June 21, 2022 • 59 mins
Modern civilization relies on the concept of debt. Wars are fought over it, loves lost and revolutions launched. So what would happen if, one day, it disappeared? Is it even possible? Tune in to learn more.
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Speaker 1 (00:00):
Cash rules everything around me. Cream. That's what today's episode
is about. Cream and sugar or stevia whatever, whatever works
for you. Yeah, you know it, could a fight club
esque scenario really take place? Uh? Those who know no, Uh,
no spoilers for a twenty year old movie. But yeah,
is it possible for an individual or a group, whether
(00:21):
in a terrorist act or an act of of of rebellion,
literally a race the world's debt or even a sector
of the world's a country's debt. Yeah, this an issue. Uh.
The idea of in two. Institutionalized debt is very, very old.
It's as old as human civilization. It's launched wars, it's
been the condition for ending wars. Uh. It exists even
(00:45):
in things like the effective student loan debt on millions
of people in the United States and abroad. The question is,
you know how much debt exists? And could someone really,
especially the world of digital money, could they just push
a button zero it out? Call a big mulligan on
the on the whole Dog and Pony Show. No jokes
(01:07):
on you guys, Jokes on you guys, because without debt,
there is no economy. Debt is the thing that makes
the economy all, let's learn about it. From UFOs to
psychic powers and government conspiracies. History is riddled with unexplained events.
You can turn back now or learn the stuff they
(01:27):
don't want you to know. Hello, welcome back to the show.
My name is Matt, my name is Noel, and Ben
your you and if you are one of the people
who happens to live in the United States and you're
(01:48):
an average household, then you have around one hundred thirty thousand,
nine hundred and twenty two dollars in debt, and of
that seven two dollars can be attributed to credit cards.
Holy mackerel, we're starting off on a positive note today,
my friends. You know what I think? Again, this is
(02:11):
the second time I've been slightly below average the same,
you know, but it's it doesn't feel great. Oh wait, no,
I am way above average. I got to count the house.
Uh if you count mortgage, that's interesting. Gosh, okay, well
then I'm well above average then. But but doesn't the
(02:31):
mortgage kind of count as an investment? I mean, it
depreciates over time, so it's not quite the same as
being in debt. But I guess it's looked at that
way as by creditors. Yeah, it feels that way now
now that I'm thinking about it. And uh, you know,
the reason that there's so much debt has been h
talked about at length for a long time by so
(02:55):
many people. We often, we in the majority of the
public across the globe, we often don't have the best
or most sophisticated understanding of what this is. And that's
why we as a species become embroiled in these strange
(03:15):
situations sometimes when all of a sudden, like consider the
Great Depression, Right, people are starving in the cities, right,
But in the rural Midwest, in the farming country, farmers
are throwing milk away and just gutting pigs and saving
what they can because the price on those animals, and
(03:38):
that you know that that beverage, I guess has tanked.
Some feels weird about calling milk a beverage, but bas
seely what I'm saying, like, that's and and then the
reason people would come to find that folks were starving
in one place, wh people were trashing resources in another
was due to something called the economy, right and right,
(03:59):
and then people would say, people would uh, the pundits
would be on the radio. The populist, the nationalists, the
whomevers would be on the radio arguing why they alone understood, uh,
the one true economy or what that thing should be.
And now we're in a world where I guess I
(04:19):
want to start off with the question, So did you
guys have economics classes in high school or in middle school?
I did, but I felt like, I feel like it
was rolled into something else, or it was like we
got half an economics class and then like the other
half was was Civics or something like that. You know,
but my memory of those days is a little hazy.
(04:40):
That's maybe that's made up. I got home X. Yeah,
I took not the same thing. No, I mean it
was personal finance. It was personal finance, if it was
all it was all that kind of stuff like how
to how to manage your your stuff, but it didn't
teach you how the Fed worked, no, and how to
write a check effectively. Right. One of the things that
(05:03):
I always think about is, you know, you're right, Matt.
For many people, at least in this country, the closest
thing people were offered to a personal finance class in
a public school is going to be home economics. However,
the individual person would probably be in a much better
position today if personal finance classes were mandatory. And I
(05:27):
know people don't like big brother federal mandates, but that's
an individual education, that is that is necessary to survive.
A lot of people don't get that, and that's why
we end up in a country where the total debt
oh by U S consumers. I can break it down,
all right, Uh, let's see now it's time for a breakdown, right,
(05:52):
Oh gosh, yeah, So what's the present one? Do we
have a backbeat for this? Okay? So credit cards seven
hundred thirty three billion dollars pales in comparison, of course,
to auto loans one point oh eight trillion dollars. And
(06:17):
then we have student loans one point to three trillion dollars,
and finally mortgages eight point to five trillion dollars. So
all of these numbers, these massive numbers, this is debt
(06:40):
um It's money that I guess needs to be paid.
What what is debt? Exactly? It's called American dream dollars. Oh,
as in imaginary dollars, which is this episode today we
are talking about that, and that I'm I'm laughing because nol,
(07:01):
what you just said, ties into so many other episodes
we could do. It hit us in our the course
of our research before we went on the air this week.
That currency itself is just a fascinating weird thing. It's
an agreement we make it totally is It's like it
could be shells, you know, shells or or or a
(07:22):
handful of sand. When you were a kid, did you
ever play the game where you just all agreed that
the floor was lava. It's like that, but with prizes
and you can move the floor for bunch of people.
I know that's that's a very biased thing, but well, yeah,
what is what is debt? That that's the question we
start with today, even though it's not our ultimate question.
(07:45):
So the good, the bad, the ugly of debt, Well,
it does do some oh nice copyright. Oh was that
Ineo Morricone? Oh man, he's the master my favorite soundtrack.
I'm gonna go listen to that for the rest of
the weekend. But the good part about debt, and there
(08:08):
are good parts, is that it sort of makes the
world go round. What are some of the good things
that this debt system does? So, in the most basic
of terms, debt is it's it's an I O U.
I mean it's without going into the entire history of
currency money as we know, at one time they used peppercorns,
peppercorns or currency that's got a function it makes your
(08:30):
food nice and spicy. But you know, I mean many
forms of currency were redeemable I O U s. I
mean that is essentially what currency boils down to, is
the redeemable I O U for a good or service,
either physically they contain some sort of valuable material a metal, gem,
what have you, poka shell, whatever, um, or they were
(08:51):
redeemable for the same amount of a different material. Okay, yeah,
So like an example for folks in the U s
And I know our numbers are pretty US centric at
this point, but we can get bigger. Uh. In the US,
there were these things called silver certificates, which fans of
certain JFK assassination theories will be familiar with. And until
(09:16):
nineteen sixty four, these silver certificates legally could be redeemed
for the amount of silver that was mentioned on the currency,
and then they stopped. Yep. But the reason, the reason
why money, why currency is so important to the functioning
of society is that all the goods and services that
are available for trading in some way or another. They
(09:40):
get boiled down to this common denominator where you have
X amount of this and I want to give you this.
I have X amount of this. I want to give
you this. We can trade with this one thing, rather
than having to break down exactly how much a goat
is worth in terms of wheat or something like that,
or you a car in terms or T shirts or
(10:03):
something strange. Yeah, I know why I'm hung up on
puka shells. I think I think, you know, maybe you
could bring it back. I think it's because I went
through that widespread panic concert last night and I saw
a lot of those. Yeah, I got a text from you.
The three am was just an animated gift of a
puka shell dancing furiously, dancing furiously. But what about liquidity.
(10:25):
That's interesting and very very very important component of all this. Yeah,
that's what you know. That's that's what we're talking about.
Two degrees that that advantage of this this stand in
So I I love what you said earlier, know with
you know the idea that money is essentially debt. Its
currency we carry around is a debt. It's a niou.
(10:46):
That was that was the way you said it. And
the reason it works currently is one because everybody agrees
that it should and two or virtually everybody agrees. Most
people agree and to the like, what did it offers
is so vastly superior to the bartering system for the
(11:07):
following thing. Okay, so let's say Matt has uh, Matt
is selling. What kind of car are you selling? Matt
uh countsh Matt is finally selling? Is counta not a
real car? Yeah, clearly I'm not a car that Matt is.
Still it is kuntas and know you decide you're going
(11:28):
to be a car guy, and because money doesn't exist,
you're going to break into your puka shell savings. But
the problem is that you don't live in the same town,
so you have to move this thing, and then you
have to also let's say it's a lot of puka
how many puka shells do you think you would That's
(11:48):
a lot, I'm gonna say, Okay, so too many for
knowl to comfortably carry, right, you can't you lose so much.
You'd lose so much shell just getting the shells there.
So I guess what I have to do is find
some sort of financial institution that will take my puka
(12:08):
shells from me, put them in some sort of puka
shell storage facility, and then give me the equivalent in
let's call them Internet Money's that that can then be
wired or transferred or moved around electronically. Bitcom sure, bitcomck
that's great, oh man, killing it today, buddy, And then
(12:29):
I can send that over the interwebs to the place
where I want to pay to me, Matt in my
banking institution, which only stores contash is right, that's that,
and then they're they're there, and you have a very rudimentary,
absurdist representation of the way business is done these days. Right,
(12:50):
And one of the most important parts there is that
Noll in this situation will then have a representative representative
token essentially of a value or an asset that he possesses.
So in theory, this promotes stability in trade, and in theory,
(13:10):
when nations are involved in mutually beneficial trade agreements, there's
more stability in the world. Allegedly, yes, mutually beneficial. Yes,
I'm just gonna repeat words from that earlier sentence. Theoretically,
(13:31):
so these money systems and these debts ultimately, because that's
what they are. They can they can be great for
society and help them function and work better together. The
problem is they can also wreak massive, disastrous, sometimes even
fatal things upon society and individual people. Yeah, you you
(13:53):
may have, at some point in your life met someone
who referred to folks who have a nine to live
job as wage slaves. That's pretty biased, But the heart
of that argument harkens back to the idea of indentured servitude.
So indenture servitude would be some deal um. The first
(14:14):
one that springs to mind is people who wanted to
travel to a different country, right, but could not afford
the trip the cost of let's say, hopping a boat
across the Atlantica. But if you agree to essentially work
only for room and board for seven years, then they
will consider your debt paid if they're not playing a
(14:36):
crooked game, you know, right, And many of those games
were crooked. So the argument there would be that wage slaves,
as the term goes, our new form of indentured servitude. Uh,
we're addicted to an ivy of money, whether that's hourly
salary or commission, and we're addicted to that because we're
less of a value generator as an individual, if we're
(14:59):
that and more of a node for debt and assets
to interact. So you that's why people can make a
hundred thousand dollars a year or who knows, who knows
how high this goes a million dollars a year and
still be just getting by due to due to crippling debt.
(15:19):
And then of course that ties into you know, a
similar argument forced labor, and we can save debt or
prison for another show, because is that still a thing?
It just in some places? Yeah? Wait, I thought it
had been here for years, but it's making a comeback
with interest here in the US. Men. Is that true? Well, yeah,
(15:43):
it's not necessarily the same equivalent, right a debt or
prison where IO debts I can't pay them. Now I
have to go live in this cell. Actually, there's I
just hit a story I typed in on Google and
one of the instant results was debt or prisons are back?
Top hit from fourteen? Is Supreme Court ruling not enough
(16:04):
to prevent dator's prison? Yeah, so you can. If you
have massive amounts of debt, you can go to prison
for it in certain instances. I thought that. I think
a lot of the stories too that popped up recently,
as in the last few years, occurred because there were
usurious court fees, legal fees, and when people could not
(16:27):
could not pay those fees, they would be incarcerated until
such time as those fees were paid, which is surreal,
and how do you make money when you're hanging out
in a prison all day long, every day. And then
(16:50):
of course that brings us to bankruptcy, which unfortunately the
golden parachute, golden parachute to unfortunately too many people are
familiar with, and it works differently for the wealthy than
it does for the poor, completely differently. Anytime you hear
about a regular Joe Schmo declaring bankruptcy, they have to
(17:11):
work and scrap and safe and hustle for years to
get that off their record, to get back to a
place where anyone will give them alone again. And as
we know, for certain folks that are in the public
eye right now, it's happened multiple times. And it doesn't
seem to be any long lasting ramifications for for doing
(17:31):
this thing. It's almost more of like a business strategy.
It depends, yeah, it depends on how it is structured.
And unfortunately, many people who are impoverished and fall into bankruptcy,
do not have the means or the connections to have
someone help them set up these I'm gesturing in the
air right now because so much of this stuff is
(17:53):
an idea. It's huge, it's huge, it is. And then
there's another one met call bills. This is also we're
at this point, ladies and gentlemen, We're just giving you
the lay of the land of debt in the US. So,
regardless of the political stance, regardless of what television channel
(18:15):
is most often trying to convince you to believe something,
the fact remains that for the vast majority of the
city of citizens, the United States has the most inefficient
and expensive health care system in the developed world. This
is not just a country where people die because a
disease or a condition is incurable. This is a country
(18:38):
where people die because they cannot afford a treatment. And
for some people that is a great tragedy. For other people,
that is uh a result of the individual's decisions and
is how it is, how it goes. But well, the
reason we bring this up for the purposes of this
(18:58):
show is because medical bills in this country are a
leading cause of bankruptcy. They're leading cause of people, uh
going into crippling debt. And we have current debt issues,
a lot of which are medically related. Yeah, when you
look at the country overall and debts that are kind
(19:22):
of hanging out waiting for the national government to pay.
The first one is social security, and we looked at
the summary of the annual report by the Social Security
and Medicare Board of Trustees, which sounds like a fun
place to work. They note that over the eighty year
(19:43):
history of the Social social Security program, it's collected roughly
nineteen trillion dollars and paid out sixteen point one trillion dollars,
leaving its asset reserves currently at two point eight trillion
at the end by the end of Now here's here's
the problem. The ratio of reserves to one year's projected cost.
(20:09):
It peaked in two thousand and eight and then it's
been declining up until two thousand fifteen, and it's it's
expected to decline even further until they're completely depleted in
four which means this money that's supposed to go to
help families with retirement, people who have disabilities, um, you know,
(20:31):
all kinds of issues people that need this money to
survive that we all pay into when you're a wage
worker in the US, it's just gonna be gone. And
that's something that's just kind of looming there in the
horizon that we have to think about. And the same
goes for Medicare, which is, uh, you know, dwindling quickly.
(20:53):
All these all these huge the huge amount of money
that are owed essentially on paper to people who once
they reach a certain age, needs to be paid out right. Yeah,
And the one of the issues with this is that
at various times the money for both of those programs
has been either controversially redistributed or maybe misunderestimated is a
(21:19):
good word, misunderestimated I like that. But yeah, there it's
two serious issues that we're going to have to face
at some point. And and that group we just mentioned,
they're saying that legislation needs to be enacted sooner or
later to minimize the impact on beneficiaries human beings who
are going to need that money. So what's uh, what
(21:42):
what's the international state of debt? Here? Well, according to
National Debt Clocks dot org, worldwide national debt stands at
sixty trillion, nine one billion, three hundred and thirty two
million and counting. That seems like a lot of money.
It seems like mad money, made up money, imaginary money.
(22:06):
If it's the number that's too big to be real,
I mean that that sounds alarmist. But whenever I see
this stuff on paper, I'm just like, this is. No
one's ever expecting to get paid back all of this money.
It's the debt itself is its own function, serves its
own function, as we've talked about exactly, you know, and
(22:27):
that if it's fascinating to me, and I think for
some people that idea maybe makes them more willing to
go into debt because it's sort of like, well, if
if we're running a deficit as a country, why can't
I run a little bit of a deficit. I can't
(22:47):
just have the stuff, you know, it's I want to
live the dream, and it's easy to get credit. You
don't have to have that much equity to get credit.
You just have to have a decent paying job and
not an absurdly low credit score. It's not hard. Well,
in this case, we're talking about countries themselves. I say perspective.
(23:10):
I think when you see these kinds of numbers and
you hear about how much you know the United States?
Isn't that, etcetera. It almost makes you say, well, well,
hell yeah, what why not me who cares? Right? It
doesn't seem like anyone is getting paid back, so why
not just roll the dice right and emphasize this perspective further.
Let's break it down by the top owing countries in
(23:35):
the world. Now it's time for another breakdown. Russia hundred
forty seven point six billion, Australia point four billion, Canada
eight d and fourteen point seven billion, United Kingdom two
point three trillion, China five point four trillion, Japan eight
(24:01):
point nine trillion, United States together now three trillion. Why
did I do a fake air horn? I guess you
could just put one. Are you talking about? That was
the best air horn I've ever heard of my life. Ben,
I know I'm prone to hyperboly, but I really do
believe that. So that's a significant proportion of the overall
(24:27):
global debt that the US holds right there, which you
know worries me a little bit. So how does that
break down for person met going to perspective? Okay, so
there are three hundred and twenty three million humans roughly
in the United States right now, citizens, and you know,
nineteen point three trillion. That amounts to just under sixty
(24:50):
thousand dollars of national debt per U S citizen, and
it represents one hundred and seven percent of the country's
gross domestic product year over year. So if somehow we
could stop paying stop all payments on everything in this
country for a year, you know, we'd be able to
pay off our national debt, which is kind of cool. Now,
(25:11):
let's also emphasize that this is not the This is
not the same kind of debt that you might encounter
if you have a student loan or absolutely, so this
is not the same kind of debt you would encounter
if you purchased um a moped. Sure, absolutely, And all
(25:35):
the numbers that we've discussed here in in our breakdown,
and the one about the the sixty dollars per person,
these are very basic, base level numbers, and if you
get deeper down in the accounting, it gets it gets
really tricky. And I was trying to familiarize myself and
understand it, but you guys, it's difficult. Right, none of
(25:57):
us are classically trained economist, and we would love to
hear from any economist in the audience, would love to
hear your opinion on the state of debt. Fun fact,
though I am a classically trained violinist, it is true.
That is awesome. You're a man many talents. I have
a little story for for us relating to the U
(26:19):
S National debt. Would you like to hear it and
come at me with it? All right? Okay? I was,
there was There was some hesitation there, all right. So
the story comes from a guy named Jason see Linkman.
Jason Selingman, you see, was an economist. It's quite good
at his job, so good in fact, that he worked
(26:43):
Pennsylvania Avenue, or he worked his boss lived there, he
worked for the president. That's how good he was. And
he was tortured at this time because he was thinking
for sixteen hours a day on this project he was
working on for his boss, a report that he was
(27:05):
going to write for his boss. And in that report
he ran into a realization that might stun a lot
of people. And he wrote with with his team a
report called Life After Debt, which they submitted to then
(27:27):
President Bill Clinton and which journalists got a hold of
years later through a Freedom of Information Act requests. And
Life after Debt is a report that you can read
it for free online. It is a report that outlines
(27:47):
what would happen if the US paid down its debt
to zero. And they wrote this in December of two thousand,
because that's the or the U. S Treasury began actively
buying back public debt, creating um, you know, digging its
way out of the financial whole it was in. But
(28:10):
they realized, Jason realized eventually that while there is such
a thing as too much debt for countries, there's also
such a thing as too little debt. So countries don't
want to necessarily have a surplus. In many cases it's
unreasonable outside of you know, a few a few countries
(28:34):
like the like Nordic countries, un some oil oil wealth countries.
So what we see is that the international level understanding
of debt and the individual levels to understand debt is different.
Not all debt is created equally. Businesses will go into
(28:55):
debt and have specialized, custom fit or bespoke plans for
balancing that debt. However, someone who was built into a
series of high high interest credit cards or student loans
(29:15):
will often not have that sort of a course. Here
in this country. There are federal programs that are supposed
to provide assistance for people who have the misfortune of
not being a business or a country when they go
into debt. However, much more money is spent by the
(29:39):
folks who make money off of credit cards and student
loans to make sure that system continues. And as of now,
debt what we've explained so far, Yes, there is an
inequality of debt. Not all debt is created equal, not
all people are in debt. But debt is a problem
for a lot of individuals, especially here in the West.
(30:03):
But the truth of the matter is debt makes the
world go round. So we were asking ourselves a few
weeks back, what would happen if we woke up one
day and all of the debt disappeared. We'll find out
right after a quick message from our sponsor. Here's where
(30:35):
it gets crazy. All right, everyone, it's story time. Let's
imagine a scenario where this actually happened, where where through
some act of massive buffoonery sorcery, it's not something insane happened,
(30:56):
and Mr Noel Brown wakes up in a world free
from debt. Ah, I can hear, how relax he is
exactly look at this world free from debt. Yeah. Well,
the great news is if he had any student loans,
medical bills, critic cards, mortgage to automatically, he'd be in
(31:16):
the clear for all those debts. It's gone. What a
time to be alive, guys. So so what what would do?
Of course, he would take some he would want to
get to take some cash, get on that first dream
trip with his you know, his honey, his squeeze, his
girl ever and uh, naturally they would go to Borneo.
(31:37):
That would go to Borneo and go to Borneo. But wait,
there would be some problems here. Oh, to get the
tickets to Borneo, Noel Brown has to buy them, and
the debit card he tries to use to buy the
ticket doesn't work because the bank that runs that debit
card is in a tail spin because debt no longer exists.
(31:58):
And the dirty open secret about banks, I don't know
if it's necessarily call it dirty, it's just how they work,
is that the money in Noel Brown's account was used
to be a loan to someone else. Yeah, Rain Capital
used it to invest in a small company in Atlanta
or something like that. Yeah, And that's when that's when
(32:19):
Noel Brown has to explain to this woman that he
loves he was going to take on a magical romantic
get away to Borneo, why they can't go to Borneo,
And he gives her his following speech. Well, you see,
as it turns out, most of the money in the
(32:40):
world is really just someone else's debt. Yeah, the money
in your bank account, my bank account, our joint bank
account because we're in love, is mostly on loan to
other people. Why. Yeah, the bank they took our money
and they used it to give someone else a car loan,
(33:02):
to give someone else a home loan, to give someone
else a loan to buy a suite new computer. Oh
but wait, there's more. There's an upside here for the banks. Yeah,
they get to use some sneaky accounting, very tricksy accounting,
(33:25):
and by doing that, they don't have to hold everyone's
money all of the time. It's a it's sort of
a game of you know, back and forth. It's being
moved around all over the place. They just hold some
of the money, and by some we're talking a tiny fraction.
So at the height of the financial crisis in two
(33:46):
thousand seven, many banks were actually leveraged at a ratio
of thirty to one. Then can you clarify that? Yes,
So in this scenario, I've I've showed up at Noel's house.
He's explaining to the love of his life he can't
go to Bordio. Well, we're at the airport. Oh you're
(34:06):
at the airport. Oh okay, alright, cool. Now I feel
underdressed because I'm obviously in my jammies. But I only
go to the airport in my jammie's. I think that's
the only time I've ever said the word jammies. Alright,
rule of three. So to clarify, Noel Brown and his
(34:27):
moving tragic speech will be telling this this uh love
of his life and whomever else is going to go
with them, that his bank account and all bank accounts
are essentially emptied unless the bank magically replenishes the account,
which would throw things into chaos. But you know, it
is a series of key strokes on a computer screen.
(34:49):
At least we have the fd I C that ensures
up to a certain amount, right, right, But a bank
no longer has a reason to exist as its sole
purpose for from this perspective, is to move debt around
every stock exchange, while Noel Brown is delivering this speech
in Hartsfield Airport. I imagine you're in Hartsfield, of course. Okay, Uh,
(35:11):
every stock exchange closes, Noel's investment portfolio is wiped out.
The puka shells he still has, but any puka shell futures,
any uh puka shell short short stocks, And I'm just
making upwards. Yeah, gonna I'm gonna need that back. Sorry,
I hope you don't mind, Because an investment is just
(35:33):
funding someone else's debt with the promise or the hope
of getting more back in return, but no one will
pay you back. And also, uh, Noel and his sweeties
retirement funds, they have one, along with everybody else's. Also
poof vanish. There's a guy named Thomas Dalton who I
(35:54):
think described this really well. What would happen if lenders
wrote off all debts. He sets is that there would
be a massive transfer of wealth from net lenders to
net borrowers. The net lenders of the world are things
like governments, right, uh, and young adults are we are
(36:15):
often net borrowers, and those close to retirement are often
net lenders. Because pension funds invest by lending. At least
some of the money out. So what would happen if
debt was erased would be a massive transfer of wealth
from the old to the young and to governments. And
Dalton also says we can make a mistake by thinking
(36:36):
of this as a transfer of wealth from the rich
to the poor, but it wouldn't work that way because
the very poor don't usually have much debt. No one
is willing to lend to them. It's only those with
large incomes or assets or potential incomes that build up
significant debt. So depending on what governments do now that
they're free from paying interest on their debts, they were
(36:56):
never going to actually pay back the debts, so it's
just the interest. The poor might benefit extra government spending, However,
it might be the rich that benefit from tax cuts.
Pensioners and those who are getting to retirement age would
have some serious difficulties. The super wealthy, says Dalton, may
lose some money, but they usually invest in equity rather
than debt, so since the companies they own often have
(37:21):
a lot of debt, the share prices would probably increase enormously,
assuming of course, that the stock market would still be around,
which is debatable. And then he said in addition, institutional
lenders would all be bankrupt, banks, insurance companies, pension funds.
The world economy would probably collapse, and to be honest,
everyone would suffer erasing all debt. This that that's his quotation.
(37:43):
In our opinion, a racing all debt is the nuclear
weapon of economic warfare, which sounds kind of heady until
we realize that economic warfare already exist today. It's occurred
in the past. We've talked about it a little bit
before with a guy named John Perkins who wrote a
book called Confessions of an Economic hit Man, and which
he says he worked for an engineering company in Boston
(38:06):
and his job was to convince leaders of underdeveloped countries
to accept development loans for construction and engineering projects, and
having a condition of those loans be that the projects
went to US companies, and these loans would later give
the US government influence and access to natural resources. And
(38:26):
we have a quote from the book that we're going
to read here. Economic hit men are highly paid professionals
who cheat countries around the globe out of trillions of dollars.
They funnel money from the World Bank, the US Agency
for International Development, and other foreign aid organizations into the
coffers of huge corporations and the pockets of a few
wealthy families who control the planets and natural resources. Their
(38:50):
tools included fraudulent financial reports, rigged elections, payoffs, extortion, sex,
and murder. They play a game that is old as empire,
but one that has taken on a new and terrifying
dimension during this time of globalization. And this is something
we've explored before. Uh often referred to as resource extraction.
(39:11):
So that's one example of how economic warfare could work,
and that would pale in comparison to the economic warfare
of erasing all debt, regardless of the intention behind it.
Erasing all that would be strange. But how how could
this We're talking about the ideas, right, and we've talked
(39:34):
about the numbers of debt, But let's talk about how
this could work. How could someone erace debt? Well? To
do this, we look at some examples from pop culture,
because that's really the only place where this has been
fully explored. Yeah, and there's some fun ones, and I
mean it's it's like, one of the ones that comes
(39:55):
to mind, um that we haven't explicitly discussed together is
the movie Escaped from l a where at the end
they we are going to get into some spoiler territory here.
You also, if we're mentioning a movie or something and
you don't want to know what happens, you should probably
skip ahead maybe seven minutes or so, or you know,
go back ten years and watch Escape from you know
(40:18):
it's it's on It's on the Netflix. I think you
can get it. But at the end of Escape from
l A, there's a device that essentially shuts down all electricity,
shuts down even batteries. They make a point in the
say like, oh, this will even like render all batteries useless,
and yeah, so this is sort of like a super
extreme version where it's like an all encompassing attack that
(40:40):
would not only get rid of all dead as we
know it, but pretty much reduced you know, humanity too.
Back to the Dark aig as we need to you know,
start over. But a really good one that does specifically
deal with um actually targeting financial corporations is Fight Club nine,
David Fincher film based on the novel by Chuck palinek Um.
There are some pretty significant differences between the novel and
(41:02):
the and the film, but they do a pretty good
job of having a very similar let's say, mission statements.
So in Fight Club, Um, they're the group of these
kind of project yeah, project mayhem, that's right, sort of
a bunch of like, uh, depressed, overly macho males, middle aged. Yeah.
(41:25):
They want to fight back because they feel like they've
been marginalized by society. They are angry. Um. Honestly, their
motivations are not particularly um positive. They're not really trying
to help anybody. They just kind of want to watch
the world burn a little bit um in my opinion.
That's that's what I take from it. But in order
to do this, they stage an attack what could reasonably
(41:47):
be considered a terrorist attack on the corporate headquarters of
several large credit card companies. I think their seven buildings
that are destroyed during the en scene, which to me
is such an iconic scene, and it's the first place
I ever heard the Pixies song where Is My? Who
Is This band? And then I you know, was down
(42:08):
a rabbit hole from then on here we are so um.
Even at the time, I always thought this was sort
of a little bit of a rudimentary example of wiping
out the debt, because it's like, surely these things are
backed up elsewhere, you know, not just in the building.
And by blowing up a building alone, you're not wiping
(42:28):
out the debt. It would require some sort of deep
infiltration of an entire file system and structure and network.
Getting much more into hacker territory before we get there.
The little bit of an interesting fact toy that Matt
turned me onto. Um, did you guys know that in
the novel Fight Club it takes place in Wilmington's Delaware?
(42:53):
Do you guys remember twelve o nine North Orange Street,
the Corporation Trust Center, the official address of over two companies, Willington, Delaware. Um,
there's a couple of little inklings in the film that
it takes place there as well. But I thought that
was a pretty clever nod. And this address keeps popping
up for us. We're gonna have to do. I think
(43:13):
we're gonna have to do like a whole episode this address.
Let's take it. Let's let's go there physically, Listeners, let
us know if you would was to go there, maybe
we can meet up to hang out. So, like I said,
I mean, I don't feel like this example holds up.
This is more of sort of an anarchist kind of
like I said, watch the World burn kind of thing.
(43:34):
But um, we have we have a really good example
in our our wonderful sponsors. As it turns out, Mr
Robot um the series involving a sort of anonymous esque
society of hackers called f Society who orchestrates a very
high level cyber attack against E Corp, which to me
(43:55):
is I think a very clever stand in for Enron
maybe or any their giant corporation or financial financial level
or something. Um. And to me, this is this is
how you would you would do this. If you were
going to attempt to do some kind of to orchestrate
some kind of complete erasure of the debt record, it
(44:16):
would have to be through infiltrating these systems, not just
blowing up a building or one computer or one set
of servers. Yeah, and they and they do. Uh. I
guess it's a two pronged attack. And there may even
be more than that that we just don't understand, uh
as viewers and you know, in the world of Mr. Robot,
But they do it by using this thing called Interpreter,
(44:39):
which is a meta sapoit back door. And the main
character Elliott goes into the main servers of e Corp,
installs a really simple program like an e x C
file on their server, which then gives them and an
easy to access back door to the servers so they
can go in. And it's crazy. It uses memory, so
(45:02):
it's not actually writing anything to disk, it's just using
the RAM on the on the machine to create this
back door. I don't pretend to understand the hacking tools,
but according to numerous people online who are actually in
the info sex space and all this, they're saying that, yes,
this is this is real. You could do this and
you could delete information if you had this kind of backdoor.
(45:25):
And like we've said about the show, I mean, it
definitely gets a lot of this stuff right. Even like
the when you see the dude doing his hacking, it
looks like command line things instead of some sort of
bizarrow like three D rendering of the Internet as it
would be if you were floating around and hackers or something. Yeah,
I was thinking of that nineties film Hackers as well.
(45:47):
So what would be hit in these things? Insurance companies, Banks.
Insurance companies are bigger depositories of this kind of value
than you might think. Um, there would also, of course,
be government institutions. This would be stuff like this would
have to involve treasuries as well as mints. This, this
(46:11):
would involve a simultaneous attack on thousands of things. It
would be very difficult to do. It also makes me
wonder as a little off, but it also makes me
wonder if someone had that power, why stop at debt?
Why not also erase repositories of personal information so like
(46:37):
medical info? Uh, you know the metadata that the National
Snooping Administration collects from you the Facebook servers. Yeah, And
we talked a little bit about the attack strategies. I
think when you mentioned the escape from l a scenario
(46:59):
of actively cutting off electronics stuff. Right, what does this
what does this cloud money mean if we cannot access
the cloud? Yeah, if you would have to kill electricity
indefinitely in order to make that work, because there are
you know, all of these huge institutions like Iron Mountain
(47:19):
that holds sensitive data like this. They've got him like
crazy generators and backup power and all the other not
to mention they keep backups on like physical tapes and
you know, like stuff that would stand the test of
time and a vault, you know, and they're constantly updating
these things and backing up all their all their data.
So yeah, absolutely, in the old days of my family,
(47:42):
it was very different. Uh, there were things that would
happen when somebody wanted to get we wanted information to disappear.
And you think about it, we live in a time
where just less than what a hundred years ago, even
(48:04):
up to the nineteen seventies, eighties, if a right, definitely
sixties or so, if a bank or a courthouse burned,
then there would be no evidence of debt or arrests
or records. There were people in my family were not
true when they were born because yeah, because someone burned
(48:28):
a courthouse or two. Yeah, and uh, this I mean,
but we no longer live in that world because there
are multiple copies of these records, which leads us to
why it probably wouldn't work if we're talking about global
debt records. So in the world of Mr Robot, it
does work. Um, and that's because E Corp. Evil Corp.
(48:50):
Owns roughly of the consumer credit industry, which is a
bit hard to fathom in our world. It means they
would just own as subsidiaries, let's say Capital One and
most of the Visa, other companies that use Visa or
MasterCard or any of those. I feel like, in theory
we have laws in place to prevent things like that
(49:10):
from happening. Well, you know, hopefully it doesn't happen in
the future for us, you know, but but in our
world it's and this is not debatable. These various industries,
from credit cards, mortgages, student loans, health insurance, all of
these are controlled by hundreds and hundreds of separate, competing companies.
Like you said earlier, Ben, and you would have to
(49:32):
I mean, you would have to strike at a huge
number of locations in order to make this happen. Um.
In fact, almost all the computers. Um. And Okay, so
let's say you were able to take out a single,
huge international credit card company. Look, I'm just using Capital one. Sorry, Capital,
I'm just using it because I have your credit card. Um.
(49:52):
It would be this tiny, itsy bitsy little dent in
the all encompassing global debt machine that exists all around us. Right,
And there's so many eyes watching this as well. There
are multiple, multiple international, state level and even local institutions
that are tasked with doing this. But then there's another thing,
(50:14):
which is uh, many countries maintain a reserve of actual
resources rather than just currencies. So the US has you've
probably heard, a strategic reserve of petrol. Uh, the US
has strategic reserves of valuable metals, right, And other countries
(50:35):
do the same thing. And then we have other reserves
of other people's currencies. So if you hit one country,
then the currency that didn't get hit, that money will
just become more valuable. So think of these reserves as
massive savings accounts. They fluctuate as spending is needed. Uh.
In some countries, those reserves are uh, dwindling, these currency reserves. Right.
(51:00):
So here's just a few examples. And some countries these
reserves are dwindling. You're getting low. According to the World Bank,
the US had five hundred and seventy four billion in
total reserves in the reserves fell below a hundred and
seven billion UM. But in other countries these reserves are
actually skyrocketing. In two thousand, China held a hundred and
(51:23):
seventy two billion, and that's in US dollars correct, And
in China's reserves jumped to a whopping three point three
four trillion, yes trillion, And there are numerous reasons behind this. Uh.
Some have to do with the importance of one currency
versus another, or treasury bonds. Another has to do with
(51:46):
trade versus currency or trade balance, and overall strategies of
where you're where you're going with your country. And it's
it's a fascinating thing that I think, Ben, maybe we
should look at in the future. Yeah, I agreed, And
especially if this interest you, ladies and gentlemen, we we
can cover it. There's the other the other factor here
(52:07):
that disaster recovery data back up something happens. Let's say
there is an attempt well the Mr Robots scenario as
they said, for it makes a little more sense than
to demolish the building's plan and fight club because they're
targeting servers as well as backup data stores. And these
(52:27):
things have started to become commonplace in the nine seventies
when people began to realize how um Matt you described
it best when we said insanely dependent we are. We
as a species become on computers and the data contained
within those. So the strategies are redundancy plus off site
and cloud storage. The records of what is what and
(52:50):
when exists in multiple places, uh, which is also strange
because that kind of thing that not omnipresence but I
guess by location, is one of the miracles sometimes attributed
to saints. So going back to our earlier thing about
(53:11):
modern mythology, in a way, through robotics were through electronics
and computing, we are once again building the miracles of old,
but in a very strange way. So when we're looking
at this, the question is what is the stuff they
don't want you to know? More immediately? Who are they? Well,
(53:32):
at this point we can say we we feel we
feel pretty secure saying that one of the problems with
learning objectively about everything from individual finance to the financial
food fight that is international relations uh, and food fight
(53:55):
being you know, an allusion to the resources. Uh. The
what what we're seeing is that it's tough to learn
this because the people who can teach you have agendas.
So you learned this first, Uh, Well, the yeah, people
who can teach you will have agendas, and that you know, naturally,
I can tie into almost anything that we learn. You know,
(54:19):
somebody who is an Egyptologist is going to have a
very different opinion about the importance of Egypt and civilization,
right sure, But in this case, the stakes are high
and their currency, right, And I mean, of course you're
not denigrating Egypt, which is enormously influential. But but but yeah,
(54:41):
maybe archaeology is a bad comparison. I think that's that's
a great point though. If you ask uh uh an
economist from the US versus an economist from China and
economists from Russia or Iran, you're going to receive different answers.
And they're not necessarily the wrong answers from that economist,
(55:04):
they're the they're the answers that most benefit that perspective, right.
And this means that in our conversations Noel, Matt and
I may have different perspectives, it doesn't This is a
case where if we disagree, it doesn't mean one of
us is wrong. Well, let's get down to it. I mean,
at the end of the day, economics isn't an exact science.
(55:27):
There are different schools of thought that are deep rooted
in older schools of thought, you know, and uh, Like
you said, just because one person has a particular perspective
doesn't necessarily mean they're wrong, And the true answer might
be somewhere in between. Combining different perspectives. There's a lot
of philosophy always use ideology exactly, but it's it's very
(55:50):
it's not I don't want to say that it's imprecise.
I think that's that's short selling it just a little bit,
because I mean, obviously there is a lot of detailed,
high level thinking that goes into this, but it's much
more like a theory, you know, than it is, Yeah,
a formula. We also did not We also haven't looked
(56:11):
at what would happen if a concentrated segment or type
of debt were a race. If just for instance, just
more how specific do we want to go. Gent's just
mortgages on ranch style homes are just wiped out, Like
what would that? That would still have a ripple, less
(56:32):
of an effect, but it would still happen. I thought
it would have a ripple. If you know, all loans
for any kind of watercraft, you know, like a sailboat
or a jet ski, it would have many ripples. I
think I was worth it, or so. We we've talked
(56:52):
a little bit about the consequences. The the they the
stuff they don't want you to know. For this episode,
the stuff be the state of economy debt in the
world affecting individual debt, an individual debt affecting the action
of states, the the existence of currency. Yeah, you know,
(57:15):
is it just? Is it truly just? And I owe you?
Is it simply a system of coupons that future historians
will find, uh will put on the par of lost religions? Right?
I mean it's that's an extreme point of view, and
that's an extreme way to phrase that question. But what
do you think, ladies and gentlemen. We we spent some
(57:37):
time on this one, so we're going to head out
of here, but we would like to hear from you
any stories you have that you think more people should
know about debt, whether individual or international. What you think,
if anything could be changed to fix this or is
this perfect the way it is? Most importantly, do you
(57:59):
think the world's debt should be a race despite the
frankly certain and inevitable consequences. Because I'll say my personal
perspective here, even if there were some kind of financial
kill switch, a reset button that would take debt to zero,
eventually debt would a system of debt would evolve. Puka Shells.
(58:24):
You are on the ground floor, my man, so you
can let us know your thoughts on Facebook and Twitter.
You can also follow us on Instagram where conspiracy Stuff
on Facebook, and Twitter where conspiracy stuff show on Instagram
and if and that's the end of this classic episode.
If you have any thoughts or questions about this episode,
(58:47):
you can get into contact with us in a number
of different ways. One of the best is to give
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We are conspiracy at i heart radio dot com. Stuff
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(59:09):
visit the i heart Radio app, Apple Podcasts, or wherever
you listen to your favorite shows.
Cash rules everything around me. Cream. That's what today's episode
is about. Cream and sugar or stevia whatever, whatever works
for you. Yeah, you know it, could a fight club
esque scenario really take place? Uh? Those who know no, Uh,
no spoilers for a twenty year old movie. But yeah,
is it possible for an individual or a group, whether
(00:21):
in a terrorist act or an act of of of rebellion,
literally a race the world's debt or even a sector
of the world's a country's debt. Yeah, this an issue. Uh.
The idea of in two. Institutionalized debt is very, very old.
It's as old as human civilization. It's launched wars, it's
been the condition for ending wars. Uh. It exists even
(00:45):
in things like the effective student loan debt on millions
of people in the United States and abroad. The question is,
you know how much debt exists? And could someone really,
especially the world of digital money, could they just push
a button zero it out? Call a big mulligan on
the on the whole Dog and Pony Show. No jokes
(01:07):
on you guys, Jokes on you guys, because without debt,
there is no economy. Debt is the thing that makes
the economy all, let's learn about it. From UFOs to
psychic powers and government conspiracies. History is riddled with unexplained events.
You can turn back now or learn the stuff they
(01:27):
don't want you to know. Hello, welcome back to the show.
My name is Matt, my name is Noel, and Ben
your you and if you are one of the people
who happens to live in the United States and you're
(01:48):
an average household, then you have around one hundred thirty thousand,
nine hundred and twenty two dollars in debt, and of
that seven two dollars can be attributed to credit cards.
Holy mackerel, we're starting off on a positive note today,
my friends. You know what I think? Again, this is
(02:11):
the second time I've been slightly below average the same,
you know, but it's it doesn't feel great. Oh wait, no,
I am way above average. I got to count the house.
Uh if you count mortgage, that's interesting. Gosh, okay, well
then I'm well above average then. But but doesn't the
(02:31):
mortgage kind of count as an investment? I mean, it
depreciates over time, so it's not quite the same as
being in debt. But I guess it's looked at that
way as by creditors. Yeah, it feels that way now
now that I'm thinking about it. And uh, you know,
the reason that there's so much debt has been h
talked about at length for a long time by so
(02:55):
many people. We often, we in the majority of the
public across the globe, we often don't have the best
or most sophisticated understanding of what this is. And that's
why we as a species become embroiled in these strange
(03:15):
situations sometimes when all of a sudden, like consider the
Great Depression, Right, people are starving in the cities, right,
But in the rural Midwest, in the farming country, farmers
are throwing milk away and just gutting pigs and saving
what they can because the price on those animals, and
(03:38):
that you know that that beverage, I guess has tanked.
Some feels weird about calling milk a beverage, but bas
seely what I'm saying, like, that's and and then the
reason people would come to find that folks were starving
in one place, wh people were trashing resources in another
was due to something called the economy, right and right,
(03:59):
and then people would say, people would uh, the pundits
would be on the radio. The populist, the nationalists, the
whomevers would be on the radio arguing why they alone understood, uh,
the one true economy or what that thing should be.
And now we're in a world where I guess I
(04:19):
want to start off with the question, So did you
guys have economics classes in high school or in middle school?
I did, but I felt like, I feel like it
was rolled into something else, or it was like we
got half an economics class and then like the other
half was was Civics or something like that. You know,
but my memory of those days is a little hazy.
(04:40):
That's maybe that's made up. I got home X. Yeah,
I took not the same thing. No, I mean it
was personal finance. It was personal finance, if it was
all it was all that kind of stuff like how
to how to manage your your stuff, but it didn't
teach you how the Fed worked, no, and how to
write a check effectively. Right. One of the things that
(05:03):
I always think about is, you know, you're right, Matt.
For many people, at least in this country, the closest
thing people were offered to a personal finance class in
a public school is going to be home economics. However,
the individual person would probably be in a much better
position today if personal finance classes were mandatory. And I
(05:27):
know people don't like big brother federal mandates, but that's
an individual education, that is that is necessary to survive.
A lot of people don't get that, and that's why
we end up in a country where the total debt
oh by U S consumers. I can break it down,
all right, Uh, let's see now it's time for a breakdown, right,
(05:52):
Oh gosh, yeah, So what's the present one? Do we
have a backbeat for this? Okay? So credit cards seven
hundred thirty three billion dollars pales in comparison, of course,
to auto loans one point oh eight trillion dollars. And
(06:17):
then we have student loans one point to three trillion dollars,
and finally mortgages eight point to five trillion dollars. So
all of these numbers, these massive numbers, this is debt
(06:40):
um It's money that I guess needs to be paid.
What what is debt? Exactly? It's called American dream dollars. Oh,
as in imaginary dollars, which is this episode today we
are talking about that, and that I'm I'm laughing because nol,
(07:01):
what you just said, ties into so many other episodes
we could do. It hit us in our the course
of our research before we went on the air this week.
That currency itself is just a fascinating weird thing. It's
an agreement we make it totally is It's like it
could be shells, you know, shells or or or a
(07:22):
handful of sand. When you were a kid, did you
ever play the game where you just all agreed that
the floor was lava. It's like that, but with prizes
and you can move the floor for bunch of people.
I know that's that's a very biased thing, but well, yeah,
what is what is debt? That that's the question we
start with today, even though it's not our ultimate question.
(07:45):
So the good, the bad, the ugly of debt, Well,
it does do some oh nice copyright. Oh was that
Ineo Morricone? Oh man, he's the master my favorite soundtrack.
I'm gonna go listen to that for the rest of
the weekend. But the good part about debt, and there
(08:08):
are good parts, is that it sort of makes the
world go round. What are some of the good things
that this debt system does? So, in the most basic
of terms, debt is it's it's an I O U.
I mean it's without going into the entire history of
currency money as we know, at one time they used peppercorns,
peppercorns or currency that's got a function it makes your
(08:30):
food nice and spicy. But you know, I mean many
forms of currency were redeemable I O U s. I
mean that is essentially what currency boils down to, is
the redeemable I O U for a good or service,
either physically they contain some sort of valuable material a metal, gem,
what have you, poka shell, whatever, um, or they were
(08:51):
redeemable for the same amount of a different material. Okay, yeah,
So like an example for folks in the U s
And I know our numbers are pretty US centric at
this point, but we can get bigger. Uh. In the US,
there were these things called silver certificates, which fans of
certain JFK assassination theories will be familiar with. And until
(09:16):
nineteen sixty four, these silver certificates legally could be redeemed
for the amount of silver that was mentioned on the currency,
and then they stopped. Yep. But the reason, the reason
why money, why currency is so important to the functioning
of society is that all the goods and services that
are available for trading in some way or another. They
(09:40):
get boiled down to this common denominator where you have
X amount of this and I want to give you this.
I have X amount of this. I want to give
you this. We can trade with this one thing, rather
than having to break down exactly how much a goat
is worth in terms of wheat or something like that,
or you a car in terms or T shirts or
(10:03):
something strange. Yeah, I know why I'm hung up on
puka shells. I think I think, you know, maybe you
could bring it back. I think it's because I went
through that widespread panic concert last night and I saw
a lot of those. Yeah, I got a text from you.
The three am was just an animated gift of a
puka shell dancing furiously, dancing furiously. But what about liquidity.
(10:25):
That's interesting and very very very important component of all this. Yeah,
that's what you know. That's that's what we're talking about.
Two degrees that that advantage of this this stand in
So I I love what you said earlier, know with
you know the idea that money is essentially debt. Its
currency we carry around is a debt. It's a niou.
(10:46):
That was that was the way you said it. And
the reason it works currently is one because everybody agrees
that it should and two or virtually everybody agrees. Most
people agree and to the like, what did it offers
is so vastly superior to the bartering system for the
(11:07):
following thing. Okay, so let's say Matt has uh, Matt
is selling. What kind of car are you selling? Matt
uh countsh Matt is finally selling? Is counta not a
real car? Yeah, clearly I'm not a car that Matt is.
Still it is kuntas and know you decide you're going
(11:28):
to be a car guy, and because money doesn't exist,
you're going to break into your puka shell savings. But
the problem is that you don't live in the same town,
so you have to move this thing, and then you
have to also let's say it's a lot of puka
how many puka shells do you think you would That's
(11:48):
a lot, I'm gonna say, Okay, so too many for
knowl to comfortably carry, right, you can't you lose so much.
You'd lose so much shell just getting the shells there.
So I guess what I have to do is find
some sort of financial institution that will take my puka
(12:08):
shells from me, put them in some sort of puka
shell storage facility, and then give me the equivalent in
let's call them Internet Money's that that can then be
wired or transferred or moved around electronically. Bitcom sure, bitcomck
that's great, oh man, killing it today, buddy, And then
(12:29):
I can send that over the interwebs to the place
where I want to pay to me, Matt in my
banking institution, which only stores contash is right, that's that,
and then they're they're there, and you have a very rudimentary,
absurdist representation of the way business is done these days. Right,
(12:50):
And one of the most important parts there is that
Noll in this situation will then have a representative representative
token essentially of a value or an asset that he possesses.
So in theory, this promotes stability in trade, and in theory,
(13:10):
when nations are involved in mutually beneficial trade agreements, there's
more stability in the world. Allegedly, yes, mutually beneficial. Yes,
I'm just gonna repeat words from that earlier sentence. Theoretically,
(13:31):
so these money systems and these debts ultimately, because that's
what they are. They can they can be great for
society and help them function and work better together. The
problem is they can also wreak massive, disastrous, sometimes even
fatal things upon society and individual people. Yeah, you you
(13:53):
may have, at some point in your life met someone
who referred to folks who have a nine to live
job as wage slaves. That's pretty biased, But the heart
of that argument harkens back to the idea of indentured servitude.
So indenture servitude would be some deal um. The first
(14:14):
one that springs to mind is people who wanted to
travel to a different country, right, but could not afford
the trip the cost of let's say, hopping a boat
across the Atlantica. But if you agree to essentially work
only for room and board for seven years, then they
will consider your debt paid if they're not playing a
(14:36):
crooked game, you know, right, And many of those games
were crooked. So the argument there would be that wage slaves,
as the term goes, our new form of indentured servitude. Uh,
we're addicted to an ivy of money, whether that's hourly
salary or commission, and we're addicted to that because we're
less of a value generator as an individual, if we're
(14:59):
that and more of a node for debt and assets
to interact. So you that's why people can make a
hundred thousand dollars a year or who knows, who knows
how high this goes a million dollars a year and
still be just getting by due to due to crippling debt.
(15:19):
And then of course that ties into you know, a
similar argument forced labor, and we can save debt or
prison for another show, because is that still a thing?
It just in some places? Yeah? Wait, I thought it
had been here for years, but it's making a comeback
with interest here in the US. Men. Is that true? Well, yeah,
(15:43):
it's not necessarily the same equivalent, right a debt or
prison where IO debts I can't pay them. Now I
have to go live in this cell. Actually, there's I
just hit a story I typed in on Google and
one of the instant results was debt or prisons are back?
Top hit from fourteen? Is Supreme Court ruling not enough
(16:04):
to prevent dator's prison? Yeah, so you can. If you
have massive amounts of debt, you can go to prison
for it in certain instances. I thought that. I think
a lot of the stories too that popped up recently,
as in the last few years, occurred because there were
usurious court fees, legal fees, and when people could not
(16:27):
could not pay those fees, they would be incarcerated until
such time as those fees were paid, which is surreal,
and how do you make money when you're hanging out
in a prison all day long, every day. And then
(16:50):
of course that brings us to bankruptcy, which unfortunately the
golden parachute, golden parachute to unfortunately too many people are
familiar with, and it works differently for the wealthy than
it does for the poor, completely differently. Anytime you hear
about a regular Joe Schmo declaring bankruptcy, they have to
(17:11):
work and scrap and safe and hustle for years to
get that off their record, to get back to a
place where anyone will give them alone again. And as
we know, for certain folks that are in the public
eye right now, it's happened multiple times. And it doesn't
seem to be any long lasting ramifications for for doing
(17:31):
this thing. It's almost more of like a business strategy.
It depends, yeah, it depends on how it is structured.
And unfortunately, many people who are impoverished and fall into bankruptcy,
do not have the means or the connections to have
someone help them set up these I'm gesturing in the
air right now because so much of this stuff is
(17:53):
an idea. It's huge, it's huge, it is. And then
there's another one met call bills. This is also we're
at this point, ladies and gentlemen, We're just giving you
the lay of the land of debt in the US. So,
regardless of the political stance, regardless of what television channel
(18:15):
is most often trying to convince you to believe something,
the fact remains that for the vast majority of the
city of citizens, the United States has the most inefficient
and expensive health care system in the developed world. This
is not just a country where people die because a
disease or a condition is incurable. This is a country
(18:38):
where people die because they cannot afford a treatment. And
for some people that is a great tragedy. For other people,
that is uh a result of the individual's decisions and
is how it is, how it goes. But well, the
reason we bring this up for the purposes of this
(18:58):
show is because medical bills in this country are a
leading cause of bankruptcy. They're leading cause of people, uh
going into crippling debt. And we have current debt issues,
a lot of which are medically related. Yeah, when you
look at the country overall and debts that are kind
(19:22):
of hanging out waiting for the national government to pay.
The first one is social security, and we looked at
the summary of the annual report by the Social Security
and Medicare Board of Trustees, which sounds like a fun
place to work. They note that over the eighty year
(19:43):
history of the Social social Security program, it's collected roughly
nineteen trillion dollars and paid out sixteen point one trillion dollars,
leaving its asset reserves currently at two point eight trillion
at the end by the end of Now here's here's
the problem. The ratio of reserves to one year's projected cost.
(20:09):
It peaked in two thousand and eight and then it's
been declining up until two thousand fifteen, and it's it's
expected to decline even further until they're completely depleted in
four which means this money that's supposed to go to
help families with retirement, people who have disabilities, um, you know,
(20:31):
all kinds of issues people that need this money to
survive that we all pay into when you're a wage
worker in the US, it's just gonna be gone. And
that's something that's just kind of looming there in the
horizon that we have to think about. And the same
goes for Medicare, which is, uh, you know, dwindling quickly.
(20:53):
All these all these huge the huge amount of money
that are owed essentially on paper to people who once
they reach a certain age, needs to be paid out right. Yeah,
And the one of the issues with this is that
at various times the money for both of those programs
has been either controversially redistributed or maybe misunderestimated is a
(21:19):
good word, misunderestimated I like that. But yeah, there it's
two serious issues that we're going to have to face
at some point. And and that group we just mentioned,
they're saying that legislation needs to be enacted sooner or
later to minimize the impact on beneficiaries human beings who
are going to need that money. So what's uh, what
(21:42):
what's the international state of debt? Here? Well, according to
National Debt Clocks dot org, worldwide national debt stands at
sixty trillion, nine one billion, three hundred and thirty two
million and counting. That seems like a lot of money.
It seems like mad money, made up money, imaginary money.
(22:06):
If it's the number that's too big to be real,
I mean that that sounds alarmist. But whenever I see
this stuff on paper, I'm just like, this is. No
one's ever expecting to get paid back all of this money.
It's the debt itself is its own function, serves its
own function, as we've talked about exactly, you know, and
(22:27):
that if it's fascinating to me, and I think for
some people that idea maybe makes them more willing to
go into debt because it's sort of like, well, if
if we're running a deficit as a country, why can't
I run a little bit of a deficit. I can't
(22:47):
just have the stuff, you know, it's I want to
live the dream, and it's easy to get credit. You
don't have to have that much equity to get credit.
You just have to have a decent paying job and
not an absurdly low credit score. It's not hard. Well,
in this case, we're talking about countries themselves. I say perspective.
(23:10):
I think when you see these kinds of numbers and
you hear about how much you know the United States?
Isn't that, etcetera. It almost makes you say, well, well,
hell yeah, what why not me who cares? Right? It
doesn't seem like anyone is getting paid back, so why
not just roll the dice right and emphasize this perspective further.
Let's break it down by the top owing countries in
(23:35):
the world. Now it's time for another breakdown. Russia hundred
forty seven point six billion, Australia point four billion, Canada
eight d and fourteen point seven billion, United Kingdom two
point three trillion, China five point four trillion, Japan eight
(24:01):
point nine trillion, United States together now three trillion. Why
did I do a fake air horn? I guess you
could just put one. Are you talking about? That was
the best air horn I've ever heard of my life. Ben,
I know I'm prone to hyperboly, but I really do
believe that. So that's a significant proportion of the overall
(24:27):
global debt that the US holds right there, which you
know worries me a little bit. So how does that
break down for person met going to perspective? Okay, so
there are three hundred and twenty three million humans roughly
in the United States right now, citizens, and you know,
nineteen point three trillion. That amounts to just under sixty
(24:50):
thousand dollars of national debt per U S citizen, and
it represents one hundred and seven percent of the country's
gross domestic product year over year. So if somehow we
could stop paying stop all payments on everything in this
country for a year, you know, we'd be able to
pay off our national debt, which is kind of cool. Now,
(25:11):
let's also emphasize that this is not the This is
not the same kind of debt that you might encounter
if you have a student loan or absolutely, so this
is not the same kind of debt you would encounter
if you purchased um a moped. Sure, absolutely, And all
(25:35):
the numbers that we've discussed here in in our breakdown,
and the one about the the sixty dollars per person,
these are very basic, base level numbers, and if you
get deeper down in the accounting, it gets it gets
really tricky. And I was trying to familiarize myself and
understand it, but you guys, it's difficult. Right, none of
(25:57):
us are classically trained economist, and we would love to
hear from any economist in the audience, would love to
hear your opinion on the state of debt. Fun fact,
though I am a classically trained violinist, it is true.
That is awesome. You're a man many talents. I have
a little story for for us relating to the U
(26:19):
S National debt. Would you like to hear it and
come at me with it? All right? Okay? I was,
there was There was some hesitation there, all right. So
the story comes from a guy named Jason see Linkman.
Jason Selingman, you see, was an economist. It's quite good
at his job, so good in fact, that he worked
(26:43):
Pennsylvania Avenue, or he worked his boss lived there, he
worked for the president. That's how good he was. And
he was tortured at this time because he was thinking
for sixteen hours a day on this project he was
working on for his boss, a report that he was
(27:05):
going to write for his boss. And in that report
he ran into a realization that might stun a lot
of people. And he wrote with with his team a
report called Life After Debt, which they submitted to then
(27:27):
President Bill Clinton and which journalists got a hold of
years later through a Freedom of Information Act requests. And
Life after Debt is a report that you can read
it for free online. It is a report that outlines
(27:47):
what would happen if the US paid down its debt
to zero. And they wrote this in December of two thousand,
because that's the or the U. S Treasury began actively
buying back public debt, creating um, you know, digging its
way out of the financial whole it was in. But
(28:10):
they realized, Jason realized eventually that while there is such
a thing as too much debt for countries, there's also
such a thing as too little debt. So countries don't
want to necessarily have a surplus. In many cases it's
unreasonable outside of you know, a few a few countries
(28:34):
like the like Nordic countries, un some oil oil wealth countries.
So what we see is that the international level understanding
of debt and the individual levels to understand debt is different.
Not all debt is created equally. Businesses will go into
(28:55):
debt and have specialized, custom fit or bespoke plans for
balancing that debt. However, someone who was built into a
series of high high interest credit cards or student loans
(29:15):
will often not have that sort of a course. Here
in this country. There are federal programs that are supposed
to provide assistance for people who have the misfortune of
not being a business or a country when they go
into debt. However, much more money is spent by the
(29:39):
folks who make money off of credit cards and student
loans to make sure that system continues. And as of now,
debt what we've explained so far, Yes, there is an
inequality of debt. Not all debt is created equal, not
all people are in debt. But debt is a problem
for a lot of individuals, especially here in the West.
(30:03):
But the truth of the matter is debt makes the
world go round. So we were asking ourselves a few
weeks back, what would happen if we woke up one
day and all of the debt disappeared. We'll find out
right after a quick message from our sponsor. Here's where
(30:35):
it gets crazy. All right, everyone, it's story time. Let's
imagine a scenario where this actually happened, where where through
some act of massive buffoonery sorcery, it's not something insane happened,
(30:56):
and Mr Noel Brown wakes up in a world free
from debt. Ah, I can hear, how relax he is
exactly look at this world free from debt. Yeah. Well,
the great news is if he had any student loans,
medical bills, critic cards, mortgage to automatically, he'd be in
(31:16):
the clear for all those debts. It's gone. What a
time to be alive, guys. So so what what would do?
Of course, he would take some he would want to
get to take some cash, get on that first dream
trip with his you know, his honey, his squeeze, his
girl ever and uh, naturally they would go to Borneo.
(31:37):
That would go to Borneo and go to Borneo. But wait,
there would be some problems here. Oh, to get the
tickets to Borneo, Noel Brown has to buy them, and
the debit card he tries to use to buy the
ticket doesn't work because the bank that runs that debit
card is in a tail spin because debt no longer exists.
(31:58):
And the dirty open secret about banks, I don't know
if it's necessarily call it dirty, it's just how they work,
is that the money in Noel Brown's account was used
to be a loan to someone else. Yeah, Rain Capital
used it to invest in a small company in Atlanta
or something like that. Yeah, And that's when that's when
(32:19):
Noel Brown has to explain to this woman that he
loves he was going to take on a magical romantic
get away to Borneo, why they can't go to Borneo,
And he gives her his following speech. Well, you see,
as it turns out, most of the money in the
(32:40):
world is really just someone else's debt. Yeah, the money
in your bank account, my bank account, our joint bank
account because we're in love, is mostly on loan to
other people. Why. Yeah, the bank they took our money
and they used it to give someone else a car loan,
(33:02):
to give someone else a home loan, to give someone
else a loan to buy a suite new computer. Oh
but wait, there's more. There's an upside here for the banks. Yeah,
they get to use some sneaky accounting, very tricksy accounting,
(33:25):
and by doing that, they don't have to hold everyone's
money all of the time. It's a it's sort of
a game of you know, back and forth. It's being
moved around all over the place. They just hold some
of the money, and by some we're talking a tiny fraction.
So at the height of the financial crisis in two
(33:46):
thousand seven, many banks were actually leveraged at a ratio
of thirty to one. Then can you clarify that? Yes,
So in this scenario, I've I've showed up at Noel's house.
He's explaining to the love of his life he can't
go to Bordio. Well, we're at the airport. Oh you're
(34:06):
at the airport. Oh okay, alright, cool. Now I feel
underdressed because I'm obviously in my jammies. But I only
go to the airport in my jammie's. I think that's
the only time I've ever said the word jammies. Alright,
rule of three. So to clarify, Noel Brown and his
(34:27):
moving tragic speech will be telling this this uh love
of his life and whomever else is going to go
with them, that his bank account and all bank accounts
are essentially emptied unless the bank magically replenishes the account,
which would throw things into chaos. But you know, it
is a series of key strokes on a computer screen.
(34:49):
At least we have the fd I C that ensures
up to a certain amount, right, right, But a bank
no longer has a reason to exist as its sole
purpose for from this perspective, is to move debt around
every stock exchange, while Noel Brown is delivering this speech
in Hartsfield Airport. I imagine you're in Hartsfield, of course. Okay, Uh,
(35:11):
every stock exchange closes, Noel's investment portfolio is wiped out.
The puka shells he still has, but any puka shell futures,
any uh puka shell short short stocks, And I'm just
making upwards. Yeah, gonna I'm gonna need that back. Sorry,
I hope you don't mind, Because an investment is just
(35:33):
funding someone else's debt with the promise or the hope
of getting more back in return, but no one will
pay you back. And also, uh, Noel and his sweeties
retirement funds, they have one, along with everybody else's. Also
poof vanish. There's a guy named Thomas Dalton who I
(35:54):
think described this really well. What would happen if lenders
wrote off all debts. He sets is that there would
be a massive transfer of wealth from net lenders to
net borrowers. The net lenders of the world are things
like governments, right, uh, and young adults are we are
(36:15):
often net borrowers, and those close to retirement are often
net lenders. Because pension funds invest by lending. At least
some of the money out. So what would happen if
debt was erased would be a massive transfer of wealth
from the old to the young and to governments. And
Dalton also says we can make a mistake by thinking
(36:36):
of this as a transfer of wealth from the rich
to the poor, but it wouldn't work that way because
the very poor don't usually have much debt. No one
is willing to lend to them. It's only those with
large incomes or assets or potential incomes that build up
significant debt. So depending on what governments do now that
they're free from paying interest on their debts, they were
(36:56):
never going to actually pay back the debts, so it's
just the interest. The poor might benefit extra government spending, However,
it might be the rich that benefit from tax cuts.
Pensioners and those who are getting to retirement age would
have some serious difficulties. The super wealthy, says Dalton, may
lose some money, but they usually invest in equity rather
than debt, so since the companies they own often have
(37:21):
a lot of debt, the share prices would probably increase enormously,
assuming of course, that the stock market would still be around,
which is debatable. And then he said in addition, institutional
lenders would all be bankrupt, banks, insurance companies, pension funds.
The world economy would probably collapse, and to be honest,
everyone would suffer erasing all debt. This that that's his quotation.
(37:43):
In our opinion, a racing all debt is the nuclear
weapon of economic warfare, which sounds kind of heady until
we realize that economic warfare already exist today. It's occurred
in the past. We've talked about it a little bit
before with a guy named John Perkins who wrote a
book called Confessions of an Economic hit Man, and which
he says he worked for an engineering company in Boston
(38:06):
and his job was to convince leaders of underdeveloped countries
to accept development loans for construction and engineering projects, and
having a condition of those loans be that the projects
went to US companies, and these loans would later give
the US government influence and access to natural resources. And
(38:26):
we have a quote from the book that we're going
to read here. Economic hit men are highly paid professionals
who cheat countries around the globe out of trillions of dollars.
They funnel money from the World Bank, the US Agency
for International Development, and other foreign aid organizations into the
coffers of huge corporations and the pockets of a few
wealthy families who control the planets and natural resources. Their
(38:50):
tools included fraudulent financial reports, rigged elections, payoffs, extortion, sex,
and murder. They play a game that is old as empire,
but one that has taken on a new and terrifying
dimension during this time of globalization. And this is something
we've explored before. Uh often referred to as resource extraction.
(39:11):
So that's one example of how economic warfare could work,
and that would pale in comparison to the economic warfare
of erasing all debt, regardless of the intention behind it.
Erasing all that would be strange. But how how could
this We're talking about the ideas, right, and we've talked
(39:34):
about the numbers of debt, But let's talk about how
this could work. How could someone erace debt? Well? To
do this, we look at some examples from pop culture,
because that's really the only place where this has been
fully explored. Yeah, and there's some fun ones, and I
mean it's it's like, one of the ones that comes
(39:55):
to mind, um that we haven't explicitly discussed together is
the movie Escaped from l a where at the end
they we are going to get into some spoiler territory here.
You also, if we're mentioning a movie or something and
you don't want to know what happens, you should probably
skip ahead maybe seven minutes or so, or you know,
go back ten years and watch Escape from you know
(40:18):
it's it's on It's on the Netflix. I think you
can get it. But at the end of Escape from
l A, there's a device that essentially shuts down all electricity,
shuts down even batteries. They make a point in the
say like, oh, this will even like render all batteries useless,
and yeah, so this is sort of like a super
extreme version where it's like an all encompassing attack that
(40:40):
would not only get rid of all dead as we
know it, but pretty much reduced you know, humanity too.
Back to the Dark aig as we need to you know,
start over. But a really good one that does specifically
deal with um actually targeting financial corporations is Fight Club nine,
David Fincher film based on the novel by Chuck palinek Um.
There are some pretty significant differences between the novel and
(41:02):
the and the film, but they do a pretty good
job of having a very similar let's say, mission statements.
So in Fight Club, Um, they're the group of these
kind of project yeah, project mayhem, that's right, sort of
a bunch of like, uh, depressed, overly macho males, middle aged. Yeah.
(41:25):
They want to fight back because they feel like they've
been marginalized by society. They are angry. Um. Honestly, their
motivations are not particularly um positive. They're not really trying
to help anybody. They just kind of want to watch
the world burn a little bit um in my opinion.
That's that's what I take from it. But in order
to do this, they stage an attack what could reasonably
(41:47):
be considered a terrorist attack on the corporate headquarters of
several large credit card companies. I think their seven buildings
that are destroyed during the en scene, which to me
is such an iconic scene, and it's the first place
I ever heard the Pixies song where Is My? Who
Is This band? And then I you know, was down
(42:08):
a rabbit hole from then on here we are so um.
Even at the time, I always thought this was sort
of a little bit of a rudimentary example of wiping
out the debt, because it's like, surely these things are
backed up elsewhere, you know, not just in the building.
And by blowing up a building alone, you're not wiping
(42:28):
out the debt. It would require some sort of deep
infiltration of an entire file system and structure and network.
Getting much more into hacker territory before we get there.
The little bit of an interesting fact toy that Matt
turned me onto. Um, did you guys know that in
the novel Fight Club it takes place in Wilmington's Delaware?
(42:53):
Do you guys remember twelve o nine North Orange Street,
the Corporation Trust Center, the official address of over two companies, Willington, Delaware. Um,
there's a couple of little inklings in the film that
it takes place there as well. But I thought that
was a pretty clever nod. And this address keeps popping
up for us. We're gonna have to do. I think
(43:13):
we're gonna have to do like a whole episode this address.
Let's take it. Let's let's go there physically, Listeners, let
us know if you would was to go there, maybe
we can meet up to hang out. So, like I said,
I mean, I don't feel like this example holds up.
This is more of sort of an anarchist kind of
like I said, watch the World burn kind of thing.
(43:34):
But um, we have we have a really good example
in our our wonderful sponsors. As it turns out, Mr
Robot um the series involving a sort of anonymous esque
society of hackers called f Society who orchestrates a very
high level cyber attack against E Corp, which to me
(43:55):
is I think a very clever stand in for Enron
maybe or any their giant corporation or financial financial level
or something. Um. And to me, this is this is
how you would you would do this. If you were
going to attempt to do some kind of to orchestrate
some kind of complete erasure of the debt record, it
(44:16):
would have to be through infiltrating these systems, not just
blowing up a building or one computer or one set
of servers. Yeah, and they and they do. Uh. I
guess it's a two pronged attack. And there may even
be more than that that we just don't understand, uh
as viewers and you know, in the world of Mr. Robot,
But they do it by using this thing called Interpreter,
(44:39):
which is a meta sapoit back door. And the main
character Elliott goes into the main servers of e Corp,
installs a really simple program like an e x C
file on their server, which then gives them and an
easy to access back door to the servers so they
can go in. And it's crazy. It uses memory, so
(45:02):
it's not actually writing anything to disk, it's just using
the RAM on the on the machine to create this
back door. I don't pretend to understand the hacking tools,
but according to numerous people online who are actually in
the info sex space and all this, they're saying that, yes,
this is this is real. You could do this and
you could delete information if you had this kind of backdoor.
(45:25):
And like we've said about the show, I mean, it
definitely gets a lot of this stuff right. Even like
the when you see the dude doing his hacking, it
looks like command line things instead of some sort of
bizarrow like three D rendering of the Internet as it
would be if you were floating around and hackers or something. Yeah,
I was thinking of that nineties film Hackers as well.
(45:47):
So what would be hit in these things? Insurance companies, Banks.
Insurance companies are bigger depositories of this kind of value
than you might think. Um, there would also, of course,
be government institutions. This would be stuff like this would
have to involve treasuries as well as mints. This, this
(46:11):
would involve a simultaneous attack on thousands of things. It
would be very difficult to do. It also makes me
wonder as a little off, but it also makes me
wonder if someone had that power, why stop at debt?
Why not also erase repositories of personal information so like
(46:37):
medical info? Uh, you know the metadata that the National
Snooping Administration collects from you the Facebook servers. Yeah, And
we talked a little bit about the attack strategies. I
think when you mentioned the escape from l a scenario
(46:59):
of actively cutting off electronics stuff. Right, what does this
what does this cloud money mean if we cannot access
the cloud? Yeah, if you would have to kill electricity
indefinitely in order to make that work, because there are
you know, all of these huge institutions like Iron Mountain
(47:19):
that holds sensitive data like this. They've got him like
crazy generators and backup power and all the other not
to mention they keep backups on like physical tapes and
you know, like stuff that would stand the test of
time and a vault, you know, and they're constantly updating
these things and backing up all their all their data.
So yeah, absolutely, in the old days of my family,
(47:42):
it was very different. Uh, there were things that would
happen when somebody wanted to get we wanted information to disappear.
And you think about it, we live in a time
where just less than what a hundred years ago, even
(48:04):
up to the nineteen seventies, eighties, if a right, definitely
sixties or so, if a bank or a courthouse burned,
then there would be no evidence of debt or arrests
or records. There were people in my family were not
true when they were born because yeah, because someone burned
(48:28):
a courthouse or two. Yeah, and uh, this I mean,
but we no longer live in that world because there
are multiple copies of these records, which leads us to
why it probably wouldn't work if we're talking about global
debt records. So in the world of Mr Robot, it
does work. Um, and that's because E Corp. Evil Corp.
(48:50):
Owns roughly of the consumer credit industry, which is a
bit hard to fathom in our world. It means they
would just own as subsidiaries, let's say Capital One and
most of the Visa, other companies that use Visa or
MasterCard or any of those. I feel like, in theory
we have laws in place to prevent things like that
(49:10):
from happening. Well, you know, hopefully it doesn't happen in
the future for us, you know, but but in our
world it's and this is not debatable. These various industries,
from credit cards, mortgages, student loans, health insurance, all of
these are controlled by hundreds and hundreds of separate, competing companies.
Like you said earlier, Ben, and you would have to
(49:32):
I mean, you would have to strike at a huge
number of locations in order to make this happen. Um.
In fact, almost all the computers. Um. And Okay, so
let's say you were able to take out a single,
huge international credit card company. Look, I'm just using Capital one. Sorry, Capital,
I'm just using it because I have your credit card. Um.
(49:52):
It would be this tiny, itsy bitsy little dent in
the all encompassing global debt machine that exists all around us. Right,
And there's so many eyes watching this as well. There
are multiple, multiple international, state level and even local institutions
that are tasked with doing this. But then there's another thing,
(50:14):
which is uh, many countries maintain a reserve of actual
resources rather than just currencies. So the US has you've
probably heard, a strategic reserve of petrol. Uh, the US
has strategic reserves of valuable metals, right, And other countries
(50:35):
do the same thing. And then we have other reserves
of other people's currencies. So if you hit one country,
then the currency that didn't get hit, that money will
just become more valuable. So think of these reserves as
massive savings accounts. They fluctuate as spending is needed. Uh.
In some countries, those reserves are uh, dwindling, these currency reserves. Right.
(51:00):
So here's just a few examples. And some countries these
reserves are dwindling. You're getting low. According to the World Bank,
the US had five hundred and seventy four billion in
total reserves in the reserves fell below a hundred and
seven billion UM. But in other countries these reserves are
actually skyrocketing. In two thousand, China held a hundred and
(51:23):
seventy two billion, and that's in US dollars correct, And
in China's reserves jumped to a whopping three point three
four trillion, yes trillion, And there are numerous reasons behind this. Uh.
Some have to do with the importance of one currency
versus another, or treasury bonds. Another has to do with
(51:46):
trade versus currency or trade balance, and overall strategies of
where you're where you're going with your country. And it's
it's a fascinating thing that I think, Ben, maybe we
should look at in the future. Yeah, I agreed, And
especially if this interest you, ladies and gentlemen, we we
can cover it. There's the other the other factor here
(52:07):
that disaster recovery data back up something happens. Let's say
there is an attempt well the Mr Robots scenario as
they said, for it makes a little more sense than
to demolish the building's plan and fight club because they're
targeting servers as well as backup data stores. And these
(52:27):
things have started to become commonplace in the nine seventies
when people began to realize how um Matt you described
it best when we said insanely dependent we are. We
as a species become on computers and the data contained
within those. So the strategies are redundancy plus off site
and cloud storage. The records of what is what and
(52:50):
when exists in multiple places, uh, which is also strange
because that kind of thing that not omnipresence but I
guess by location, is one of the miracles sometimes attributed
to saints. So going back to our earlier thing about
(53:11):
modern mythology, in a way, through robotics were through electronics
and computing, we are once again building the miracles of old,
but in a very strange way. So when we're looking
at this, the question is what is the stuff they
don't want you to know? More immediately? Who are they? Well,
(53:32):
at this point we can say we we feel we
feel pretty secure saying that one of the problems with
learning objectively about everything from individual finance to the financial
food fight that is international relations uh, and food fight
(53:55):
being you know, an allusion to the resources. Uh. The
what what we're seeing is that it's tough to learn
this because the people who can teach you have agendas.
So you learned this first, Uh, Well, the yeah, people
who can teach you will have agendas, and that you know, naturally,
I can tie into almost anything that we learn. You know,
(54:19):
somebody who is an Egyptologist is going to have a
very different opinion about the importance of Egypt and civilization,
right sure, But in this case, the stakes are high
and their currency, right, And I mean, of course you're
not denigrating Egypt, which is enormously influential. But but but yeah,
(54:41):
maybe archaeology is a bad comparison. I think that's that's
a great point though. If you ask uh uh an
economist from the US versus an economist from China and
economists from Russia or Iran, you're going to receive different answers.
And they're not necessarily the wrong answers from that economist,
(55:04):
they're the they're the answers that most benefit that perspective, right.
And this means that in our conversations Noel, Matt and
I may have different perspectives, it doesn't This is a
case where if we disagree, it doesn't mean one of
us is wrong. Well, let's get down to it. I mean,
at the end of the day, economics isn't an exact science.
(55:27):
There are different schools of thought that are deep rooted
in older schools of thought, you know, and uh, Like
you said, just because one person has a particular perspective
doesn't necessarily mean they're wrong, And the true answer might
be somewhere in between. Combining different perspectives. There's a lot
of philosophy always use ideology exactly, but it's it's very
(55:50):
it's not I don't want to say that it's imprecise.
I think that's that's short selling it just a little bit,
because I mean, obviously there is a lot of detailed,
high level thinking that goes into this, but it's much
more like a theory, you know, than it is, Yeah,
a formula. We also did not We also haven't looked
(56:11):
at what would happen if a concentrated segment or type
of debt were a race. If just for instance, just
more how specific do we want to go. Gent's just
mortgages on ranch style homes are just wiped out, Like
what would that? That would still have a ripple, less
(56:32):
of an effect, but it would still happen. I thought
it would have a ripple. If you know, all loans
for any kind of watercraft, you know, like a sailboat
or a jet ski, it would have many ripples. I
think I was worth it, or so. We we've talked
(56:52):
a little bit about the consequences. The the they the
stuff they don't want you to know. For this episode,
the stuff be the state of economy debt in the
world affecting individual debt, an individual debt affecting the action
of states, the the existence of currency. Yeah, you know,
(57:15):
is it just? Is it truly just? And I owe you?
Is it simply a system of coupons that future historians
will find, uh will put on the par of lost religions? Right?
I mean it's that's an extreme point of view, and
that's an extreme way to phrase that question. But what
do you think, ladies and gentlemen. We we spent some
(57:37):
time on this one, so we're going to head out
of here, but we would like to hear from you
any stories you have that you think more people should
know about debt, whether individual or international. What you think,
if anything could be changed to fix this or is
this perfect the way it is? Most importantly, do you
(57:59):
think the world's debt should be a race despite the
frankly certain and inevitable consequences. Because I'll say my personal
perspective here, even if there were some kind of financial
kill switch, a reset button that would take debt to zero,
eventually debt would a system of debt would evolve. Puka Shells.
(58:24):
You are on the ground floor, my man, so you
can let us know your thoughts on Facebook and Twitter.
You can also follow us on Instagram where conspiracy Stuff
on Facebook, and Twitter where conspiracy stuff show on Instagram
and if and that's the end of this classic episode.
If you have any thoughts or questions about this episode,
(58:47):
you can get into contact with us in a number
of different ways. One of the best is to give
us a call or number is one eight three three
std w y t K. If you don't want to
do that, you can send us a good old fashioned email.
We are conspiracy at i heart radio dot com. Stuff
they Don't Want you to Know is a production of
I heart Radio. For more podcasts from my heart Radio,
(59:09):
visit the i heart Radio app, Apple Podcasts, or wherever
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Ben Bowlin
Noel Brown
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