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I enjoyed this episode. I can see why some people are criticising him for taking a while to explain his points but not everything should be boiled down to a clickbait soundbite. The whole point of a podcast is to be able to explore complex ideas in depth
I prefer to listen to someone clearly thinking about their answer in real time because there's so much to say about such complicated issues that it's difficult to condense it down to an easily digestable sentence compared to a clearly rehearsed soundbite. Might just be personal preference but at the very least it conveys a thought process and a sense of complexity.
"Everything in finance takes place across time." What a beautifully succinct statement, which I'll try to keep in mind for the rest of my days. Don't be short sighted when dealing with your finances!
4:14 worth repeating, because its quite interesting, that credit existed 2000 years before coinage. The order of invention (in recorded history) is: Credit > Coinage > Barter, not Barter > Coinage > Credit - as many textbooks will incorrectly tell you. Coins weren't invented to make it easier to barter, they were invented because you couldn't reliably give credit to a stranger you'd never met - so something that strangers could agree on the value of was used instead. Some of the ancient Mesopotamians civilizations also had a 7-year cycle of debt relief, to prevent society becoming too unequal. So after 7 years all debts were cancelled and everyone went back to square one - debt slaves would be returned to their families, and everyone had a chance of a fresh start.
Actually I would argue that logically it's Barter > Credit > Coinage. Credit is barter over time, also meaning Credit is impossible (non-existent) without something changing hands first (a sheep or a bag of salt for an IOY)
Another great interview. Detailed, sophisticated and assumed a high degree of respect for the audience. Personally, I had to listen hard and occassionally pause to reflect - but it was well worth it. We see far too much insipid clickbait on YT these days and need more of this quality. Well done.
Book titled The Elite Society's Money Manifestation holds the key to forbidden tehniques for manifesting money, which have truly transformed my life, it's worth exploring.
The brain drain into finance is something I have seen first hand. I studied Structural and Civil Engineering at uni. In final year we often had companies coming in to pitch why we should apply to them, often bribing with plenty of pizza for us to listen(!) almost every single company that came in to chat in my final year was a bank or banking offshoot. Only 1 company was an engineering company. And it's certainly very attractive, the salaries the financial sector can pay is far in excess what 'real' sectors can pay - heck, I could have earnt almost twice as much as I did following engineering just joining Aldi (the supermarket) middle management when starting out which was another thing pitched to me.
So funny I studied the same thing and my childhood friends dad was trying to persuade me to apply to Goldman Sachs as his eldest son was an MD there. Oh the financial security I could have had lol.
I started my career in 2001 at Rolls-Royce as an engineer. Within 4 years I was trading currency for them and for the past 15 years I have been working in Finance IT. I was faced with a choice early on where a manager told me he could get another 10 of me easily so why would he pay me more. Seems totally reasonable, but hardly a compelling argument to stay...
@@StevieeG Didn't know Rolls-Royce traded currencies. Is that just to hedge price fluctuations across their markets rather than to drive (excuse the pun) revenue?
@@RiskOnInvestor @RiskOnInvestor not the car manufacturer… BMW own that trademark. The jet engine manufacturer who have a multi billion dollar yearly exposure to GBPUSD and EURUSD and have products/projects with decades long lifecycles.
The yield on government bonds is controlled by the central bank. A central bank creates money and uses it to purchase government bonds of a specific term, continuing until the bond yield reaches their target. Lower yield targets require the central bank to create more money, injecting more into the economy (monetary inflation), which is why lower interest rates are associated with higher inflation. Conversely, higher interest rates reduce the money supply and are associated with lowering inflation.
@@SchmozzleGTO The Bank of England exclusively purchases second-hand government debt through Open Market Operations (OMO). By law, it is prohibited for the Bank of England to buy government debt directly from the government.
We haven't seen the inflation we have seen in financial assets in the cpi because the continuing improvements in efficiency, reducing quality and shrinkflation. Not to mention offshoring and basically slave labour. There is an inflation debt waiting to be paid.
A very engaging and sophisticated podcast. Great to see the social class divides being crossed and harnessed in such a humorous and mutually admiring way. Respect to you all guys. Great guest, very knowledgeable and informative. Well done all.
This was really good. For some reason I rarely see economists on TH-cam who really look into fundamental properties of the system and try to figure out what is wrong.
Interest rates don’t control inflation. Transitory inflation is FOMO. Baked in inflation is excessive government debt and debt created via QE. Extreme wealth is created by extreme debt.
@ Currently it’s just extreme inequality. Modern Monetary Theory MMT. (Magic Money Tree) will ensure the can will be kicked further down the road. To reduce inequality just stop QE and deficit spending. The wealthy will lose a lot and the poor will still be poor.
I loved this guy, he was taking time to cover his points but you can see he's constantly reassessing his standpoint every single time he's about to speak to make sure it's still relevant. People these days just spend all their time trotting out the same old tired lines and never go back to make sure their thinking is still relevant, this guy didn't and it shows that he's passionate about the subject as he's constantly thinking before speaking. Very interesting and engaging person to listen to.
You had as much fun making this as I did watching it, thank you 👏👏 👍👍 Respectful debate, witty and thought provoking. Move aside Dogma, let's see what's really happening here.
21:29 it’s worth taking on as a life lesson. By individuals taking on debt, they’ve brought their consumption from the future to the present, thus reducing their potential future consumption.
I remember working harder when the interest rate on my debt was high. When I had low interest rates the urgency to get the job done as quickly was just not there as much.
No not Sarcasm! I am not talking about mortgage on a house to live in but development finance. Business loans. Zombie companies are companies that simply don’t get enough work out of their employees to pay the higher interest rates.
Like his idea of a pendulum which has gone one way for 40 years with lower rates and higher debt to a extreme of zero or negative rates, QE, massive debts ...and now we go the other way, as huge government debt is inflated away, trust is eroded and rates rise in response...
Not to talk about the fact that most of the world's creditor nations are abandoning Western debt, due to an epochal shift in the world monetary and financial system (No Rollover) in a discussion about interest rates is frankly absurd. If you want to get an idea of what's coming down the pyke, watch Rollover (1981). I think it's on youtube.
Guys it’s very simple. First rule: Borrow to invest not to consume. Second rule: borrow to invest when the fundamentals make sense not borrow to follow FOMO which is where we are now but heads are in the sand as we are in denial!!!!! Need some experts to have balls and stand up.
Why does a government give a central bank the right to print money? Can they not print the money themselves without paying the central bank the interest on it. Surely, the government could put money in and out of the supply as an When they see fit dependent on societal needs and supply and demand of goods and services. It's a genuine question. If my thinking is too simplistic, please elaborate for me (anyone in the comment section I'd be happy to learn)
Good interview, covered a lot. I recall Will Hutton back in 2010 (before labour were even deposed, to be fair) in the guardian article "The country's renewal is being betrayed by cheap, paltry politics" admitting "quantitative easing has become the most flagrantly regressive public policy intervention in modern times" I think he ended up supporting it anyway, lol. echoing the end of the interview, I also recall a study where it concluded 5-6% of GDP being in the 'financial sector' was the sweet spot...about where poland is. Higher than that & growth in the wider economy is actually retarded. The UK, by comparison, peaked at nearly 13% in 2007. Good luck changing that with a political establishment that cares only for London when the UK economic model subsidizes London at the expense of the regions. On the subject of good inequality vs bad, it reminds me of an interview of the nauseating Hestletine & equally nauseating Loach (albeit for different reasons) in 2010 talking about the deserving vs undeserving rich th-cam.com/video/V2nvaTLVQKk/w-d-xo.html Also note the absolute economic illiteracy of Loach - he talks of a wealth tax of 5%, generating £200bn off the £4 trillion in wealth the rich held at the time. He says that is to pay off "the debt" but what he means is "the deficit" (it was approaching £200bn the previous year) Yet can't see the issue with charging a 5% tax on wealth that at the time was at best generating typically a 3% return There IS a difference in that you have producers...men like Henry ford who sell by making something more available, & thus cheaper, and you have rent seekers, who profit more off restricted supply....ie the opposite. One should get rewarded, the other penalized.
ultimately interest rates provide the incentive to save each others' time, which is expressed in productivity. the more productive, the more time saved. QE/negative rates is essentually the becoming of Gosbank in the Soviet Union.
Why do we assume interest /usury has always been a part of civil society..?? A relatively simple search will show that it hasn't.. In fact when charging interest on our money was stopped and instead the government (represented by the people) printed its own money away from central banks etc, we saw a massive rise in the standard of living right across the board. The working week/year was reduced dramatically and so people became more involved in building up their society - at a time when these incredible buildings were created around the UK. Have a look into the history of Persistent Andrew Jackson.. he puts all of this into context with regards to humanities financial freedoms vs the vampiric central banks.
Great episode and so important for financial literacy! For a related understanding of the rationale of interest rate, Marx's reasoning is that there cannot be a 'natural' rate of interest since interest payments occur between different fractions of the same class (different agents of the same element, capital) and hence there can be no fundamental law determining the movement of the interest rate. The rate of interest consequentially depends on the rate of profit and the proportion of profit divided between the lender and borrower
Market interest rates are generally based on future expectation of growth, inflation and risk. It's when governments and central banks get involved it goes awry.
Can't help feeling that the red button might have taken a pounding in this discussion. And I bet Mr Chancellor looks great in a funky bow tie. Loved it!
Brexit, Ukraine War, Covid, Gaza War, Inflation and Cost of Living, and into a multi-year Stagflation or Debt Crisis Event. No wonder hair loss treatments are doing so well 😂
I'll like them to break down all this productivity crisis stuff. What productivity? What sector? what outputs? what inputs? ...and in units, in money supply adjusted local currency, not inflation adjusted, crude, broad, broadest money supply adjusted terms. We are not in a new normal, we are back to the old normal. 1985-2005 was the aberration, thats my assertion. They are trying to return to an era of halcyon days that never existed.
But it IS the case that, in the south east at least, a 1.5m house a few years ago is now worth only 1m.! How can people, especially those in the financial world, not know this! It blows my mind how well this is covered up.
I've been shopping from Wilko since I moved to England in 2011. Yes their products were cheap, but they got the job done. When they closed it was sad like when the nice grandpa at the end street you don't talk much to but you like died :/
The discussion of government borrowing, interest, inflation, inequality and lack of productivity growth is interesting and seemed well founded. I do find the lack of discussion on public expenditure in the UK during the low interest years to be a fundamental flaw. If there had been infrastructure investment and incentives for growth industries in this period none of the negative consequences attributed to low interest rates, clean energy and “zombie companies” would be an issue.
House prices: - Planning is super locked down and heavily affects the supply and quality of stock. (Can the average family buy some land and build a house?) - Stamp Duty heavily disincentivises buying and selling.
@@balinx Exactly, the higher the taxes, the more expensive the goods. I completely don't understand why you need to pay SDTL on your main residence, it significantly hikes the amount you need to save before you purchase your first home.
SDTL needs to be reformed to a yearly tax on property / land. You won't then have the disincentives of a mobile workforce. And the huge up-front cost. The question is how to bring about these changes in a way that is acceptable politically. The ACT in Australia has done it, so it is possible.
@@balinx We don't need some draconian taxes on our own homes so people end up having their homes taken from them like in America. It should just be removed. The discussion should be about how many billions should be cut from government spending and how many millions should be deported from the country.
Not going to lie I struggled with this episode at the start. It wasn’t so clear what was his “sell” / main thesis. But I’m glad I stuck with it and he grew on me. Good discussion and nice bit of humour thrown in too. Thanks guys
I think the discussion is great and some of the cynicism is warranted, but there is a lot missing. Wealth creation is real and it makes little sense for borrowing to be a blocker to something that could generate massive wealth which has consistenly happened in human history. The other issue is that interest rates are related to risk too. Life has become a lot more predictable so the risk to lenders has come down in many ways. Years ago, a bad season might cause a famine.
2008 was a great missed opportunity to free ourselves from the rancid banking model the city of London operates. Gordon Brown may he forever burn in hell! The banks were down & out for the count. Conversely, not a single building society had to be bailed out with public funds. There were a couple of smaller mutual failures, but they were able to be merged with bigger ones & no taxpayer money put at risk. What should have happened is the retail banks should have been let go to the wall. QE, if required, limited to whatever the FSCS compensation limits were at the time once the assets had been liquidated - namely he banks assets/loan books auctioned off to the building societies at fair value. Some repossessions taken place, and durations on other mortgages extended. We had a fine model of Mutuals, Building socs, Credit unions & co operatives in this country on a local level with local knowledge. Many lost in the greed of the 80s so the carpetbaggers who joined on mass could force through demutualization for a few hundred quid. Some, like Bradford & Bingley didnt even last ten years post demutualization. Growth & greed put ahead of stability.I guess thats one good thing Gordon Brown did...stop the carpetbaggers. All the first banks to go to the wall were the demutualized building societies - Northern Rock, Bradford and Bingley, Abbey national, Halifax, C&G...the list goes on. There is no reason for city of London to have a role in retail banking. Should all go back to the mutual model. Sadly I understand Nationwide now has one of the worst quality mortgage portfolios going. They didnt need FSCS but had to pay in more to bail non mutual rivals. I guess they figured if the banks are 'too big to fail' we need to be too. Moral Hazard multiplied, the responsible bail out the cheats.
The criticismof the test was that poorer children may consume the marshmallow regardless of the promise of more down the line as they come from a resource scarce background where they take what they can get there and then. But I think using it to describe interest rates as Ed did is still relevant. In fact it’s more applicable as he goes on to discuss how the benefits of low rates were not passed on to those with lower incomes.
I liked his test that with with time and interest rates, that the girl would have a choice of the marshmallow now, or half a marshmallow later. She was polite / disciplined and after reflection made the correct choice of now!
Love this pod - great work. There are a whole number of inaccuracies from the guest in this episode however - incorrect contentions on mortgages, irrelevant comparisons on housing prices, no substantive discussion on inflation - this needs a challenge or rebuttal, and I'd be very happy to be the channel to provide it!
The housing crisis always seemed very simple to my mind. After the Nixon shock and the creation of fractional reserve banking, cash was guaranteed to lose all of its value quickly. When people realised that they couldn't just hold their 'money' in the bank without losing 30% of their spending power each decade, they decided to buy assets to store their wealth. Real estate was the simplest form of yield bearing asset to fly to, so prices just kept going up... because the money had to run somewhere. Buy a property and let it out was the idiot proof way to make money. And it worked and perpetuated itself. Now it's bitcoin. That's the scarce asset that will bubble for decades.
We don't even have fractional reserve banking any more do we? Since the late 2000s its been like 'no reserve banking' lol. Of course its more than RR's alone. I think Turkey still has reserve ratios up at around 30% & isnt exactly known for its low inflation status. Fractional reserve banking as I understand it is just another way of saying 'the multiplier effect' which, at least when I did the old a-level economics 20 something years ago seemed to be regarded as the key to all 'growth' The trouble is when power is handed to a bunch of cocaine addicted spivs in the city of London, who really know little to nothing at all about engineering, technology, healthcare or any other sector or business that we might want to invest in and grow. Moreover they know themselves they know nothing at all about these things, but have to invest somewhere. Their response - invest in speculative bubbles instead. They can take their commission & bonus, make out like a bandit during the boom years, and someone else is left holding the bag.
I disagree with his point on low rates being the main cause of unaffordable housing. The great inflation of house prices was 1995-2007 give or take a year or two, when rates were 3.5-7.5%, averaging well over 5%, hardly low by historical standards. I think the consensus of supply constraint holds.
You are correct - the interest rates themselves weren't the driver of price rises between 1995-2007. House prices dropped between 1990 and 1995 which led to mass negative equity (stalling house sale volumes) and pent up demand which was was released in 1995 as wages had increased during that period. We then saw the link between endowments and interest only mortgages broken delivering more affordability to buyers, which in turn fueled house prices. Combine this with the low interest rates of the 2010's and we have a nearly 20 year bull run on UK house prices. Supply has always been an issue all through this period, particularly between 2008-2012 (but increase again in 2013).
1995 - 2007 was a very strong economy, so asset price rises are expected. 2008 - 2022 still saw strong house growth when other asset classes did poorly (in the UK at least)
@@IAMMARTICUS1470 and in answer to @peterhannaford460 as well. 2008-2022 did not see strong house price growth in the UK. In the UK real house prices peaked in 2007 and today are 23% below that peak. That's a real terms correction, definitely not a bull market. And are you seriously saying assets in general have done poorly post-2008? Wow, yes the FTSE100 is a joke, but the global stock index is up 644% nominal and 394% real terms since the trough in 2009!! A stunning bull run.
a lot of people wanted property 'as a pension' Thatcher created a generation of philip greens and then brown came along scrapping the dividend tax credit. People wanted a 'tangible' pension. I remember my dad voting blair in 1997 & then rather regretting it a couple of months later with the pensions changes.
It's not an interest rate crisis, it's a government money crisis. Interest rates should be set by the free market. Instead we have committees at central banks, ie. communist style command and control interest rates. Therein lies the problem. If only there was a type of money outside the control of governments where interest rates could be set freely....
The problem is that in the fractional reserve system central banks are needed to restrict money supply. If they weren't, the market interest rate would always be set near 0, thus creating an almost infinite money supply and rapid inflation. Let's assume you're a bank and you create GBP 1 million for a mortgage - what interest rate would you consider a market one? The consumer chose you if you're cheaper than the competition and the minimal interest rate you can issue is the one that covers your costs related to issuing the GBP 1 million mortgage, which are close to none. That means, you can charge even 0.1% on this mortgage and this would still be 0.1% of the profit, as creating money does not cost you anything.
@@franekspeak953 History disagrees. Real interest rates were higher before the invention of central banks. The central banks are the problem. Commercial banks will charge interest also for the default risk of the borrower. The ones that don't charge enough will go bust IF ALLOWED TO DO SO. The 'too big' to fail' mantra is another part of the problem. Bank SHOULD be allowed to fail. Keeps a natural lid on credit extension.
@@franekspeak953 the entire premise of central banking is fractional reserve money creation. Central banking is the instigator and enabler of the fiat money pyramid of debt.
Must watch.... but productivity growth is not happening anytime soon so the state will HAVE TO BRING DOWN RATES AGAIN. theres no other way. Otherwise the 'housing crisis' has only just begun now because mortgages will become unaffordable. Growth is not happening.
While low interest rates reduce the immediate burden of debt, they may encourage governments to accumulate higher levels of debt. If interest rates rise in the future, the cost of servicing that larger debt could become problematic. If you need to finance a war you bring the cost of debt down so you can borrow.
I dont think the UK state will take into consideration interest rates when it vomes to borrrowing. The UK state will have to go further into debt to support itself and the growing needs of the country. That is the driving factor for going into debt. Whether they do that at 1% or 4% has little bearing on their actions. State services and local councils are extremely strained and the tax burden is at an all time high to support these services.
@@billykotsos4642the UK needs investors to buy their debt, else the central bank would have to monetise the debt (money printing - inflation) which devalues the currency resulting in rising prices. If the UK looks risky investors will charge higher interest rates which may put limits on the amount they can borrow and obviously the cost goes up.
After 2008 we had low interest rates for around 15 years and there wasn't any meaningful growth in the UK. What makes you think it'd different this time if we had low interest rates again?
I think interest has destroyed the concept of value. Why is a problem for an apple to cost the same now as it did 100 years ago??? Interest has distorted everything and caused the erosion of the value of savings over time
I always figured the original purpose of interest rates were not to serve as a hedge against inflation, a price of money, but as a hedge against the risk of default for an individual investment. Its why, as in understand it, with most central banks the core mandate is, ostensibly at least, "STABLE prices" - not Stable inflation at 2%...stable prices. Stable prices shows prejudice to neither debtor not lender. Interest bearing money/usury isnt new, but i do wonder if the idea of a monopolistic central bank combined with the monopoly on violence the state holds is a more recent development.
I think this guys brain is stuck on full throttle. must be computing millions of equations and pushing out sentences which incorporate multiple streams of information. Trying to keep up at the moment 🚴♂. well I kept up and managed to understand what was said. I enjoy all the the visitors who come onto the show as they provide a diverse insight into financial thinking. Thanks again guys.
Hi Damian, keep up the good work, I love your content. Please can you interview Steve and Steve from the playing ftse podcast? It's one of the best investing podcasts out there. I think they have a small following on youtube but bigger on Spotify, they deserve more exposure! I am just an avid listener who wants them to continue, I have no other skin in the game!
The problem is that gold, silver, bitcoin, fine art, nfts, etc are tradeable assets that don't generate any cashflows. If you buy them you are speculating that someday someone (a greater fool?) will pay you more for them. A much less risky approach is investment in the inflation linked government bonds mentioned in the podcast. Another less risky approach is investment in commodities, real estate, rentable assets like railcars, etc. These will give you a useable increase in cashflows and spending power that protects against inflation.
@@Billwzw Gold keeps its value, paper can be printed into oblivion. Who cares about generating income if that income is getting smaller and smaller over time?
the main issue he didn't address is when a bank offers a mortgage to a consumer the bank creates the loan out of nothing (then has the ordacity to charge interest on the loans) ... hence the rise in property prices is due mainly to this fact more than any other ... its a constant addition to the money supply that creates inflation...
The impatience comment isn't very complete. Because humans have consistently created wealth from absolutely nothing. There are many instances, documented historically, and conceivable, where a small amount of borrowing plus an interest rate can create substantially more wealth than the principal and interest would be. To delay that makes little sense. I think the issue is when it all overheats.
You could control inflation when interest rates was 15% because u had so much room to go up and down. We are now at a point where u can't increase interest because the economy will crash and u can't lower it because inflation will be to high. Cheap money has ran it's course, no where left to go now.
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months , my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second daughter. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks...
@@EmilyEvelyn-90 Quitting may not be the best approach if you ask me. This is where an AI comes into the picture. I barely have time to trade myself as my job swallows up most of my time. *MARGARET MOLLI ALVEY* ..
Hang about. Usuary was a crime in many places over history. Shouldn’t that be mentioned?! Inflation may be what he is failing to distinguish from interest. Hope he picks himself up.
It was a crime because it is evil. Money has a "cost" only because it is constantly being debased by central bankers. But many people are too professionally and emotionally invested in defending the tribe that controls all of the central banks to admit any of this.
Bad inequality - when hand outs are given to those already wealthy. When people pay a lower percentage of tax even though they earn more money by exploiting loopholes. When crony capitalism exists.
There is no such thing as a loophole. It's either legal in which case it's a deliberate decision by policy makers to include the exclusion within tax legislation. If it's illegal then it's a matter for relevant authority to police. If it's grey the relevant authority has the option to take the matter to court and/or change the law. The majority of people only use legal tax exclusions (e.g. ISAs, pensions) etc to reduce their tax burden.
Hello! We’ve put something together for you - a free guide for beginners that shows 80% of what you need to know about personal finance on 2 pages.
You can get it here: makingmoney.email/80-guide-video
I enjoyed this episode. I can see why some people are criticising him for taking a while to explain his points but not everything should be boiled down to a clickbait soundbite. The whole point of a podcast is to be able to explore complex ideas in depth
Agreed - this is what the longform podcast format is all about. Found this very interesting
I think it's the fact he umms and arrs so much. That isn't what podcasts are about. An interesting topic but this is a difficult listen to be honest
I prefer to listen to someone clearly thinking about their answer in real time because there's so much to say about such complicated issues that it's difficult to condense it down to an easily digestable sentence compared to a clearly rehearsed soundbite. Might just be personal preference but at the very least it conveys a thought process and a sense of complexity.
He's a very polite chap, trying not to offend with straight talking. But what he's saying is clear. Low interest rates have trashed the economy.
If you didn’t enjoy the episode, you were not the target audience
"Everything in finance takes place across time." What a beautifully succinct statement, which I'll try to keep in mind for the rest of my days. Don't be short sighted when dealing with your finances!
Also "The trouble with zombies, is that they sort of...hang around"
Excellent interview and interviewee. Respectful, challenging and thought provoking. Well done lads.
4:14 worth repeating, because its quite interesting, that credit existed 2000 years before coinage.
The order of invention (in recorded history) is:
Credit > Coinage > Barter, not
Barter > Coinage > Credit - as many textbooks will incorrectly tell you.
Coins weren't invented to make it easier to barter, they were invented because you couldn't reliably give credit to a stranger you'd never met - so something that strangers could agree on the value of was used instead.
Some of the ancient Mesopotamians civilizations also had a 7-year cycle of debt relief, to prevent society becoming too unequal. So after 7 years all debts were cancelled and everyone went back to square one - debt slaves would be returned to their families, and everyone had a chance of a fresh start.
thats very interesting... maybe we should implement that here.
Actually I would argue that logically it's Barter > Credit > Coinage. Credit is barter over time, also meaning Credit is impossible (non-existent) without something changing hands first (a sheep or a bag of salt for an IOY)
@@madma11 Wouldn't work, to many greedy people.
Check out the book by the late David Graebner - Debt. It seems like you may have already
@@matthewp619 haven't actually. I'll give it a read. Thanks!
I’m expecting him to be slated in the comments but I quite like him. He seems to think and double check himself before he answers.
Another great interview.
Detailed, sophisticated and assumed a high degree of respect for the audience.
Personally, I had to listen hard and occassionally pause to reflect - but it was well worth it.
We see far too much insipid clickbait on YT these days and need more of this quality.
Well done.
Thank you John really glad you enjoyed the chat
Emperor Palpatine if he went into finance instead of becoming a Dark Lord
omg, now I cant unhear it!
One of his many clones...
Or Douglas Murray
Seeing Pilps here feels like seeing your drug dealer at a library.
Thought this immediately xD
Great guest to invite on to stand back and give us a historical perspective on the financial system - really enjoyed it.
What a diamond geeza...the part about being more risky with other peoples money killed me
A guest too posh for T's button 😂
Never shopped at Wilko’s either by the sound of it😂
I'm pretty new here but that button was super cringe
Book titled The Elite Society's Money Manifestation holds the key to forbidden tehniques for manifesting money, which have truly transformed my life, it's worth exploring.
The brain drain into finance is something I have seen first hand. I studied Structural and Civil Engineering at uni. In final year we often had companies coming in to pitch why we should apply to them, often bribing with plenty of pizza for us to listen(!) almost every single company that came in to chat in my final year was a bank or banking offshoot. Only 1 company was an engineering company. And it's certainly very attractive, the salaries the financial sector can pay is far in excess what 'real' sectors can pay - heck, I could have earnt almost twice as much as I did following engineering just joining Aldi (the supermarket) middle management when starting out which was another thing pitched to me.
So funny I studied the same thing and my childhood friends dad was trying to persuade me to apply to Goldman Sachs as his eldest son was an MD there. Oh the financial security I could have had lol.
I started my career in 2001 at Rolls-Royce as an engineer. Within 4 years I was trading currency for them and for the past 15 years I have been working in Finance IT. I was faced with a choice early on where a manager told me he could get another 10 of me easily so why would he pay me more. Seems totally reasonable, but hardly a compelling argument to stay...
@@StevieeG Didn't know Rolls-Royce traded currencies. Is that just to hedge price fluctuations across their markets rather than to drive (excuse the pun) revenue?
@@RiskOnInvestor @RiskOnInvestor not the car manufacturer… BMW own that trademark. The jet engine manufacturer who have a multi billion dollar yearly exposure to GBPUSD and EURUSD and have products/projects with decades long lifecycles.
Same, but I like my job. I don't reckon I'd find finance as fulfilling.
You guys are killing it. Subscribed
4:15 Really important this section, Discount Model, value in the present is worth more than the value in the future. Time, mortality etc.
One of the most sensible people I have heard talk for a long time.
The yield on government bonds is controlled by the central bank. A central bank creates money and uses it to purchase government bonds of a specific term, continuing until the bond yield reaches their target. Lower yield targets require the central bank to create more money, injecting more into the economy (monetary inflation), which is why lower interest rates are associated with higher inflation. Conversely, higher interest rates reduce the money supply and are associated with lowering inflation.
M2 supply. Even Thatcher made this apparent.
At point of issuance but once they're trading in secondary market, its the market that decides the yield...
@@SchmozzleGTO The Bank of England exclusively purchases second-hand government debt through Open Market Operations (OMO). By law, it is prohibited for the Bank of England to buy government debt directly from the government.
We haven't seen the inflation we have seen in financial assets in the cpi because the continuing improvements in efficiency, reducing quality and shrinkflation. Not to mention offshoring and basically slave labour.
There is an inflation debt waiting to be paid.
A very engaging and sophisticated podcast. Great to see the social class divides being crossed and harnessed in such a humorous and mutually admiring way. Respect to you all guys. Great guest, very knowledgeable and informative. Well done all.
He is brilliant! Really enjoyed this one. ☺️ He's so quietly funny too.
This was really good. For some reason I rarely see economists on TH-cam who really look into fundamental properties of the system and try to figure out what is wrong.
Interest rates don’t control inflation. Transitory inflation is FOMO. Baked in inflation is excessive government debt and debt created via QE. Extreme wealth is created by extreme debt.
Extreme debt leads to bankruptcy, and extreme inequality. Extreme inequality leads to anarchy and violence (ie: war or revolutions)
@ Currently it’s just extreme inequality. Modern Monetary Theory MMT. (Magic Money Tree) will ensure the can will be kicked further down the road. To reduce inequality just stop QE and deficit spending. The wealthy will lose a lot and the poor will still be poor.
I loved this guy, he was taking time to cover his points but you can see he's constantly reassessing his standpoint every single time he's about to speak to make sure it's still relevant. People these days just spend all their time trotting out the same old tired lines and never go back to make sure their thinking is still relevant, this guy didn't and it shows that he's passionate about the subject as he's constantly thinking before speaking. Very interesting and engaging person to listen to.
You had as much fun making this as I did watching it, thank you 👏👏 👍👍 Respectful debate, witty and thought provoking. Move aside Dogma, let's see what's really happening here.
Thank you so much Adrian we will keep the chats coming
21:29 it’s worth taking on as a life lesson. By individuals taking on debt, they’ve brought their consumption from the future to the present, thus reducing their potential future consumption.
Fast becoming my favourite finance podcast
its amazing isnt it
Loving this guy!
He is great
I remember working harder when the interest rate on my debt was high. When I had low interest rates the urgency to get the job done as quickly was just not there as much.
Sarcasm?. But reality is different.
No not Sarcasm! I am not talking about mortgage on a house to live in but development finance. Business loans. Zombie companies are companies that simply don’t get enough work out of their employees to pay the higher interest rates.
Like his idea of a pendulum which has gone one way for 40 years with lower rates and higher debt to a extreme of zero or negative rates, QE, massive debts ...and now we go the other way, as huge government debt is inflated away, trust is eroded and rates rise in response...
Not to talk about the fact that most of the world's creditor nations are abandoning Western debt, due to an epochal shift in the world monetary and financial system (No Rollover) in a discussion about interest rates is frankly absurd. If you want to get an idea of what's coming down the pyke, watch Rollover (1981). I think it's on youtube.
Great interview....Servicing Government debt is more like 26% not 12% as mentioned in video around 20:39.
Some eye-watering amount around £10bn a month paid back in interest alone!
This guy’s a unit
Guys it’s very simple. First rule: Borrow to invest not to consume. Second rule: borrow to invest when the fundamentals make sense not borrow to follow FOMO which is where we are now but heads are in the sand as we are in denial!!!!! Need some experts to have balls and stand up.
Great episode, thank you very much
Really enjoyed this podcast! Thankyou
You are welcome thank you watching
Why does a government give a central bank the right to print money? Can they not print the money themselves without paying the central bank the interest on it. Surely, the government could put money in and out of the supply as an When they see fit dependent on societal needs and supply and demand of goods and services. It's a genuine question. If my thinking is too simplistic, please elaborate for me (anyone in the comment section I'd be happy to learn)
Have a watch of the prince's of the yen all about Japan's banking system
Excellent. Very informative and entertaining
Great podcast guys. Very knowledgeable guest
Good interview, covered a lot.
I recall Will Hutton back in 2010 (before labour were even deposed, to be fair) in the guardian article "The country's renewal is being betrayed by cheap, paltry politics" admitting "quantitative easing has become the most flagrantly regressive public policy intervention in modern times"
I think he ended up supporting it anyway, lol.
echoing the end of the interview, I also recall a study where it concluded 5-6% of GDP being in the 'financial sector' was the sweet spot...about where poland is. Higher than that & growth in the wider economy is actually retarded. The UK, by comparison, peaked at nearly 13% in 2007. Good luck changing that with a political establishment that cares only for London when the UK economic model subsidizes London at the expense of the regions.
On the subject of good inequality vs bad, it reminds me of an interview of the nauseating Hestletine & equally nauseating Loach (albeit for different reasons) in 2010 talking about the deserving vs undeserving rich
th-cam.com/video/V2nvaTLVQKk/w-d-xo.html
Also note the absolute economic illiteracy of Loach - he talks of a wealth tax of 5%, generating £200bn off the £4 trillion in wealth the rich held at the time. He says that is to pay off "the debt" but what he means is "the deficit" (it was approaching £200bn the previous year) Yet can't see the issue with charging a 5% tax on wealth that at the time was at best generating typically a 3% return
There IS a difference in that you have producers...men like Henry ford who sell by making something more available, & thus cheaper, and you have rent seekers, who profit more off restricted supply....ie the opposite. One should get rewarded, the other penalized.
ultimately interest rates provide the incentive to save each others' time, which is expressed in productivity.
the more productive, the more time saved.
QE/negative rates is essentually the becoming of Gosbank in the Soviet Union.
Edward Chancellor Palpatine: Interest rates fell to a rate at which some would call... unnatural.
That was a very entertaining and informative watch. Thanks.
Why do we assume interest /usury has always been a part of civil society..??
A relatively simple search will show that it hasn't.. In fact when charging interest on our money was stopped and instead the government (represented by the people) printed its own money away from central banks etc, we saw a massive rise in the standard of living right across the board.
The working week/year was reduced dramatically and so people became more involved in building up their society - at a time when these incredible buildings were created around the UK.
Have a look into the history of Persistent Andrew Jackson.. he puts all of this into context with regards to humanities financial freedoms vs the vampiric central banks.
Another really great episode- thank you ❤
Great episode and so important for financial literacy! For a related understanding of the rationale of interest rate, Marx's reasoning is that there cannot be a 'natural' rate of interest since interest payments occur between different fractions of the same class (different agents of the same element, capital) and hence there can be no fundamental law determining the movement of the interest rate. The rate of interest consequentially depends on the rate of profit and the proportion of profit divided between the lender and borrower
Market interest rates are generally based on future expectation of growth, inflation and risk. It's when governments and central banks get involved it goes awry.
You mustn’t take Marx too seriously
@@clipdump Sorry, I don't udnerstand what you mean? Which Marx, the Marx of Grundrisse? Why?
Can't help feeling that the red button might have taken a pounding in this discussion. And I bet Mr Chancellor looks great in a funky bow tie. Loved it!
Such an enjoyable episode
Brexit, Ukraine War, Covid, Gaza War, Inflation and Cost of Living, and into a multi-year Stagflation or Debt Crisis Event.
No wonder hair loss treatments are doing so well 😂
Mr Rolandas
I'll like them to break down all this productivity crisis stuff.
What productivity? What sector? what outputs? what inputs? ...and in units, in money supply adjusted local currency, not inflation adjusted, crude, broad, broadest money supply adjusted terms.
We are not in a new normal, we are back to the old normal. 1985-2005 was the aberration, thats my assertion. They are trying to return to an era of halcyon days that never existed.
But it IS the case that, in the south east at least, a 1.5m house a few years ago is now worth only 1m.! How can people, especially those in the financial world, not know this! It blows my mind how well this is covered up.
Great podcast.
Great interview.’Thank you!
Really good interview. The one thing we all agree on it seems is excessive inequality is driving large systemic risk
Like Marx said eventually capitalism eats itself
(About all he said that did make sense!)
I've been shopping from Wilko since I moved to England in 2011. Yes their products were cheap, but they got the job done. When they closed it was sad like when the nice grandpa at the end street you don't talk much to but you like died :/
Interest rate because for I say, yes, hence foresome so forth, forgive, amen.
😂
Very interesting and rich discussion. I like the allusion that interest rates are a planet to which other economic planets are affected by.
The discussion of government borrowing, interest, inflation, inequality and lack of productivity growth is interesting and seemed well founded. I do find the lack of discussion on public expenditure in the UK during the low interest years to be a fundamental flaw. If there had been infrastructure investment and incentives for growth industries in this period none of the negative consequences attributed to low interest rates, clean energy and “zombie companies” would be an issue.
House prices:
- Planning is super locked down and heavily affects the supply and quality of stock. (Can the average family buy some land and build a house?)
- Stamp Duty heavily disincentivises buying and selling.
@@balinx
Exactly, the higher the taxes, the more expensive the goods. I completely don't understand why you need to pay SDTL on your main residence, it significantly hikes the amount you need to save before you purchase your first home.
@@franekspeak953 everyone would stuff every penny into their houses otherwise as a land bank
SDTL needs to be reformed to a yearly tax on property / land. You won't then have the disincentives of a mobile workforce. And the huge up-front cost.
The question is how to bring about these changes in a way that is acceptable politically. The ACT in Australia has done it, so it is possible.
Labour will crash the housing market and rightly so
@@balinx We don't need some draconian taxes on our own homes so people end up having their homes taken from them like in America. It should just be removed. The discussion should be about how many billions should be cut from government spending and how many millions should be deported from the country.
Not going to lie I struggled with this episode at the start. It wasn’t so clear what was his “sell” / main thesis. But I’m glad I stuck with it and he grew on me. Good discussion and nice bit of humour thrown in too. Thanks guys
I think the discussion is great and some of the cynicism is warranted, but there is a lot missing. Wealth creation is real and it makes little sense for borrowing to be a blocker to something that could generate massive wealth which has consistenly happened in human history. The other issue is that interest rates are related to risk too. Life has become a lot more predictable so the risk to lenders has come down in many ways. Years ago, a bad season might cause a famine.
This old boy is definitely a relation to Rowley Birkin QC.
27:23 "you get these companies that should go out of business" sooo, you mean the big banks. They should have been gone after 2008
2008 was a great missed opportunity to free ourselves from the rancid banking model the city of London operates. Gordon Brown may he forever burn in hell!
The banks were down & out for the count. Conversely, not a single building society had to be bailed out with public funds. There were a couple of smaller mutual failures, but they were able to be merged with bigger ones & no taxpayer money put at risk. What should have happened is the retail banks should have been let go to the wall. QE, if required, limited to whatever the FSCS compensation limits were at the time once the assets had been liquidated - namely he banks assets/loan books auctioned off to the building societies at fair value. Some repossessions taken place, and durations on other mortgages extended.
We had a fine model of Mutuals, Building socs, Credit unions & co operatives in this country on a local level with local knowledge. Many lost in the greed of the 80s so the carpetbaggers who joined on mass could force through demutualization for a few hundred quid. Some, like Bradford & Bingley didnt even last ten years post demutualization. Growth & greed put ahead of stability.I guess thats one good thing Gordon Brown did...stop the carpetbaggers.
All the first banks to go to the wall were the demutualized building societies - Northern Rock, Bradford and Bingley, Abbey national, Halifax, C&G...the list goes on.
There is no reason for city of London to have a role in retail banking. Should all go back to the mutual model.
Sadly I understand Nationwide now has one of the worst quality mortgage portfolios going. They didnt need FSCS but had to pay in more to bail non mutual rivals. I guess they figured if the banks are 'too big to fail' we need to be too. Moral Hazard multiplied, the responsible bail out the cheats.
This guy makes sense but he is being too cautious coz he knows what shit lies ahead. Everyone is having a party in massive denial.
The marshmallow test has been debunked as it basically determined on the kids family's level of poverty
But was the test failed because they’re poor, or are they poor because they failed the test?
The criticismof the test was that poorer children may consume the marshmallow regardless of the promise of more down the line as they come from a resource scarce background where they take what they can get there and then.
But I think using it to describe interest rates as Ed did is still relevant. In fact it’s more applicable as he goes on to discuss how the benefits of low rates were not passed on to those with lower incomes.
I liked his test that with with time and interest rates, that the girl would have a choice of the marshmallow now, or half a marshmallow later. She was polite / disciplined and after reflection made the correct choice of now!
So your premise is that no child from a
deprived background would be intelligent enough to grasp the concept of deferred gratification?
Great video - the thought of interest rates/mortality is a really interesting concept
Using interest to counter inflation, it's a bit like one handed clapping. If price caps beyond an agreed % would that make it more useful.
He sounds like Douglas Murray's older brother 😂
Love this pod - great work. There are a whole number of inaccuracies from the guest in this episode however - incorrect contentions on mortgages, irrelevant comparisons on housing prices, no substantive discussion on inflation - this needs a challenge or rebuttal, and I'd be very happy to be the channel to provide it!
The housing crisis always seemed very simple to my mind. After the Nixon shock and the creation of fractional reserve banking, cash was guaranteed to lose all of its value quickly. When people realised that they couldn't just hold their 'money' in the bank without losing 30% of their spending power each decade, they decided to buy assets to store their wealth. Real estate was the simplest form of yield bearing asset to fly to, so prices just kept going up... because the money had to run somewhere. Buy a property and let it out was the idiot proof way to make money. And it worked and perpetuated itself.
Now it's bitcoin. That's the scarce asset that will bubble for decades.
We don't even have fractional reserve banking any more do we? Since the late 2000s its been like 'no reserve banking' lol. Of course its more than RR's alone. I think Turkey still has reserve ratios up at around 30% & isnt exactly known for its low inflation status.
Fractional reserve banking as I understand it is just another way of saying 'the multiplier effect' which, at least when I did the old a-level economics 20 something years ago seemed to be regarded as the key to all 'growth'
The trouble is when power is handed to a bunch of cocaine addicted spivs in the city of London, who really know little to nothing at all about engineering, technology, healthcare or any other sector or business that we might want to invest in and grow. Moreover they know themselves they know nothing at all about these things, but have to invest somewhere. Their response - invest in speculative bubbles instead. They can take their commission & bonus, make out like a bandit during the boom years, and someone else is left holding the bag.
I disagree with his point on low rates being the main cause of unaffordable housing. The great inflation of house prices was 1995-2007 give or take a year or two, when rates were 3.5-7.5%, averaging well over 5%, hardly low by historical standards. I think the consensus of supply constraint holds.
You are correct - the interest rates themselves weren't the driver of price rises between 1995-2007. House prices dropped between 1990 and 1995 which led to mass negative equity (stalling house sale volumes) and pent up demand which was was released in 1995 as wages had increased during that period. We then saw the link between endowments and interest only mortgages broken delivering more affordability to buyers, which in turn fueled house prices. Combine this with the low interest rates of the 2010's and we have a nearly 20 year bull run on UK house prices. Supply has always been an issue all through this period, particularly between 2008-2012 (but increase again in 2013).
1995 - 2007 was a very strong economy, so asset price rises are expected. 2008 - 2022 still saw strong house growth when other asset classes did poorly (in the UK at least)
@@IAMMARTICUS1470 and in answer to @peterhannaford460 as well. 2008-2022 did not see strong house price growth in the UK. In the UK real house prices peaked in 2007 and today are 23% below that peak. That's a real terms correction, definitely not a bull market. And are you seriously saying assets in general have done poorly post-2008? Wow, yes the FTSE100 is a joke, but the global stock index is up 644% nominal and 394% real terms since the trough in 2009!! A stunning bull run.
Prices were kept artificially high. Governments bailed out the whole housing market by cutting rates so much. It was hugely damaging.
a lot of people wanted property 'as a pension'
Thatcher created a generation of philip greens and then brown came along scrapping the dividend tax credit. People wanted a 'tangible' pension.
I remember my dad voting blair in 1997 & then rather regretting it a couple of months later with the pensions changes.
It's not an interest rate crisis, it's a government money crisis. Interest rates should be set by the free market. Instead we have committees at central banks, ie. communist style command and control interest rates. Therein lies the problem. If only there was a type of money outside the control of governments where interest rates could be set freely....
If only some computer technology could allow this
The problem is that in the fractional reserve system central banks are needed to restrict money supply. If they weren't, the market interest rate would always be set near 0, thus creating an almost infinite money supply and rapid inflation. Let's assume you're a bank and you create GBP 1 million for a mortgage - what interest rate would you consider a market one? The consumer chose you if you're cheaper than the competition and the minimal interest rate you can issue is the one that covers your costs related to issuing the GBP 1 million mortgage, which are close to none. That means, you can charge even 0.1% on this mortgage and this would still be 0.1% of the profit, as creating money does not cost you anything.
@@franekspeak953 History disagrees. Real interest rates were higher before the invention of central banks. The central banks are the problem. Commercial banks will charge interest also for the default risk of the borrower. The ones that don't charge enough will go bust IF ALLOWED TO DO SO. The 'too big' to fail' mantra is another part of the problem. Bank SHOULD be allowed to fail. Keeps a natural lid on credit extension.
Central banks can only control short term rates. Longer term rates like the 10yr, 30yr are market based
@@franekspeak953 the entire premise of central banking is fractional reserve money creation. Central banking is the instigator and enabler of the fiat money pyramid of debt.
Higher interest rates prevent, more borrowing which creates more money :), That also effects the commercial banks, who do most of the money creation.
Must watch.... but productivity growth is not happening anytime soon so the state will HAVE TO BRING DOWN RATES AGAIN.
theres no other way.
Otherwise the 'housing crisis' has only just begun now because mortgages will become unaffordable.
Growth is not happening.
While low interest rates reduce the immediate burden of debt, they may encourage governments to accumulate higher levels of debt. If interest rates rise in the future, the cost of servicing that larger debt could become problematic.
If you need to finance a war you bring the cost of debt down so you can borrow.
I dont think the UK state will take into consideration interest rates when it vomes to borrrowing.
The UK state will have to go further into debt to support itself and the growing needs of the country.
That is the driving factor for going into debt. Whether they do that at 1% or 4% has little bearing on their actions.
State services and local councils are extremely strained and the tax burden is at an all time high to support these services.
@@billykotsos4642the UK needs investors to buy their debt, else the central bank would have to monetise the debt (money printing - inflation) which devalues the currency resulting in rising prices. If the UK looks risky investors will charge higher interest rates which may put limits on the amount they can borrow and obviously the cost goes up.
After 2008 we had low interest rates for around 15 years and there wasn't any meaningful growth in the UK. What makes you think it'd different this time if we had low interest rates again?
@@Ratgibbon are you replying to me?
I have been saying for a while that growth is not happening.
I have always been against that narrative
Great video, and thanks for the promo code.
Raising and lowering taxes would be better at controlling inflation and reduce debt at the same time.
I think interest has destroyed the concept of value. Why is a problem for an apple to cost the same now as it did 100 years ago??? Interest has distorted everything and caused the erosion of the value of savings over time
I always figured the original purpose of interest rates were not to serve as a hedge against inflation, a price of money, but as a hedge against the risk of default for an individual investment.
Its why, as in understand it, with most central banks the core mandate is, ostensibly at least, "STABLE prices" - not Stable inflation at 2%...stable prices. Stable prices shows prejudice to neither debtor not lender.
Interest bearing money/usury isnt new, but i do wonder if the idea of a monopolistic central bank combined with the monopoly on violence the state holds is a more recent development.
I think this guys brain is stuck on full throttle. must be computing millions of equations and pushing out sentences which incorporate multiple streams of information. Trying to keep up at the moment 🚴♂. well I kept up and managed to understand what was said. I enjoy all the the visitors who come onto the show as they provide a diverse insight into financial thinking. Thanks again guys.
If US is expensive and large companies are shying from UK LSE, are they stupid or just doing what everyone else is doing? Feeling FOMO!!!
Great discussion, but not entirely sure where it takes me in terms of clear direction for the navigation of today’s investment challenges…..
Where’s the red buzzer?😊
3 minutes in and I’m was lost . Still no wiser. Can someone summarise what actually is the problem? Much appreciated
Hi Damian, keep up the good work, I love your content. Please can you interview Steve and Steve from the playing ftse podcast? It's one of the best investing podcasts out there. I think they have a small following on youtube but bigger on Spotify, they deserve more exposure! I am just an avid listener who wants them to continue, I have no other skin in the game!
So basically buy gold and silver to protect yourself against prniting to oblivion.
The problem is that gold, silver, bitcoin, fine art, nfts, etc are tradeable assets that don't generate any cashflows. If you buy them you are speculating that someday someone (a greater fool?) will pay you more for them. A much less risky approach is investment in the inflation linked government bonds mentioned in the podcast. Another less risky approach is investment in commodities, real estate, rentable assets like railcars, etc. These will give you a useable increase in cashflows and spending power that protects against inflation.
@@Billwzw Gold keeps its value, paper can be printed into oblivion. Who cares about generating income if that income is getting smaller and smaller over time?
the main issue he didn't address is when a bank offers a mortgage to a consumer the bank creates the loan out of nothing (then has the ordacity to charge interest on the loans) ... hence the rise in property prices is due mainly to this fact more than any other ... its a constant addition to the money supply that creates inflation...
g
Informative but also great fun
Now that’s a sense of humour 😂
If you just listen to audio, you could be mistaken for listening to Douglas Murray
The impatience comment isn't very complete. Because humans have consistently created wealth from absolutely nothing. There are many instances, documented historically, and conceivable, where a small amount of borrowing plus an interest rate can create substantially more wealth than the principal and interest would be. To delay that makes little sense. I think the issue is when it all overheats.
You could control inflation when interest rates was 15% because u had so much room to go up and down. We are now at a point where u can't increase interest because the economy will crash and u can't lower it because inflation will be to high. Cheap money has ran it's course, no where left to go now.
It's a de facto default on sovereign debt.
Darth Sidious sure knows alot about finance
Taxes are negative interest rates
Another interesting podcast, featuring the aptly named Mr Chancellor...the James May of interest rates...
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months , my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second daughter. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks...
@@EmilyEvelyn-90 Quitting may not be the best approach if you ask me. This is where an AI comes into the picture. I barely have time to trade myself as my job swallows up most of my time. *MARGARET MOLLI ALVEY* ..
@@BotheGhita Oh please I’d love that. Thanks!
*MARGARET MOLLI ALVEY*
Lookup with her name on the webpage.
yea thanks, i had to go shop and buy some marshmellows half way through hahaa
It's a shame you can't interview David Graeber
Interesting
Hang about. Usuary was a crime in many places over history. Shouldn’t that be mentioned?! Inflation may be what he is failing to distinguish from interest. Hope he picks himself up.
It was a crime because it is evil. Money has a "cost" only because it is constantly being debased by central bankers. But many people are too professionally and emotionally invested in defending the tribe that controls all of the central banks to admit any of this.
The thing is with his hypothesis you’d have been out the S&P last two years and missed 50% returns.
I gave up a third of the way through, didn’t hear him mention money supply (money printing) which dilutes the value of fiat currency
Good luck to you guys but going to miss this one. Don't want to make it a self-fulfilling prophecy by feeding it energy. 😏
that's quite a healthy mindset
Wishful thinking is what they are, reality is reality.
@FreaksSpeaks Agreed - this video is speculation, not reality.
"Economic forecasting is there to make astrology look respectable" - JK Galbraith. 😏
Bad inequality - when hand outs are given to those already wealthy. When people pay a lower percentage of tax even though they earn more money by exploiting loopholes. When crony capitalism exists.
There is no such thing as a loophole. It's either legal in which case it's a deliberate decision by policy makers to include the exclusion within tax legislation. If it's illegal then it's a matter for relevant authority to police. If it's grey the relevant authority has the option to take the matter to court and/or change the law. The majority of people only use legal tax exclusions (e.g. ISAs, pensions) etc to reduce their tax burden.
Sounds like Communism to me. _Rich people need to pay more!_
No. The government needs to spend less.