Lessons - How Excessive Money Printing Can Backfire | David Morgan - Founder of the Morgan Report

Everything's going up in price like I so if you look at the major city So I'm originally from Toronto I'm Canadian I'm from Toronto and you can't buy it attached home for less than two million dollars And there's other there's other issues that are are stopping that but I mean the the average I think I think to live in Toronto you have to make about 200 K to be considered middle class $200,000 a year to be considered middle class and the salaries are not just the people are not just handing out $200,000 salaries and that carries over into everything So now you see now we're starting to see defects and made in major urban areas for sure Maybe maybe less so in like smaller in smaller cities where life seems more affordable But it obviously impacts everybody so what's so what's the fix for this like you know we try and we print money right We print money to You know to to help the economy when COVID happens to keep up with you know foreign entities that are also Printing money and to and to maintain that pace. So what's the alternative to this? Well, let me speak at that. You can re ask the question. I just listened to Mr. Ackerman Rick Ackerman from That's I think he's still in the Bay Area. I met him through a mutual friend a long time ago The guy that I introduced me was a actual day trader for a firm Anyway, he just did this interview and talked about CB Myers in the bookcase behind me in the middle part of there Probably have almost every book ever written by Mr. Myers. He wrote he's long deceased lived in Spokane by the way at one time Was Canadian moved to Spokane And wrote several books and he wrote probably the preeminent newsletter remember I told you I was a newsletter junkie back from my 20s He wrote Myers finance and energy and from my perspective it stood out there a few Writers that really stood out he was one of them And what he talked about was and this is from Rick's interview that was just very recent but all debts are paid Which means that you loan the money and you lose because you made a bad loan So your million dollar loan on that house that the mortgage holder could not pay In that case you get the house back. So that's not a really good example So you make a million dollar loan based on a signature saying it's God. I trust you. I'll pay you back You can't So the person or entity that loan that million dollars just paid for it. It's gone. It evaporates into monetary heaven is Jim dine she's to say Or on another loan of a million dollars someone takes Linda and Linda pays back the loan But the money that's involved is as we know from finance or accounting double entry book Keep one asset is a liability of somebody else, but the money exists So when the money is produced or the currency is produced by the loan In a free market if you make a bad loan you have to pay the price So you lose Hey, I saved up $10,000. I'm going to loan it to the government. I'm going to buy this bond And then the government says those bonds are invalid now. I'm not talking about the US although it could be But I'm not I'm going to use like bonds of the civil war for example You put up the cash and I'll who who paid Well the cash buyer of the bond paid for the bond and it was worthless So that money is gone For that person, but that money did go to the person that issued the bond and what do they do they bought munitions with it or whatever So anyway, I'll probably be laboring the point But the idea is that there could be as I said earlier A lot of deflation when these Housing prices come down because the market usually meets the conditions at hand Which means if the average person in Toronto is making I'll make up a number 80,000 a year and 200,000 required to buy a house Well the housing prices will probably come down or salaries go up I don't think the sellers will go up this time as Rick pointed out in his interview Back in the late 70s and 80s. It's called cost push inflation. I think that's a term. It's already remember But wages kept increasing. I remember when I started my aircraft job my first check I got I was a little uptight because it was greater than the contract I'd signed And so I was you know It's kind of kind of scared in a big corporation. I asked one of the People to dinner or was it I don't get it. This is actually oh, I don't worry about that. That's cola What's cola is that something you drink That's a cost of living adjustment Every so often And there'll be a cost of living adjustment your wages will go up based on the inflation rate So I just happen to be in that sweet spot with a cola contract demanded that we got an increase. Well, that's not happening this time So you're not going to see the wages go you might in a few cases here and there, but you're not going to see the enacted like it was When I was young I really really got that so you've got Static wages or lower wages with an increasing Cost of things that are needed like food and energy So you got a real squeeze in what's called stagflation really everything that you need cost more and wages are static are going down So really puts the hurt on the middle class pretty much eliminates the middle class over time I mean look, I don't know what you make. I'm not interested. I'm interested in you as a person not as You don't want to be happy healthy and wide and free yet You know your income level is and it's important to me. It is to you That the type of person you are and whether or not you're being treated in a manner by society That's cognizant with the ability that you have and it's not You already stated and I want to put words in your mascot and you can retract anything I'm saying But you know, we're in an unjust system That is skewed to a few at the expense of the many