Part Of The Problem - Dave Smith - Gamestop Insurrection
Aired: 2021-01-29
Duration: 47:12


=== The ANCAP Libertarian Take (02:48) ===

[00:00:02]  We need to roll back the state.
[00:00:04]  We spy on all of our own citizens.
[00:00:06]  Our prisons are flooded with nonviolent drug offenders.
[00:00:09]  If you want to know who America's next enemy is, look at who we're funding right now.
[00:00:15]  Every single one of these problems are a result of government being way too big.
[00:00:27]  What's up, everybody?
[00:00:28]  Welcome to a brand new episode of Part of the Problem.
[00:00:32]  I am Dave Smith doing this episode solo, and we're also a little bit late on it.
[00:00:37]  I apologize for that.
[00:00:38]  It's not Robbie's fault.
[00:00:40]  He'll be out for this episode, just me.
[00:00:42]  But I wanted to talk a bit about the GameStop insurrection as it was unironically labeled by Bloomberg, an insurrection.
[00:00:52]  That's the word to go with now, I guess, to get people scared.
[00:00:56]  This is one of those times where we're a little late with the episode, but I'm actually kind of glad that we are because this stuff that's going on right now is really, really interesting on many different levels.
[00:01:07]  And I'm glad I was able to like dig into it a little bit more before we've recorded this.
[00:01:13]  So a lot of people are talking about this, this craziness with the stock of GameStop.
[00:01:19]  Also, a few other companies, AMC and other companies that have kind of been driven up.
[00:01:24]  But primarily GameStop is the big one right now.
[00:01:27]  And it's not just what happened with the stock, but it's the reaction to it.
[00:01:33]  It's who the winners and who the losers were and what it revealed about the whole system and how the system works.
[00:01:39]  And now it's bringing up all of these questions about capitalism and regulations and Wall Street speculation and all this other stuff.
[00:01:48]  So I wanted to talk about all of it and I want to try to give a little bit of a different perspective on this than just what everybody else is saying on all different sides of it, which, you know, like there's, there's a lot of people out there who are making good points about this.
[00:02:02]  I'm not even disagreeing with a lot of them.
[00:02:06]  But I think maybe we could talk about it in a slightly different angle and give a little bit more of the ANCAP libertarian take on all of this.
[00:02:18]  So let me start first by focusing on kind of the bigger picture, which is what I do, Dave Big Picture Smith, and talking about how I view this whole system and this whole game.
[00:02:32]  And I think that that might be helpful to think of it as a game.
[00:02:37]  So when we talk about capitalism, free markets, laissez-faire, as it's known, in other words, voluntary exchanges, think of it as a game.

=== Capitalism As A Game (02:37) ===

[00:02:51]  Think of it, let's say it's like basketball, okay?
[00:02:54]  Which is a game I used to play a lot when I was younger and I had knees.
[00:02:59]  So let's just think of it as, and when I'm talking about this game, it's everything that involves people making voluntary deals, exchanges to improve their standard of living.
[00:03:14]  So if you think about the idea of like on the most basic level of trade, like if you think about one person, you know, in a very primitive economy, one person is like a farmer and he plants corn.
[00:03:34]  And another person is, you know, like makes wooden fireplaces, you know, chops down trees and collects logs and builds a little fireplace.
[00:03:47]  And that one of them has a whole bunch of corn.
[00:03:49]  The other one has a whole bunch of lumber.
[00:03:52]  And eventually you get to a point where this one guy has really figured out how to plant corn and this other guy's really figured out how to chop down trees and build a little fireplace.
[00:04:03]  And at a certain point, they both have a little bit of expertise in those fields.
[00:04:08]  And the guy who is planting corn, he has enough corn to eat and then some extra corn.
[00:04:18]  And the guy who is building fireplaces, he's warm and he has a couple extra fireplaces that he's not using.
[00:04:26]  Now, the guy who makes fireplaces is starving and the guy who makes corn is freezing.
[00:04:32]  So what do they do?
[00:04:34]  They make a deal.
[00:04:35]  They trade.
[00:04:36]  They say, hey, you're hungry and warm.
[00:04:39]  I'm full and cold.
[00:04:42]  How about I give you a little bit of corn for one of those sweet ass fireplaces?
[00:04:46]  And it's a deal where both of them benefit.
[00:04:48]  And that's why they voluntarily make the deal.
[00:04:50]  And that right there is, that's the game.
[00:04:53]  That's the most basic form of a free market voluntary exchange, right?
[00:04:59]  And then you could have huge, you know, massive levels of, you know, capitalism where it's like, you know, billion dollar company is being bought and sold and all of this stuff.
[00:05:09]  But in the same sense of the game of basketball, you could go down to your local park and see two 10-year-olds playing one-on-one.
[00:05:18]  And or you could go, you know, buy tickets.
[00:05:20]  Well, I guess this year you can't buy tickets, but previously you could buy tickets to an arena with 30,000 people watching the Lakers play the Celtics.

=== Unfair Basketball Rules (06:30) ===

[00:05:29]  And that's also basketball.
[00:05:30]  But one of them's just on a very small level and one of them's on an incredibly high level.
[00:05:34]  But it's both, it's all the same game.
[00:05:37]  You're playing basketball, you know?
[00:05:39]  So what's happened, try to imagine now that there's a league.
[00:05:44]  There's a league like the National Basketball Association, right?
[00:05:47]  There's the NBA.
[00:05:48]  Now, the NBA isn't basketball, but it is the most well-known, you know, most profitable basketball league.
[00:05:58]  And let's say that everyone's forced into the NBA.
[00:06:02]  If you want to play basketball, you have to play in the NBA.
[00:06:06]  And basically what happens are there's like three teams that buy off the refs.
[00:06:15]  And the refs just work for these three teams and they design every rule.
[00:06:20]  And all of the higher ups in the administration work for them too.
[00:06:24]  Now, by the way, if it's the story of like America or, you know, how this normally works is that those teams actually were, you know, some of them, if you go back through the history, were actually winning, like were legitimately winning the games and then eventually bought off the refs.
[00:06:40]  But that's kind of not so important for the moment.
[00:06:43]  But so let's say that now you have the NBA and the rules are just all completely rigged.
[00:06:50]  They're all rigged for the big teams.
[00:06:53]  There's three teams, whatever you want.
[00:06:54]  You know, it's like the Lakers and the Celtics and the Clippers and everything's rigged for them.
[00:06:59]  They get all the draft picks.
[00:07:01]  They get the first 100 draft picks just split between those three teams every year and they have every advantage you could think of and the refs are in their pockets and they're cheating for them and they design rules specifically to help those teams win.
[00:07:15]  And then even when there's rules that aren't specifically designed to help them win, they only call fouls against the other team, right?
[00:07:23]  Like even if the rule says no one can foul, but then if you actually look at who gets called for fouls, it's very disproportionately their competitors and not those three teams.
[00:07:33]  And those three teams basically just win championship after championship and they're raking in all the profits and that's how it goes.
[00:07:40]  Now, what happens in this situation is a lot of people look at that system.
[00:07:46]  They smell that this league is bullshit.
[00:07:48]  It's so obvious and transparent right in your face.
[00:07:50]  Look at it.
[00:07:51]  League is, this is bullshit.
[00:07:53]  And then they conclude and this is kind of the, the left-wing and sometimes right-wing uh conclusion is, like basketball, basketball is unfair.
[00:08:04]  This is an unfair game, but of course, in this, in this metaphor, this is not perfect, but you know, you get the point you, you realize basketball really isn't the problem and in fact, basketball right like, just like I was saying before, that guy trading his corn for a fireplace, that's not the problem, the.
[00:08:23]  The problem is that this isn't fair basketball.
[00:08:27]  This is a rigged game and basically what you have is the kind of so the um the, the socialist slash communist, like extreme left-wing position is, abolish basketball.
[00:08:42]  That's how we uh, that that's how we solve this problem right, and that's just.
[00:08:48]  But then you ruin everything.
[00:08:49]  Then we all starve to death right, like this, and and it's that's why that's what happens every single time that's actually been instituted yeah, then everybody starves to death.
[00:08:57]  Congratulations, that doesn't seem like a great system, and so most people reject that because they go, look as up as this league is, at least i'm not starving to death, at least there is a game to be played.
[00:09:10]  Um, now the more moderate, uh kind of like progressive position is that we need to empower the refs.
[00:09:21]  We need to have more regulations, give the refs more rules so that they can crack down on these three teams that are winning all the time.
[00:09:30]  But what's the problem with that what?
[00:09:34]  What's the problem with that?
[00:09:35]  Well, it's that the refs are crooked.
[00:09:37]  The refs are in this cheating for those teams, so why would you want to give the crooked refs more power?
[00:09:43]  And every time we give the crooked refs more power, we notice those three teams win even more games, which kind of makes sense if you realize that they're not actually acting as good referees.
[00:09:56]  They're just pretending to be referees and in fact they're players in the game too.
[00:10:01]  And you know behind the scenes they're sharing in all of the.
[00:10:04]  You know money that these three big teams are pulling in.
[00:10:07]  You know, like the Biden's family all getting a whole bunch of money from credit card companies and Ukrainian and Chinese energy companies or whatever.
[00:10:14]  You know.
[00:10:15]  Again, like I said, the analogy is not perfect, but you get the point that i'm going for right?
[00:10:19]  So the, the libertarian the, the anarchist, uh position on all of this is that we need to abolish all of the rulers that are making these unfair rules.
[00:10:34]  And then people get caught up in saying you know things like well um, but if it wasn't for you know the, if you didn't have refs, how would we call you know fouls?
[00:10:46]  How would we do all this?
[00:10:47]  Or how would this work?
[00:10:48]  How you know, how would you know who plays who next or who?
[00:10:51]  But if you actually look around at just the game of basketball right, you could go down to any court and what do they do?
[00:10:57]  Oh well, they'll call their own fouls in this one.
[00:10:59]  Or maybe they choose somebody who's neutral to be a ref if he's not doing a bad job, Job.
[00:11:03]  He won't be chosen to be a ref in the future.
[00:11:06]  How do they decide who has the next game?
[00:11:07]  Well, there's a whole system that just naturally kind of evolves where you go in, you call next.
[00:11:13]  Oh, someone already called next.
[00:11:14]  You get the next one after that.
[00:11:16]  The point is just that there are organic, bottom-up solutions to all of these problems that don't involve a corrupt, top-down, you know, dirty system like the one that we're playing in now.
[00:11:30]  So this becomes, I just wanted to kind of like put that out there because this is, I think, speaks to the kind of bigger picture of how people respond to this stuff when they're like, oh, like, well, this is the problem with capitalism or this is a problem with Wall Street or any of this.
[00:11:44]  Now, a lot of people will blame capitalism that these, you know, huge corporations are able, and in this case, the big banks are able to trample over everybody else.
[00:11:57]  But it's like I was saying with the basketball analogy.

=== Hedge Funds Shorting Stocks (14:13) ===

[00:12:00]  The whole thing is rigged for them.
[00:12:02]  And none of this is just an organic game of basketball.
[00:12:05]  Like the fact that these three teams get all the draft picks has nothing to do with just the game of basketball.
[00:12:12]  This is an unfair system.
[00:12:14]  And of course, they're going to win and get stronger and stronger if they get all of the good players.
[00:12:20]  So in other words, you know, that's what's going on with this banking cartel system.
[00:12:27]  It has nothing to do with just whether banking should exist in theory.
[00:12:32]  What it has to do with is should the government create a Federal Reserve that then prints money out of thin air and hands it to the big banks at 0% interest.
[00:12:42]  All right, guys, let's take a quick second and thank our awesome sponsor for today's show, which is IP Vanish.
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[00:14:49]  Okay, so keeping all of all of that in mind, let's get into what happened specifically with this situation with the GameStop, GameStop stock.
[00:15:02]  So GameStop, for I'm sure everybody, you know what GameStop is, right?
[00:15:07]  It's like a retail video game store.
[00:15:09]  They sell video games and systems and they trade in games and stuff like that.
[00:15:15]  Anyway, so it was a very popular store for years now.
[00:15:21]  And then they've been doing poorly.
[00:15:24]  Their stock's been doing bad for the last couple of years.
[00:15:26]  And I think most of that has to do with the fact that video gaming has been transitioning to being online.
[00:15:34]  A lot of people now just buy their games online.
[00:15:36]  They don't have to go into the store anymore.
[00:15:39]  And so it's just, it's kind of like the old model that's dying out a little bit.
[00:15:44]  It's kind of like, you know, Blockbuster or, you know, Barnes and Noble's or stores like that.
[00:15:51]  And then all of a sudden, you know, like Netflix or Amazon come in and they just, not everybody has to go to these stores anymore.
[00:15:57]  And so their stock went way down.
[00:16:00]  And this was like pre-pandemic.
[00:16:01]  It was in 2019.
[00:16:03]  Their stock was doing really, really bad.
[00:16:04]  But they've been doing some things to move to a more online based format.
[00:16:11]  And their online sales actually did really good through the pandemic.
[00:16:14]  I guess a lot of people have a lot of free time.
[00:16:17]  And, you know, video games were one way to kill the time when there's nothing else to do.
[00:16:23]  And so the actual stores, a lot of them were closed through 2020.
[00:16:28]  And their online sales were doing really good.
[00:16:30]  Anyway, that's just in the background.
[00:16:32]  So they were one of the most shorted companies.
[00:16:40]  I think they were the most shorted company by like hedge funds.
[00:16:45]  And then the people on Reddit got wind of this.
[00:16:49]  Now, just to be real quick, just in case anybody doesn't know, it's not like that complicated or important, but shorting a stock is basically just betting against it.
[00:17:00]  You're betting that the stock is going to go down.
[00:17:02]  It's a form of speculation.
[00:17:04]  So you're speculating that this stock is going to lose money.
[00:17:07]  So what you do is you basically they borrow the stock and sell it with the promise of returning it later.
[00:17:16]  So for example, if a stock is at $10 a share, you borrow that from somebody and you sell it.
[00:17:22]  You sell it for $10 a share.
[00:17:24]  But now you have to buy it later and return it to the person who you borrowed it from.
[00:17:29]  So if it goes down to $5 a share, you buy it back for $5 a share, you pocket the $5, right?
[00:17:34]  So you bought it, you sold it at $10, you buy it back at $5, you make yourself a little profit.
[00:17:40]  Now, shorting, it's a way that you can make some money, but it's also very dangerous.
[00:17:46]  And this is why most people, most average people don't get into shorting because on the downside of shorting, like if you buy, if you short a stock at $10, right?
[00:17:58]  So you're borrowing the stock, you sell it at $10.
[00:18:01]  The most you can make off of that is what the price of the stock was, right?
[00:18:05]  So the stock goes to zero, then you can, you know, you sell it back, you make your $10.
[00:18:11]  But the most you can make is what the stock was valued at to begin with.
[00:18:16]  But the losses can be infinite because if you buy it, you know, or if you short it at $10 and then the stock goes up to, you know, 300, 500, 1,000, 10,000, you can lose that much minus what you originally shorted it at.
[00:18:31]  But so there's, so this ends up being a tool that's used quite a bit by hedge funds because they typically have more money to play with and they can speculate a little bit more.
[00:18:43]  And they make a lot of money off doing this quite often.
[00:18:45]  So it's done all the time.
[00:18:48]  So anyway, so the Reddit page, what is it called?
[00:18:51]  Wall Street Bets got wind of the fact that this stock was so shorted, and they decided that they kind of colluded together to decide that they can all get in on this stock.
[00:19:04]  It was really brilliant.
[00:19:06]  So, what they figured out was that, look, these major hedge funds have shorted this stock.
[00:19:12]  If we all buy it now, we can drive the price up and they have to buy it back from us.
[00:19:18]  So, they've shorted this stock, meaning they've borrowed it and sold it.
[00:19:23]  And so now they owe the stock back.
[00:19:25]  They have to buy it back at some point.
[00:19:27]  And Wall Street Bets has like, I think they've got millions of people in this subreddit group.
[00:19:33]  And it's all about people who are, you know, looking at what to invest in and things like that.
[00:19:38]  So this ended up like driving the stock through the roof.
[00:19:41]  And then the fact that they know that all like it, it just kind of kept growing exponentially because they knew that the stock was going up now.
[00:19:50]  Now they know that all these hedge funds have to buy it back.
[00:19:52]  So then they know that they can drive it up even more.
[00:19:55]  Then Elon Musk tweeted it out and it just goes through the fucking roof.
[00:19:58]  But this thing went nuts and it was so shorted by these big hedge funds that it ended up, it's been making people, just regular people.
[00:20:08]  I mean, not like poor people.
[00:20:09]  These are people who, you know, have some money to invest and play around with, but just regular people are getting fucking crazy rich off this shit.
[00:20:17]  And hedge funds are bleeding.
[00:20:20]  I saw one, according to Reuters, the losses on the shorts have topped $70 billion.
[00:20:27]  They've lost like major fucking money.
[00:20:29]  Like they took a huge chunk away from these big hedge funds guys in what's really an amazing move.
[00:20:36]  Like this never happens.
[00:20:38]  And there's something about it that it kind of feels like, you know, like when the internet first came out and we almost didn't know what we could do with this thing.
[00:20:50]  And then someone would come up, well, here, we can do this.
[00:20:52]  We can message each other or we can, you can put a website up or you could sell things on this website.
[00:20:57]  There's all these things that like, oh, no one really thought to do that before.
[00:21:00]  And not that I know that this hasn't happened before.
[00:21:03]  I've never seen an example like this, but it feels like one of those moments where you're like, whoa, people really can do this now.
[00:21:13]  And this is something that to me, as a libertarian anarchist, is really interesting to watch happen because this is one of the things that we've been talking about for a long time, not specifically on, you know, countering hedge funds shorting stocks, but just the idea that one of the really powerful weapons that people have against the ruling elite is that there's so many more of us than there are of them.
[00:21:43]  And we don't usually realize that, but that's the reality of it.
[00:21:47]  Like you don't need to have some type of like violent confrontation with the state.
[00:21:52]  You don't need to have what they had on January 6th or something like that.
[00:21:57]  That doesn't result in anything good.
[00:21:59]  It just results in people dying and then civil liberties being lost.
[00:22:04]  But if enough of the people wake up, there's no need for anything like that.
[00:22:11]  Like, for example, right?
[00:22:14]  If 100 million Americans decide we're not sending our taxes in, we're not paying income tax anymore, then we just abolished the federal income tax.
[00:22:26]  That's it.
[00:22:28]  We don't need to elect somebody.
[00:22:29]  We don't need to repeal this.
[00:22:31]  We don't need to have constitutional arguments or have a Senate hearing or anything like that.
[00:22:36]  If enough people just decide we're not doing this anymore, then that's it.
[00:22:40]  It's over.
[00:22:41]  They can't possibly enforce it on that many people.
[00:22:44]  So, there is enormous potential when large groups of people kind of get on the same page and realize that this whole system is rigged and it's not rigged in your favor.
[00:22:56]  So, anyway, this was just like a moment where it's like, oh, yeah, you guys can do this.
[00:23:01]  You can do this.
[00:23:02]  And the fact that you could do this now, there's no reason why you can't do this again.
[00:23:06]  And this is part of the reason why everyone's freaking out.
[00:23:08]  It's not just about this $70 billion that was lost.
[00:23:11]  It's the fact that, well, now, I mean, what's to stop you from, if any company is being shorted on such a large scale from doing this again.
[00:23:21]  And one of the huge things that's interesting about this is that so much of this is driven by just fury at the, you know, the Wall Street class.
[00:23:36]  People are angry at the big banks and they should be.
[00:23:39]  I mean, after the year 2020, who could blame them, right?
[00:23:43]  So people are making millions.
[00:23:47]  There was one guy, I think, who they said he invested like 50,000 in GameStop when it was like way down at its lowest, and his portfolio is up to like, I think, like close to 30 million or something like that.
[00:24:00]  Like people have made a lot of money off of GameStop.
[00:24:02]  Now, personally, and I'm, you know, I'm not a financial advisor.
[00:24:06]  I don't know, you know, I'm not an expert in these things at all, but this is way overvalued at this point.
[00:24:12]  And so lots of people, you know, possibly might lose money on it.
[00:24:15]  And so, you know, it's not like this is just the, you know, everyone's going to get rich for free.
[00:24:21]  But there was a, here's the reality, at least as of right now, as I'm recording this.
[00:24:26]  There was a huge transfer of wealth.
[00:24:28]  And for once, it wasn't from the middle class to the top, you know, 0.01%.
[00:24:36]  This time, it was actually from the hedge funds to regular people who were on Reddit.
[00:24:43]  And that in itself is pretty incredible.
[00:24:45]  But what's really incredible is watching the reaction, watching the reaction of the entire cathedral.
[00:24:52]  The ruling class, the corporate press, the financial sector, all of them are freaking the fuck out way more than they did over 2020 when you had this much bigger transfer of wealth because that transfer of wealth was from the poor and the middle class to the top of the upper class.
[00:25:14]  Now, that doesn't freak them out because that's just the way the system is supposed to work.
[00:25:18]  So, you know, like back to my basketball analogy, right?
[00:25:23]  So much of what happens in America is the argument between the left and the right about what, you know, who to blame.
[00:25:33]  So you have these top, these three teams that own the whole NBA and the refs are cheating for them.
[00:25:42]  And so in this analogy, like the teams are the big corporations and the refs are the government.
[00:25:48]  And so people on the left will be like, well, the problem are these big corporations, these big three teams.
[00:25:55]  And then people on the right will be like, no, the problem is the refs cheating for these three teams.
[00:25:59]  But the truth is that they're all working together.
[00:26:03]  They're all kind of one.
[00:26:04]  They're conglomerate.
[00:26:06]  Like they're all part of the same thing, the same corrupt, fucked up system.
[00:26:10]  And then, of course, like I said, the big problem is you blame the sport.

=== Blaming The System Not Sport (05:07) ===

[00:26:13]  Well, the problem is basketball.
[00:26:15]  It's like, really, no, there's no problem with the game of basketball.
[00:26:17]  It's a great game.
[00:26:18]  All right, guys, let's take a quick second.
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[00:27:35]  All right, let's get back into the show.
[00:27:37]  Anyway, so it's not so much, you know, one or the other as it is all of them.
[00:27:44]  And so one of the things that you've seen now is Robinhood has stopped allowing people to trade in these stocks.
[00:27:54]  Or excuse me, they're not exactly stopping you.
[00:27:57]  You can sell them.
[00:27:59]  If you have it, you can sell them.
[00:28:01]  Because what you have now is you have these big hedge funds who need to buy back this stock, but people don't want to sell it because they're all just still piling into it and the price is going up and up and up.
[00:28:10]  So these big hedge funds are looking at it like, shit, I got to buy this back and no one wants to sell it to me.
[00:28:14]  And it's going up and up and I'm going to have to pay more and more and more for it.
[00:28:17]  So Robinhood comes in to protect the hedge fund class very blatantly.
[00:28:23]  And that's what's beautiful.
[00:28:25]  It's beautiful that it's so blatant.
[00:28:26]  This caught them so off guard that they don't even have time to have a backroom meeting and plan out a strategy and how we're going to sell this.
[00:28:35]  They're just moving as fast as they can.
[00:28:36]  And it's just blatant for everyone to see.
[00:28:39]  Oh, you guys made money and the hedge fund class lost.
[00:28:43]  That we need to intervene on right away.
[00:28:46]  That we need to step in on and say, no, no, no, we have to protect the hedge fund class.
[00:28:50]  Wouldn't it be nice if anybody had done that while the middle class was bleeding all throughout the year 2020?
[00:28:58]  Wouldn't it have been nice if anyone stepped in and said, whoa, whoa, whoa, we've got to stop this from happening.
[00:29:03]  This is the way it works, right?
[00:29:05]  There are these rules that are designed to keep those big teams winning.
[00:29:15]  That's how it always is.
[00:29:17]  And so, you know, now all of a sudden you have talk about how this is market manipulation or something like that, which like, yeah, it is.
[00:29:24]  It definitely is.
[00:29:25]  But come on.
[00:29:26]  I mean, how much market manipulation have we seen out of the big speculators?
[00:29:30]  So, you know, like, just for example, right?
[00:29:32]  Like insider trading is people go to jail for that shit.
[00:29:37]  Here's another one of the rules that are put in by these corrupt refs.
[00:29:42]  Okay.
[00:29:42]  So you cannot trade.
[00:29:45]  Insider trading is defined as having material information that's not public about a stock and then acting on that.
[00:29:53]  So either buying or selling a stock because of that insider information.
[00:29:57]  How many times do you see, you know, like fucking congressmen go to jail for that?
[00:30:03]  I mean, they used to actually have a regulation that I think protected them from going to jail for that.
[00:30:07]  I don't think that's in place anymore.
[00:30:09]  But there were stories, you know, early in 2020.
[00:30:13]  Was it Dianne Feinstein and a couple other like big senators who sold their hotel stocks, sold like, you know what I mean?
[00:30:21]  Sold like restaurant stocks and shit like that while right before, as they were telling everyone, oh, COVID's no big deal.
[00:30:26]  But when they knew all this shit was going to get locked down, yeah, they sold their stocks.
[00:30:30]  What is that?
[00:30:30]  What is that if not insider trading?
[00:30:33]  But, you know, people go to jail for that shit, but not them, because they're protected.
[00:30:39]  And that's just, I mean, it's just one example, but that's how this whole thing works.
[00:30:42]  So it's all designed to protect these people.
[00:30:46]  But the thing I want to focus on is that it's not the game of basketball.
[00:30:52]  The game of basketball is great.
[00:30:54]  That's what gives one guy corn and the other guy, you know, a fireplace.
[00:30:59]  That's what gives us all of this, everything we have.
[00:31:02]  That's why, you know, like we have such comfortable lives.
[00:31:05]  And like, you know, the standard of living is where it's at.
[00:31:08]  We all take this for granted at times, but it's like the natural state of the world, the natural state of the world is living in abject poverty.
[00:31:19]  It's the natural state of the world.

=== Voluntary Exchanges Create Wealth (15:50) ===

[00:31:21]  Like Tom Woods said this once, but I always thought this was great because, you know, people ask the question, why is there poverty in this world?
[00:31:29]  But that's the wrong question to ask because that's obvious.
[00:31:32]  Why is there poverty?
[00:31:33]  Because that's what was given to us.
[00:31:35]  That's what we're born into.
[00:31:36]  The question is, why is there wealth?
[00:31:39]  That's the much more important question.
[00:31:41]  Because why is there poverty?
[00:31:43]  You can, you know, just rewind the clock and yeah, man is born naked into the world.
[00:31:48]  That's poverty, the state of poverty.
[00:31:50]  You better go hunt for your food and gather some nuts and berries and try to build a little bit of, you know, shelter.
[00:31:57]  And, you know, you're probably going to get, you know, like die in some horrific way, very young.
[00:32:03]  You're going to get a cut.
[00:32:04]  It's going to get infected.
[00:32:05]  You're going to sit there and die.
[00:32:06]  Or you're going to get eaten by an animal or, you know, whatever.
[00:32:10]  You know, break your ankle running after some animal that you're trying to hunt or something.
[00:32:15]  You know, like that's like, that's the natural state of life is poverty.
[00:32:19]  But how do we get from there to here, to this very comfortable life that we all live relatively?
[00:32:26]  And the answer is that we specialize and we trade.
[00:32:31]  You figure out something that you do.
[00:32:34]  And it's usually a very little thing that you have a little bit of expertise in and you spend all of your time on that.
[00:32:39]  And then there's like billions of other people and they spend all their time on other things and we all trade together.
[00:32:44]  And that's where the, you know, the beautiful was the iPencil Leonard Reed thing comes in, right?
[00:32:50]  Now, which I know I've done on the podcast before, but just to quickly go through that, right?
[00:32:55]  So the idea is that, I mean, Leonard Reed writes it in a real nice way where it's from the perspective of the pencil, but the idea is that like there's no person in the world who knows how to make a pencil.
[00:33:09]  And if you actually think about what goes into making a pencil, there's it takes millions of different people.
[00:33:16]  And you, you know, like just the like the fucking graphite that used to be lead, but that's like that needs to be mined from the ground.
[00:33:26]  In order to mine, you need all types of tools.
[00:33:28]  For those tools, you need metal.
[00:33:30]  That also has to be mined from the, like all these different steps.
[00:33:32]  And if you actually take out all of that, I mean, you can go through this and through it.
[00:33:36]  You need trucks, you know, to like move the stuff.
[00:33:38]  In order to have trucks, you have to have a tire.
[00:33:40]  For a tire, you need rubber.
[00:33:41]  But they also need other metals.
[00:33:43]  You need aluminum.
[00:33:44]  You need all these different things.
[00:33:45]  It's actually millions of people, millions of people with different expertise doing all types of different work.
[00:33:51]  And it all comes together to create a little pencil.
[00:33:55]  And then you'd be like, well, what does this pencil cost you?
[00:33:57]  Like $10 billion?
[00:33:58]  And you're like, no, it's like three cents or something like that, you know?
[00:34:01]  And we don't even think about it.
[00:34:03]  That's just, but this is what's all around us.
[00:34:05]  This is how wealth is created.
[00:34:07]  And there are some problems that come with countries that are too wealthy and the excesses and people getting lazy and forgetting how they got there and all that shit.
[00:34:16]  But believe me, it's a lot better than the problems that come with your, you know, three-year-old dying in your arms in the woods.
[00:34:23]  It's, you want wealth.
[00:34:25]  It's, it's a lot better than it is negative.
[00:34:28]  So Just to be clear here, right?
[00:34:33]  The problem when you see all of these big teams winning and everybody else losing is not that we're playing the game of capitalism.
[00:34:42]  The problem is that this is crony, state-run, corrupt capitalism.
[00:34:48]  And all of it has its fingerprints right on that.
[00:34:51]  Like, again, like, just like I said, like this one example of the teams in the NBA, they all get the draft picks.
[00:35:00]  And then you go like, well, why do these teams keep winning?
[00:35:03]  And it's like, well, because there's this one fucked up rule that they get all the good players and just that alone.
[00:35:09]  And you can blame the game of basketball, but it has nothing to do with the game.
[00:35:12]  It has to do with this, this fucked up rule that was put into place by the people who run the system.
[00:35:18]  And so one of the major factors in all of this, right?
[00:35:22]  Because what's coming out now is a lot of people who are like, well, why the fuck are companies shorting stocks to begin with?
[00:35:28]  What's with all of these hedge funds speculating, fucking up the economy and tanking these companies and shit like that?
[00:35:34]  But this is not a result of laissez-faire capitalism.
[00:35:39]  This is a result of the fucked up system that's been created by the ruling elite.
[00:35:44]  And just to give you the easiest and quickest example, because it always comes down to monetary policy.
[00:35:50]  This is so much of everything that's going on in this country, like all the craziness that we're living through comes down to monetary policy.
[00:35:58]  And that doesn't get discussed nearly enough.
[00:35:59]  It's one more reason why Ron Paul was such a goddamn hero.
[00:36:03]  He's the only, only, only, only person to run a presidential campaign where he put monetary policy like right at the center.
[00:36:13]  It was like, it was like war and the Fed.
[00:36:16]  Those are the most important issues and they still are.
[00:36:19]  But so we've basically had now since 2008, the most insane, artificially low interest rates that are set by the Federal Reserve.
[00:36:30]  They've been damn near zero for most of that time.
[00:36:35]  And I mean, they were at zero for, I think, over eight years, then they ticked up a very little bit, then went right back to zero during the whole COVID crisis.
[00:36:44]  But what happens, right?
[00:36:45]  And so part of the reason, you know, like interest rates are essentially the price of money, what it costs to borrow money.
[00:36:55]  And the Fed has driven interest rates down to zero because of a lot of problems that the government created to begin with, but also so that we can support this ginormous government that we have because the government's spending, you know, four or five trillion dollars a year now.
[00:37:12]  And so we need to be able to finance that.
[00:37:14]  You need to be able to borrow the money at very low interest rates.
[00:37:18]  And it was also done so we could put all the wars on the credit card and all this other shit.
[00:37:23]  The only way that the current system that we have with such a big government works is if interest rates are incredibly low.
[00:37:31]  If they weren't, it would all come tumbling down like the house of cards that it is.
[00:37:36]  So we keep interest rates incredibly low.
[00:37:38]  But what are the other effects of that?
[00:37:40]  Well, there's many.
[00:37:41]  One is that it destroys savers.
[00:37:44]  It's basically impossible to save.
[00:37:46]  I don't know.
[00:37:46]  I'm sure a lot of you have noticed this, but like you can't put your money in a savings account and get anything for it.
[00:37:52]  You certainly can't keep your money.
[00:37:54]  And this is what people used to do.
[00:37:56]  People used to put their money in savings accounts.
[00:37:58]  In fact, some of you guys, maybe not for the younger people who listen, but for the older people who listen for sure, like people my age and older, most of you, your grandparents, kept change.
[00:38:09]  They kept jars of change around because that was like their mentality.
[00:38:12]  Like you save money, that's money and you save it.
[00:38:16]  But now what happens if you save money?
[00:38:18]  Well, between the fact that you can't get any interest on it and that the money is constantly being inflated, you're losing money by just sitting by it just sitting there.
[00:38:26]  Now, if we lived in an economy with normal interest rates, a lot of people, if they were looking to make a profit off their money, they can save their money, they can make modest investments.
[00:38:37]  But when it's at zero interest rates, then what do you do if you want to make money?
[00:38:42]  Well, you push everyone into speculating.
[00:38:44]  And so this is why there's this huge industry of speculating.
[00:38:48]  I mean, look, just go look at the economy of speculators before and after America got off the gold standard.
[00:38:57]  I mean, I'm not saying there was no speculators before, but it wasn't the huge economy that it's become.
[00:39:03]  And so that's a huge part of why all of these hedge funds do all of this speculating to begin with, because they've always got to find a way to make a profit on their money.
[00:39:12]  That's their job.
[00:39:13]  That's what they're looking to do.
[00:39:14]  They're looking to profit.
[00:39:16]  That's why people give them the money in the first place is so they can make money off of it.
[00:39:20]  And they can't do it in an honest way because the interest rates are so incredibly low.
[00:39:25]  So they have to be in this constant cycle of speculation.
[00:39:30]  So anyway, they got beat.
[00:39:32]  They got beat this time at their own goddamn game.
[00:39:35]  And the thing that I find really interesting about all of this is that not only were they beat at their own game, okay?
[00:39:43]  There's no reason why they can't be beat at this game again and again and again.
[00:39:47]  That's to me the really interesting part.
[00:39:50]  Now, a lot of things lined up perfectly here.
[00:39:52]  There were a lot of other factors with GameStop in particular.
[00:39:55]  But as you see with it going on now with like AMC and these other companies, there's no reason why they can't be beat again.
[00:40:02]  This can, unless there's some type of crackdown, which believe me, they're thinking about.
[00:40:08]  This is this can be done again and again.
[00:40:12]  And so that's really interesting.
[00:40:14]  The other thing that's really interesting is everybody now gets to see this is another great red pill opportunity moment for so many people as you get to see the whole system freaking out that for once there was a transfer of wealth from the hedge fund class to regular Americans.
[00:40:34]  That's not supposed to happen.
[00:40:36]  And so they're all flipping out to shut it down.
[00:40:38]  I mean, the fucking Robinhood thing, like I'm, I'm not the first one to make this point, but doesn't that just sum up where we are in the upside down perfectly?
[00:40:49]  That an app called Robinhood, their fucking name is Robinhood, and they're very, they're terrified that for once they were actually stealing from the rich and giving to the poor.
[00:40:59]  And I use the word stealing loosely because no one stole anything from anyone.
[00:41:04]  It's just they played the game and they beat them at the game.
[00:41:07]  And so that's what's going on here.
[00:41:09]  You have the fucking bought off referees.
[00:41:12]  You have the three teams who are colluding with the whole fucking organization.
[00:41:16]  And some of the little teams figured out how to use those rules against them and they won a game.
[00:41:22]  They won a big game.
[00:41:23]  And now everyone's freaking out because this isn't designed to be, you know, a game that you win.
[00:41:30]  This is designed for those three teams to keep winning and for you to keep losing.
[00:41:34]  But I also would say that notice, I think it's a moment and I hope people do notice this, that the game itself is actually what allowed you guys to win.
[00:41:44]  So basketball isn't the enemy here.
[00:41:46]  Neither is free market capitalism.
[00:41:48]  Free market capitalism, this was a great example of it.
[00:41:52]  This was a beautiful, look at that, man.
[00:41:53]  I mean, really think about it.
[00:41:55]  For all of the people who have advocated for government solutions, and so many of them have, right?
[00:42:01]  Like what is the center of Bernie Sanders and AOC's career?
[00:42:07]  What is the center piece?
[00:42:09]  What was the call that Obama made over and over again that you hear from every Democrat?
[00:42:15]  Well, the rich should pay their fair share.
[00:42:18]  I mean, that's what we need.
[00:42:20]  We need the government to come in here and force the rich people to give back a little bit of their money.
[00:42:27]  But it's all just, it's like some representative from the corrupt NBA saying, we need the refs to make sure these three teams don't win every single time.
[00:42:39]  But we all know what they're doing.
[00:42:40]  That never works because they're in bed with those three teams and their whole existence is about propping them up and making sure they win.
[00:42:47]  But so we've had this.
[00:42:48]  We've had, I mean, how many just different government policies, right?
[00:42:52]  Like from the, you know, the creation of the income tax in 1914, this was what it was supposed to be created to do.
[00:43:00]  That's 1914.
[00:43:02]  That's over 100 years ago.
[00:43:03]  We created an income tax and it was sold this way to bleed the rich.
[00:43:10]  You know, like that's the point.
[00:43:11]  We're going to tax the really rich people and give some of that money back to the people who don't have it so good, which in theory sounds kind of nice, I suppose.
[00:43:20]  But what is that?
[00:43:21]  What has that grown into?
[00:43:22]  What have we gotten from that now?
[00:43:24]  We've had an income tax for 106 years.
[00:43:27]  Okay.
[00:43:28]  106 years of a federal income tax.
[00:43:30]  And what does that do?
[00:43:31]  Does that do anything to bleed the rich?
[00:43:34]  No, they have an army of tax accountants and tax lawyers.
[00:43:38]  They get out of anything they don't have to.
[00:43:40]  But what does the income tax do?
[00:43:42]  Well, it destroys the lives of regular working people, destroys marriages, destroys families.
[00:43:48]  You know, people are thrown in jail over it.
[00:43:51]  People are absolutely just ruined by the IRS.
[00:43:55]  Okay.
[00:43:56]  All these other government programs that are designed to do all of this stuff.
[00:43:59]  We've been at this forever.
[00:44:01]  And what happens?
[00:44:02]  Where do any of these policies go when they're advocating we go through the refs?
[00:44:07]  Like in this corrupt basketball league, that's how we're going to get back at the three teams.
[00:44:11]  We're going to go through the refs.
[00:44:13]  Except the refs are working for those three teams.
[00:44:16]  So we keep going through the refs and what happens to those three teams.
[00:44:19]  They're winning more and more championships, more and more championships.
[00:44:22]  What of any of these Democrat policies that are supposed to bleed the rich have ever resulted in income inequality going away?
[00:44:30]  And forget even income inequality, because I'm not talking about like someone making $100,000 to someone making $60,000.
[00:44:36]  I'm talking about someone making, you know, $100 million in a bonus compared to the guy making $50,000.
[00:44:44]  And what does that do?
[00:44:45]  Nothing.
[00:44:46]  And what did we just do?
[00:44:47]  In one little example.
[00:44:49]  Oh, it was free market capitalism.
[00:44:51]  It was actually the game, the pure game of basketball that allowed these little guys to take on the big guys and win.
[00:44:59]  Now, here's the other thing I want people to notice.
[00:45:02]  What's the response to this going to be from the cathedral?
[00:45:08]  And when I say the cathedral, if you guys don't know what I'm talking about, is the entire establishment, the entire, this includes the corporate press, the government, the deep state, the big banks, academia, all of them, all of these outlets.
[00:45:21]  What's the response going to be?
[00:45:23]  What do you think?
[00:45:24]  You think they're going to say, we need more basketball?
[00:45:27]  No, they're going to push for more regulation because that's the answer to squash this.
[00:45:34]  And they'll do it in the name of something.
[00:45:36]  They'll try to push in the name of like market volatility or something.
[00:45:40]  Like these motherfuckers have a problem with market volatility.
[00:45:43]  And these hedge funds are making billions off market volatility.
[00:45:47]  That's just fine.
[00:45:48]  But all of a sudden, when some people on Reddit are making millions off of it, then that's a big problem.
[00:45:53]  So they'll find whatever excuse they can.
[00:45:56]  I think they're going to try to insert identity politics into it somehow.
[00:46:00]  You know, it's like the Trump supporter, racist Nazis on Reddit are trying to take down the economy.
[00:46:06]  I told you already the Bloomberg piece, the insurrection, as they called it.
[00:46:11]  But this is all just a distraction, like it always is.
[00:46:14]  It's always a distraction from the real issue, which is power, which has always been power, which is the fact that this system is rigged and it's rigged against regular people and for the elite.
[00:46:29]  And this to me is just, whew, what a fascinating little example.
[00:46:35]  What a fascinating little example of it that this all is.
[00:46:38]  So, okay, that's my rant for today.
[00:46:42]  I'll be interested.
[00:46:43]  We record again tomorrow.
[00:46:44]  I'll be interested to get Robbie the Fire's thoughts on all of this stuff.
[00:46:49]  Don't forget, by the way, if you have, excuse me, if you haven't already, don't forget to grab Scott Horton's new book, Enough Already.
[00:46:58]  Really excited about that.
[00:46:59]  I'm almost done reading it, and I'm going to have Scott on in the next few days to do a podcast about that.
[00:47:07]  Yeah, go check out my comedy special, Libertas.
[00:47:09]  It's up on my YouTube channel for free.
[00:47:11]  That's all.
[00:47:12]  Peace.