Jason Hartman talks about prices during COVID-19. He welcomes guest Ellen Brown to talks bout Universal Basic Income. They discuss debt payments, China, and more.
Jason Hartman 0:54
Welcome to Episode 1455 1455 and four 189 countries worldwide. Thank you for joining us. And thank you for sharing the show with other people so that they can get the benefit of knowing how to invest during a pandemic. And that is definitely something we all need to be aware of. These are absolutely crazy historic times we’re in hasn’t happened for 102 years, right. And so, we are on the cusp of a lot of new things, a new normal, and just a lot of a lot of changes. So talk about it many times a day with many, many people. It’s absolutely staggering what’s going on right now in so many ways. But today, we have Ellen brown back on the show, she’s been on several times, and as your guide to success in this environment. I thought it was good to bring her back. As we talk about a few things related to the good old folks at the central banks. We’re going to talk a little bit about UBI universal basic income and Folks, you whether you like it or not, big government is here and it’s here with gusto and it is here to stay and it’s just getting bigger and bigger and no, I don’t like it Okay, this time is a libertarians nightmare. No in so many ways, you know is we sort of wake up from from this a little bit which I kind of get the sense the world’s waking up a little bit from this, this nightmare. People are starting to really ask some questions, and conspiracy theories are flying. And let me tell you, here’s a prediction for you. Some of these conspiracy theories will turn out to be true. They will not be considered conspiracies or privy of wacko out there people with tinfoil hats. You know, a lot of this stuff is just you got to ask questions, you know, question authority. And as we come into the new normal knowledge only will the wealth gap get so much bigger. I mean, this is just the true digital divide. That’s what that is what is really, really reared its head during this crisis. And we haven’t even seen the effects of it yet. We haven’t seen the effects of all these bankruptcies. I mean, the bankruptcy courts are just going to be clogged with people. And it’s going to be a very sad situation for many we are truly in a crisis time, but like I’ve always said, and like the Chinese saying, crisis and opportunity, they go hand in hand, okay, and they really do they really do. That’s not just hyperbole. It’s not BS. It is true, because the opportunities are definitely, definitely becoming very, very visible. And I’ve talked to you about many of them. I’ve talked to you about roommates, remote workers, remote working out, mass migration, density issues and things like that. But one of the things that may surprise you is, and I just was reading an article about this this morning. Why are home prices going up as the economy appears to be falling apart? Well, good question. I’m glad you asked. I’m glad you asked. And it’s because the inventory has declined faster than demand has declined. So, again, it’s too early to tell we don’t really have the real numbers in on this. Remember real estate, unlike the stock market has a fairly significant lag time to its reporting. Okay. But I think we all know that look, it’s kind of obvious that if people are stuck inside if they’re afraid, oh my god, I went to the grocery store this morning. Seriously, it just feels like a massive overreaction to me. You’d almost think there’s some sort of, you know, toxic nerve gas and or something. Everybody’s wearing a mask and gloves and I was just wearing shorts and a T shirt. So no mask, no gloves. Maybe, maybe it’s I don’t know, it’s possible, but it just seems like a massive overreaction or It really does. But we’ll see, you know, maybe I don’t know, I don’t know. Nobody knows. The one way aisles. You can only go down the aisle one way and everybody looks at each other with suspicion, like, who could they be hearing the virus? You know, and listen, I’m not saying this is not a real thing. I think it is a real thing. Okay. I firmly believe there is a Corona virus, and that’s all legitimate. Okay. But the reaction to it may be massively out of out of proportion. That’s that’s the thing I’m questioning. So understand the distinction, right? I’m not questioning that there is a virus and it is harmful and that people have become ill and Sadly, people have actually passed away from it. Sure that’s all true. Okay. But it’s also true that the death numbers are being manipulated. And there’s just a whole bunch of stuff that we haven’t even heard about yet. So it’ll come but home prices, you know, obviously, not that many people are out looking at houses, right spring selling season, which was the biggest season for traditional real estate didn’t happen this year. So that definitely puts a crimp in the market. But guess what? There were 1.5 million homes available for sale at the end of March in the United States. Now, that might seem like a lot, but that’s actually down 10% from the same time last year, okay. It’s down 10% and that’s why prices are up from a year ago. They are up 8%. Now, the amazing thing here is, this even considers the cyclical markets. But don’t make any sense. The we’re already crashing whose bubbles were already popping. Before you ever heard the words Coronavirus are the word I guess it’s one word, right? Or COVID-19. It’s not one word or two, the 19 and the COVID. Those are two words. Right. Okay. And the dash, that’s another word. Right. Okay. Anyway, I’m, I’m being kinda slapstick here, but you get the idea. Right? So prices have gone up during this whole thing. Crazy. I know. But that’s because inventory has contracted even more. Now there’s going to be a huge glut of apartments. But there’s going to be a shortage of single family homes that will continue. And tomorrow. I think tomorrow, I’m going to share some Sam Zell with you, Sam Zell is a big time real estate investor, billionaire, Forbes 400 richest people in america and Sam Zell is the only one that I ever heard. heard many years ago publicly discuss the idea although he did not call it this because, sadly, I don’t think he listens to my podcast. Can you imagine? a billionaire can learn anything from a multi millionaire What? What is the world coming to?
Jason Hartman 8:19
You if he had a podcast, I’d be listening to him, okay, because he knows more than I do. Anyway, the point is, Sam Zell, not a listener to the podcast, but he did allude to the same thing that is one of my core teachings. And you know what I’m gonna say probably your regular listeners have been listening for the last 15 years. Inflation induced debt destruction. Sam Zell was the only big time person I ever heard say that I’ve never heard it come from any other guru. I never heard it come from now President Trump, or anybody remember President Trump is a big real estate guy, right? You know, let’s not forget that and all that. All the haste and the hatred and the you know, the every Right, but he’s a real estate guru, essentially. Okay. I never heard anybody really allude to the idea before anybody in the limelight, allude to the idea of inflation and do step destruction which I’ve been teaching since 2004. Except Sam Zell, he did allude to it. And that was many years ago when he talked about his equity. Read equity office read, I think he was talking about at the time, and he alluded to that. So hopefully tomorrow I’ll get some time to share some of some Sam Zell with ya. Okay. And we’ll do that. He’s, he’s one of the big time real estate people you don’t hear much about. You may not have even heard his name before. I don’t know. I don’t know. But anyway, hey, without further ado, let’s get to our guest today. Ellen Brown, and we’re going to talk about a variety things. We’re here for you to guide you through this situation. Whatever you need, reach out Jason Hartman calm or one 800 Hartman and here is Ellen Brown. It’s my pleasure to welcome a returning guests back to the show. And that is none other than Ellen Brown. She’s the author of 13 books. I first found out about her great work when I discovered the book web of debt. And more recently, she’s author of public bank solution and banking on the people democratizing money in the digital age. And she recently published an article about UBI, universal basic income. As you know, we had presidential candidate Andrew Yang on the show talking about that. And interestingly, I’ll just kind of start with this, Helen, and you’ll probably disagree with me. But, you know, philosophically, I don’t want to agree with this. It feels like another expansion of the welfare state a handout, blah, blah, blah. And you know, you’ve heard that trope more than enough times, I’m sure. But interestingly, in the pandemic, situation we find ourselves in there really isn’t in efficient mechanism, or there’s really no mechanism to get money to people. So what you have happened, and I’m sure you’re going to elaborate on this quite a bit, is you have all of these corrupt big banks that are now already being sued, thankfully, you know, getting their hand in the till and the money’s not going where it was intended to go. It’s a mess. Where do you want to go with that?
Ellen Brown 11:25
Yeah, well, I agreed. And the other problem is, you can think about these long range things that people need, like, obviously, we need Medicare for all and things such I mean, we’ve we’ve seen how bad our medical system has been in responding to this crisis. But all that stuff is sort of spotty, you’re gonna get some money here, some money there, and they’re gonna still be people left out. So the reason I like the universal basic income, at least to talk about it on a theoretical level is that it goes to everybody equally and you don’t, it’s very easy to distribute. In the sense of, you don’t have to go and show that you’re worthy of you know that you’re under a certain income level or whatever it takes. You don’t. You don’t have to have all kinds of bureaucracy deciding who gets what, it just goes to everyone equally. Now, a lot there is 25% of the population is unbanked or underbanked. So they might still have trouble accessing it if it just goes right into your bank account. But we’ve been pushing for postal banking, you could just have it go right to your post office, and anybody can open an account at the post office, which is what we have from 1911 to 1970.
Jason Hartman 12:38
Hang on, what is a postal account? What do you mean an account at the post office? What does that mean?
Ellen Brown 12:44
Yeah, well, we don’t have them right now. But it used to be that we had postal banks. So it was just another window in the post office. We’ve already got the infrastructure. You’ve got a post office in every little town, even little towns where they have banks, you know rural areas. And it used to be that you could just you went to one window and mailed your packages and then you went to the other window and deposited your check or put checks or pulled out some money. You know, it’s just basic banking not not like elaborate mortgage loans or anything like that. So they could do that on an emergency basis. Again, just say you can go to the post office and get your check, just open an account, which you know, you could do it on your cell phone or whatever, you know, you could make it quite easy. And another option is there is something called Treasury direct where anybody who wants to can open an account and that’s you know, it’s digital online, and it’s where, where you can go to buy treasury bonds right now. So anyway, it’s possible to get do some very fast, efficient way to get this money into people’s pockets. But what I was really writing about wanted to write about is it it seems to me that The obvious way to fund this is just issue the money the way, you know, basically, quantitative easing, theoretically, quantitative easing is reversible. But we’ve just seen that you can’t reverse it. It’s just like the federal debt, theoretically, we’re gonna pay off federal debt, but everybody knows we’re not gonna pay off $24 trillion federal debt. It just sits there. And the thing that grows is the interest. I mean, you could just Other than that, it just keeps rolling over and over and over. And you could just fund it through the Federal Reserve and roll the whole thing over. In other words, basically, it’s just issued MONEY MONEY issued by the government. So that’s what I think we should also do with a universal basic income. And any argument that we don’t have the money has just been killed by the fact that the Federal Reserve is just promised $4 trillion to basically corporate America to bail out everything. And save all sorts of big and little businesses and hedge funds and the riskiest dodgiest of things. It used to be that. I mean, technically, when the federal reserve funds something like when they did quantitative easing, they can only use things that are backed by the government. So it was supposed to be so very safe things backed by the government. So they were supposed to take as collateral or in other words, what they did was buy these federal bonds federal securities or mortgage backed securities from Fannie Mae and Freddie Mac, who, which are government agencies, so are government backed agencies. Anyway, so now they’ve expanded that and the way they expanded it was that the Treasury has set up these special purpose vehicles which the Treasury that’s us we the taxpayers are funding this. We are putting up 450 $4 billion capital for this what’s basically a shadow bank? I could go into that but you know, it’s not like a Chartered Bank, but it has the function to a bank where when you say it, what is it? Okay, this special purpose vehicles is the car. Right? Yes, pseudo bank. So what these SPV is they’re called what they do so you’ve got him for like commercial paper and municipal paper and all kinds of different corporate debt. And what and it’s run by minuchin. Steve minuchin, the Treasury Secretary so obviously another bureaucrat, another appointee, not somebody we elected and it’s, who decides what they buy is BlackRock, which is the world’s largest asset manager there. BlackRock is bigger than the economies of many countries. I mean, it’s this huge entity that does not have the best reputation. But anyway, so you’ve got all these private entities in there raking out so this $454 billion, billion dollars that we’re putting up for this, these SPV S will then be used to leverage $4 trillion in credit or debt or whatever that so they can buy up all these bonds and various dodgy sorts of assets that the Federal Reserve is not allowed to buy up itself. But it’s
Jason Hartman 17:35
going to do it by hook or by crook, I guess I’ll say, and what’s so terrible and scary about this other than the massive amount of corruption and the greedy hands that will be in the cookie jar, and all of that stuff is even if it was a clean program, the fact that they’re just doing it the the powers that be, you know, I wouldn’t say the government normally but it’s not just The government, right, it’s the it’s the Fed and the government and the SPS. They’re all picking the winners and losers. What the heck is their right to pick the winners and losers? Shouldn’t the marketplace sort that stuff out? No, they don’t. You know, you get political cronyism. And it’s just, it’s just absolutely terrible,
Ellen Brown 18:20
right? We don’t actually have capitalism anymore. We have crony capitalism, or corporatocracy, or whatever. Yeah. So anyway, they’re gonna tap into this $4 trillion of credit that the Fed has available. And without blinking an eye, I mean, the Congress voted unanimously to pass this bill in the space of a few days, basically, because they didn’t want to have to come back into, you know, meet in person. So they all just passed it by the internet. I mean, even the postman have to work you would think Congress could come in for a couple of days and argue about this. So they passed that without even worrying about where are we going to get $4 trillion? So taking come up with $4 trillion for all these entities, oh, and another thing is they make these loans. And that’s what the purpose of our capital, if they’re making loans like to buy asset backed securities or which are, say, auto loans, like half of those are going to default. And when they do, it’s, we are, it’s our capital, that’s going to fill in the hole there. So so there’s plenty of money out there that they can get from the Federal Reserve. And they could just as well get it for a universal basic income for the people. But then what everybody so
Jason Hartman 19:36
as an aside note, you know, Larry Fink of course, is chairman CEO of BlackRock or at least he was, I don’t know, in revenue 2018 was 15, almost $15 billion rounding with an operating income of 5 billion. Unbelievable.
Ellen Brown 19:54
I just did you know, also as an aside, you know, BlackRock on December 31st added increase their investment in moderner, the lead vaccine producer on December 31, the first day we ever even heard about a problem in Wu Han. And then on the day that the market crashed in March, after the market went way, way down. BlackRock alone made $68 million on moderner because you know that stock shot up while everything else collapse So anyway, these it’s an interested party. So BlackRock gets to choose which bond funds they buy, and obviously, they’ve got their fingers in these bond funds. So anyway, yeah, totally corrupt. Yeah, the
Jason Hartman 20:42
whole system is just it’s amazing. That one, I want to, let’s just jump away from this direct topic for a moment. Okay. What is the endgame of the money spending, conventional wisdom, or at least modern conventional wisdom, would say that all of spending is in inflationary pressure. You can’t just create money out of thin air forever. You can’t just run up the debt forever. You can’t just run deficits forever. The chickens have to come home to roost. You know, we got to pay the piper, whatever expression you want to use, or can we?
Ellen Brown 21:18
Yeah, that’s what I was reading this article a bit is that Yes, we can. And I mean that this is in terms of a universal basic income, let’s assume that we, that it takes another $3 trillion to give a 1200 dollar a month universal basic income to the people. The problem is people think of this as like a picture of bucket of coins and you just keep pouring more buck more coins in and eventually it’s gonna overflow or it’s gonna deflate the value of the coins. But that’s not what our money system is. It’s not a fixed amount of money. It’s a credit system, a credit and debit system are 95% of the money supply is created by banks, when they make loans and this has been confirmed by the Bank of England the Bundesbank, the International Monetary
Jason Hartman 22:04
Fund, listen to my listeners will not deny that because they have an understanding of how this whole games work, smoke and mirrors game works, right? Money is lent into existence. But your act, what you’re talking about that is almost like bets. Okay. And I think the first question is, is that okay? It seems really Hocus Pocus.
Ellen Brown 22:29
Okay, well, that my premise is that’s the system I’ve got. And you know, we have to deal with that weekend. We’re not gonna
Jason Hartman 22:35
change. You’re just being practical as well. I
Ellen Brown 22:38
actually think it’s not a bad system. What’s wrong with it is that it’s run by private banks, and they are interested parties and they’re corrupt and their goal is to make as much money as they can for their shareholders. You say that do
Jason Hartman 22:49
you include the Federal Reserve as being a private bank though?
Ellen Brown 22:52
Yes. Okay. But, but they could be public that’s and they should be. So that’s what I think if so, anyway, The problem is that banks create the principal but they don’t create the interest. So debt always grows faster than the money supply, which means you’re always in a deflationary situation and with the money supply, and debt grows faster than the money supply for another reason, there’s or at least the money available to repay the debt is not there for another reason. And that’s because people don’t put their money back into the money supply. In other words, if all of our money is created by banks as loans, it’s all going to have to go back to the bank to pay off the loan. So it has to be made available to repay the loan, otherwise, you’re going to have this increasing deficit on one side of the balance sheet. And the reason it doesn’t there’s two reasons. First of all, we have two economies essentially, we have producer consumer economy, which is where you want to keep the money. And then the financialized economy where you have money making money. It’s parasitic, draining money out The real economy and because of the Fed put, which is, you know, it used to be the Greenspan put and now it’s the Fed put where the Fed just isn’t gonna let the market go down the stock market go down whenever they do everybody screams bloody murder and and then the Fed jumps back in and reverse you know lowers the interest rate yet more and does have more quantitative easing etc so the Fed put means that you really can’t lose money in the financial economy or at least you couldn’t right up until recently. So investors and well even bankers or whatever people in general savers put their money into the financial economy because that’s where the money is. That’s where you make money because the Fed has protected it and made sure that you make more money there than by putting money into factories and you know, producing things so therefore, the real economy is always chronically short of money because there’s a hole in the bucket for one thing leaked out into the final Analyze the economy or a lot of people just save their money. Or they might just be sitting in a bank account not doing anything. I think
Jason Hartman 25:06
I think that’s kind of important what you just said. You said the real economy is always short of money. Because there’s a hole in the bucket where those quarters that you talked about are those coins drain, always into the financial economy. And my listeners have heard me talk about this before. There’s two economies sometimes I say there’s the main street economy and the Wall Street economy, and they’re completely different. There’s the financial economy and the real economy. In the real economy. People in companies produce things imagine that when a concept in the financial economy, they just move crap around, rename it, you know, leverage it, dude, I don’t know you explain more about the financialized economy. I get so annoyed by the whole thing. Sound I just sound angry. But you know what, go go ahead and go into that a little bit. What is the financial economy To me the financialization of so many parts of the economy. I mean, it is truly shocking. How many things Elon have become a derivative. It’s absolutely amazing. Talk on that for a moment. Yeah. It’s worth elaborating on.
Ellen Brown 26:13
Well, I’d say the stock market and all these well derivative market, which is what? Up to a quadrillion or something like that. But and then people would say, well, so the money goes into the financialized economy, but then they’ll spend it back into the real economy, but they don’t, that’s the thing. That big money is not going into consumer goods, they’ve got all the consumer goods they need or want, where it goes, they use their big money for big things like buying off politicians, you know, buying oil companies or you know, just buying up really big things. That’s what they want with their money. Not Okay, okay.
Jason Hartman 26:49
Wait, wait, wait. Let me play devil’s advocate with you on that one, right. Is that really true though? Because the idea that Money Never Sleeps When the rich pay off a politician, which is absolutely disgusting, or, you know, they buy a yacht or they buy an oil company or whatever they do, the money doesn’t go away. it trickles down to us a cliche into I mean, it doesn’t go away. It does.
Ellen Brown 27:19
trickle down, though, if you look at a chart, it just keeps trickling up. They just keep sucking more and more out and it, it goes into, well, it was probably sitting in offshore tax havens or it’s gone offshore and other ways.
Jason Hartman 27:33
Well, now, in that way, it does sort of evaporate, right? It goes when it goes offshore. That’s Yeah,
Ellen Brown 27:39
and a lot of I think there are trillions of dollars that are being held by corporations just in cash. I mean, I have a curse, I have an IRA and, and half that money is just sitting there and cash in my stockbroker account. I mean, they’re not even like if it was in a bank, the bank might be using it for loans, but not my stock. broker. So there’s a lot of money that’s just not in the market. You know, it’s just held off the market. I’m just saying that people rich people who have many, many times as much money as poor people aren’t going to go out there and spend many, many times as much money on buying trinkets and groceries and gas and all this things they’ve been they’re gonna buy the same
Jason Hartman 28:22
thing is that only buying trinkets and gasoline and paying rent is real really beneficial to the economy? I mean,
Ellen Brown 28:31
well, they will go buy houses I agree and that will drive up the price of house and
Jason Hartman 28:35
it will employ construction people and it will buy
Ellen Brown 28:39
assuming there’s room to build I’m taking things that are already there. You know, I said
Jason Hartman 28:44
Yeah. Okay. So they take an expensive place take you know, they go buy houses in Manhattan or Beverly Hills, right, which is where they buy them. Okay, so a real estate broker, a mortgage company gets paid in, decorator gets paid. You know, money. Does it doesn’t use the seller gets paid and the seller uses those proceeds somewhere, it doesn’t evaporate. I think that’s a fair statement.
Ellen Brown 29:08
True. But you still have all this money being sucked out that doesn’t go back into the local economy. I mean that all those things could happen at the same rate they were happening before. And it’s not going to increase the money. And you know, the overall money in wage earners pockets. They’re the ones that they want to pay their wage earners as little as possible. And that’s the problem. That’s why, particularly in times like this 80% of the population lives paycheck to paycheck. So what are those people going to do on the second month when they don’t get their 1200 dollar check? I mean, I haven’t seen my 1200 dollar check. I don’t know. I guess some people have. Anyway, you know, people are desperate out there right now. So you’ve got to do some.
Jason Hartman 29:52
So we covered a little bit about the financialized economy. Do you want to see anything more on that before we go back and then let’s get back to your article because I think this The article is really interesting. And let’s talk more about UBI. But anything else about the financialization of the economy?
Ellen Brown 30:07
No, I think that’s okay. All I had to say, Okay, let’s go back
Jason Hartman 30:09
to the article.
Ellen Brown 30:11
Okay, so with the UBI.
Ellen Brown 30:15
Because there’s this growing gap, what happens routinely and this has happened for thousands of years is that debt grows and grows and grows until it gets so high that people can’t borrow anymore. And what they do instead is they pay down their debts, but they’re not taking out new debts. And that shrinks, the money supply shrinks and shrinks and then you go into deflation, which turns into depression. And that’s that syndrome that the that everybody’s afraid of, or that you know, that the big the Fed and all the regulators are afraid of. So there are two options you can what they used to do in antiquity was just forgive the debt periodically because
Jason Hartman 30:56
Jubilee right,
Ellen Brown 30:57
yeah, because the lender was The king or the, or the temple? But you can’t do that anymore because the lender is private, you know, they’re private lenders. And even if they wanted to forgive the debts that would that would put them into bankruptcy because they would they’re supposed to balance their books. So the other one, I
Jason Hartman 31:18
hate the idea of any sort of debt Jubilee and why I hate it is it would be totally unfair and unequal distribution of benefits. For example, you know, there’s a lot of talk now about forgiving student loans. Look, I am student loans are a huge ripoff. Believe me, you’ve got my sympathy. But the problem is, I don’t have a student loan. So they forgive the student loans and all the taxpayers pay for it. Why do I have to contribute to that I didn’t get any benefit.
Ellen Brown 31:44
Right. And then the people that just finished paying off their student loans, they’re gonna be upset. Yeah, so I totally agree. That’s the problem with all these different programs that give some here some there, so that but you do have to fill that bucket that just got drained and There’s, and so that to me, the fairest way to do it is to just figure out call it a national dividend. It’s the extra money that we need to put into the economy to balance the books to, you know, to pay off all the old debt. So, so if you get an UBI, and you’re in debt, you could even make it mandatory that the money goes first to pay off your debts, like your credit card debt. Your bank knows what credit card debt you have, and it would just go automatically to pay that debt off. Well, when it goes to pay off debt, it disappears. That’s the catch. The thing that people aren’t recognizing is that money evaporates when it pays off debt. So if you give the people randomly, you know, everybody gets the same, but if the people use it to pay down their debt, that money that portion of the money is going to disappear. And I saw somebody somebody wrote a whole book on this and he said he figured that at least 50% of a UBI would go to pay, pay back debt and and Then he Well, he actually figured more like two thirds of it would either that or it would be saved or pulled off the mic. I don’t know,
Jason Hartman 33:07
make sure Elena, we catch your position on that. Are you saying that? That is though it’s good or bad?
Ellen Brown 33:13
I’m saying it’s good. I mean, it’s given the system we have, we’ve got to do something about that debt, if we give people in the debt you’re talking about is just personal debts, right? Yeah. Everybody’s well, business, whatever, you know, any kind of debt, the money will, if the money goes to, to the extent that the money goes to pay off debt, it will disappear, because that’s the way the system works. It’ll go, it’ll just go into the bank account, like you’ll go to your credit card thing and your credit card balance will be gone, but you won’t have like extra money to spend. And there’s actually at least room for 10% growth in the money. Well, we used to be that we said we were at full employment, but everybody knew we weren’t really, but now we’re clearly not at full employment. So there’s clearly a lot of room to grow. So any Extra that actually did go into buying goods and services would go to stimulate production of goods and services, which would be good for the economy.
Jason Hartman 34:09
Okay, so how does this relate to if it relates to what we’re starting to hear a lot about, and millennials would like it. And that’s modern monetary theory, otherwise known as mmt.
Ellen Brown 34:25
Well, mmt actually says you can go that the government can go into debt a lot more deeply than it’s doing right now or thinks it can, because the effect of it is to just borrow from the Federal Reserve and to create new money. I don’t actually agree with that, because that I don’t think that is the effect would that Treasury is not allowed to go directly to the Federal Reserve and borrow Not right now. I mean, it could be that you couldn’t change the law and say that, you know, the government could just print extra money and I would agree with That’s good. We need extra money out there in the system. But to say that it doesn’t matter if the government goes further and further into debt, and particularly the way it’s set up now or the or the debt has to be sold on the open market first. And that means it goes to private bondholders and they’re going to want their interest and you’re going to have the interest burden. I mean, I’ve seen projections that in like 10 years, we’ll be paying a trillion dollars, just an interest rate. Now, I think it’s 554,000,000,565 billion, something like that. Annually, just an interest and there’s no need to be paying interest. We could be borrowing it directly from that central bank at interest free because they rebate the interest to to the Treasury when after detecting costs.
Jason Hartman 35:47
So Ellen, it sounds too good to be true. I mean, we can just give people money. Have the Federal Reserve pay for it. Don’t we have to? Doesn’t someone pay for that a foreign Country buying a treasury bill or something? Can we just create money out of thin air and? Or do we create inflation? Is that how we all pay for it?
Ellen Brown 36:09
And what you’re creating is credit, all of our money is credit. And we need more credit out there. This is the way the Chinese do it, and they prove it in the model. The Chinese increase their money supply by 1800 percent, like 18 times in 20 years, and they did not run into hyperinflation. But what they do is, this state owns 80% of banking assets. So what they do is they go right to their big banks, borrow from the bank, the bank creates the money on its books. They use that money to build a high speed rail, let’s say and then the proceeds from the high speed rail, pay off the loan. That’s the way our system works. You’ve got to get the credit out there first, pay all the workers materials, make some money, pay the thing off, the end of the money comes back and there isn’t enough money out there. Right now, so that’s what helicopter money does. It’s gets more money out there to pay off the loans and to build more stuff. So it’s not going for nothing. It’s going for real goods and services. It’s the counterparty to the goods and services that we will be making in the future. That’s what all loans are, its monetization of your own future promise to repay
Jason Hartman 37:22
very interesting. I know you’ve got to run to another interview, give out your website.
Ellen Brown 37:27
Ellen brown calm is my own website. And then there’s public banking Institute dot o RG and my books are available on Amazon, among other places.
Jason Hartman 37:38
Ellen, thanks so much for joining us.
Ellen Brown 37:40
Thank you. Always good to talk to you, Jason.
Jason Hartman 37:47
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