#14 - Interview with Nick Gomez of ANG Traders (Part 1)

Ryan Benincasa: 0:16

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Adam Rice: 0:34

Hello, everybody, and welcome to episode 14 of the applied MMT podcast. We have a special guest on today, Nick from Angie traders. Nick runs a investor group on Seeking Alpha and a newsletter called away from the herd that is MMT informed it's an MMT. Look at markets MMT based analysis on markets. So Nick, we are excited to have you on today. Thank you for joining. I guess my first question to you is kind of if you could go into your maybe your professional background and how it is that you came to learn about MMT and how it informs your work. And we can go from there? Sure. Well, I if

Nick Gomez: 1:14

I was a physics and math teacher for about 2020 years. And I was I was investing my I've been investing my my own money for about 45 years. And I retired and decided to use what I knew to basically help others really, and take take what I had learned from investing my own money and from, from my physics, my physics background, I'm not an economist, but But I, I am a mathematician. So I picked up a lot of economics in my fourth, four decades plus, and it was about 10 years ago that I came across Mosler and actually, I've actually it is the 10 year anniversary of that, that discussion that Moser had with an Austrian economist. I don't know what that's Oh, yeah. Is that right? Yeah. Yeah, I

Adam Rice: 2:31

saw that. I saw that on Twitter today that that would say is the 10 year anniversary of that debate? Yeah,

Nick Gomez: 2:36

no. And he just eviscerated the it's kind of like, Oh, hi. Oh, no. But anyway, yeah. So it was it was very good. And so and then I I read some, some Kelton. Early early on and, and some re Rachael Ray. Yeah, so I, I got my eyes open, it was kind of an epiphany as to how the monetary system works, and where, before I was, I was basically focused on you know, mathematical patterns, technical patterns and sentiment patterns in the market. To sort of, in my analysis, I then you know, now it's, it's mainly MMT informed monetary of following the money, so to speak, and, you know, the monetary impact, and the fiscal fiscal flows, you know, when godly plays into it. One of my associates, Alan long bond, you know, has taught me a lot on on sector sector flow. And my, my partner is, is more of a computer scientists guy. And so he does, he does a lot of a lot of work for me as well. But basically, you know, it's, it's really gotten simpler for me over the four decades because of a proper understanding of money. Basically, I think the, the problem we have with, you know, like with a debt ceiling, for example, it all comes down to people not understanding what money is like, fundamentally, I think that's what's causing these problems. But anyways, I'm getting off to I'm getting off track here. You guys wanted to know what I was? My history. Yeah. So it was basically math and physics. My own investing for more than four decades. And about almost almost 10 years ago, I started AMG traders and has been sort of growing it as a boutique service and ever since. Awesome,

Adam Rice: 5:09

very cool. Well, I think, you know, it's funny, I think I was saying to Ryan the other day, you know, I don't know how anyone can honestly We analyze what's going on on a macro level without understanding MMT. Like, it seems like everyone's kind of in the dark, if you don't understand MMT right, and it's kind of like this whole, this whole rate hike thing is kind of making it clear, because everyone else is wrong. And they haven't they still have no explanation for what's going on. No.

Nick Gomez: 5:39

We've been calling for a recession for what, 18 months now.

Adam Rice: 5:43

Right. And, and people are still, you know, reluctant to recognize the MMT. Or at least, you know, I don't know if it's the MMT case. But it's, it's the Mosler case, which is that the interest rate hikes are stimulating the economy. And people are still out there on social media going, Oh, no one can explain what's going on here.

Nick Gomez: 6:08

And when when I when I explain it, or tried to explain it in, in some of my public articles, not to my subscribers, but to my public, in my public articles on Seeking Alpha, the comments, there, it's, it's unbelievable. Like, it's an exercise in patience for me. Because it's like everybody, almost everyone actually gets angry. At the truth, right. It's really quite something. And I basically come down to the asking them all right, what is money to you? And more specifically, the US dollar? Where? Where does the US dollar come from? This US dollar, you know, like, get start with that? Because they seriously do not. They do not know what money is. They don't know. They think it's real. And they think it's scarce. Right?

Adam Rice: 7:16

Yeah, it's so it's just so baked in like this. And, you know, I kind of get it. It's like, I think we all start with this mental model of money. Like there's, like, it's this scarce resource, and the government is funded by the private sector. Yeah. And that is like trying to, you know, get people to understand that that's not actually the way it works. But that's not the correct mental model. For some reason, it's like, very fundamentally, there's a lot of cognitive dissonance there, you know, and trying to get people to change their thinking about it. But then once, at least, I find that like, once people realize this, it makes a ton of sense to them. Right?

Nick Gomez: 7:53

It does, but that for certain, but for certain people, because somehow the majority of these from you know, the interactions I have on Twitter and on my the comments in my, in my articles, they really cannot fathom what money is in that. And the US dollar, what what it is they can't fathom that. They're actually it's only an idea, or this is an idea. And so and you don't have control of that idea that government does. Right. Right. It's that it's not like a household budget, they can't get past the idea that it's not like a household budget. Right up until that point. So think of a monopoly game. And I think that's, that's a really good, a really good analogy. Yeah, you know, the economy is the game plant, you know, we're, we're participants in this game, going on the board. And the bank is like a separate entity, outside of the game. If the bank runs out of dollar bills in the game, what do you do? So you scratch some paint, you rip some paper up and put a number on them? And they work just the same? Right? Right. That's kind of that's really exactly the way it is. Yeah.

Adam Rice: 9:24

Yeah. And for some reason, that's very offensive to people. It is.

Nick Gomez: 9:29

That's the word offensive. They're offended when I when I tell them the way it really is.

Adam Rice: 9:35

Right? And I don't I don't really I can't really put my finger on why that is, other than it's so different than the model that we kind of, you know, grow up with, or, you know, the commons. It's so different from the common sense model. But yeah, people it's very deeply ingrained. And it does kind of offend people when you propose that this is not the way things work. They have like a visceral

Ryan Benincasa: 9:55

reaction.

Nick Gomez: 9:57

emotional reaction.

Adam Rice: 10:00

So do you. Do you get a lot of pushback on Seeking Alpha when you guys publish? Absolutely.

Nick Gomez: 10:07

I wouldn't say that 90% of the commentary is up pushback and like you say, like, an offended pushback, right? Like I had offended their mother or something it was. I don't get it. And so, you know, I'm trying to explain to them like to bring it down to the really the fundamental problem, which I think I've identified it as people don't know what money is, I think that's, that's the fundamental problem. Otherwise, you wouldn't have the discussion of the debt ceiling? If right, if you knew what, what fundamentally, what the dollar is, right? We wouldn't have it.

Adam Rice: 11:02

I was gonna say, you know, I think and I Mosler made this point in an interview recently, he said that he thinks that MMT has made a lot of progress, because it feels like the solvency constraint is no longer talked about. So if you compare, you know, this most recent debt ceiling episode with the debt ceiling episode and 2011, there was so much talk in 2011, about the government being able to, you know, not being able to pay its bills about how we have to borrow more from China in order to, to afford what we you know, to afford the spending, we have planned, or there's just a lot of that kind of talk around the financial crisis around 2011. And you didn't hear that as much today. And it's like people are, it seems like people are kind of more interested. And it's because we're experiencing, you know, price increases, but it does seem like the conversation has shifted more to inflation, rather than solvency, which feels like a step in the right direction. It

Nick Gomez: 12:02

is is a small step, though, because McCarthy was still plugging away at you know, borrowing from China, right? It's like a credit card. And it's in like, it's like your kid and Oh, my God.

Ryan Benincasa: 12:16

But by the way, so we sent out a tweet earlier today highlighting a recent comment made by JW. Mason in a article post on Barron's, which by the way, the fact that this is getting into Barron's is, to me a huge sign of progress. Yes. He pointed out that, that the Social Security Trust Fund, which by the way, is, you know, part of the US Treasury that hold 6 trillion of our so called national debt. And by the way, it also owns about 5 trillion so so that's a leverage of over a third of the total, quote, unquote, you know, government debt is by the government. The largest creditor, if you want to say that to the United States government, is United States government. And

Nick Gomez: 13:13

you see, that's, that's why I think I tweeted earlier, it's like, it's not that. And so to, to talk about it as that is to talk about angels on the head of a pin. Because it's not that there are no angels on the head of a pin. And there's not It's not that, you know, it's not like, it's not like a household. It's not that people, I sometimes I ask, you know, in the commentary, I asked, okay, where where did the dollars come from, for you to buy a treasury bill? Or treasury bond? Right? Where did those dollars come from? All from my job? No, no, no, no like

Ryan Benincasa: 14:02

that where they got transferred your words your company, get the dollars from?

Nick Gomez: 14:07

Keep going, like, where did those dollars come from? Is it they came out of thin air when Congress made a law, allowing to spend it, the US dollar is a law. That's what it is. It is whatever Congress legislates to spend, because it spends it into existence. So the US dollar is a law. And it's a law that says that they that you can only pay your taxes, using these things using these dollars that they create. So it's a tax credit, and it's a transferable tax credit. And like, all money, it is something that we agree can release real resources, because the money is not real. Right? Like $1 Bill is not a US dollar, any more than the deed to my house is not a house. You know, great

Ryan Benincasa: 15:13

analogy.

Nick Gomez: 15:14

You know, it's It's an idea. Idea. It's something we agree will release the real stuff, the real labor, right? Materials, services. Yes, that that's true. And the the only place you're going to get these tokens is, is through congressional spending laws. Right. And that's the dollar, you know. And so treasury bonds are just a different, it's just$1 that they pay an interest on, is not required for spending. It's not required for anything. It's a leftover, vestigial leftover from the, from the gold standard. And that's the other. That's, that's fundamental problem. Number two, everybody is still stuck in the mindset of the gold standard, where, where you're trying to make something that's virtual, like money, tie it to something physical, like gold, which, you know, it doesn't, it doesn't work, because it's not physical. It's, you know, it's a virtual thing. It's just an idea. And so, the run up to for the, for the currency creator, to run out of money is like saying, you're running out of, you're running out of thank yous, or

Adam Rice: 16:38

you're running out of emails.

Nick Gomez: 16:42

You're running, you're running out of out of out of, I don't know, thoughts out of dreams. It's not real. Right? We'll

Adam Rice: 16:50

write why, you know, I tweeted from our account the other day, and I'm surprised that, you know, I had never thought about it this way. But and I don't think I've ever heard anyone else say something like, I mean, I've heard something, say, I've heard MMT, or say something similar, but a good way to think about it as is saying the government can run out of dollars, like saying the government can run out of food stamps. And it's just tokens to buy food with right, dollars are the same thing. But they're, you know, they obviously have more different degree of purchasing power. Right. Right.

Nick Gomez: 17:22

So the first thing we have to remember and understand is that the that the dollar is not a real thing. It's not a physical thing. It's not a real thing, it is simply an agreement. That, right, it's an agreement, we all we all agree that it can release real resources it can buy, you know, it can buy my labor, you know, whatever it can release real resources, and that it's only the US Congress, who can issue dollars through their spending legislation. Right. Right. That's and, and so, but then then people will say, Well, what about banks, private bank, chartered banks, I thought that that fine. Charter banks through law through a charter through a license can issue dollars, like the currency creator does out of thin air, because they don't lend deposits, it just creates the creative deposit, right, right out of thin air. That boy, where's that licensed come from? It comes from the currency creator, cuz that's where it comes from. Right?

Ryan Benincasa: 18:41

Technically, it comes from the Office of the Comptroller of the Currency, which is a, which is part of the Treasury, which is particularly proud of the executive branch, but But point point remains like it comes from the government.

Nick Gomez: 18:55

And so they are they are allowed, but it's not current savings unions, for example, are not chartered banks, they they do lend out deposits, but chartered banks are under under fed regulation, and they, they they can make they can make dollars appear out of out of nothing, they just have to stay within you know, their SLRs or their ratios and so on, which are determined, you know, arbitrarily basically by by the by the regulator. So, you you have I've lost my train of thought now, what was they saying? The Yeah, so, Congress makes up makes up the the spending laws and then the banks make loans, create create money, great dollars that way, but those, those deposits, those loans also create a liability, a liability that has to be cancelled, right. So if the if the person that low that borrow the money doesn't pay it back, then the bank has to cancel that loan, cancel that liability. With its own capital, its own right. So it is temporary money, I call it temporary money, because it has to be cancelled, it has to go back and be cancelled loan has to be paid back. When Congress spends money into the spending laws, it creates money out of thin air. But it doesn't have to tax it back and cancel it. And so what it doesn't cancel back, what it doesn't tax back and cancel is left in private bank accounts. And we wind up calling that a debt. Right. You see, like, I keep I keep saying to people, and they don't believe me. It's not that, right. It's not, if any, but if it's a debt in any way, it's the private bank account, could owe it to the back to the to the government as taxes could have a tax debt, maybe right at some in the future, because it hasn't been taxed back yet. So it's it's just not debt. Right?

Adam Rice: 21:27

Isn't? Well, you know, on that topic, which is, you know, these strange semantics that seemed to confuse everybody. Did you guys know, I think, Ryan, I think you and I have talked about this. But on Treasury direct, there's actually a security you can buy, called a 0% certificate of indebtedness. You can go on Treasury direct, like I'm looking at right now. And you can deposit money into Treasury direct, and it's in this instrument called a 0%, CFI certificate of indebtedness. So the government owes you that amount with no interest. And it's as you can, it's says, let's see here, it is intended to be used as a source of funds for purchasing eligible interest bearing securities, there is no limit to the amount you may hold in your CFI. You may build the amount of your CFI in a number of ways. And it basically just says how you can deposit money into it. Right, that certificate of indebtedness is government debt and my asset, and it's not complicated, like I think everyone can understand that. But yeah, for some reason, the word debt just just throws people off. Exactly,

Nick Gomez: 22:33

exactly. I try and explain to people, it's not that what it is, is a savings account with zero risk. Like, like where, and because it's zero risk, you know, the government is cannot, cannot go bankrupt. So you are gonna get your principal plus your interest. Guaranteed, absolutely guaranteed. Right. That's that's, it shouldn't have a zero interest, because as a zero, that has a zero risk, right, absolute zero risk, and you're in Moser keep saying that, you know, the, the natural, you know, if there is a natural interest rate, it is zero. Yep. Right. It's zero. Right. And that, and that's what and that's why,

Ryan Benincasa: 23:19

because if we didn't drain all the reserves out of the banking system, then they would go to zero.

Nick Gomez: 23:24

Yeah, exactly. That's right. That's right. Because, and, and the savings accounts that we're calling treasury bills and treasury bonds. Those are zero risk and should be carrying zero interest. But they don't they actually carry an interest, especially, especially now. And here's something that I want to get off my chest.

Ryan Benincasa: 23:49

This whole Wow, Nick.

Nick Gomez: 23:53

You know, I get so much pushback that No, I have trouble. I have trouble not not getting a little upset sometimes. But Treasury. Treasury bonds are savings accounts. They raise the interest rate to fight inflation. Okay, they saying to fight inflation, which is nonsense. And we know that we know that Volker, proved it. He caused the inflation to go up to 18%. His rates and the rates actually cause the inflation, right until the private debt could no longer be maintained at those high levels. And then you get unemployment and then demand gets crushed. And oh, look, it goes down. And I've said many times, raising the interest rate to try and quell inflation is like amputating your toes to make your shoes fit instead of spending on buying bigger shoes will eventually fit but it's a painful, bloody mess. Right and that's

Ryan Benincasa: 25:12

that's right. And does that leave us better off?

Nick Gomez: 25:15

It's not Exactly. But you, before I even knew about mn t, you know, decades ago, I already knew that when they start raising interest rates, the stock market will go up. Like, just because I saw it mathematically, I saw what what, what

Adam Rice: 25:37

led you to that? Was it just looking at at, you know, past charts, just

Nick Gomez: 25:42

looking at past charts, you know, and you Oh, you overlay the Fed funds rate over the s&p, the s&p 500. And it's as clear as day, right? raise rates, and the s&p follows it goes up until rates get too high, you know, what, what is too high is when the when private debt can no longer be maintained comfortably, at which point people's acid start to be sold in order to cancel that liability, right. And at that point, then it then it can snowball, right? Like it happened in you know, 2000. You know, it happened in 2000 2008. But it's the 2000 is, is particularly illustrative, because private debt went way up, way up, and it's still at things, things weren't going great for, you know, two, three years, even, you know, riding was going great. Clinton was having budget surpluses, which were what cause private debt to go up, because people are making up for the their deficit, which is the government surplus is their deficit. And so they're making up in their lifestyle for that deficit by borrowing money not went up. And that's not that can work as long as you know, everybody's working. And, you know, things are not too, you know, interest rates are not too high. But once they get past 6%, once you get past 6%, you tend to run into trouble, you tend to run into trouble. And that's what happened in in in 2000. But in 2000, you had Clinton running budget surpluses, which means they were net, taking money out of private bank accounts, and being made up for the situation now, and I've been saying this for about three or four years, the situation now is like the mid 1990s, only better, because we aren't we now we're not running budget surpluses. Now we're but we're running budget deficits, which is great. And we have technology because all major bull markets are right on the back of some tool that we've built. Right, in the 90s. It was communication, and by bio Gen tech, right by biotechnology. Mostly the, the, the internet. And, and that's what that's what blew that up. And now now we have a i and we have alternative energy. That is climate Climate Technologies, which are are going to fuel a bull market that I think will be maybe bigger than the 90s. But bigger than that tech, that, you know, it turned into a bubble because of the budget surpluses ran the excesses and so on. But, but this time, we're starting from private debt being historically low as a percentage of disposable income, like the maintaining of it. Yes, theoretically low.

Adam Rice: 29:21

Right. Right.

Nick Gomez: 29:22

So we have that. And we have government government deficits, which is private surpluses. So the two the two things that stopped the tech bubble of the 90s. We don't have yet the polar opposite.

Adam Rice: 29:45

Right. So

Nick Gomez: 29:47

I've been I've been saying for so long now. Like, we are going to have a massive bull market that nobody believes. Right? Nobody believes it. When they start believing it. That's when I'm going to that's when it's going to be overheated. I'm going to start getting myself out. Right now. Nobody believes what's going on. All

Adam Rice: 30:16

right, yeah, yeah, no, no, no one could have predicted this as Ryan and I always.

Nick Gomez: 30:22

Nobody except us.

Adam Rice: 30:26

But don't pay attention to MMT because it's crazy. Yeah, it's crazy. You

Nick Gomez: 30:29

know, money from nothing. Okay. Yeah. So they're, you know, very, it's very interesting how far off reality. The Hurt is. Yep. And they don't understand they literally don't under they can understand what's going on. That book has been going up since October. And they've been doing nothing but But predicting recession and bear markets.

Ryan Benincasa: 31:01

All right, and none of them will get fired.

Nick Gomez: 31:07

And then here, I am telling everybody the what's going to happen and why it's happening. And, you know, I still I still run a little boutique. Instead of a, you know, I don't know, an Amazon warehouse of

Adam Rice: 31:26

Nick, are you familiar with with MMT? Macro trader Douglas, and be sure what you paid? Yeah, man.

Nick Gomez: 31:32

He's great. Yeah, they

Adam Rice: 31:34

do very good work. And I think so You said you have a background in physics. I'm wondering if you have Have you looked at their models at all? Just

Nick Gomez: 31:43

in a cursory fashion, but I really, I really do like, I really do like, his work. Yeah, yeah. I

Adam Rice: 31:51

think they're doing some amazing stuff. It's really cool. I

Ryan Benincasa: 31:53

also think it's, it's pretty telling, frankly, you know, Nick, you're up there math and physics background teacher bees use math and physics background and teacher I mean, Mosler obviously, we know is primary background is in kind of banking, and, and fun management and finance. But he also, you know, is it has an engineering hobby. Yeah. And seems to have an affinity for, for, you know, for engineers, you know, he told us a story about the guy who was the former head of engineering at at GM that worked for the Bush administration that was that that, you know, immediately got MMT. So it's just, it's just interesting to me that, that, that everyone would like, kind of like a physics, math engineering type of brain tends to be gravitate towards MMT systems people, right? Yeah. Yeah, exactly.

Nick Gomez: 32:57

Yeah. And, yeah, it's, I haven't actually, I haven't had that thought before, but it's sort of formulating in my head now that, you know, when, when you when, you know, some math and when you when, you know, some physics ideas are what's really important. And it doesn't have to be something physical that you can touch you, so you're quite used to having ideas be real, as real as anything, you know, like, the, the atom, you know, the electrons, you know, cloud around around an atom? Well, we've never seen that. We never, you know, physically touch that, or even seen a photograph of it really. Yet, we, we believe that, that it exists, because we have our math telling us so not our senses can't our senses don't. But, you know, I read a book recently that, that was, again, a bit of a bit of an epiphany, and basically, you know, every mind, every human brain produces its own reality. So what we think of as reality is not really what the universe is, like, you know, it's not, you know, right, look at a table is solid, but, you know, we know, through our, through our mathematics, that it's mostly space, you know, because the actual nuclei, of the of the items are, you know, very, very far apart from each other. So there's really nothing but space there. And a little bit of real stuff, real matter. So that's an idea that goes against our senses because the human brain didn't evolve to maximize veracity of what the what the universe is really, like, you know, if if it did, we'd be able to see that that table that by computers sitting on really is mostly space. So it didn't evolve. We didn't evolve brains to maximize veracity. Truth, evolve, our brains evolved to maximize, maximize reproduction of DNA, that's the bottom line. That's, that's how our brains are maximized to reproduce. And so, so, in here, we are trying to explain something that is ethereal. And simply an idea. You know, the monetary system, and how it works is not a real solid thing. It's a physical thing. So we're trying to explain what you know what money is. And people can't understand it. Because it doesn't jive with their senses. And you know, the senses of like, I have to pay my debts, I have to get money, I have to get more money than I spend, or else I can't keep, I can't keep going, they can't imagine something that is not immediately accessible to their senses. Aha, mathematics extends your senses, so that you can get some more information about what the universe is really like. And if you don't have that, it starts to become difficult to see it, to understand it or to or to believe it. So I, I found I found that very interesting. We all we all assume that everybody else sees the color red the same way.

Ryan Benincasa: 36:44

Right, right.

Nick Gomez: 36:45

Assumption, you know, your brain produces a produces a reality, based on, you know, the inputs, from your five senses, and so on. And mine does the same thing. But my reality is probably way different than your reality in actual facts. I mean, there are some things that, you know, I look at a tree and yeah, I see a tree and you say, Yeah, I see a tree too. But even that, the tree I see, May May formulate differently than the tree, you see. Right? Because we were basically making making assumptions, you know, and fuzzy logic about about stuff is no, it was it was fascinating. It helped me understand why how, how other people could miss this so much, like be so far off the mark. Like, oh, like, because, yeah, everybody's brain produces its own reality. Right,

Adam Rice: 37:49

right. Well, you know, the particularly amazing thing to me about about MMT is that it's so central to such a big part of everyone's life. And there's so much money, like in financial services, like there's so much money, and there's so much time spent, there's so much media and so much education in this space. You know, it's not like we're talking about, you know, antiques or something. Yeah. It seems just so much of the community is wrong about so much, you know, and, and it's just, it's amazing. I

Nick Gomez: 38:25

mean, could you could you ever if you if you wrote fiction, where 95 98% of the participants in some, in some pursuit had the pleat wrong. Understanding of the pursuit. Yeah. Right. That's, that's the situation I think we're in.

Ryan Benincasa: 38:57

Right. Yeah, I think you're right. I mean, what astounds me is that, you know, there's, you know, I happen to think that a lot of, you know, a primary driver of the stress and financial markets in 2022, you know, a big reason for that was the massive tax drain we saw in the, in the end the record fiscal tightening that we that, that happened, you know, this

Nick Gomez: 39:23

past year in 2022, in 22. Yeah.

Ryan Benincasa: 39:27

So, so I can, I can, you know, that's my view, I can entertain arguments, that, you know, there were other factors that that, you know, were perhaps as important perhaps more important, but I happen to think that that is the most important driver. And yet, that isn't a conversation anywhere anywhere you read any of the press any of the research nope, anything. It's not It's and so it's just so shocking that that isn't even the faintest of considerations. Like it's not even part of the conversation alone being like the dominant like okay, debating whether it's like, you know, what's the dominant driver now? It's just naive and naive and mentioned no knocking Shot.

Adam Rice: 40:17

It's not even meant it's not mentioned. And now that I mean, the s&p hit a 52. week high today, no mention of the fiscal situation, no mention of the deficit, no mention of the interest rate driving payments to the private sector. And, you know, Ryan, what was the tweet that we saw yesterday, there was some kind of commentary. There was like, they were trying to make sense of how the economy is still doing well, how the markets are still doing well, despite the rate hikes. And they said it must be the lagging effects of 15 years of easy money policy.

Ryan Benincasa: 40:51

Finally, right. Oh, worked 15 years later, oh, we have proof. Right.

Nick Gomez: 41:03

You know, so it's the same thing with inflation. Okay. So inflation went up, inflation is always a shortage issue. It's always a supply issue. The the, the reasons the causes for the shortages are various, you know, natural disaster war, monopolies corruption, you know, we you know, and we had a number of those a natural disaster with COVID closing down the entire global economy. Like, that's, that's a natural disaster. So you get shortages. And then in a normal situation, capitalism, if there's a if there's a shortage of real resources, you if there's a profit to be made, and they're going to start making more of that stuff, and then that'll meet, it'll meet demand, right, you'll get you get this shortage. So they go and raise interest rates to try and kill demand. Right, but you know, cut off your toes idea. But they raised interest rates, because the, the, the already rich, I'll call them the already rich, namely the financial industry, the already rich, we're not, we're not getting enough interest free your risk free interest to make up for the inflation of the prices, which were being caused by the monopolies, you know, taking advantage of the shortages. But that's another another discussion. Right. So raising the interest rates really happened because the financial industry came down on Powell, because remember, Powell had been saying for six months, it's or maybe five months, four months, that inflation was transitory because it's, you know, it's a supply issue. He was right. They were right. Right.

Adam Rice: 43:02

They were right. And he got mocked for that. Yes. No. And what's what's crazy to me about the whole transitory is he got so much heat for saying it was transitory. And it's not like he put a timeline on it. He just said, We believe we believe inflation is transitory, that doesn't mean it's going to be gone and three days or 30 days, but it means it will go back down. Right? And he was getting so much heat just for calling a transitory, right and

Nick Gomez: 43:24

fine. And then he got so much heat from the people that were saying, Hey, I'm losing to this inflation, right? Because I you know, I'm not kidding, you know, I'm getting 1% on on my money here. Risk free, mind you, you should be getting zero, but okay, I'm only getting 1%, you know, and inflation is at five or six. So what did they do? Like, historically, they went from zero to five. Right? A few months, right? They raised the universal basic income for the rich, because that's what that's what treasuries basically are, you know, risk free income for no work. Okay, that's I'm sorry. That's that's what it is. The i, yeah. The rich, not for us. No. I feel I'm rich. But anyway, you know, it's, it's UBI for the rich, right? Free income for no work.

Ryan Benincasa: 44:29

It's a political decision. It's a political to compensate people for the inflation that was experienced because of the supply shortage.

Adam Rice: 44:40

All right, we're going to pause there and split this up into two parts. We talked to Nick for about an hour and a half total. So this is the first 45 minutes. We'll be posting the second part of our interview with Nick next week. Thank you guys for listening. We really appreciate it. And please like and comment if you're listening on YouTube.