The Great Depression: Largest Wealth Transfer in History Happening Again?

They're watching the stock market go up, up, up, up. Then the government or the central banks pulled the credit punch bowl away. That's what created the crash of 29. So basically what I get from the Great Depression is there was pretty much no confidence in the economy at that point. And so everyone's like, I need to get my money out of the bank. And the bank's like, uh, about that. We don't have any of your money. And then that was the beginning of the crash. And the FDIC was created to alleviate that. So that, Hey, just so you know, if you pull your money out, we got you. But from what it sounds like, they don't actually have that money to like have you in it, but to have your back in that case. Okay. So what really happened in the Great Depression is we were transitioning from a gold standard that created limitations on how much money they could print and how much debt they could take on. Because it was a 20th of an ounce that backed $1. So 20th of an ounce, they could print $1. When they legalized the federal reserve, now that same 20th of an ounce, they needed flexibility, right? That's, that's always the real, we need it flexibility. We need to be able to do more. So now this 20th of an ounce, instead of backing $1 back $2 and 40 cents. And that's exactly what they did. So when you look at the purchasing power chart, number one, that was when they converted corporate debt into our money, right? We had the $20 gold coin was the original. Then we had, they converted it to that because this is so inconvenient, so heavy to carry around coins, but paper is much easier. But you could walk into the bank with this, walk out with this. And at the same time, they put the federal reserve notes. So the pure corporate debt instruments in the system, every single one of these bills has the same nominal face value, $20. All of them are $20. Today, this has, I think I probably paid five bucks for it because I don't pay for this stuff. You know, I'm not willing to pay a lot for it. This is somewhere around market value of like 5,000 or 5,500 or something like that. Still not reflective, it's true fundamental value. And how much can you buy with this $20 bill, right? So they printed all that money. And this was also the first time when they were shifting the US from really a farming community to a consumer driven economy. So now in the 20s, they pumped all that two and a half, almost two and a half times more money. I have all the proof on this. Two and a half times more fiat money introducing the debt money into the system. And that's what created the roaring 20s. Because there was so much new money out there that could trickle down. And the middle class for the first time had access to credit. And so they did. And they're watching the stock market go up, up, up, up. They're watching the industrialists making all of this money. Well, they had a lot more free cash now. They had credit. They had more cash in their businesses. They wanted to emulate those that were in power. And so I think it's really interesting. They actually, for the first time historically, granted a perpetual charter to a central bank, right? Typically, the charter was for 15 to 20 years, because the governments typically knew that the central banks would end up inflating away the currency. So they could point their finger and say, oh, we didn't do it. That's not true either. But we didn't do it. It was those darn central banks. So they could use that as an excuse. But the perpetual charter was granted to the Federal Reserve. I could be wrong about these dates, but I'll be in there pretty close. It was either 1927 or 1928. At the same time, I think it was 27 was a perpetual charter. 28 was when the big kahunas started getting out. The industrialists started getting out and taking their profits. But the general public, naive, they know nothing, right? It was just a house of cards. And so they just kept pumping money into it. And then the government or the central banks pulled the credit punchbowl away. That's what created the crash of 29. After enough of the risk had been transferred from those industrialists to the general population, now all of a sudden, it was too expensive to support these very overvalued markets. That sounds kind of familiar. Yeah. What's a credit punchbowl? Oh, well, credit punchbowl means that any individual could go in. It's kind of like if your kid wanted a credit card at this age, they'd probably give them a credit card at this age. So the credit punchbowl is the ability of the individual to borrow. Just, yeah, just get money. You know, I mean, that's the credit punchbowl. Now you owe that money. Now you have debt and you have to service that. But that's the credit punchbowl. And a lot of people will look at their credit, and this is how they want us to look at it anyway, that that's our money. That we can go out and just use that credit and keep stimulating the economy, while at the same time, you're depleting your ability to continue to consume. So when they pulled that punchbowl in 29, well, enough risk had been transferred from the few, from the one percenters to the many. And that's when we went into the Great Depression. So it was because of all of the overprinting of the money and that opening up of that credit window. That's really what created, really, that zoom up in stock prices. But that was just a wealth transfer mechanism. Just like today. Really, it's not any different then than it is today. What would happen if they took the credit punchbowl away from these market makers, from these banks that are sitting on no reserves? Why did they take it away? What was their reasoning back then? Well, it was just getting too much. But they waited until the big kahunas that knew what they were doing. Got their buck. Correct. Got out. Transferred risk. This is all about transferring the risk from the few to the many. It's all about transferring the wealth from the few to the many. But the problem is, is when you build your wealth on debt, you have to be able to service that debt, roll that debt over, pay it off, or you will default on it. Right? Yeah. And so that's the reckoning that we're having. Because the lower the interest rates are, and I don't know if you know this or not, but in 33, they also pushed interest rates to zero interest rate policy. Right? Didn't work then. It didn't work now. But hey, let's double down and do it again. Why not? Japan shows us the way. China shows us the way to control the people. Japan shows us the way to control the debt. Oh my god, it's such a joke. But that's what happened. You know, they created all that money and it looks great. I mean, if I suddenly plopped a million bucks in your hand, what are you going to do with it? Are you going to save it or are you going to spend some of it? I'm going to spend a little bit of it. Exactly. You know, you'd probably spend even more of it, especially if you understood that how quickly it was losing value. Right? Then you put it into something that has a much better shot at holding its value. And this is proven. Period. End of discussion.