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Unknown A
You've done everything right. You went to college, you got a good job, you've worked hard and gotten promoted. But you're still living paycheck to paycheck. And the same is true for most of your friends. And all of you want to know why in the hell it seems to be impossible to get ahead. How can it be that the American dream is dead? How is it possible that the boomers could buy a house with a stick of chewing gum and some matchsticks and you've been forced to give up on ever owning a home? Welcome to the world of inflation, where your money is worth less every year no matter how hard you work. I am Tom Bilyeu and today I'm going to help you understand why inflation feels like your wallet is being dry humped by the Grinch. And most importantly, what you can do about it.
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Unknown A
And what you can do about it is the important part here. Because even if the game is rigged, you can learn how it's played and you can still get ahead. First, a definition. What is inflation? Simply put, inflation is prices going up over time. But while some would have you believe inflation is good or a natural law of the universe, the reality is that long term inflation rips countries apart from the inside by stealing your purchasing power and incentivizing the accumulation of debt at the individual and governmental levels. It is the great deranging force that makes you want to adopt a boomer just to drown them in the bathtub. Now I'll explain how in a minute, but I'm telling you right now. Once you see that inflation is the primary method by which wealth is transferred from the poor and middle class to the wealthy, you cannot unsee it.
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Unknown A
And that's why I talk about this on an endless loop. Now listen, inflation is not the only problem, but it is the biggest problem. So it's going to be my focus today. Now if inflation is the price of things going up over time, why do I call it government approved counterfeiting? Because of the underlying thing that causes the prices to actually go up. And what is that underlying thing? The government printing money out of thin air so that they can spend more money than they bring in in taxes. Now why would they want to do that? Because then politicians do not have to get you to vote for a tax increase when the bill comes due for all the things that they promised to give you. Politicians by nature are in the business of both governing and getting re elected and to get reelected. They have all, universally, all throughout human history realized that promising to give you Free stuff is the very thing that's going to get them reelected.
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Unknown A
The bad news is that there really is no free lunch. But what you're living through right now is that you really can make someone else pay for a huge portion of that lunch. Here's how it works. When the government prints money out of thin air, each dollar becomes worth a little bit less. Think of it this way. It's like pouring some coffee into a giant mug. Every bit of water you add to the mug dilutes the coffee. That's why the government can't just print a ton of money and make everyone a billionaire. That would be the equivalent of pouring a tsunami of water into a thimble full of coffee. It's what's known as hyperinflation and it makes money worthless. Just as too much water would make it impossible for you to taste the coffee, too much money makes it impossible to buy anything. It is the great irony of this grand counterfeiting.
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Unknown A
The money ultimately has no remaining value. You can think of it another way. If there is one pizza for sale and everyone has $100, maybe people are willing to pay $10 for the pizza. But what if there is only one pizza still, but everyone now has a billion dollars, how much would they be willing to pay for that same pizza? Millions? It's certainly possible as a percentage of the money that they have. And that's why you can't print more money unless at the same time you add a corresponding amount of things that people want to buy. Now I can hear you saying, yeah, but Tom, we're only talking about 2% inflation. Why should anyone be scared of that? If I get all of my free stuff promised to me by the politicians in their bid to get re elected, why should I care about the government printing 2% new money?
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Unknown A
And the answer is very simply compounding. Compounding interest has been referred to as the eighth wonder of the world. Here's why. 2% annual inflation in just five years will steal almost 10% of your purchasing power. In 10 years, that number jumps to nearly 20%. So while you'd still see $100 in your bank account, that $100 after just 10 years would only buy $80 worth of stuff. Also, 2% is just the target. According to truflation, the real compounded interest rate over the last five years alone was over 25%, thanks to unprecedented deficit spending in printing by the government. To all of the people that will have you believe that money printing is not the cause of inflation, I say this. There are studies that Show a point nine correlation between money printing and inflation. One would be perfect correlation. We're at zero point nine. So we are but one tenth of a point off from there being a perfect correlation between money printing and inflation.
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Unknown A
I think we have found the smoking gun. More money in the system means higher prices. Period. Now, before I explain how inflation exactly facilitates the great wealth transfer from the poor and middle class to the wealthy and from the young to the old, another fascinating side effect. Let me give the devil its due. Inflation really does have an upside. Like all bad things that manage to stick around, it really does just enough short term good that people cannot stop themselves from doing it. Think of it as a cocaine bender. Pre fentanyl once in a while probably isn't going to kill you, but get addicted and you are toast. And as a society, we are officially addicted to the upside of inflation. And that is a twofold problem. Inflation creates momentum in the economy. That's number one. Because your money is going to be worth less than a year, you're incentivized to spend your money and not save it.
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Unknown A
That gets the economy humming. And that is a very good thing. And when you keep inflation to roughly 2% a year, people cannot figure out why they're having trouble getting ahead. Inflation also allows capital to be aggregated. That is number two, people being willing to amass a large amount of money isn't actually bad. It is a good thing. You would not want to live in a world where capital couldn't be aggregated. It's beyond the scope of this video, but I'll just say this. All of the cool stuff in your life, like your computer, the AC that's keeping you right now either warm or cool, your iPhone that you're probably listening to this on, and the Internet itself are all the result of someone making enough money that they could take some crazy risks and fund insane projects that have en masse, led to good things.
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Unknown A
Now those things sound pretty good, I assume. So what's the problem? Right? That's the question. First and foremost, it is immoral to secretly take people's money. Taxes are one thing, vote for what you believe in, but it's something else entirely. When the government prints money, racks up huge deficits, which is the same as raiding the bank accounts of future people, and then distributes the rated funds in a way that makes the rich richer and the poor rich poorer. All right, we've now reached the point in the story where I'm going to have to explain exactly how inflation, your government legally counterfeiting Money so they can secretly siphon off your purchasing power to supposedly give you free things, which in the final analysis aren't actually free. They're just reaching into your wallet and taking the money without having to ask your permission. Imagine this. Your rich friend.
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Unknown A
Let's call him Gov. Your rich friend, Gov invites you out to this incredible free lunch. He likes you, really wants you to like him. So he says he's going to throw a lavish bash in your honor. It's going to be insane. You do not want to miss this. Absolutely decadent. And did he mention that it's all free? He's going to pick up the tab. You don't have to worry about anything. All you have to do is show up and enjoy yourself. You go, and it really is amazing. It's like a Roman feast fit for a king. You wonder to yourself, how on earth is he going to pay for all of this? Sure, you give him some money every year to help him do cool stuff for you, but. But nothing like this. At the event, Gov gives an incredible speech. He calls you out.
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Unknown A
He says, this is to honor you and the other attendees at the party, that you guys deserve this kind of lavish treatment and it's all free. The bad news is, during that speech, a hacker goes into your bank account and steals from everyone at the party equally to pay for the feast. And there's nothing you can do to stop them. Whatever. It's only 2% of your money. Right? And that was a pretty epic party. Wrong. The problem is, this is where we have to let go of the analogy. Because the government doesn't actually steal your money, they counterfeit it. And that steals your purchasing power. Remember, it's like diluting your coffee with a bunch of water. And here's the kicker. Someone is going to receive those counterfeited dollars. This is the part of the heist that everybody misses. The counterfeited dollars might not be worth a full dollar, but they're still worth a lot.
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Unknown A
And someone is going to benefit from those and it's going to be unevenly distributed. But why the rich, right? Is it just because they're friends with the politicians and the bankers? Certainly part of the story. And I'll explain that in a minute as we get into debt. But it's not the full story. This is where we have to talk about what happens when the money is counterfeited at scale. You lose your purchasing power. As we've discussed, you're incentivized to spend rather than save. People start accumulating debt. More on that later, prices go up on the things you want to buy. Again, as we've discussed. But and this might be the most important, what we haven't discussed, is that the price of the things you own and could sell also go up. Now, if you own what are called assets, you're in great shape. As the government inflates the money supply and prices go up due to inflation, you've got a bunch of cool stuff that people might want to buy and you can now sell them for higher prices.
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Unknown A
In fact, the prices of what are known as inflation resistant assets go up roughly the same amount as inflation. It's never exact, but it's close. Now, what are assets? Things like stocks, bonds, real estate, precious metals, gold, silver, bitcoin, art, things like that. Okay, cool. But one more time, how does this make the rich richer and the poor poorer? Fun fact. Not everyone who owns assets is rich, but basically every rich person owns assets. It is like rich person 101, and I am not joking. The second I made my money, money managers came out of the woodwork offering to help me manage my money. And lesson number one, buy assets. That was the thing that they were drumming into my head. And here's why. When the money supply is inflated, the price of assets go up. So if you know the government is going to print money, and they are, then you need to own assets as a way to protect yourself against that inflation.
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Unknown A
Now here's a breakdown of exactly the way that this happens. Because there are only so many valuable assets available in the world, they retain their value as the dollar gets diluted Whenever people have more money, but the number of things available to buy stays the same, prices go up. Remember that pizza? So rule number one a beating inflation is to buy things, AKA invest, or in my words, gamble on things you think will go up in value by at least as much as the money supply is being inflated. So anyone holding inflation resistant assets is going to see their net worth go up as the money is printed. It's not technically that the assets have gone up in actual value, it's just that the dollar has gotten weaker. Going back to the coffee analogy, if caffeine is what you really want and I pour a bunch of water into your coffee, it takes a lot more mugs of that watered down coffee to get the same caffeine buzz.
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Unknown A
So it is with asset prices. It's not that your 401k actually went up in value or that your house even went up in value. It's that it takes more of your weakened, diluted dollars to get the same purchasing power. Now, guess who's savvy enough or able to pay savvy people to advise them to own assets? Wealthy people. That's the first part of how the rich get richer. They don't have to be corrupt to beat inflation. They just need to know how to strategically own assets to at least match inflation. The second part of how a very small number of the rich get richer is that when the government is injecting printed money, counterfeited money, into the system, they do so mostly through buying debt, both governmental and corporate. But that means that the government has to decide, has to make a decision, whose debt they're going to buy.
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Unknown A
They are literally picking winners and losers. Now, it is very important to note that there's a very complex interplay between the Fed, which is technically not an arm of the government, and the government itself for how much money is printed and where it goes. But that is beyond the scope of what we're talking about today. So I'm not going to be going into all that as I am convinced that people hide the truth of money printing and inflation in the complexities. They want you to get lost in how complex this is in the nuances. That stuff doesn't really matter when you lay it bare. It's pretty easy to follow, and it is extremely shocking what's happening. Speaking of shocks, let's have our final shock before we talk solutions. Inflation triggers a massive accumulation of debt. Just like a lot of salt makes you thirsty, inflation encourages both people and the government to take on debt.
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Unknown A
A lot of debt. Why? The reason is twofold. One, if dollars are going down in value over time, then borrowing 20k now is like having only borrowed 30, say 10k at some point in the future. And given that that's true, savvy people use debt as leverage to buy assets that they're betting will go up in value as the value of the borrowed dollars decline. So as people just trying to save their money get hammered by inflation, savvy investors using debt to buy assets not only have a good chance of keeping up with inflation, but the really savvy ones can make a return that far outpaces inflation, making them wealthier over time. The second reason that people take on debt in an inflationary environment is that because for the average person, debt is the easiest way to get access to more capital when saved money is losing its value.
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Unknown A
This is doubly true if wages in real, AKA inflation adjusted terms, are not going up. Okay, that's inflation in a very small nutshell. Now what do you do about it? We'll get back to the show in a moment, but first I have an important message for anyone who owes back taxes or has unfiled returns. If you get a knot in your stomach every time you think about the IRS and dread what might happen if they come knocking at your door, you need to listen. Tax Network USA can help. These aren't just tax people, they're problem solvers. They've got a direct line to the irs. They know exactly, exactly how to navigate the system and they've already resolved over 1 billion in tax debt for people just like you. Whether you owe $10,000 or 10 million, they've got the expertise to settle your tax problem in your favor.
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Unknown A
Don't let tax trouble hold you back. Face it head on and let Tax Network USA help you put it behind you for good. Call Tax Network USA today at 1-800-958-1000 or visit tnusa.comimpact Again, that's 1-800-958-10000 or go to tnusa.comimpact this is a paid advertisement. And now let's get back to the show. Here it is. First, understand the game you're playing re watch this video. Pursue a deeper understanding of how money printing, assets, debt and the social unrest that people are feeling right now because they cannot get ahead all work together. Next, remember your money is being inflated away. It does not matter how many dollars you have in the bank, matters how much stuff you can buy with that money. Always think of your money in what's known as real terms, not nominal terms. Real terms just means adjusted for inflation. Nominal means not adjusted for inflation.
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Unknown A
So yes, you have $100 in your bank account, but it only buys $80 worth of stuff. A really good calibration is the cost of energy in dollar terms. Energy is arguably the most important thing you will buy that isn't directly related to your safety and survival. And honestly, many of the things related to your safety and survival are tied to energy. If you benchmark your purchasing power against, for instance, how much oil it will buy, you'll have a very good barometer of where things act actually stand. I know most people won't do that, but it is a good reminder that it doesn't matter if you have $1,000 in your bank account if the cost of gas is too high as that affects virtually everything else in the economy. You need to shift your thinking from assets are a nice to have to assets are a must.
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Unknown A
You have to find a way to save money that won't be devoured by inflation. Or as savvy people say, you need an inflation resistant way to store your wealth. Get involved in the stock market. But remember, it's risky. Investing is best understood as gambling. Now, people absolutely hate it when I call the stock market gambling, but it is indeed gambling. I'm not saying it's bad, it's great. The financial markets are incredible. They're a miracle. All I'm saying is that when you invest in the stock market or any asset class, you're taking a risk. You're placing a bet that its future will be better than its present and someone will buy them from you for more than you paid. If that was guaranteed, though, the system wouldn't work. In fact, the only reason you get a return on your investment is because you are taking a risk.
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Unknown A
If you weren't, there would be no return. And to my point that the stock market is best understood as gambling. The literal Oxford Dictionary definition of gambling is to take risky action in the hope of a desired result to push it even further. Investing in the stock market is gambling at two levels. One, as the definition says, you're taking a risk for a desired result. And two, public company stocks are not based on fundamentals. I don't care what anybody tells you. They're priced based on human sentiment. Recently, the stock market saw the biggest single day swing. It moved by a trillion dollars in a single day. Based on news, just news that DeepSeek, an AI company may indicate that Nvidia won't be worth the same in the future as it is today. Nothing changed in the fundamentals of Nvidia's business. It was pure speculation about the future of Nvidia's business.
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Unknown A
And not even quite that it was pure speculation about how people will feel about Nvidia's future business. Which is another way of saying that the sentiment changed. And the stock market is all about placing bets on which way the sentiment will change. Because believe it or not, you can actually make a lot of money betting on a company doing worse in the future. But that is definitely a story for another day. I want to say one more time, the stock market is incredible. I love it the most. I am very, very glad that it exists. I. I believe strongly that not only should people be able to invest in the stock market, they should be able to gamble on any legal activity that they want. I further believe that the US Stock market has contributed massively to America's economic might. I just don't think people should be put in a position where they're forced to place bets on any asset in order to keep up with the government stealing their money through inflation.
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Unknown A
Now if you're looking for the lowest risk way to store your wealth, that's short term US Treasuries. As long as the yield that they provide is close to the rate of inflation, you can keep up by owning an asset backed by the US Government. The treasury yield in fact is literally known as the risk free rate of return. If you're looking for a simple, manageably risky way to store your wealth, index funds can also be useful if you really want to get fancy and try to capture more upside. Have a chance of significantly beating inflation, but still you want to keep your risk tolerable Read up on Ray Dalio's All Weather Portfolio. The TLDR is to hold assets in 12ish uncorrelated asset classes. He makes it sound pretty simple, but I think the average investor is not going to learn enough to pursue this strategy.
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Unknown A
But Ray has been insanely successful in the markets and this is a strategy he said he would recommend to his own family if he wasn't around to help. Alright, for those of you wondering what I personally do, I'll tell you, but this is aggressively not financial advice. I'm good at making money but very dubious at investing. It's also important to note that this is a snapshot as of the moment when I recorded this video. I may change things at any time, but for now the bulk of my investments fall into the following five asset classes. 1. Short term treasuries for reasons I explained previously 2. Equities aka the stock market 3. Bitcoin 4. Real estate and 5 my businesses which has been my most lucrative investment to date betting on myself. All right, that is the truth about inflation. It's government approved counterfeiting that slowly drains your wealth, forcing you to gamble just to stand still.
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Unknown A
Yes, the game is rigged, but once you learn how it works, you really can play to win. Alright, not everyone is going to agree with everything that I've said, so I want to address some of the most frequently asked questions and challenges that I get.
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Unknown B
There has never on the history of anything been 0% inflation. It happens in literally every country, everywhere and is simply part of any system that uses currency. How much inflation happens is where the argument should be.
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Unknown A
That is literally not true. So if you look at Japan, you don't have to go back very far to see that there was a period recently where they had negative inflation AKA deflation. Now if you're saying that this is All a spectrum and that it's either going to be deflating to inflating. And some people are going to claim that deflation is worse. Which again also is only true if you're looking at crisis borne deflation. Because technology is inherently deflationary. We never notice it because the government is so busy inflating the currency that they are gobbling up what would otherwise be driving costs down. But it is admittedly very difficult to find that sweet spot. But when you look, meaning even gold inflates because we're going out, we're mining, we're finding roughly 2% more in the gold supply. So that's going to go up. But if you look at bitcoin, Bitcoin is literally designed to be what's known as sound money, something that is not inflating.
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Unknown A
Now there have been periods of time where we get closer to sound money. When you, if you go back and look at the dollar was originally on the gold standard. So it inflated, but very slowly in a very controlled way where you actually had to go out and get more gold in order to peg the dollar. But the reason that you're seeing the rise of bitcoin is because it is a truly non inflationary asset. And so people are investing in it precisely because it can't be inflated. So this people really have to break this idea that this is an inviolable law of nature, that something is going to inflate, it does not have to inflate, prices do not need to go up. That it really is mechanistically cascading down off of more than just inflation. I understand that. But again, looking at that 0.9 correlation, they are so tightly correlated that over time it is far simpler and far more accurate quite frankly to say as we counterfeit the money, as we print money, as we inflate the supply of money, that prices are going to go up accordingly.
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Unknown A
I think that's the right way to look at it. Now again, there are complexities here, but I think it is far wiser to strip those away and ask why are people so excited about a non inflationary asset like Bitcoin? What is it that it allows you to do? And what it allows you to do is stop people from abusing that privilege of being able to reach into your pocket and steal your purchasing power. That is the real key. Once you understand that it is an invisible tax, inflation is an invisible tax. Once you ask yourself why is it okay for the government to counterfeit money, but I can't counterfeit money, you begin to understand why this is a problem once you start asking, why can't they just print a billion dollars and give it a billion dollars for everybody and give it to them? Why do they need to take in tax money if they can just.
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Unknown A
Why do we run up these huge deficits if we can just print money? Because it is impossible to avoid the consequence of inflation if you're not increasing productivity. And really what the government is trying to do is they're trying to pace that productivity by gobbling it up and printing money.
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Unknown B
How that takes into account government bonds. Why has he not mentioned that private banks are also responsible for increasing the money supply whenever they lend money? Not trying to defend the government, but that level of simplification always leads to falsification.
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Unknown A
I love that. And thank you for giving me a chance to say one of my favorite phrases, which is the dao that can be spoken is not the eternal dao. If you've ever read the book the Dao de Jing, one of the. I can't remember if it's the opening paragraph, but it talks about that the dao translates as the way. So you could take that phrase to mean the path that can be explained is not the actual path. So for sure, in simplifying this enough that it can actually be spoken out loud and that people can understand it, you are for sure lopping things off and making it not literally true, but it allows people to navigate. And I value an idea's merit based on its utility. And so when I think about the world as okay as they inflate the money supply, I'm going to need to be in assets that are inflation resistant.
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Unknown A
That correlation is 0.9. That acting in accordance with that, it works perfectly. But you are correct that another way that the money supply is inflated, but again, it's still just the inflation of the money supply is the way that fractional reserve banking works. So we could do a whole thing on fractional reserve banking and how deeply problematic it is, because I'm not saying, hey, fractional reserve banking is wonderful, but other ways of inflating, that's terrible. They are all problematic. Every bank is insolvent. And if you did a quote unquote run on the bank, you would expose that they hold. I think it's less than 10% of your money they actually have. Crazy but true. Which means if people moved on the bank, you'd only be able to get a little bit less than 10 cents on the dollar. And quite frankly, it wouldn't work like that because what they would do Is they give it to the first people that ask.
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Unknown A
And this is why people run in the bank. So, yeah, welcome to another dark corner of how money works. Still inflating the money supply.
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Unknown B
What about private businesses price gouging?
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Unknown A
Private business price gouging? This feels like a totally unrelated thing, but I know that people have this sense that the real battle isn't the government making decisions to print the money, that the real battle is with corporations being greedy and not paying their fair share. All right, first of all, capitalism, because of something known as regulatory capture, because of the inflation of money supply, there are things that must be addressed. There is no doubt about that. If you were to remove the government in there, trying to intervene and trying to outsmart the market, trying to make sure that everything is sort of this eternal flat line. But if you think about it, it's an eternal flat line that's going like this. It's degradating everybody's value in terms of the money that they hold. So, yes, it's a smooth, slow decline into oblivion. But as Ray Dalio says, every country ever has printed so much money that the money ends up hyper, inflating literally every currency, every reserve currency ever throughout human history, all the way back, they've all done it.
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Unknown A
They end up printing too much money. That inflation of the money supply causes that debt accumulation that I was talking about. The debt accumulation gets to the point where you can no longer service the debt. And it either ends with people internally fighting and you have a civil war, you have a war with another country, but it almost never resets without bloodshed. So just to be very clear about how the game plays out. Okay, so now to actual corporate price gouging. The reality is that the market will bear what the market can bear. And in a time of emergency, if you try to go in and layer over the top of it that we're not going to let the market set the price here, we're going to tell people how much they can change it. That might feel good morally. But I'm recording this not too long after the historic fires here in Los Angeles, where they're talking about putting price caps on the people that will come in and rebuild these homes.
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Unknown A
Now, by doing that, what you're saying is we're going to make this take a lot longer because the price that somebody is willing to pay for it is a proxy for value. And so if you want people to come in and say, oh, I value my time here in Los Angeles building homes more than I value my time in Denver building Homes, you let people raise their hand and say, I value this construction here more. And as I want to, as the home builder, I want to capture that value. I'm going to go there and I'm going to say, these houses, from a timing perspective, are more valuable to build. And so now you're able to draw in people from all over the world to get them to build houses in this one area. When you don't let them do that, you derange the market.
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Unknown A
It ends up taking way longer. And you're not able to get that talent from everywhere to come and address this. It's like surge pricing in Uber. The second you don't let them do surge pricing, now they're just going to be times where you can't get a car. And so now somebody trying to use that service is like, hey, I would very much like this price to, quote, unquote, gouge me so that I could get home. And I will plan if I want to avoid these high traffic times. But at least I now have an option.
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Unknown B
Why do I still feel just as doomed and lost after what I experienced was just validated?
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Unknown A
So the bad news is that you still are in the situation that you're in. If you've not yet gotten your life organized such that you can begin to accumulate wealth, it is going to be very disheartening. And there's a really fascinating way to think about what money is that I think will bring this home. Money is the thing that allows you to concretize the output of your time. Meaning you go do a thing. Now, what is the proof of work? You get money for it. So that proves that you spent that time wisely. Now when you spend that time wisely, you get that money, but it's devalued over time. You're never able to get ahead. And so there's a sense of like, this is futile. Why am I working this hard? Why am I trying to be smart? Why am I being disciplined and dedicated?
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Unknown A
This doesn't make sense. Like, no matter how hard I work, I'm getting myself in trouble. And don't get me started on education and debt for education and all that which puts people behind the eight ball before they even begin. But all of that is the thing that leads people to feel like, yo, this is futile because I am not able to capture the value of my own time. It's. I'm putting it into a leaky bucket. And once you start rearranging your life and saying, okay, look, I don't like the way that I feel right now the system feels very broken. But I'm going to set that emotion aside because there are structural things that I can do with my life that I just outlined in the previous section of the video to make sure that I'm transferring that proof of work into an inflation resistant asset that over time is going to allow me to sidestep the ravages of inflation.
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Unknown A
So instead of buying what are known as unproductive assets, things that are fun to have, going on a vacation, a lot of fun. But the reality is, if you took that money and you put it into an asset, if you're savvy enough in the way that you gamble and it is gambling, then over time you're able to amass wealth that will let you live. Instead of off the principal, you're able to live off of the interest that you're accruing. Going back to this idea of compounding interest is the eighth wonder of the world. It really adds up when you're doing it well. And now if you do it well, you can outpace inflation and you're able to grow your wealth over time. Now when you get into that loop, it feels a lot better. But if you're hearing this at like 35, 45, it hurts, man, it stings.
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Unknown A
But this is the reality of the world that we live in now. For better or worse, this stuff moves in cycles. And that's why, if you're paying attention, you feel something is happening to the American psyche right now. And that's because we're at the phase of the debt cycle where we have accumulated so much debt that we are having to inflate our currency so rapidly. In fact, look at your screen right now and you will see a graph of how much we have inflated the currency just in the last five years and how rapidly we're accumulating debt. It is insane. And so we are going to need something called a debt jubilee. Now, that has a really great name, but that's the thing that people die over. This is the thing that causes blood in the streets. Because if you owe somebody money, that's somebody else's asset, that debt.
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Unknown A
They own your debt, that's their asset. When you don't pay that debt, they just get wiped out. Great for you, bad for them. Flip it. If you're the one that owns the asset, then you get wiped out. But this is why young people especially have this burn it all down energy because they're like, hold on a second, you're telling me if there's enough bloodshed in the streets that I can get rid of my debt. I'm here for that. And that is how this all ends up, just in heartbreak, devastation. And look, I don't want to fear monger, but I'm just telling you, throughout history, the number of times the cycle has played out and it ends so frequently, it's not 100% of the time. But boy oh boy, is it frequent that it ends in civil war, external war, bad things, or cataclysmic debt restructuring via a massive recession or depression.
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Unknown A
Now, a recession would be far preferable to kinetic war. But you don't get to the other side of where we're at without one of two things. And here is your ray of hope, the pain or productivity. Remember I said that the reason that the pizza ends up going up in cost is because people are getting more money, but they're not getting more pizzas. But what if you created more pizzas? What if instead, if there's four people fighting over one pizza, we give them a bunch more money, but let's say that we give them 10 times more pizzas than we give them money now the cost of the pizza actually goes down. So that is the promise of innovation. This is why I'm obsessed with two things, finance and how money really works, and AI. And I'll throw in deregulation just for spice. If we can get the US economy, if any country can get their economy growing at a level of, say instead of 2%, you're growing at a level of 4 or 5%.
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Unknown A
Now all of a sudden you can drive your debts down because you're so productive. And so AI really is the great hope for this generation that AI makes good on, the promise and all the hype that we believe. Because if AI can come in and drive energy costs down, if AI can come in and make goods of basically every ilk cheaper and cheaper and cheaper, now all of a sudden we can really get the economy humming. Things cost a lot less, people's quality of life goes up. So you deregulate, you get businesses far more productive, you get the economy humming, you get innovation from AI, driving energy costs down, driving labor costs down. And now all of a sudden you could be one of those few societies that manage to get that debt jubilee not through violence, but through innovation. And that is my hope.
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Unknown A
And that's why, man, if you hang out on this channel long enough, you're going to hear me talk about those two things on a loop, those three things. You're going to hear me talk about finance, the regulatory environment and the grand hope of AI all right, everybody stay safe out there, boys and girls. Lean into innovation, learn how the game works and play to win. Until next time, my friends. Be legendary. Take care. If you're a business owner looking to scale, I can help. I assume you're here because you know the world is a freakishly complicated place. But with the right rubric for for decision making, you can navigate even the most complex problems well. After scaling my last company to a billion dollar exit, I knew I had a winning formula. Something I call the Physics of Progress. It works in any industry, in any economic climate.
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Unknown A
Bull market, bear market, doesn't matter. Every complex problem can be solved if you know how to approach it from first principles. In the end, that's how you avoid getting trapped in plateaus. Think about the biggest challenge facing your business right now. Maybe your revenue drops every time you step away. Maybe your industry is affected by tariffs or your business partner is holding you back. Maybe your marketing is no longer working, or you hate social media and everyone tells you that's where you have to be. These problems can seem impossible until you approach them from first principles. That's exactly what I teach inside the Billion Dollar CEO program. I'm only working with a select group of entrepreneurs right now, but if you've got a real business and are looking to scale, apply now. Visit impacttheory.com scaling or click the link in the Show Notes to apply again.
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Unknown A
That's impacttheory.com scaling if you like this conversation, check out this episode to learn more. To me, the economy is like a chessboard. Once you see where all the pieces are, you can get a sense of where you are in the game and what is most likely to happen next in the near term. As you look at the set piece right now of a right wing popular.