Macroeconomics 101: Inflation and Beyond!

Speaker A: Another one we could talk about is the money laundering methods of the uber rich.

Speaker B: Have you heard of that? Have you heard of the, uh, Mattress Conspiracy?

Speaker A: Oh, Mattress Firm.

Speaker B: Yeah.

Speaker A: Oh, dude. Yeah. When has anyone ever bought a m. Mattress from Mattress Firm?

Speaker B: We. Matty and I did.

Speaker A: I did too, actually.

Speaker B: All right, man.

Speaker A: All right.

Speaker B: Welcome back.

Speaker A: Here we are.

Speaker B: It has been some, um, time.

Speaker A: Yeah, it has been a lot. Has. There has been a lot that has happened. Um, you are a dad times two.

Speaker B: Yep.

Speaker A: Which is. That's like that. I mean, that's the biggest one. That's definitely the. That's the cause of delay. It's obviously an exciting cause of delay.

Speaker B: Yeah. Yeah. That was that. Crazy. Crazy.

Speaker A: Yeah.

Speaker B: Crazy.

Speaker A: Ah, you. Was it you. You didn't know the gender until. That's so crazy. Until the day of.

Speaker B: Yep.

Speaker A: That's so.

Speaker B: Yeah, we pulled it out. And balls. Uh, and a penis. It's a boy. I actually had a bad angle. The nurse kind of got in my way and when Maddie pulled him up, she actually got the first view. So I didn't even get to see it before because I was like trying to maneuver and then like look around and by the time I was like getting to it, Maddie had already seen it.

Speaker A: That's so, uh.

Speaker B: And uh, yeah. Saying it was a boy.

Speaker A: It's awesome.

Speaker B: It's so awesome. So two boys, like exactly two years apart. It's a blast. So fun.

Speaker A: So fun how? Sleep.

Speaker B: Um, it's a little bit difficult to come by, but to be fair, it's not bad.

Speaker A: Okay. How would you say this compares? Like just right off the bat? Obviously. Obviously. We're only a couple weeks in, but how is this compared to your first child?

Speaker B: He.

Speaker A: In terms of like the life change, I guess.

Speaker B: Oh, like going from one to two.

Speaker A: Yeah. Like the birth, the obviously like the work that's involved. Like, is it the same? Is it easier?

Speaker B: Hezzy's too. So like he's manageable. He's manageable. Like he can take orders, you know, sufficiently well.

Speaker A: Right.

Speaker B: With a little bit of rebellion in his heart. But he does it and he like, can be a little bit self sufficient. It's like, Hezzy, we need you to play with your toys or something.

Speaker A: Okay.

Speaker B: Yeah.

Speaker A: Ah, yeah.

Speaker B: So it's not like having two babies. That would be tough. People who have twins. I have, like, that's tough. Or even like your brother.

Speaker A: Mhm.

Speaker B: Uh, yeah.

Speaker A: Yeah. Pretty much two years apart.

Speaker B: No, no, no. They're. They're, they're one year apart. They're exactly one year apart.

Speaker A: Oh, yeah, you're right.

Speaker B: Not two years.

Speaker A: One and one.

Speaker B: That's a big difference.

Speaker A: Oh, yeah, you're right. Yours is just now.

Speaker B: Yes.

Speaker A: Yeah. Wow.

Speaker B: Okay.

Speaker A: Yeah.

Speaker B: Yeah.

Speaker A: So we have a baby and a two year old.

Speaker B: They had a. And a newborn.

Speaker A: Yep.

Speaker B: Yeah.

Speaker A: Yeah, that's true. That kind of. That's weird. That kind of slipped my mind. Yeah. Because Ethan's now one. Ethan's my youngest nephew.

Speaker B: Yeah.

Speaker A: And. Yeah. So you've had. You've had more time. Yeah, I think two years, um. I think two years is a good gap.

Speaker B: It's a sweet spot. Yeah, it's a sweet spot. They're still gonna be really close. They're gonna be really good buddies.

Speaker A: Mm. Mhm.

Speaker B: But they're not like, they're gonna grow up with a lot of the same friends in the same circles and the same things. Whatever. But it's not so close that it makes this particular phase difficult. Right, but you're only in it for so long, man. Like, you literally, uh, a couple years goes by pretty quick, and all of a sudden it's like, it's easy. Like giving hesi to my grandparents or. Sorry, my parents.

Speaker A: Mm. His grandparents.

Speaker B: His grandparents is easy.

Speaker A: Yeah, yeah, yeah, yeah.

Speaker B: That's cool. Titus. Titus has been a way easier baby than has he was.

Speaker A: Okay.

Speaker B: In terms of his temperament, like, it's not even close.

Speaker A: Yeah, it's not even.

Speaker B: First of all, what are we doing, man?

Speaker A: Oh, yeah, we gotta get to it. We're actually. We're drinking, uh. Yeah, we're drinking bourbon.

Speaker B: Well, we need to introduce the podcast.

Speaker A: Oh, we do.

Speaker B: Yeah.

Speaker A: Okay.

Speaker B: Welcome to the podcast.

Speaker A: Yeah, this is. This is the. The Bull Strap Found Bull Strap podcast where the founders talk all things. Um, all things.

Speaker B: Everything.

Speaker A: Yeah, honestly, it used to. We used to kind of confine what we talk about into a certain box, but now it really is just like whiskey. What's. What's current?

Speaker B: I wish. Sorry, I need to speak into the mic. I wish that I knew bourbon and whiskey better, first of all. Okay, so Woodford Reserve.

Speaker A: Mhm.

Speaker B: Kentucky straight bourbon whiskey.

Speaker A: Yep.

Speaker B: Distiller select. What? What's. This is a dumb. This is such a dumb question. Is going to reveal how little I know.

Speaker A: Oh, no, but hit me.

Speaker B: Bourbon and whiskey. Like, what is the difference between the two?

Speaker A: M. Okay, so in whiskey. Um, Cheers. Yeah, cheers.

Speaker B: Cheers to, uh, us.

Speaker A: Yeah. I haven't had Woodford in a while. I do love Woodford, though.

Speaker B: I think it's nothing like too special. M. But if you're going for a cheap one, it's like, just nice.

Speaker A: I would say it's more like middle range and bottles, like, what, 30 bucks? Yeah, 35 or so.

Speaker B: Yeah.

Speaker A: That is so good. To me, it's really good. That is the most, um.

Speaker B: Yeah, that's interesting. That's actually really good.

Speaker A: Like, in terms of just a bourbon flavor, that is exceptional. There's not anything dynamic or, like, new to it. But when I think of bourbon, like, that's the flavor I'm thinking of, and it's. Yeah, that's so good.

Speaker B: What is that?

Speaker A: So what is. Yeah.

Speaker B: What's.

Speaker A: Yeah, yeah. So bourbon, by law, in order to call a whiskey a bourbon. So all bourbon is whiskey, but not all whiskey is bourbon. So, like, bourbon is a type of whiskey, if that makes sense.

Speaker B: Bourbon is whiskey.

Speaker A: Yes.

Speaker B: But not all whiskey is bourbon.

Speaker A: Yep. So you can have. So within the whiskey family, you have bourbon, you have scotch, you have Irish whiskey, like, blended whiskeys.

Speaker B: Okay.

Speaker A: And so bourbon, in order to be called bourbon, it has to be brewed or, uh, aged. Made. Distilled. Has to be distilled in America.

Speaker B: In America.

Speaker A: In America. The whole process must be done in America.

Speaker B: For bourbon.

Speaker A: For bourbon.

Speaker B: Why?

Speaker A: That's just what. So bourbon.

Speaker B: That doesn't make sense.

Speaker A: Yeah, that's what it is. Bourbon is American. Yep.

Speaker B: American whiskey.

Speaker A: In the same way that scotch, if you want to call something scotch, everything must be done in Scotland.

Speaker B: Oh, okay.

Speaker A: Like, otherwise, it's not Scotch Territorial. Yeah, yeah, yeah. It's very territorial.

Speaker B: All right. No, no, no. That's cool. Okay, so, uh. But that's a weird class. Is there any. There's got to be something else to it than just.

Speaker A: So for bourbon, it's, um, made in America or distilled in America, it has to be aged for a minimum of four years. It has to be aged in new, charred oak barrels. So they have to. Do. They have to be new barrels, and they have to be charred, so they have to be hit with flame on the inside.

Speaker B: Okay.

Speaker A: And then, uh. And they also have to be 51% corn. Like the mash bill, the kind of the ingredients that go into making it or distilling it has to be at least 51% corn.

Speaker B: That's so interesting.

Speaker A: Yep.

Speaker B: And weird.

Speaker A: So that's how you. And under those qualifications, you end up with bourbon. And so.

Speaker B: So what's just. What's whiskey?

Speaker A: What's so whiskey a barrel aged. I, um, think grain distilled liquor.

Speaker B: I hope you know what you're talking about. It sounds like.

Speaker A: Pretty sure that's what whiskey like, because whiskey I'm not necessarily.

Speaker B: Say that again. Say it again.

Speaker A: It's just a grain. It's like predominantly grains, either, ah. Rye or barley or corn. Um, okay. Which you can get like rye whiskey. That would be 100% a straight rye whiskey.

Speaker B: Yeah.

Speaker A: Would be a hundred percent rye whiskey.

Speaker B: Okay.

Speaker A: And so it's aged in a. I don't know if the barrel always has to be new for whiskey. That's something. I don't know. But I know for bourbon it does. Like it has to be a brand new barrel. Um, but yeah, and then it's got to be. It's got to be aged. It's got to be aged. And mostly grain.

Speaker B: Huh.

Speaker A: But other than that, I'm not sure what the. I don't know outside of that, what the rules are. But bourbon specifically. 51% corn, made in America, at least four years old.

Speaker B: Wow.

Speaker A: Yeah.

Speaker B: That's so interesting. I'm gonna end up drinking this so fast.

Speaker A: Oh, it's so good.

Speaker B: I'm just smelling it.

Speaker A: Mm. Mhm.

Speaker B: I mean, yeah, this, this, uh, I feel like among bourbon enthusiasts, this is probably nothing to write home about.

Speaker A: Um, it's well respected though. Like, Woodford is definitely a. Like. Oh, you only have Woodford. Like, no one's gonna complain.

Speaker B: Okay.

Speaker A: But yeah, like, even the most versed whiskey drinker is gonna be happy if Woodford is what they have.

Speaker B: Okay, so what's Scotch?

Speaker A: Okay, so Scotch I know. Oh, Scotch I'm not as versed with because I don't love Scotch. And so I've never really like dove into Scotch. I, um, know that it must be obviously made and distilled entirely in Scotland.

Speaker B: Okay, interesting.

Speaker A: Um, the age limit is three years. I know that.

Speaker B: Um, is there an age to whiskey?

Speaker A: Whiskey? I think whiskey is three years.

Speaker B: Okay.

Speaker A: And so Scotch falls within that for whatever reason, Bourbon is full.

Speaker B: Is there anything less than two years, like less than three years that can be classified as anything? Or it's like it's got at least be in a barrel for a certain amount of time.

Speaker A: Oh, I don't know. Then you might just end up with like a liqueur. Like.

Speaker B: Okay.

Speaker A: Yeah, I'm not sure because it's weird because whiskey is one of the few, um, I don't know liquors if you would like post Prohibition.

Speaker B: Yeah.

Speaker A: Whiskey got all these laws and so in order to. Depending upon what you want.

Speaker B: What do you mean? Whiskey got all these laws, like, like

Speaker A: in the ways you can make it basically like, hey, now we're going to bring whiskey back. Depending upon what you call it. Means it must fall within these criteria. Yeah. So it's like. Okay, it's weird.

Speaker B: They controlled. They controlled it a little bit. Like m. Yeah, okay.

Speaker A: Mhm.

Speaker B: That makes sense because during, during prohibition

Speaker A: people were making crap alcohol, like moonshine and stuff.

Speaker B: Yeah.

Speaker A: Which is basically.

Speaker B: So that was like a protective measure. Like, hey, if you're going to call something whiskey, it's got to be.

Speaker A: It's got to be at least, uh, this.

Speaker B: Okay. Yeah, okay, that makes sense. Yeah, that makes sense. Yeah. Because during prohibition, people were like you. They were making sketch alcohol.

Speaker A: Oh. Yeah.

Speaker B: It was like, it was basically like

Speaker A: basement distilleries, like stuff.

Speaker B: It's like the equivalent of like modern day, like hardcore drugs or something like M. Meth or like.

Speaker A: Yeah.

Speaker B: There were people dying from alcohol consumption in prohibition. Yeah.

Speaker A: Yeah. I mean, I made sense if you think. I mean, just outlawed.

Speaker B: You're like just making. You're making crappy stuff. Stuff you're throwing. You're experimenting. Oh, try this. This is going to really get you. This is going to make you go wild.

Speaker A: Yeah.

Speaker B: Like it's basically drugs at that point.

Speaker A: Yeah. You're testing.

Speaker B: Yeah.

Speaker A: You're just testing what works.

Speaker B: That's why drugs should be legal.

Speaker A: That's.

Speaker B: Huh.

Speaker A: Oh, there's a topic.

Speaker B: Yeah.

Speaker A: Do you or do you not believe that the government should be able to tell you what you're allowed to put in your body? A podcast for another time.

Speaker B: Yeah, that's. That's actually a good topic. That is a good topic.

Speaker A: If you guys want us to expound on that. Yeah, let us know. Yeah, that is. That could be a whole thing.

Speaker B: That could be a whole thing.

Speaker A: Yeah, that's a good.

Speaker B: Yeah, I. Dude, I'm. That's a tough one for me. I feel like I sit a little bit on the fence, but I lean pretty libertarian when it comes to that. I'm like, man, make it legal. And people have to deal with their own moral decisions basically. Like.

Speaker A: But then where you can. I agree with you. But as someone who.

Speaker B: Save this for another podcast.

Speaker A: Yeah.

Speaker B: AKA just. Just go for it right now.

Speaker A: I was gonna say as. As someone who would debate though, then you bring in the question of like, okay, heroin. Where like, everyone knows that heroin's not good for you. You know, like, that can be the argument. But is. Is that the truth is all forms of heroin.

Speaker B: Hold on. But technically alcohol. There's not really any type of alcohol

Speaker A: consumption that's good for you. I know, that's another one.

Speaker B: But, uh, but heroin is in another category of substances that's like, you instantly get addicted, and coming off of it is rough. It's. So heroin's pretty synthetic, right?

Speaker A: Yeah, I believe so. I mean, it's made by the poppy seed. It's within that family. It's an opiate. Um, to my knowledge. I say that one confidently, but that one I'm not 100% sure on. I'm pretty sure it comes from the poppy, though.

Speaker B: It's within the Mason Hosar, resident drug and alcoholic.

Speaker A: The opiate world, though. I mean, that's a crazy one. Like, you can say, oh, heroin. So addictive. But, like, so is oxy.

Speaker B: Yeah.

Speaker A: And we're giving oxy to every surgery patient there is.

Speaker B: That's true.

Speaker A: And so it's like, okay, what's the.

Speaker B: Yeah.

Speaker A: Is that actually a variable of good or not good?

Speaker B: Right, Right.

Speaker A: Oh, it's.

Speaker B: It's, uh, a. Yeah, that's always interesting to. To think about and to hear about is people that, like, got addicted to oxy.

Speaker A: My dad was a, uh.

Speaker B: Really?

Speaker A: Yeah, he was one of them. He had. No. He had knee surgery. And granted, he was, like, wise enough and strong enough and a former nicotine addict, so he kind of went, oh, this is what addiction is. Like, I got to get off this. Well, yeah, he had knee surgery, and he said he was five days in, and he was, like, all right, like, done with the pills, Whatever. He said he felt that coming off of the oxy was worse than, like, the pain that it was fixing. Like he wanted to rip his skin off was how he described it. Yeah.

Speaker B: Five days.

Speaker A: Five days. Like, hey, five days of pills, and now, like, you're ready to come off, and he's calling his doctor going, if. Like, if you can't fix this feeling, I need more, cuz, like, this is not good. Yeah, that's crazy.

Speaker B: That's so crazy. You know what? That's ringing a bell. There was a guy that I used to work with, um, who a similar thing, but his were for kidney stones, and he had bad kidney stones, so they prescribed him.

Speaker A: Yeah.

Speaker B: Oxycodone.

Speaker A: And, um.

Speaker B: Dude, it took him, like, coming off of it. He was, like, shivering, and it was.

Speaker A: It was bad cold sweats.

Speaker B: Yeah, the whole thing.

Speaker A: The whole thing. It's wild.

Speaker B: That is wild. It's wild that you could just give people drugs like that. Like, under medical. They're so. They're so, like, not, um. Well, they're. They're just not legal. So then for the medical community to be like, okay, this is the conduit through which it's legal here yeah, there's

Speaker A: one like, hey, like, if you. If we had a pile of oxy right now and you were just put one in your mouth just for the will of it, just for. Hey, I'm a popping oxy.

Speaker B: Yeah.

Speaker A: You would be breaking the law in the United States of America.

Speaker B: Yeah. Because it's not prescribed.

Speaker A: It's not prescribed to you. But if you go cut your knee open or whatever, we have surgery. Like, hey, we'll give them to you. Yeah, well, just. It's weird.

Speaker B: I get it. Like, technically, there's like, okay.

Speaker A: Pain relief.

Speaker B: Yeah.

Speaker A: It's the whole, uh.

Speaker B: I have back pain.

Speaker A: Yeah. Yeah. That's another. Oh, man. That's a whole nother podcast. I know that.

Speaker B: I know. Yeah.

Speaker A: The medical world of things.

Speaker B: Well, I think something that I wanted to talk about that was kind of relevant is this might be boring, but I think we'll try and go there.

Speaker A: Okay.

Speaker B: Inflation.

Speaker A: Oh, man. It's, uh, up. Inflation is real. We're in it. That's that. Okay. Well, I guess the. What do you think I want to hear?

Speaker B: What do you think this is a little bit my topic? Uh, like, I enjoy this enough. I enjoy economics. Yeah. And like, former.

Speaker A: Former cpa.

Speaker B: No, I'm.

Speaker A: You can't.

Speaker B: Yeah.

Speaker A: You hold that title forever.

Speaker B: Yeah, well, not forever. I'm gonna make my license inactive because I'm not using it.

Speaker A: Okay.

Speaker B: But if I. All I'd have to do is, like, start back up my. My continuing education to do a certain amount of hours of continuing education whenever I want, and then I can get, like, relicensed.

Speaker A: Oh, interesting.

Speaker B: Yeah.

Speaker A: You just have to be up to.

Speaker B: I passed the exams. Yeah.

Speaker A: With what's going on. Yeah.

Speaker B: I have to do 80 hours worth of learning, which you can do online. You can do any year, every two years.

Speaker A: Oh, that's not awful.

Speaker B: No, but 80 hours is two weeks.

Speaker A: Yeah, that's. Yeah, true. So full week a year just.

Speaker B: It's annoying. Yeah, that's annoying. Yeah.

Speaker A: What if you. Assuming. Okay, like, you don't do four years. Like, four years. You just let that slide. Do you have to now go back

Speaker B: to two years or you don't do,

Speaker A: like, you just, like, let that go and you don't do any of your 80 hours.

Speaker B: Yeah.

Speaker A: Do you have to now go back and sit for all the exams and stuff?

Speaker B: If you don't do the. You're saying if you don't do the proper thing and, like, file to be. Yeah, but you just, like, don't do your cpe. You don't do your Continuing education, you just let it go.

Speaker A: Uh, like, can you.

Speaker B: I don't know, there's rules around it. I forget. But I think it's more like, it's more of a slap on the wrist. Like they're gonna make you do something worse.

Speaker A: Mhm.

Speaker B: Yeah. Yeah. I'm gonna need more of this soon.

Speaker A: Yeah. Also quick, quick recognition. I don't know if you can see your shoes, but we are both wearing old New era I think is what they call these vans. Black jeans and a white T shirt.

Speaker B: Oh my gosh. Wow.

Speaker A: Yep. We're like, we're actually like that's hilarious right now, bro.

Speaker B: High foot.

Speaker A: Yeah. Which is also funny because we did the same thing for our Thanksgiving dinner. We had. Oh yeah, that's a big Thanksgiving thing. And yeah. In the same, that same colors.

Speaker B: Yeah. Yeah, that's hilarious.

Speaker A: Um, yeah. Okay, so inflation. There's two pieces I guess really to maybe dive into. There's inflation as it happens, which is. I don't even know what our current, what is like our inflation rate.

Speaker B: Yeah, I don't know either. I think it's like 8% or something.

Speaker A: Okay. I want to say it was like 10. That was where my brain was.

Speaker B: Eight and a half.

Speaker A: Okay.

Speaker B: It's, it's high, it's really high. And it's not been this high in like a very, very long time.

Speaker A: Yeah.

Speaker B: Yeah.

Speaker A: And so there's, there's a whole bunch of different things that can obviously like impact that. And you, you honestly are going to know this like way better than I am. Um, maybe like so after inflation. So we have call, ah, it an 8% inflation. So now for every dollar you have $0.08 less. So now for every Dollar you have $0.92 based on your spending ability in the country.

Speaker B: Yeah.

Speaker A: That leads to what we're now saying we're entering is recession. What is that? I guess this is really a question because like I don't really know and I want to be educated where like how are those things? So like how is that related in the sense that all of a sudden, okay, there's only 8%, like assuming 8% less is going into the market. But now all of a sudden it's just like there's a tipping point and stuff just goes down. Yeah. Like what is. That's what I don't understand. Like the, it's like, oh no, we're not entering a recession. But it's like, oh well, if we do, then everything just.

Speaker B: So inflation is not necessarily a cause of recession, if anything.

Speaker A: No, recession is a. I Think it's inflation causes recession.

Speaker B: Well, uh, uh, sorry, sorry. What I meant to say is that a recession is not caused by inflation.

Speaker A: Oh, okay.

Speaker B: The two things are maybe kind of related, but not really.

Speaker A: Okay.

Speaker B: At least the way I tend to think about it. This could get really boring. Really?

Speaker A: Yeah, I'm like, interested.

Speaker B: Okay, so here's, yeah, here's uh, let's do like some, some 101 here.

Speaker A: Okay.

Speaker B: If there is one basketball that exists. You've probably heard me give this analogy before, but if there's like one. If there's one thing that exists, like one basketball that exists in the entire world.

Speaker A: Mm mhm.

Speaker B: That basketball is really insanely valuable.

Speaker A: Right.

Speaker B: Depending on the supply or. Sorry. Depending on the demand for that basketball.

Speaker A: Right.

Speaker B: No, it's why the Mona Lisa is

Speaker A: so, of course, so valuable.

Speaker B: There's only one and the demand for it is really high.

Speaker A: Right.

Speaker B: So that's like basically an incalculable. There's incalculable value to that piece.

Speaker A: Mhm.

Speaker B: But all of a sudden if there's millions and millions of basketballs and they're being made and they're being produced, you know, it's supply and demand. Like there's way more supply and there's sufficient demand. So the two things kind of meet each other and then the market sets that price. So supply and demand meet each other and then the market sets a price. What people don't realize is that the same principles apply to money. The same principles of supply and demand apply to money. So if there's only one dollar bill that exists in the whole world.

Speaker A: Mhm.

Speaker B: That dollar is valuable. Yes, that dollar is valuable. But if you're just printing trillions and trillions and trillions and trillions, and you're just pumping it into the system and you keep printing and printing and it's just numbers on a screen. And then again, the laws of supply and demand take effect with money as well.

Speaker A: Mm mhm. Saying that there's way more dollars, there's way more dollars.

Speaker B: So the value of each dollar goes down.

Speaker A: Right, okay, yeah, that makes sense.

Speaker B: So, uh, people, uh, basically people tend to think of inflation as rising prices, but really what causes rising prices is an increase in the money supply.

Speaker A: Right, okay. Right. Okay.

Speaker B: So that's why you'll get people talking about a gold standard. Because there's a fixed amount of gold and you can only mine so much out of the earth every year.

Speaker A: Mhm.

Speaker B: So like it's not rapidly changing. Like you can't just print trillions, you can't like there's a finite amount, it's fixed and it's just to facilitate trade. M. Like money is no more than that.

Speaker A: Right.

Speaker B: And when you start doing, when you start playing that game of printing and putting it into the economy, that ends up, it's like stimulus that props up the economy. It like boosts the economy. Inflation actually is good for the economy short term, but then it ends up turning a corner. And now when the Federal Reserve, when the Fed decides to start tightening and they raise interest rates and they're not printing as many dollars and they're not

Speaker A: trying to recoup maybe the.

Speaker B: Well, they're.

Speaker A: Or slow, they're trying to slow the supply.

Speaker B: They're trying to play God and like decide for themselves and make the decisions about, about the money supply, about interest rates and about the economy. That really should just be done by the market. The market should decide these things and find its own equilibrium. And they are the ones that play with those numbers and tweak things and it ends up resulting in these booms and busts. Like you go up and then we inflate, buh, buh, buh, buh, bup. And then all of a sudden crash, burn come down. And then you know, that's uh, like the banks make a lot of money off of these, off of these things.

Speaker A: Okay, so my next question would be, and this is actually kind of wild, I feel like what you're describing is almost like a cryptocurrency. Like, like, I mean you're saying like, okay, so like we've got a limited amount of gold. Yeah, I'm going to use Bitcoin because I think that's kind of the only one to like talk about in the world of everyone knowing about crypto. Yeah, Bitcoin, we've got a limited amount of those and everyone is accessing them. Like there's no government that's necessarily like managing that. Uh, and so in a way the people are deciding, all of the people are deciding what the value of that is. Because as it gets used as like trade, all that stuff, that's kind of interesting. Like I really, until you explain that, I'm not saying that bitcoin is the answer. Right. But until you kind of started explaining it that way, I'm now going, oh, that's, that's, that's what the craze is. Because now people are going, oh we,

Speaker B: yeah, people view Bitcoin as a gold, as like digital gold, right?

Speaker A: As like an inflation proof currency.

Speaker B: Yeah, yeah.

Speaker A: But obviously I don't think that there

Speaker B: There are people who agree and disagree with that. I think blockchain is a really compelling technology.

Speaker A: Mhm.

Speaker B: But I, I just don't think that I really could be wrong about this. I don't know. I, I don't know. I'm no expert on crypto.

Speaker A: Yeah.

Speaker B: So my tendency is to think that, like, you can't touch, you can't touch crypto. Like in a really disaster scenario, your crypto is worthless. Like, nobody wants.

Speaker A: Mhm. But I feel that way with gold.

Speaker B: Um, gold has had value for thousands and thousands of years. People use it for trade. Like it's been used. It's the earth's natural mechanism for trade. Like it's what, it's what the Earth has provided as. Like, here's what you will use to buy and sell as like a mechanism for trade. Crypto could, uh, it could be that and like, especially in the digital age. But like, I think a lot of people who care about gold understand this problem where, when, when, when the money supply gets inflated and when things go crazy, you can turn into Zimbabwe, where paper is more valuable than, than the money it's printed on.

Speaker A: Mmm. Or no, did I say money is more valuable than the paper? It's print.

Speaker B: No, no, the paper is more valuable than the, than what's being printed on it. So like, even if you're printing like trillions of dollars in Zimbabwe currency, it doesn't matter because they've just inflated it into oblivion.

Speaker A: Yeah.

Speaker B: It's now worthless. Same thing with Venezuela. Like, their currency is worthless. And that, that goes into a disaster scenario where nobody cares about crypto in Venezuela and it's because the economy is upside down and totally haywire. They're like killing cats for food. You know what I mean? Like, they're, it's bad.

Speaker A: So, okay, so we just.

Speaker B: Gold and silver are still incredibly valuable over there. Okay, so, so that's, that is, that's the point that I'm making. Uh, like I don't think gold and silver are replaced in that particular sense. Like real disaster. I think it's like a speculative, it's a speculative investment, in my opinion, for sure.

Speaker A: Agree.

Speaker B: Is what is your Bitcoin?

Speaker A: That can be. Yeah. And I can agree with that. My, I guess my thinking is, well, there's two pieces. One, we just printed like $17 trillion.

Speaker B: Yeah, I've lost track. Yeah, it's ridiculous.

Speaker A: But in my mind, like, that's more, that's more than our national debt that we've just now printed. And so why not just print the

Speaker B: national debt and pay it off.

Speaker A: No, I'm saying, like, in my mind we should have just like, basically decreased our dollar value by like 50%. So, like, if our entirety.

Speaker B: How much, how much have. Have, like food prices gone up? Do you, do you have.

Speaker A: I don't know. No, I don't.

Speaker B: It's high. It's probably closer to 50%. Home prices have gone up.

Speaker A: Uh, easy. 50 more, maybe 100. Probably 200.

Speaker B: Yeah, yeah. So that's the point. The way that the, the way that the Fed tracks what they call the inflation, uh, like what they call cpi, mhm, the Consumer Price Index. It is kind of whack. Like, it's not perfectly accurate. It's not a good. It's not like a really good reflection. And I forget why. I used to be way more well versed in this. But, like, generally speaking, it's not really a good reflection. Like, food has doubled, gas has doubled.

Speaker A: Um, that's not good.

Speaker B: Home prices have doubled. So, like, it kind of does reflect like that. You've doubled the money supply, but it doesn't take effect right away. There's two things that determine. I feel like. No, no, there's two things that determine the increase in price or inflation, if you want to call it that. So one is an increase in the money supply.

Speaker A: Right.

Speaker B: Two is the speed at which. It's called velocity. The speed at which money changes hands.

Speaker A: How much are people spending?

Speaker B: How much are people spending?

Speaker A: Like, how often and quickly are they.

Speaker B: Yes. So what ends up turning Zimbabwe into Zimbabwe and Venezuela into Venezuela, uh, is towards the end, people start to recognize, oh, my gosh, every day that I hold on to dollars, they're less valuable. I want to buy this. How many dollars are you willing to take?

Speaker A: Uh, just get rid of your dollar.

Speaker B: Yesterday. Yesterday was 100. Today it's 200. Okay, $200. I don't want. I don't want dollars. I want things.

Speaker A: Right.

Speaker B: And that's when things go haywire quick. Like, yeah, you get, you get like thousands of percent increase in prices overnight just because people realize, oh my gosh, the money in my pocket becomes less valuable day by day.

Speaker A: Yeah.

Speaker B: And then, uh, it totally. That's what wrecks the economy is like, people. As soon as people recognize that, that's velocity. So then velocity takes over and basically ruins the whole thing. Everybody's like, I don't want dollars, I want things.

Speaker A: Okay? So if you can suppress the velocity,

Speaker B: the velocity, that's what, that's that you're describing. You're describing runs on the bank. What governments Always try to do. They try to do price and wage controls. They try to like, okay, the price of XYZ thing is set at this.

Speaker A: Mhm.

Speaker B: Wages are set at this. You can't spend more money than this per week. They all do this.

Speaker A: Yeah.

Speaker B: When it gets to that point at the end they're like, oh my gosh, this is going haywire. You can't do this. You can't do this. You can't do this. And then it.

Speaker A: They add all these regulations. Yeah.

Speaker B: And then it creates a black market M. It doesn't work. You have to let the economy do its thing. Like the economy is because you run out of business. If you're trying to follow the rules, you're going to run out of business.

Speaker A: Yeah.

Speaker B: Because you can't charge enough. You can't like advertise enough.

Speaker A: Yeah.

Speaker B: It doesn't work. Nothing. Nothing works. Nothing works.

Speaker A: For those at home, that might have been a little like maybe a little less interesting than it was for me. For me that was like money. I need that, I need that kind of info. Like I almost need. I feel like I need like a 15 minute spark notes. Like it can be like really intellectual. Like hey, here's exactly how it works and how it happens. But yeah, I just needed a little more of like a uh, here's what's, what's going on.

Speaker B: You know what's funny is it's pretty conspiratorial but like the next layer to this is that we have a debt based monetary system.

Speaker A: We do?

Speaker B: Yes. Do you know what that means?

Speaker A: Yeah. You do? Yeah. We've been in debt over there forever. Rats, children. Yeah, uh, that whole thing.

Speaker B: Kind of, kind of. But uh, yeah,

Speaker A: yeah. Like we.

Speaker B: Yeah, I told you.

Speaker A: Yeah. It's like the idea that no one really own uh, like we don't really own our own monetary system. It's like, well, everyone's in debt to everyone else and it just passes this huge money block of like power to power and kind.

Speaker B: Yeah. Kind of.

Speaker A: It kind of loses the money of it. Yeah.

Speaker B: It's credit theory basically. So um, I forget if that's the right term but basically it's a credit or debt based monetary system which means that the way that money's created is not by printing, just by printing it. It's a misconception. The Federal Reserve prints.

Speaker A: Mhm.

Speaker B: Money but they're a bank. So the treasury, the us, The United States treasury, which is a part of our government when they need trillions of dollars to go to war.

Speaker A: Mhm.

Speaker B: They can't Just print it. They call up the Federal Reserve, which is a bank for the government private institution. They have to call the Fed and say, hey guys, we need X trillions of dollars. And we passed it through Congress. The Federal say, okay, print it and lend it to the government. Money is created through debt and debt only.

Speaker A: So we're lending.

Speaker B: So if all debts were paid off across the world, if everybody paid down debts on their homes, debts on their XYZ Elemental P like governments paid down their debts, everybody's bank account would show zero. There would be no money in the system. Um, because the only way that money is created is through the use of debt. Debt is how money is created. Loans are money.

Speaker A: Like, yeah, like there is no. No money enters the system that doesn't have to get paid back by its creation.

Speaker B: Yes.

Speaker A: It only enters the system by someone saying, I'll give this back to you.

Speaker B: Yes.

Speaker A: Yeah.

Speaker B: That's how money is created. That is how money is created.

Speaker A: Mhm.

Speaker B: Which is. So in a way it's basically whack that system. Again, this is conspiratorial because that's in, in uh, like actual. I would probably get like slapped around by like a real economist that. Like a Keynesian economist that like knew their stuff. And sure, whatever. If this is, you know, whatever, this is fun.

Speaker A: We're just. No, not like cheers. Sure. You might not know that we're drinking here too.

Speaker B: We're idiots.

Speaker A: I might not listen to the ins and the outs of like how it all works, but I think in the. It's also tough because like the conspiracy theory, whatever, it's like, yeah, all the details might be not there, but there's enough big picture evidence to go, this is how it works.

Speaker B: Yeah.

Speaker A: Um, so explain this to me.

Speaker B: Yeah.

Speaker A: In that theory, Joe Biden, our President, goes, we're gonna print 17 trillion.

Speaker B: Yeah.

Speaker A: Federal Reserve. I need that money. Or Treasury. No, reserve.

Speaker B: The Federal Reserve.

Speaker A: Reserve. We need this money. So Joe Biden, in a way is betting that America, like our economy and our gdp, all of that is able to pay that money back. Is that in a way, like a bet that he plays?

Speaker B: Kind of.

Speaker A: Okay.

Speaker B: The problem is, is that nobody can ever do it. This, the adept, uh, based monetary system is meant to fail.

Speaker A: Always.

Speaker B: Always. There's. There's no way because there's always more debt. There's no, there's no real money. It's all debt.

Speaker A: Mmm.

Speaker B: It's all debt. So it's, it's meant to like, you have to repay. Uh, let's say there was Just, you know, one bank said, hey, here's $100,000 that I'm going to loan. And that's all the money that's in the system.

Speaker A: Right.

Speaker B: But you have to pay it back with 10% interest. So they created $100,000, but you have to pay it back with $110,000. Where's the 10 to come from? More loans?

Speaker A: You got to go get that from somewhere else.

Speaker B: Yeah, you get it from somewhere. Yeah, like, uh, that's. It's, it's impossible. At the end of the day, this monetary system is meant to totally fail.

Speaker A: That makes sense because the way that it works. Yeah. Because if money, if any money is loaned and the payback is not break even, if there's interest on anything, then yeah, you never. Because in order to even pay it back, there must be some value that comes outside of where it was printed.

Speaker B: Yes.

Speaker A: Because if it's like, hey, I give you 100k, I need 105k back. But there's only 100k in American currency, so you better find 5k in value. Like in value. Obviously it would be dollars, but yeah, uh, like at the beginning. Yeah, it would be like, okay, so you better go find 5k from someone.

Speaker B: And it worked for a while. Like, it's not that it doesn't like permanently not work. Like it does work for a little while, but eventually it, it's, it's meant to fail. The system is meant to fail.

Speaker A: So is 10% inflation a failure? Who knows?

Speaker B: But dude, this is what's so interesting. It's. When I was growing up, I get. I played a game called Runescape.

Speaker A: Oh, baller gangster game. Yeah.

Speaker B: A lot of people probably won't know what that is, but it's basically like, it's an online game and you have a person.

Speaker A: Rpg.

Speaker B: It's rpg, Yeah. A role player game. So like you walk around and you can chop wood and you can fish and like you basically bring your skills, uh, you can like fight, so you bring your skill levels up. And it has its own economy. But the thing that's interesting about RuneScape is that there's always more coins being made in this game. Coins are never going down. Coins. There's only ever more coins being created and circulated because like, there's no, um. Yeah. So basically inflation is happening within the game itself and it reflects like if you look at the prices, uh, in,

Speaker A: in the game, in the game of

Speaker B: things that you can buy, the prices are always going up. All of them prices are always going up because coins lose. They're losing value because coins are only ever created.

Speaker A: Right.

Speaker B: Like, there's no way to get rid of coins.

Speaker A: Yeah, she just keep getting more stuff. So unless we keep going, you get.

Speaker B: You get coins from like, making things and then you can sell it.

Speaker A: Okay.

Speaker B: Like it's got its own economy, which is really. Or if you kill, you know, there's different things that you can kill in the game that like, give you money, but it's only ever creating money.

Speaker A: Is this an online game?

Speaker B: Yeah.

Speaker A: Okay, yeah, that makes sense. Yeah, yeah. So they have to be.

Speaker B: So it's such an interest. Like that is. I read a whole article on it and I was like, oh my gosh. It's the same rules apply to its own little economy that's like happening in this. Prices are only ever going up. That's because money's only ever created how?

Speaker A: Runescape.

Speaker B: Obviously there's supply and demand. So like, something could pop off, like a bitcoin that's like, oh, this is the new fad in the game. Like, everybody wants a dragon sword, a dragon blade, and then all of a sudden the demand for that is pushing the price up.

Speaker A: Mm. Mhm.

Speaker B: And then supply and demand takes into effect and then. Yeah.

Speaker A: So you want. Oh, it's wild. What that's now happening with actual currency in video games in the blockchain world.

Speaker B: What do you mean?

Speaker A: Because now. So there are video games now that are built on the back of blockchain.

Speaker B: Okay.

Speaker A: So every.

Speaker B: Wait, wait, wait, wait. Built on the back of blockchain.

Speaker A: So, like, what is what. Okay, so they're built rather with blockchain. And so there's like nf the NFT space, if you would. So imagine, uh, every cosmetic in Runescape, whether it be a red cape or a dragon sword or whatever. Yeah. Is an nft.

Speaker B: Okay.

Speaker A: Ownable by someone.

Speaker B: Okay.

Speaker A: And so now you're in the video game, you're playing Runescape Live, whatever, and you discover the one green dragon that there is in the whole game. Uh, like, yeah, there's only one. And now you have it.

Speaker B: Yeah.

Speaker A: But you can trade it to any player that there is. Like, you just like, send it to them within the game. Yeah. So now everyone in that game with like Bitcoin or whatever it is now wants to buy your sword.

Speaker B: Okay.

Speaker A: And they can. So there are people.

Speaker B: What do you mean they can?

Speaker A: Like there are video games now where they. You link your crypto wallet to it. Like, I could send you $500. And then immediately it's like, boom.

Speaker B: Real money.

Speaker A: Yeah.

Speaker B: Wait, wait, wait, but what if that person doesn't want to sell?

Speaker A: Then they hold it. They can hold it, but.

Speaker B: Yeah, but they can actually sell it.

Speaker A: Like, so now you go progress in this game and get all the achievements. Like you can sell them. Like they have actual, uh, transferable. Obviously there's no real value, but because they're both limited and you can, like, send them value.

Speaker B: Value is sort of an ambiguous thing. It's like what people determine has.

Speaker A: Yeah. So if there's.

Speaker B: If there's demand. If there's demand for something, it will have value, right? Yeah. So if there's enough demand to, like, sell, um, you know, a stupid sword in a video game and, like, enough people want that, that's demand.

Speaker A: Yeah.

Speaker B: It's the same thing with art. Like, private or. Sorry. Yeah. Art doesn't really have value. It's paint on a canvas. But because people. Because people say that is, you know, a Picasso painting and it's done in this time period and it's xyz, whatever. Then it's like, okay, that has value.

Speaker A: Dang. This is a whole nother podcast talk.

Speaker B: But, uh, we've had like three of those.

Speaker A: I know. We've had good ideas. Another one we could talk about is the money laundering methods of the uber rich.

Speaker B: Have you heard of that? Have you heard of the. The. The mattress conspiracy?

Speaker A: Oh, Mattress firm. Yeah. Oh, dude. Yeah. Where. When has anyone ever bought a mattress from Mattress Firm?

Speaker B: We. Matty and I did.

Speaker A: I did too, actually. But I went to be once, man.

Speaker B: You did?

Speaker A: Yeah, once in my whole lifetime.

Speaker B: Yes. Same.

Speaker A: I've bought one $800 mattress in my entire lifetime, and yet there are. There's a mattress firm in. There's multiple mattress firms in, like, every city.

Speaker B: Yes.

Speaker A: Yeah.

Speaker B: Yeah. When you go down. It's crazy.

Speaker A: Yeah.

Speaker B: It's wild.

Speaker A: Yeah. That is a big one.

Speaker B: What were you going to say?

Speaker A: The. I don't. I think it's capital gains. You pay no gains tax on fine art.

Speaker B: Um.

Speaker A: Hm. And I'm pretty. I'm pretty sure that that is. I'm pretty sure you pay no capital gains tax.

Speaker B: Let me. Let me look that up.

Speaker A: Uh, and so it has become this. I don't know if oligarch is the right word or whatever, but, like, it has be. Fine art has become a way for the scheme to take. Like.

Speaker B: That can't be true, bro. There's no way that's true.

Speaker A: I'm telling you. Here we go. Borrowing against the value of artwork. So taking on a mortgage allows people to get cash without having to sell which means there are no, there are no capital gains tax due.

Speaker B: Yeah, of course that's the same thing as with real estate. Like a cash out refi. If you buy, if you buy a property. Uh, this, this is, this is why loans can be good. Basically it's the same thing. It's the same thing with real estate. If you buy a property for $1 million and your loan is, let's say you put 20% down. So you paid 200K and your loan is 800K.

Speaker A: Mhm.

Speaker B: Right. And then the value of the property increases to 1 million, or sorry to 2 million.

Speaker A: Mhm.

Speaker B: You can now through the bank, borrow against that 2 million because the, the property is increased in price. So you can take another, call it 800k off the table. M. You don't have to sell it, but you can take. Because the value has doubled.

Speaker A: It's like, look, it's, it's already worth what I owe you. Yeah.

Speaker B: So it's, it's worth more than I owe you. And if I take 800k off the table, I still have 400k, which is still 20% of 2 million.

Speaker A: Mhm in.

Speaker B: I have 200k that I put in dollars to buy the property and 200k in acquired value. So I can take 800 off the table and use it for whatever I want and not pay capital gains tax. I can borrow against it. And it's so cheap to do that. That's like cheap.

Speaker A: So what if you just borrowed it and paid it off? Borrowed, like borrowed 800k and then paid off your home?

Speaker B: That's done. But you still have an 800k loan.

Speaker A: Okay. Yeah. Okay, so your bar. Yeah.

Speaker B: Yeah. Ah. So you can, technically you can sell it if you want, which is, it's not, it's not sell it, it's. You can borrow against the value of it.

Speaker A: Yeah. That's so strange to me. Like, hey, I'm gonna give you money. So it's basically like, hey, you're gonna

Speaker B: give me 800k principle. The same principle with art.

Speaker A: And if I don't pay, you buy art.

Speaker B: Let's, let's use easier numbers. You buy something for a hundred dollars and it goes to 200. And now, um, instead of selling it for 200 and having to pay taxes on that hundred dollar increase.

Speaker A: Mm mhm.

Speaker B: You can just borrow the hundred dollars and use that for more art.

Speaker A: Just buy more.

Speaker B: Buy more art.

Speaker A: Yeah. Yeah. Interesting. Okay. Yeah, that makes sense.

Speaker B: Yeah.

Speaker A: There's another, there is another piece to that. And I'll, I'll Bring it back at another time. But there is a, um, there is a loophole within the fine art world, and it might be like, uber fine art, like north of 20 million or something, but there is. There is a loophole of, like, for whatever reason, paintings are the thing to do. Like, outside of watches and boats and

Speaker B: cars and, um, it's probably because they retain their value so well. And you can't buy anything that small that is worth that much diamonds. Okay. Yep, probably true.

Speaker A: Which is actually kind of a. Yeah, that's a big one too. That's another cool one to kind of jump in.

Speaker B: Yeah, yeah, yeah, that's probably. That's probably true.

Speaker A: That's true.

Speaker B: Well, I think.

Speaker A: Dang. This has been a. Yeah, this has been a full.

Speaker B: It's a full podcast. I think what we're gonna do now is transition to the, uh, to this, the BS Society portion of the podcast. Oh, yeah, put that down like that.

Speaker A: There you go.

Speaker B: Boom.

Speaker A: That should have been that way this whole time.

Speaker B: I know. We're drinking out of BS Society whiskey glasses.

Speaker A: I don't even know if you can see the. They're laser etched under there.

Speaker B: Yeah.

Speaker A: Oh, yeah.

Speaker B: But if you're not a part of the BS Society, you should be. At this point. We have some fire members as a part of the, uh, society.

Speaker A: Discord's popping off.

Speaker B: The Discord is popping off. That's actually. I've been loving that.

Speaker A: Yeah, we should actually check in with the Discord and be like, yo, we're filming.

Speaker B: Yeah, we should.

Speaker A: I'm a little.

Speaker B: In fact, we're gonna do that right now. We're gonna send a quick pic to the Discord Chat.

Speaker A: You won't see it, though, unless you're, uh.

Speaker B: There it is.

Speaker A: Unless you're in the. Unless you're in the Society. So if you're not. If you're not a member, it's. It's probably the coolest thing we do around here, at least as far as Claudio and I are concerned. So we send you custom gear, uh, every quarter as well, such as this.

Speaker B: This was the inaugural. This or this was the very first gift that we sent. We sent this box out with these whiskey glasses. And it's sweet. We send an item that's curated like this every single quarter. There's that. You get 20% off our site always. It's Black Friday pricing 24. 7, 365. You get it all the time. Whenever you want to purchase something, you get access to a Discord Chat that is hosted by us. So we're in there. We're active, we're responding, we're talking to people. It's really sweet. What else? There's so many other things.

Speaker A: I know.

Speaker B: You get access to the next part of this podcast.

Speaker A: Yeah, that's a big one.

Speaker B: That's a big one.

Speaker A: Yep, yep.

Speaker B: We, we do that. And um, yeah, it's just sweet. You get early access to new products.

Speaker A: We also send things like, oh, he's randomly sent something.

Speaker B: The Discord. The Discord chat is gonna be like a for. We just included that as another piece of the BS society. So it's like a little bit of an evolution of this. But that's going to be a, ah, forum for us to like send stuff, get product feedback, like early access to everything that we do. It's basically like you guys are getting a massive behind the scenes look into everything that we're doing at bullsht and it's sweet. You get to connect with us. Like, just absolutely awesome.

Speaker A: That's so gangster.

Speaker B: So sick. So sick. It is literally my favorite thing that we do here.

Speaker A: Probably.

Speaker B: It's a lot of fun.

Speaker A: I can, I can tap into that.

Speaker B: Yeah. So that being said, we're going to say peace to all of you guys and transition to that part of the podcast. See ya.