here, from 2020, when they started printing money like crazy because of COVID, house prices went up about $150,000 and those would be called gains. Now, what happened? Did the house become worth more? Does it suddenly start performing valuable services it didn't do before? You know, you park your car in a garage and you still have a garage,

but now you get a massage, right that's no it's still a house nothing happened there was inflation inflation happened this is inflation houses don't go up in price because they have more utility they go up in price because of inflation so let's just say that we had 150 000 of gains right well it at 20 taxing of capital gains unrealized capital gains that'd be 30 grand you would owe on the government for them causing the price of your home to go up and i said that accurately step one government creates inflation step two your assets inflate in price of course step three the government demands you pay them back part of the difference and they're going to call that um unrealized appreciation no it's inflation so these things should always be inflation adjusted right so if i buy the s&p

and it goes from a thousand dollars nominal holding to fifteen hundred dollars but 250 that was inflation that's not gains that that's not gains. This is a simple concept. But of course, the government's all confused about it all the time. They pretend like they don't know what inflation is, but we'll get to more of that in just a second. All right. So, hey, but what about my unrealized losses? My unrealized gains they want to come after, but what about my unrealized losses sorry charlie nothing nothing doing nothing doing we're only coming after the upside we're never going to like correct for the downside it's just how these people roll okay now from zero hedge they noted here

they pulled out a piece of an article here and they say here down in the red box in yellow that budget blueprint they're saying includes a 25 minimum tax on billionaire wealth much of which is unrealized capital gains that are not currently subject to taxation oh no somebody owned owned something that has gone up in price because we made it go up in price because we're the government we can't get our hands on that dude we did that we built that that's like this is al gore's internet. Dude, we made your stuff go up in price. You owe us. You got to kick some of that back. A little taste. You got to give us a little taste. It's just, this is insane. But this is the world you live in. And of course, you have to

understand that this is the world you're living in. You're going to have to plan accordingly because these people are here to wreck the system. That's what they're going to do. They're going to absolutely wreck the system. I mean, just destroy it. And you will experience that even though the Dow may be at $100,000, but it's still going to be a wrecked system because as the Dow goes to $100,000, the cost of the hot dog will go to $400, right? And it won't be quite, won't work out. Carrying on in white in the red box, it says a recent analysis by Americans for Tax Fairness estimated that U.S. billionaires and centimillionaires, that's $100 million, it's not billionaires anymore.

We've already cut billionaires by a factor of 10, collectively held at least $8.5 trillion in unrealized capital gains in 2022, a massive untapped source of federal revenue. Massive untapped source. Look, these people have all this wealth right now because the Federal Reserve printed money and gave it to them. And I agree, they're sitting on a big old pile of unearned wealth that they really ought not to have because I believe in hard work and all of that. So that's a different story. But the idea that the government's going to come in and start wrestling with this idea of taking your untapped capital gains is a very dangerous concept, as I'll show you.

Because that's where it starts. Hop, skip, and a jump. And next thing you know, they're coming after your untaxed gains on the crocheting you sold at your yard sale. I mean, we just all know exactly how this works. They start here. Oh, soak the rich. We wear our beautiful silk dress. So tax the rich.

We put it on our back. Anyway, and by billionaire, they did mean actually centi-millionaire. They said Biden is proposing a 25% minimum tax rate on households worth at least $100 million. And they call it a billionaire tax. Look, basic math, folks math folks this is not hard you're off by a factor of 10 it's called an order of magnitude very simple okay at any rate uh and so again there may be legit issues here but you and i both know that once they start down this path that camel's nose gets under the tent and next thing you know they're coming after people with 10 million to their name and then a million to their name and then 100,000 to their name is just how this works time after time. So we should talk about it. Channeling this ignorance,

Joe Albanese here says, you owe that only if you have assets of over 100 million and you calculate a tax rate falls below the 20% minimum. That would have zero effect on the vast majority of Americans. And Adam down there, Adam is Numa writing, nope, wrong. Only 10,000 people are impacted by this, not gains of 20,000 for little fish. Try again. These people just don't know their history because here, let me help you out. Here's some history for you. Okay. When income tax started way back in the day, so the marginal income tax brackets back here in 1913, that's the year the Federal Reserve was started. Note that the marginal tax rate between zero and 20,000 in 1913 dollars was 1%. That was the marginal tax, 1%. But if you adjust that 20 grand,000 to $2,015, that would have been equivalent to earning $480,000.

You would have paid 1%, $4,800 equivalent in today's world for having $4,800 of $480,000 of income. And then it ratcheted up there such that you could actually hit a max of 7%. But that's if your income was around $12 million equivalent, right? So that would be that right there. So that's how it started. How's it going? So in 1913, top tax bracket was 7%. Now it's 39.6%.

Tax bracket range was 1% to 7%. Now it's 10% to 39.6%. The top bracket was $11.8 million in equivalent used today. That's where it graduated to, right? Today, the top tax bracket is $466,950. Boink, you've hit the top. You're going to be paying 39.6% of every marginal dollar over that amount, whereas you didn't hit the top 7% amount until you hit that equivalent amount in today's dollars. Total tax revenues for the government in today's dollars, total tax revenues, $17.1 billion today. It's $3.364 trillion in 2017. As of current, it's about $4.2 trillion.

So I would much rather have a government operating on $17 billion than $4 trillion because they do a lot of mischief with their $4 trillion. They bomb people and spend it on dumb subsidies and promote all kinds of shenanigans. And they hire millions of people who do nothing but make sure that they can administrate really painful laws and rules and the trivia, administrivia that does nothing to make our country better, safer, saner, healthier, happier. So I'm not a fan. Today's standard deduction, you were able to deduct your first $98,000 of income. Today, that's only $12,600. Total number of 1040s filed was $358,000. Today, it's $148,606,000. Total pages in the tax code 400 you could reasonably understand the tax code today 74,608 which thousand pages do you want to specialize in i guess is is the rule now it's just this is insane

so that's how it started and this is where it's going so that's why when you watch kamala proposing to come after all these rich people it's an important thing to understand because that's actually when you look at the 10 planks of the communist manifesto, this is just written down. This is how it works. First, plank one would be abolition of property, okay, and property rights. We're seeing that happen already, right? Remember, you'll own nothing and be happy. Well, if I don't own it, who does? Is it the government? Is there some rentier class that I'm renting from? But look at plank two, a heavy progressive or graduated income tax. So Lenin said,

here's the way you ruin a country, right? First, it's by a process of inflation, and then it's by a process of taxation, And then it's finally by a process. Number three is deflation. So that would be the three-step policy, right? You inflate, you tax, and then you pull the rug out and you go through a process of deflation. That way you ruin all of your capitalists. You ruin all the rich people because you hate them because you're full of envy and resentment, right? You don't ever think about, hmm, that person is rich and I seem to, I envy that. So I'll tell you what, I will work harder and apply myself harder so that I can get there too. That's not the thing. It's like, no, no, we got to bring them down to our level. And when it's like, oh, the capital tax and the income

tax are different. So we better bring this one to this one. No, no, bring this one down and figure out how to shrink the government. That would be the right way to go about this, but they're not going to do it. And this has huge impacts for the future. They're not going to do it. They're going to print more money. We'll get to that. I got to go through inflation more specifically. Okay. Now, listen, one thing that I've learned through this whole COVID experience and as the older I get, the more true this becomes. This is a Charlie Munger quote. If you don't know who he is, he is formerly, he's dead now, the right-hand man of Warren Buffett.

And Charlie was a smart guy. And he's just a quote machine. Really erudite, very studied individual. And he said, show me the incentive and I will show you the outcome. And I was thinking about this and i was talking with somebody and and the question came up was chris do you trust any experts you know i thought about them like not doctors anymore that's for sure right as a professional class they've totally toasted their professional like just crushed i mean they just destroyed themselves right um

i was stumped until i realized oh pilots you know what i actually trust pilots and you know why because our incentives are 100 aligned they can't just like crash the plane and walk off and i die right so a doctor can totally mistreat your cancer and doesn't matter they still get paid and the porsche you know gets paid off and all that other stuff. If doctors died every time their patients died, you'd probably see a very different treatment approach. Be like, Chris, we're going to have to keep you healthy. I'm going to come over to your house twice this week and make sure you're eating your veggies and sticking to your keto diet.

The incentives have to be aligned. So I trust pilots because pilots have the same incentive I do, which is to land and not die. Right. So that's why I think they do such a good job. And that's why as a class, if you noticed, I mean, it's very, very rare to see pilot errors at all. And there's millions of flights happening all the time. And so you have to find somebody who works with you, who shares your incentives.

So we searched long and hard as part of my business. And by the way, my registered investment advisory is called Peak Financial Investing. And I do get compensated when I help people find advisors such as this gentleman here, Paul Kiker of Kiker Wealth Management. And Paul just sees the world the way I do and probably the way you do. And he's a man of exceptional integrity and he's very easy to talk to. And so I would invite anybody who really wants to maybe talk with a financial advisor who not only gets it, but sees it the same way you do, go to peakfinancialinvesting.com. There's a simple little form there, fill it out. Somebody will get back to you within 48 business hours from Paul's team,

and you can schedule a consultation with them all free. Just you deserve it. Really. If you have, if you have any wealth that needs protecting, he's your guy. All right. Inflation. And this is why your wealth is going to need protecting. Okay. First up, let, let, let's start with this. Hang on a second. Let me, let me let me pull up my um make sure that we got audio here yeah okay let's listen into this together this is this is amazing um here we go what else are you going to do to fix this problem with inflation all right thank you well let's start with this. Prices have gone up,

and families and individuals are dealing with the realities that bread costs more, that gas costs more. And we have to understand what that means. That's about the cost of living going up. That's about having to stress and stretch limited resources. That's about a source of stress for families that is not only economic, but is on a daily level something that is a heavy weight to carry. So it is something that we take very seriously. Very seriously. And we know from the history of this issue in the United States that when is a heavy weight to carry so it is something that we take very seriously very seriously and we know from the history of this issue in the united states that when you see these prices go up

it has a direct impact on the quality of life for all people in our country so it's a big issue and we take it seriously and it is a priority therefore all right i was i was miming a little thing there where i mean you just you have to be baked for this to make any sense whatsoever i mean two or three joints and and it i mean this what a non-answer uh camilla clearly has no clue what she's talking about she she is a post turtle right and that's texas saying a post turtle is somebody when you come across when you're driving up the road and you see a turtle um on a post you know a couple things uh it didn't get there by itself and it has no idea what to do now that it's there post turtle uh she has no idea what she's talking about. It's embarrassing, of course. And quite literally demoralizing for anybody with a half a brain, obviously.

So what is inflation? So let's turn to the masters. Look, it's not that hard, OK? Milton Friedman, he's a truly wise man. He said inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than an output. End quote. It's that simple. Inflation is a monetary phenomenon. Oh, we printed too much money and we don't have enough stuff. Now the prices have to come up because there's too much money floating around. That's what it is. Very simple.

You print money, you get inflation. So, oh, Kamala, here's your inflation. I found it. Quantity of money explodes higher. We can see here that from the great financial crisis back here in 2008-9, the Federal Reserve exploded the money they printed. This is their balance sheet, as it's called. But this is just money printing, pure and simple, throwing it out into the world because we have to save the markets, which means that we have to make the portfolios of our rich people explode higher. That's anyway, 688% increase. Did our economy expand by 688%?

No, it did not. So we got lots of inflation at first. Nobody cared because all the way back here, all this stuff, they just poured it into the market. So stocks went really high and bonds went really high and junk bonds went stupid expensive. Right. In fact, even here in 2019, we hit a peak where there was 17 trillion dollars worldwide of negative yielding debt. Negative yielding debt.

Wow. You have to print a lot to get the negative yielding debt. But they managed with their buddies in the ECB, that's the European Central Bank, Bank of Japan, Canada, all that. All the Western countries printed like crazy and they managed to get to $17 trillion of negative yielding debt, which means you have to pay for the privilege of lending your money to the German government. I'll give you $1,000 thousand why don't you give me back um in five years give me back 998 we're cool like what the hell is that so this was inflationary full stop but it inflated stocks and bonds at first but then in this nasty old period right here where

they dumped it in and it became government deficit spending and stimmy checks this is when it finally hit the price of milk and all the stuff that Kamala is babbling on. She knows nothing about that stuff. She doesn't buy anything. Right. And here's your inflation. It's in your money, a 42% increase in the money supply from March of 2020 through to April of 2022, a 42% increase in money in two years, 42% increase in money in two years. There's your inflation right there. Full stop monetary phenomenon. That's it. There's your inflation. OK. M2 versus inflation here, we can see this is inflation in blue. I'm sorry, M2 is in blue and and red is consumer price inflation. You see how it really is like sort of a almost a suspiciously

straight line here. Because listen, the government lies about how many jobs there are. It lies about how much inflation there is. It lies about how much oil is coming out of the ground. It's just reflexive. Your government, if you're in the United States, lies to you about all the official statistics because it needs them to look more contained than they really are. They need to, they're painting a narrative picture.

They want you happy and consuming, not fretting about things. So, so even with this, this is just like a very suspicious 45 degree line with a few little wiggles in here, just, just for appearance's sake, it's BS. But at any rate, they couldn't hide the BS anymore. And suddenly inflation explodes higher. This red line jags upward. It, guess what? The same time that that m2 money growth which is growing parabolically here all of a sudden goes vertical and inflation takes off too much money not enough stuff so the cost of things that are there goes up that's inflation we call it inflation inflation is not the price of things going up. It is the value of the money going down.

Why does the value of the money go down? Because there's more of it, right? What would your worth be as a place kicker on a football team, and you're the only one who can kick 50 yards? Be pretty high. What if you were one of 800 people who could kick 50 yards who was on the team? Your value goes down right you can still kick 50 yards but it's has nothing to do with nothing except that there's too much money it's that simple it's that simple and oh by the way here's your inflation i found it here too

it's in u.s government deficits and spending look at this this government spending starting to ramp up it's starting to go exponentially it's's like increasing. And then this is coming. Oh, no. Crash. And now it's way up here. Right. Where if you said, well, the normal sort of increase, it would have been about here. The government is now spending between one and a half to two trillion dollars more than it would have if it had just stayed on trend. But it can't help it because it got kind of addicted to all that deficit spending. And here's what it looks like on a chart where you can see this is in millions of dollars. So what's a hundred thousand million?

It's a trillion, right? So 120,000 be 1.2 trillion. This is 1.6 trillion and that's 2 trillion. You can see here the trend is very clearly rolling over. The U.S. government is now fixed for 10 years minimum at about the $2 trillion per year deficit level for the next 10 years. Trillions and trillions and trillions are just, where do they get that? Well, join me back up here. The Fed prints it up. They print it up. As long as M2 is exploding, there's plenty of money to buy all this extra government paper

down here. So that, listen, it's very simple. By the way, if you want to be confused about all this, I highly recommend you listen to Paul Krugman, who is truly not a wise man. Here he said, in inflation update, in the past I focused on a measure that excludes lagging shelter and used cars as well as food and energy. Just to note that it adds to the evidence, inflation has been largely defeated, he wrote here back in 2023. And of course that was false, but he was CPI, X food, X energy, X shelter, X used cars.

So he's just chucking out anything that looked expensive, right? Paul, what is inflation without the ability to eat, stay warm, or move around? Obviously, it's complete junk. So anyway, don't listen to this guy. He is a moron when it comes to this stuff. And Paul Krugman actually single-handedly proves that the Nobel Prize Committee is useless, as you could possibly imagine, as if you needed

more evidence of that. But he single-handedly proved it all by himself. Now, listen, I just need to point out that permanent inflation, that's something you and I, we just live with, we expect it, we expect more of it because the Federal Reserve has said they have a target and they're going to create permanent persistent inflation. It's going to be 2% a year, it's going to be 3%, it's going to be something, but it's not going to be zero. And I just want to point something out, that from 1665, which is pretty much more or less when Europeans started to settle in the United States,

because it's the United States inflation chart, for the next, oh, let's call that 100 years, there was exactly zero inflation. Right here to 1765 right zero zero inflation meaning if you had a dollar in 1665 you could have put it in the ground and dug it up a hundred years later and it would still buy a dollar's worth of stuff same like whatever a suit of clothes cost or a house or an acre of land or a quarter milk, it would have had the same relationship to it all over that whole hundred years. And then we had this war, revolutionary war.

And look, the price levels kind of went bad. They were up like 80%. But then inflation came back down again to basically the same level as it was before. And then there was another war. Inflation was a little hotter this time. But then again, under a hard money system of gold and silver, inflation came back down again, such that we can now say that for 200 years, from 1665 to 1865, a dollar was a dollar was a dollar

had the same purchasing power in terms of acres of land, quarts of milk, anything you wanted. Can you imagine what it would have been like to have lived in an era where for 200 years there was zero inflation it changes everything what you can plan on how you're going to build your business how you're going to save money everything is different when you live in a non-inflationary environment i just put this chart up to show you it is possible now unfortunately for the world for the united United States, 1913, right about here, the Federal Reserve is created. And the Federal Reserve right from the get-go is like, you know what? We're here to serve our banker buddies. And they really like inflation because as we inflate things, they can make more and more and more loans, which means they can just

clickety-clack their keys or write their little pieces of paper, and then they can extend more loans. And when they extend more loans, they get more interest being paid back. And note the work the bankers created was just like a stroke of a pen, click of a key. But they're making all these loans, and the loans come with the interest payments, which represent the work of the people. Somebody else has to take the risk, right? Take the risk, go out, perform the hard work, wake up in the morning, make the capital investments, manage the crews, do all of that,

and then give a skim back to the banks. So the banks loved inflation. So they asked and demanded for more of it. And the Federal Reserve came along and said, bro, we got you covered. And here's what inflation looked like up through about, I guess that brings us up to around the year 2000. So all of a sudden, this was the country's entire history back here for 200 plus years. And then all of a sudden, the Federal Reserve is created right here.

And the next 100 years, a little janky. Let's carry on, though. Actually gets worse than that. Actually, this only brings us up through 2008. Huh. I wonder if we can bring that up even higher. Yeah, there we go. There, I had to staple some more pieces on. There, that's what inflation looks like now with that last one tipped way up like, ah, because we've been printing like crazy. So here's the thing. If you read about inflation, you are probably confused because you are being lied to on a daily basis. There's lies inflation has come down. PBS on May 15th says

inflation has ticked down in the first drop. Oh no. NPR six days ago, inflation fell to its lowest level in more than three years in July. It makes it sound like inflation is coming down. No, what they're having trouble saying is the rate of inflation is lower. Not inflation has come down, like prices have come down, but the rate of inflation is lower than Not inflation has come down, like prices have come down, but the rate of inflation is lower than it was. This is what inflation looks like since about 1955 through to current. See that again, that's suspiciously flat line, but this is that most recent jag. Does it look like it came down? Has inflation reduced? Are prices lower than they were? The answer is no, they are not. So again,

you're being lied to all the time about this, but this is just a failure to communicate. But they always magically managed to fail to communicate a fairly simple concept, which is like, yeah, there's still inflation. It's just not running as hot as it used to. Sometimes they get to it by about paragraph six, but that's not the point. The point is to convince people that the Biden administration is doing a great job or Washington and the Federal Reserve are doing a great job. This is not a great job. This is a tale of woe and misery, particularly that last jag right there from 2020 onward, where it tips up very sharply. That's not good. And you know it. And you know, people are struggling with this. This is terrible. Kamala is like, oh, as we all know,

inflation is when your budget gets stretched. No, Kamala, it's a lot easier than that. And by the way, Milton Friedman, turning back to the wise man, because we got to cleanse our palate of the Krugman word I used before, he said, inflation is taxation without legislation. So this is true. Inflation is actually a hidden tax. And this is an important concept. Everybody should understand this. So he said, you know, consider that in December, the inflation rate back back in the equivalent of $3,500 every single year. And it reduces your income by $3,500 for every $50,000 you make. So that's what a 7.5% rate of inflation means. It means you're going to lose $3,500 of your purchasing power from your saved money every year for $50,000 of savings, right? Well, where did it go? What do you mean I lost my purchasing power? Like, where is it?

Like, it's an accounting identity. You can't just, purchasing power doesn't just evaporate. It had to go somewhere. It had to be transferred. Well, that's why a government creates inflation. They print and spend, and then your, but the amount that they overprint and spend by is the amount by which all of the bank accounts

of saved money go down in value it's just a transfer it's a tax it's just literally a tax when the government says oh we have a deficit of two trillion this year that is a tax it's a tax on the future is a tax on the present it's a tax on every dollar saved out there it is a tax but worse worse it causes people to have to stretch out on the yield curve and take big risks just to try and not lose money. The amount of gyrations and planning elderly people have to go through to just make sure their money is going to last long enough is painful to have to go through. Because you don't know how much inflation there's going to be. You just know the government's going to get in trouble. They're going to do something monumentally stupid. It'll be an emergency, right? Oh no. Who could have predicted that Russia would behave and react in the way they just did after we poked them 400

times. And now we have to pay for this war. So we're going to have blah, blah, blah, blah. There's always a reason to print more, spend more always, always, always, always. And that's a theft. It's a theft because it's inflation. It's taxation without legislation. There shall be no taxation without representation or legislation. But unfortunately, inflation is a tax. That is, it's a hidden tax. So that means that this is another lie, right? Biden promises no new taxes on anyone making less than $400,000. Well, those are actual lawful taxes that were passed in a lawful manner, but that's not counting the hidden tax.

And by the way, there it is. This is it. This is your hidden tax right here. This was taxation. This was nasty. This is really hurting people. It's hurting people badly. So this is actually just another lie. And so we're all tired of the lies. We're all tired of the gaslighting, all of that. So here you go. You ready? I have a two point plan for stopping inflation. So this is what the government would have to do. It's just two point plan. Very, very simple. Here's what we do. You stop printing money and then you stop spending money you don't have. That's it. That's the whole program. That's how you beat inflation. So when Kamala's like, Kamala, what are you going to do about inflation?

She should have said, well, two things. We're going to tell the Fed to stop printing money every time their Wall Street buddy's getting a little bit of hot water and that maybe Wall Street's going to have to learn how to take losses now and then like the rest of us. Okay. There's that. And then the second thing is we're going to have to go to a balanced budget. There.

That's how you do it. But of course they won't do that because this would be politically difficult and you'd have to actually have political chops it would cost political capital and not everybody would like it and both parties would yell at you for being such a daddy downer right but this is how you stop inflation this is it that's easy there it is stop printing money and then stop spending money you don't have. That's it. Whole thing. Okay.

So carrying on here, Elizabeth Warren said, have you noticed that groceries cost a lot more than they did a few years ago? So here we go. Okay, now this is about to get really dumb. She said, you're not the only one. Massive food corporations have kept prices up nationwide to exploit consumers and make a profit. It's time to bring them down. I like that she got ratioed hard on this one. And here's a couple of the comments that were underneath that ratioed her pretty hard.

This is flat out dumb, ignorant, stupid, or just weasely lying, because honestly, she should know better than this. And I think she could. She probably does. So this is just political posturing. But again, it sets the rats in the cage against each other she's dog whistling to her faithful to say with her resentment and envy dog whistle it's those evil corporations that's why your groceries are more expensive no elizabeth it's because you and your stupid colleagues print money and spend money they don't have i know you don't do it you have the fed do it you've outsourced that little thing so you can keep your hands clean. Oh, it wasn't us. We didn't

tell the Fed to expand their balance sheet by $4 trillion. Right. So here you go. Look at this. Here was a comment under Elizabeth's stupid tweet. This is Walmart's revenue. Oh my gosh, look at those people just jacking prices up. Oh, but wait, here's their profits. Wait a minute, hold on. Profits started at $16 billion in 2015, and now they're $11 billion, and it was $16 billion on $485 billion of revenue, and now it's $11 billion on $611 billion of revenue. That's not consistent with somebody just raking it in and crushing it with jacking prices up on people, scoring evil profits.

So it wasn't Walmart. And that, by the way, Elizabeth, just in case you keep track, that is the largest company in this particular thing that we could talk about. How about this? Kroger, Kroger, the food store, their profit margins, those greedy bastards with their fat 1.5 percent profit margins. Oh, my God. bustards with their fat 1.5 percent profit margins oh my god this is just what a thin margin highly competitive business selling food is so it's not the grocery stores i'm so tired of being lied to and gaslit but of course you know we've been talking and tracking how the mcjobs report out of the blS, which stands for Bureau of Liars and and and shit heels.

Those people, the BLS, turns out they had to revise jobs down for last year for by one eight hundred and eighteen thousand. We were we've been reporting on this the whole way through. Thanks to the great reporting at Zero Hedge in large measure, because, you know, they would say, oh, jobs grew by 255,000 and then the stock market would go up, you know, and then later they would say, oh, we were going to revise that down by 50,000 or some number, right? It turns out that the average monthly payrolls change instead of being 220,000 was actually closer to 150,000, a minus 31% change. They overstated jobs on a monthly basis by an average of 31.2%. What an accident.

So again, it's all this asymmetry where you see that they are constantly always making mistakes in one direction, but not in the other direction. They're going to come after your unrealized capital gains, but they're going to be totally silent about your unrealized capital losses, right? They're going to want to come after all that money you made, ignoring the fact that it was actually their inflation that actually caused those things to go up in price, not relative value. Now, I love me some Frederick Bastiat.

He said, when plunder becomes a way of life for a group of men and women in a society over the course of time, they create for themselves a legal system that authorizes it in a moral code that glorifies it. And I think you could replace the word plunder in this saying with lying, and it works just as well. So this is where we're at right now, just trying to decode all of the BS that's happening out there in the world right now. And you're going to have to spend as much time as you can trying to understand the financial system. I have this thing called the crash course. It explains the money system. It's in multiple chapters.

But if you haven't watched the crash course to understand how banking, how money, how inflation come together, you really should treat yourself to that because you're going to need to understand the system so that you can understand what the rules are. So you understand what the game is, which will help you understand where the puck is going to be. Because you'll at least understand you're in a game with a puck, right? My prediction is that we're going to see some sort of a scare coming into the fall of this year in 2024. And then that will be the excuse for more Fed printing because it's always a good time to print.

But you need an emergency, right? And that emergency is going to have to be significant enough to allow them to really begin to blow out their balance sheet again, print more money. And then later everybody gets to go, oh, where'd all this terrible inflation come from? It comes from the same place it always does. It's not like the mysterious fountain of life.

Ponce de Leon has to find it. It's right there. It's at the Federal Reserve. It's at the Eccles building, right? It's at 33 Liberty Street, New York, where the Fed headquarters are for the New York Fed, which is the center of the center. Okay, so that's coming, and you absolutely are going to have to work double overtime to make sure that whatever wealth you have doesn't get seized, predated upon, taken by the system. And by the way, all these tax code changes we're talking about here, these are what we would call lesser takings. You should also be aware of the great taking that's sitting in our legal system code right now, such that if there

is a big giant hiccup in the financial system, wouldn't you know it, but they have legalized it and put it into a legal system that authorizes their plunder, right? This is Frederick Basiat writing about one of the oldest things you know about in human behavior, which is that if people can get a free lunch, if they can take your stuff from you and can do it in a way, in a legal way, oh, but the laws say that all your portfolio belongs to us, right? If they can do that, they will. And they have. If you don't understand the great taking as well, I have a great taking webinar that you should probably, definitely, absolutely take a look at because that is the great taking. But we are now in an environment of lesser and greater takings. And

that's just what happens when a system runs out of gas. The plunder comes forward. The people who are in charge of the system can't help their plundery ways. They have glorified it. They have a legal system that authorizes it. And here we are. But by knowing about it, you have your first tool in your toolkit. And then by working with people who understand how to avoid that, evade that, legally, all of that. But if you are just got a blindfold on, you just prefer not to know, you're rowing around, bird in a box, you know, with a blindfold on, you're going to bump into some stuff.

I'd rather you didn't. I want you to be happy, healthy, wealthy, prosperous, all of that. We'll get through this. But first thing you have to understand is how the system is rigged and why the riggers are rigging it the way they have. It's because they're greedy. Also, they don't understand history and they're going to break the system. So with that, thanks very much for listening.

Hope you enjoyed this Finance U, and Paul will be back with us next week. See you then. Bye, everyone.