Name: Dave Smith on Hyper-Inflation and Fractional Reserve Banking
Uploaded: 2023-11-24T17:20:27.000Z
Description: Watch the stand-up comedy video 'Dave Smith on Hyper-Inflation and Fractional Reserve Banking' from PowerfulJRE on Comedy Buff. Published 2023-11-24. Transcript available.

Watch the stand-up comedy video 'Dave Smith on Hyper-Inflation and Fractional Reserve Banking' from PowerfulJRE on Comedy Buff. Published 2023-11-24. Transcript available.

- The Joe Rogan Experience.
- All these things get corrupted,
and particularly today, we just, you know,
the size of the U.S. federal government
is the biggest organization in the history of the world.
There's nothing, there's not even a close second.
- And it's got survival instincts.
- Yeah.
- It doesn't want to give up ground.
It doesn't want to give up power.
- Well this is-- - It wants to keep expanding.
It wants more funding for its projects.
It wants to hire more people to deal with something
in an incompetent way.
And it's not like the free market where it,
like if it's incompetent,
like there's gonna be a competitor that comes along
and does a better job and you're gonna lose the market.
- Now you ever look at the,
if you look at like the list of the richest counties
in America, and they're like, I forget the exact numbers.
It's like-- - It's all lobbyists.
- Well it's like 10 of the, they're all,
not all, but the vast majority of them
are right outside Washington D.C.
and right outside New York City.
And so like, what is that?
Is that capitalism?
Do you go to Washington D.C. and you go,
oh there's more millionaires there than there are
in any other part of the world in the suburbs
around Washington D.C.?
Is that 'cause there's great big factories
and they're making so much stuff
that everyone wants to buy?
It's like, no.
That's because our centralized federal government
spends over six trillion dollars a year.
And where does that money go?
It goes into all the people who are connected to government.
And why is it outside of New York City?
Is it because in New York City they have great big factories
where they're making all the things that everyone wants?
It's like, no.
And that's not 'cause of capitalism.
That's 'cause Richard Nixon took us off the gold standard.
And now it's just this phony casino Wall Street money.
So it's everybody, all the people at the top
who are making all of this money,
they're not making it.
It'd be one thing if you're like John D. Rockefeller,
before he colluded with the government,
you created Standard Oil and now there's this big oil company
and you're making the country richer by this.
But they're not making the country richer,
they're extracting wealth out of the rest of the population.
It's all just extracted.
I mean literally, the federal spending is extracting wealth
out of people by taxing them and then spending it,
literally taking the money from people who work
and giving it to politically connected people.
And then the Wall Street money is just printing money
and then making your dollar less valuable.
So just in another way, extracting wealth from the people.
And this is basically why we live
in this populist moment right now
where so many people are so freaking furious
at the establishment, 'cause they're right to be.
- They're right to be.
It's a shit system.
It's a shit scary system that you can never beat
if it gets to make its own rules.
- Well it's not what,
and it's not what America was supposed to be, you know?
- It's so wild, the stock market is such a wild idea
that it's based on confidence
and you bet on companies.
- Yeah.
- Essentially betting on buying and selling
and you can wreck them and you can own them
and there's people that just play that game.
All they do is chase after businesses, short businesses.
You could short a country.
- Yeah, yeah, yeah, yeah.
No, it's pretty wild.
It's pretty wild and all--
- It's the craziest gambling.
- But this is also, you know, like to go back to like
Ron Paul stuff, this was like at the center of his campaign.
I don't think anybody else, outside of like the Libertarian Party
will put up candidates who like talk about this stuff.
But Ron Paul was the only one like in a major party
who got like a huge amount of traction behind him.
But where he was like, look, this is all like when you go,
when you have a fiat currency system and you go off
of any type of gold standard or anything
that kind of limits the government's ability
to just print as much money out of thin air as they want to,
you get this thing where we live in a cycle
of constant inflation.
And this is something that people don't put
that much thought into.
Like, you know, when you're talking to your grandma
or something and she's like, in my day,
a bottle of Coke was a nickel.
We just take that almost as like, yeah,
well that's how it works.
Things over time get way more expensive.
That's just how, 'cause that's been
so just how we've always experienced life
that it's just a given that everything's always
gonna be a little more expensive.
And we may have a bad year where things are like
9% more expensive.
And then maybe we'll have a better year
where things are only 2% more expensive,
but it's always going in this direction.
But that's not a law of nature.
That doesn't just have to be that way.
And in fact, if you looked at like from the year,
say 1800 to the year 1900,
somebody talking to their grandparents
would have had the complete opposite thing.
They would have been like, oh my God,
it was so much more expensive when I was young.
And now things are getting cheaper.
And in fact, the natural tendency
in a society that's developing,
the natural pressure is for things to get cheaper.
'Cause if you just think about it, right?
Like you get more efficient at making them.
You get, you know what I'm saying?
Like you get, you get more efficient at making them.
You can make more things with less manpower.
That would naturally put a downward pressure on prices.
But because the government keeps printing money,
the value of the money goes down.
And so we live in this system where things get more and more expensive.
But then when you have that, right?
And then you have all types of government incentives on top of that, right?
So it's like, okay, first of all, you're gonna,
if you just hold your money,
because this is what people used to do many generations ago,
was the idea of just saving your money.
You save it.
But if you just save your money today, Joe, you're a sucker because of this
system, right?
Like if you just hold your dollars, well, you're just losing money actively.
So you got to be chasing interest in order to just not lose money.
You have to be chasing an investment.
You know what I mean?
You have to be like gambling on something.
And so now, and then of course, there's also other like tax incentives where
like you,
you can kind of defer taxes if you invest in things.
And so you're kind of like pushed into, you know, like, well, put it in your
401k,
put it in this, put it in that.
And then you won't, but just think about that.
Like logically, aside from being really good for rich bankers,
why would you think that it's a good for like an average, you know, say like
couple,
who's just like working and making money and they don't know anything about
stocks and bonds and trading for,
you know, exchange traded funds and what to invest in and whatnot.
Why would you say that you, you should be working?
No, you shouldn't be working and saving a little bit for your, uh, for your
retirement.
What you should be doing is gambling.
You should always be gambling your money constantly.
Isn't that sound financial advice?
Gamble and gamble on something that you don't understand.
Right.
And you've done no research on it.
Yeah.
Trust someone who works on wall street.
Do you remember that time about a year or so ago where banks started failing?
Remember that, remember how spooky that was where banks started going under and
there was a real concern
that it would cause a, you know, a cascade effect.
They were very, very concerned about that.
Yeah.
And it didn't, but it got close and we had never heard about that many banks.
I mean, there was a savings and loan crisis.
Remember when a bunch of those places went under?
Yeah.
I remember that.
I found out about that because Vinnie Pazienza, the boxer lost a bunch of money
in one of those.
Oh, really?
Yeah.
Like, you know, I think his life earnings, I think he lost a shitload of money.
Like quite a few people have lost a lot of money in these fucking things.
Yeah.
Banks go under.
Yeah.
All of a sudden you lose everything.
Like what?
You don't have my money?
There's no money.
Well, and of course in 2008, that was, that was the big one, you know, in 2008
and they
really set a precedent there with that kind of too big to fail line of logic,
where if
that's true, that the banks are too big to fail and then you bailed all of them
out and
now they're bigger than they were then, then they're really too big to fail now,
right?
So it kind of perpetuates this idea that we, listen, the banking system and
everybody kind
of knows this, the banking system is built on a house of cards and it could
collapse at
any moment.
And if it does, the federal government's going to have to come rob you of your
money to give
to a bunch of bankers again.
That's our system.
That's our financial system.
And the CEOs of those banks still got bonuses.
Oh yeah.
Yeah.
They all still got bonuses.
They said they had to give them bonuses.
Otherwise they would leave and go other places.
And it's, and it shows, it shows a real, um, like eroding of something
completely different
than the political system, just our culture, that there wasn't at least like,
like enough
shame of those people to just go, yeah, I'm going to not take my bonus this
year.
Cause I don't want to get dragged through the streets and like killed by the
citizens of
this country.
I don't want to feel like that.
And it's not as if these people didn't already have tens of millions of dollars.
Like they really needed their bonus from this year or like little Timmy isn't
going to
get his Thanksgiving turkey.
They want a yacht.
Yeah.
It's like, no, I want a fifth yacht.
Yeah.
Like it's like that level.
But the whole banking system is it.
What's the, um, oh man, I'm going to get this.
What's the Christmas movie where they kind of go over fractional reserve
banking?
Uh, is it, it's a wonderful life or the one where they're like, where they all
come into
the bank.
There's like a bank run and they want their money.
And he's like, oh, but don't you see your money's over here at Frank's farm.
And then his money's over there.
And that's how, but like, uh, I can't remember which one it was, but anyway,
it's a wonderful life.
Is that what it was?
Yes.
I think it was.
It's a wonderful life.
Oh, no, maybe not.
That's movie.
No, but yeah, yeah.
It's an old one, but they're go, but the whole system of fractional reserve
banking is really
kind of this fascinating like thing.
Cause everybody still kind of has in their mind that if you, you kind of have
in your mind
that the money in your bank account is your money and that you're holding it,
that they're
holding it for you.
Right.
But that's not right.
That's not what's going on.
And if you ever actually read like the contract that you sign when you open, uh,
a checking
account, that's not what it is.
It's more like you're loaning money to the bank and they owe that money to you,
but they
don't have to give it to you.
They, you could legally speaking, you could walk in tomorrow, uh, to a bank.
I mean, no one actually walks up to a teller anymore.
It's a wonderful life.
Isn't a Christmas movie.
It's a banking movie.
Oh yeah.
Yeah.
Yeah.
So that is the scene.
I was right about that.
Okay.
Uh, but so you, you, you could.
Walk into the bank tomorrow and you're checking, you know, account balances,
whatever, say it's
$5,000 and you could go, I'd like to take out $2,000 and they can say, no, you
can't have
it.
Now they owe it to you technically, but they don't have to give it to you.
They're not just holding it for you to give to you on demand.
Now the system hasn't collapsed.
So they will give that to you today.
If you walk into a bank, but when you, too many people come in and they want
too much
money, well, they don't have it.
Yeah.
Is the point.
So when you open a bank account and I don't know exactly what the reserve rates
are now,
cause I know they did change this during COVID, but for a while it was 10% was
the, what the
federal reserve set as the reserves that you had to put away.
So when you come in to your bank and you give them a hundred dollars to open a
checking
account, just to make it an easy number, they, they hold $10 and they loan out
$90 and now,
so they, they'll loan that money out.
And so essentially they owe you a hundred dollars, but the, the effect of this,
right, is that
now there's this, this guy.
So let's say you open in the account with a hundred dollars.
Now there's another guy who takes out a loan for $90 and you're now in the
economy and
kind of like, you think you have a hundred dollars and he thinks he has $90,
but really
there's only, there's not $190.
There's only a hundred dollars that you get what I'm saying, but here's where
it gets even
crazier than that.
This guy doesn't just hold his $90.
He goes and puts it in the bank.
And so the bank holds 10% of that money and then loans out 90% of that to
somebody else who
then puts that money in the bank.
And then they take 10%.
So when you actually look at the effect of it, there's like not nearly as much
money in
the bank as we all think we have in the world.
So essentially if everybody came into the bank or even just too many people
came into the
bank and said, we'd like to withdraw our money, there's nowhere near enough
money for them
to give you.
So inherently the whole thing is kind of a house of cards.
It's like when you're going to a stadium and try to use your cell phone, you
realize
there's no signal, even though you have five bars because everyone's using
their phone.
So there's no signal for you.
You can't get online.
You can't make a phone call.
Right.
Like this thing only works if we're not all trying to do it at the same time.
Exactly.
But if we do, then we're in a lot of trouble.
Yeah.

Dave Smith on Hyper-Inflation and Fractional Reserve Banking

- The Joe Rogan Experience.
- All these things get corrupted,
and particularly today, we just, you know,
the size of the U.S. federal government
is the biggest organization in the history of the world.
There's nothing, there's not even a close second.
- And it's got survival instincts.
- Yeah.
- It doesn't want to give up ground.
It doesn't want to give up power.
- Well this is-- - It wants to keep expanding.
It wants more funding for its projects.
It wants to hire more people to deal with something
in an incompetent way.
And it's not like the free market where it,
like if it's incompetent,
like there's gonna be a competitor that comes along
and does a better job and you're gonna lose the market.
- Now you ever look at the,
if you look at like the list of the richest counties
in America, and they're like, I forget the exact numbers.
It's like-- - It's all lobbyists.
- Well it's like 10 of the, they're all,
not all, but the vast majority of them
are right outside Washington D.C.
and right outside New York City.
And so like, what is that?
Is that capitalism?
Do you go to Washington D.C. and you go,
oh there's more millionaires there than there are
in any other part of the world in the suburbs
around Washington D.C.?
Is that 'cause there's great big factories
and they're making so much stuff
that everyone wants to buy?
It's like, no.
That's because our centralized federal government
spends over six trillion dollars a year.
And where does that money go?
It goes into all the people who are connected to government.
And why is it outside of New York City?
Is it because in New York City they have great big factories
where they're making all the things that everyone wants?
It's like, no.
And that's not 'cause of capitalism.
That's 'cause Richard Nixon took us off the gold standard.
And now it's just this phony casino Wall Street money.
So it's everybody, all the people at the top
who are making all of this money,
they're not making it.
It'd be one thing if you're like John D. Rockefeller,
before he colluded with the government,
you created Standard Oil and now there's this big oil company
and you're making the country richer by this.
But they're not making the country richer,
they're extracting wealth out of the rest of the population.
It's all just extracted.
I mean literally, the federal spending is extracting wealth
out of people by taxing them and then spending it,
literally taking the money from people who work
and giving it to politically connected people.
And then the Wall Street money is just printing money
and then making your dollar less valuable.
So just in another way, extracting wealth from the people.
And this is basically why we live
in this populist moment right now
where so many people are so freaking furious
at the establishment, 'cause they're right to be.
- They're right to be.
It's a shit system.
It's a shit scary system that you can never beat
if it gets to make its own rules.
- Well it's not what,
and it's not what America was supposed to be, you know?
- It's so wild, the stock market is such a wild idea
that it's based on confidence
and you bet on companies.
- Yeah.
- Essentially betting on buying and selling
and you can wreck them and you can own them
and there's people that just play that game.
All they do is chase after businesses, short businesses.
You could short a country.
- Yeah, yeah, yeah, yeah.
No, it's pretty wild.
It's pretty wild and all--
- It's the craziest gambling.
- But this is also, you know, like to go back to like
Ron Paul stuff, this was like at the center of his campaign.
I don't think anybody else, outside of like the Libertarian Party
will put up candidates who like talk about this stuff.
But Ron Paul was the only one like in a major party
who got like a huge amount of traction behind him.
But where he was like, look, this is all like when you go,
when you have a fiat currency system and you go off
of any type of gold standard or anything
that kind of limits the government's ability
to just print as much money out of thin air as they want to,
you get this thing where we live in a cycle
of constant inflation.
And this is something that people don't put
that much thought into.
Like, you know, when you're talking to your grandma
or something and she's like, in my day,
a bottle of Coke was a nickel.
We just take that almost as like, yeah,
well that's how it works.
Things over time get way more expensive.
That's just how, 'cause that's been
so just how we've always experienced life
that it's just a given that everything's always
gonna be a little more expensive.
And we may have a bad year where things are like
9% more expensive.
And then maybe we'll have a better year
where things are only 2% more expensive,
but it's always going in this direction.
But that's not a law of nature.
That doesn't just have to be that way.
And in fact, if you looked at like from the year,
say 1800 to the year 1900,
somebody talking to their grandparents
would have had the complete opposite thing.
They would have been like, oh my God,
it was so much more expensive when I was young.
And now things are getting cheaper.
And in fact, the natural tendency
in a society that's developing,
the natural pressure is for things to get cheaper.
'Cause if you just think about it, right?
Like you get more efficient at making them.
You get, you know what I'm saying?
Like you get, you get more efficient at making them.
You can make more things with less manpower.
That would naturally put a downward pressure on prices.
But because the government keeps printing money,
the value of the money goes down.
And so we live in this system where things get more and more expensive.
But then when you have that, right?
And then you have all types of government incentives on top of that, right?
So it's like, okay, first of all, you're gonna,
if you just hold your money,
because this is what people used to do many generations ago,
was the idea of just saving your money.
You save it.
But if you just save your money today, Joe, you're a sucker because of this
system, right?
Like if you just hold your dollars, well, you're just losing money actively.
So you got to be chasing interest in order to just not lose money.
You have to be chasing an investment.
You know what I mean?
You have to be like gambling on something.
And so now, and then of course, there's also other like tax incentives where
like you,
you can kind of defer taxes if you invest in things.
And so you're kind of like pushed into, you know, like, well, put it in your
401k,
put it in this, put it in that.
And then you won't, but just think about that.
Like logically, aside from being really good for rich bankers,
why would you think that it's a good for like an average, you know, say like
couple,
who's just like working and making money and they don't know anything about
stocks and bonds and trading for,
you know, exchange traded funds and what to invest in and whatnot.
Why would you say that you, you should be working?
No, you shouldn't be working and saving a little bit for your, uh, for your
retirement.
What you should be doing is gambling.
You should always be gambling your money constantly.
Isn't that sound financial advice?
Gamble and gamble on something that you don't understand.
Right.
And you've done no research on it.
Yeah.
Trust someone who works on wall street.
Do you remember that time about a year or so ago where banks started failing?
Remember that, remember how spooky that was where banks started going under and
there was a real concern
that it would cause a, you know, a cascade effect.
They were very, very concerned about that.
Yeah.
And it didn't, but it got close and we had never heard about that many banks.
I mean, there was a savings and loan crisis.
Remember when a bunch of those places went under?
Yeah.
I remember that.
I found out about that because Vinnie Pazienza, the boxer lost a bunch of money
in one of those.
Oh, really?
Yeah.
Like, you know, I think his life earnings, I think he lost a shitload of money.
Like quite a few people have lost a lot of money in these fucking things.
Yeah.
Banks go under.
Yeah.
All of a sudden you lose everything.
Like what?
You don't have my money?
There's no money.
Well, and of course in 2008, that was, that was the big one, you know, in 2008
and they
really set a precedent there with that kind of too big to fail line of logic,
where if
that's true, that the banks are too big to fail and then you bailed all of them
out and
now they're bigger than they were then, then they're really too big to fail now,
right?
So it kind of perpetuates this idea that we, listen, the banking system and
everybody kind
of knows this, the banking system is built on a house of cards and it could
collapse at
any moment.
And if it does, the federal government's going to have to come rob you of your
money to give
to a bunch of bankers again.
That's our system.
That's our financial system.
And the CEOs of those banks still got bonuses.
Oh yeah.
Yeah.
They all still got bonuses.
They said they had to give them bonuses.
Otherwise they would leave and go other places.
And it's, and it shows, it shows a real, um, like eroding of something
completely different
than the political system, just our culture, that there wasn't at least like,
like enough
shame of those people to just go, yeah, I'm going to not take my bonus this
year.
Cause I don't want to get dragged through the streets and like killed by the
citizens of
this country.
I don't want to feel like that.
And it's not as if these people didn't already have tens of millions of dollars.
Like they really needed their bonus from this year or like little Timmy isn't
going to
get his Thanksgiving turkey.
They want a yacht.
Yeah.
It's like, no, I want a fifth yacht.
Yeah.
Like it's like that level.
But the whole banking system is it.
What's the, um, oh man, I'm going to get this.
What's the Christmas movie where they kind of go over fractional reserve
banking?
Uh, is it, it's a wonderful life or the one where they're like, where they all
come into
the bank.
There's like a bank run and they want their money.
And he's like, oh, but don't you see your money's over here at Frank's farm.
And then his money's over there.
And that's how, but like, uh, I can't remember which one it was, but anyway,
it's a wonderful life.
Is that what it was?
Yes.
I think it was.
It's a wonderful life.
Oh, no, maybe not.
That's movie.
No, but yeah, yeah.
It's an old one, but they're go, but the whole system of fractional reserve
banking is really
kind of this fascinating like thing.
Cause everybody still kind of has in their mind that if you, you kind of have
in your mind
that the money in your bank account is your money and that you're holding it,
that they're
holding it for you.
Right.
But that's not right.
That's not what's going on.
And if you ever actually read like the contract that you sign when you open, uh,
a checking
account, that's not what it is.
It's more like you're loaning money to the bank and they owe that money to you,
but they
don't have to give it to you.
They, you could legally speaking, you could walk in tomorrow, uh, to a bank.
I mean, no one actually walks up to a teller anymore.
It's a wonderful life.
Isn't a Christmas movie.
It's a banking movie.
Oh yeah.
Yeah.
Yeah.
So that is the scene.
I was right about that.
Okay.
Uh, but so you, you, you could.
Walk into the bank tomorrow and you're checking, you know, account balances,
whatever, say it's
$5,000 and you could go, I'd like to take out $2,000 and they can say, no, you
can't have
it.
Now they owe it to you technically, but they don't have to give it to you.
They're not just holding it for you to give to you on demand.
Now the system hasn't collapsed.
So they will give that to you today.
If you walk into a bank, but when you, too many people come in and they want
too much
money, well, they don't have it.
Yeah.
Is the point.
So when you open a bank account and I don't know exactly what the reserve rates
ar