Machiavelli - The Art of Power in The Modern World — Transcript

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1. 0:00The very word "secrecy" is repugnant  in a free and open society;
2. 0:09and we are as a people inherently and historically  opposed to secret societies, to secret oaths and
3. 0:17to secret proceedings. For we are opposed around  the world by a monolithic and ruthless conspiracy
4. 0:25that relies primarily on covert means for  expanding its sphere of influence. It is
5. 0:32a system which has conscripted vast  human and material resources into the
6. 0:38building of a tightly knit, highly efficient  machine that combines military, diplomatic,
7. 0:45intelligence, economic, scientific and political  operations. Its preparations are concealed,
8. 0:53not published. Its mistakes are buried,  not headlined. Its dissenters are silenced,
9. 0:59not praised. No expenditure is questioned,  no rumor is printed, no secret is revealed.
10. 1:24Machiavelli is one of the greatest political  philosophers of all time. His work “The
11. 1:30Discoursi' would advocate for a self-governing  Republic and highlight that living under a
12. 1:35monarch with absolute rule was akin to slavery,  providing the political underpinnings for both
13. 1:41the English and American revolutions. But  Machiavelli's other work, The Prince, would
14. 1:47have a far more sinister influence. A guidebook  to rulers on how to gain and consolidate power,
15. 1:53the Prince was considered so dangerous it was  banned by the Catholic church for more than 200
16. 1:59years. It has not only paved the way for tyrants,  despots and dictators but has had a profound
17. 2:05impact on business, politics, religion and the  halls of power on every continent of the globe.
18. 2:12But what did Machiavelli say? Who did he influence  and how has what a man wrote 500 years ago,
19. 2:18shaped the modern world in which we live today?  From the White House to the Kremlin from the
20. 2:24Vatican to the Federal Reserve, this is how a  man from Florence changed the course of history.
21. 2:30This is how the writings of Nicolo Machiavelli  are used to manipulate and control everyone.
22. 2:49In 1469 Niccolo Machiavelli was born in Florence.
23. 2:54The son of a lawyer, he was not born into a  family of great wealth nor one of poverty,
24. 2:59but a family that prioritised a classical  education, with Machiavelli being trained in what
25. 3:04was known at the time as “Studia Humanitatis”  or in English the “Studies of Humanity”.
26. 3:11At the age of 7, he would begin learning Latin,  followed by Grammar, Rhetoric and Poetry,
27. 3:17with the education considered complete when one  had learnt Ancient History and Moral Philosophy.
28. 3:23It was commonly believed that these subjects  would best prepare someone for public life, as
29. 3:29Cicero had once said, “These disciplines nurture  the values we principally need in order to serve
30. 3:35our country well”. And luckily for Machiavelli,  that time would come sooner than expected.
31. 3:42500 years ago, Italy was not the same as it  is today, it was not one unified country,
32. 3:48but rather a collection of independent  city-states, each with its own ruler
33. 3:54and governments. The Pope ruled Rome, the  Medici’s Florence, and the Sforza family Milan,
34. 4:00all competing and waging war against  each other for power and influence.
35. 4:05It was In 1434 that the Medici family  had established their rule over Florence,
36. 4:11with their expertise in banking and commerce  transforming the city into an economic powerhouse.
37. 4:18In 1469, the same year Machiavelli was  born, Lorenzo de Medici came to power,
38. 4:24with his family renowned for being  keen financiers of Florentine culture,
39. 4:28using their immense wealth to fund artists  such as Michelangelo, Botticelli and da Vinci.
40. 4:35But although the Medicis were great patrons of the  Italian Renaissance, Lorenzo was accused of being
41. 4:41a tyrant, whose greed, corruption and immorality  defied the teachings of the Christian church.
42. 4:47He would later die in 1492, and just two years  later, King Charles VIII of France invaded Italy.
43. 4:55The Medici family, who had ruled Florence for  60 years, would now lose their grip on power,
44. 5:01with the Florentine people supported by  the French driving them out of the city.
45. 5:06Florence then established a Great  Council, composed of thousands of men
46. 5:11from the region's noble families. From  these men, a small group were elected,
47. 5:16and they in turn would appoint others to help  run the city. The Florentine Republic was born.
48. 5:23With many positions within the republic needing  to be filled, Machiavelli's name was put forward,
49. 5:28with it being likely that his intelligence  and drive were noticed by the great council.
50. 5:34And so, in 1498, at the age of just 29  and with no prior diplomatic experience,
51. 5:41Machiavelli was elected to the Secretary of  the Second Chancery, a position that had to
52. 5:47coordinate all the correspondence and relations  with regard to Florence's territorial possessions.
53. 5:54Shortly afterwards, he was also  appointed Secretary to the Ten of War,
54. 5:58the committee responsible for all the foreign  and diplomatic relations of the republic.
55. 6:03In this position Machiavelli could be  called upon to travel on behalf of the Ten,
56. 6:08negotiating with potential allies, gathering  information and aiding the Ten’s ambassadors
57. 6:14by writing up detailed reports on foreign  affairs and sending them home to Florence.
58. 6:20For the next 14 years, Machiavelli would be  sent on various important missions across
59. 6:26the European continent, where he would travel  to numerous states, representing Florence's
60. 6:31interests and getting to see for himself, how  power really operated behind closed doors.
61. 6:37For his first mission, Machiavelli would visit  Caterina Sforza, the Countess of Imola and Forlì,
62. 6:44before being sent for 6 months to the  court of Louis XII, the King of France.
63. 6:50He was next sent to observe Cesare Borgia,  the Duke of Romagna and Captain General of
64. 6:56the Papal army, who with the support of the French  would conquer large portions of Northern Italy.
65. 7:02In 1506, Machiavelli would  visit the new Pope, Julius II,
66. 7:07making extensive notes on his character  and leadership, and a year later would
67. 7:12be sent on his last mission, to the court  of the Holy Roman Emperor, Maximillian I.
68. 7:19It would be these diplomatic experiences coupled  with lessons from Greek and Roman history,
69. 7:24that would provide Machiavelli with the  material needed to write The Prince,
70. 7:29a collection of notes and lessons he had observed  regarding statecraft, leadership and manipulation.
71. 7:36Far from the Christain ideals of  modesty and temperance of the time,
72. 7:39The Prince would delve behind the  curtains and highlight the true
73. 7:43mechanisms and tactics rulers use to  gain, consolidate and exercise power.
74. 7:50The Prince would not be published during  Machiavelli's lifetime, with it being only
75. 7:545 years after his death in 1532, that the first  printed copies of the book were distributed.
76. 8:01Some would call it the work of ‘Satan’s finger’,
77. 8:04and others a ‘handbook for tyrants, with  William Shakespeare in the early 1600s,
78. 8:09using the term “Machiavel” to refer  to a cunning and scheming person.
79. 8:13But over time, some would begin to see The  Prince in a different light, that it described
80. 8:19the world as it really operates, with The French  philosopher Rousseau believing its contents were
81. 8:25a service to the public, exposing and allowing  them to observe the secret tactics of tyrants.
82. 8:31English philosopher Francis Bacon stated that  ‘we are much beholden to Machiavel and others,
83. 8:37that write what men do, and not what they
84. 8:40ought to do. But perhaps the Prince's  impact is stated best by author Tim Parks:
85. 8:46“Machiavelli’s little book was a constant  threat. It reminded people that power is
86. 8:52always up for grabs, always a question of  what can be taken by force or treachery,
87. 8:59and always, despite all protests to the  contrary, the prime concern of any ruler.”
88. 9:06But for one ruler in particular,  Machiavelli’s words would have a
89. 9:10profound impact, one that would  not only change the course of
90. 9:14history but would result in the death and  subjugation of tens of millions of people.
91. 10:21In all actions of all men, and especially  of princes where there is no court
92. 10:26of appeal, the end justifies the means.” Perhaps no man in history has taken these
93. 10:32words more seriously than Joseph Stalin, who was  known to annotate his own copy of The Prince.
94. 10:36Ruling over the Soviet Union from  1928 until his death in 1953, Stalin,
95. 10:43would through the calculated use of terror,  force and propaganda, transform the Soviet
96. 10:48Union into a world power while gaining the  love, support and admiration of his people.
97. 10:54“You must either pamper people or destroy them;  harm them just a little and they’ll hit back;
98. 11:00harm them seriously and they won’t be able  to. So if you’re going to do people harm,
99. 11:05do it in such a way that you do  not have to fear their vengeance.”
100. 11:09To consolidate his power Stalin was willing  to use any and all tools at his disposal to
101. 11:15completely crush his opponents, making sure  they stood no chance of challenging his rule.
102. 11:20His political rivals would be shot, citizens  who spoke out against him would be hunted down,
103. 11:25and millions would be sentenced to backbreaking  work in Gulag labour camps where they would be
104. 11:31forced to carry out decades of slave labour  on highly dangerous projects for the state.
105. 11:36In 1937, Stalin would take these measures  to the extreme, launching The Great Terror,
106. 11:42a campaign to rid society of his rivals and anyone  who displeased him. Lasting for a year and a half,
107. 11:48The Great Terror would spread fear across the  entire country, with over 1,500 people being
108. 11:54killed each day. Husbands would turn on their  wives, children on their parents, and by the
109. 12:00time The Great Terror came to an end, there were  none left to speak out against Stalin's rule.
110. 12:06By the time of Stalin’s death in 1953, over  26 million people had been shot, imprisoned,
111. 12:13or subjected to internal exile, an average of  over 1 million per year. But how was Stalin able
112. 12:20to get away with so much? How could he purge,  torture and control an entire empire, without
113. 12:26any repercussions? The answer lies within one of  Machiavelli's most important rules… Propaganda
114. 12:34“So long as he has the people on his side  a ruler needn’t worry about conspiracies,
115. 12:38but when they are against him and hate him  he’ll have to watch everyone’s every move.”
116. 12:45Stalin understood that public support was crucial  to his position. If he was loved, and the people
117. 12:51swore allegiance only to him, it would be very  difficult for his enemies to oust him from power.
118. 12:57And so, Stalin would go to extreme  lengths to develop a cult of personality,
119. 13:01with the state producing an endless stream of  propaganda, portraying Stalin as a Hero and a God.
120. 13:09Statues of him were erected across the country,
121. 13:11the city of Tsaritsyn was renamed to  Stalingrad, and during World War II,
122. 13:17Stalin's name was added to the national anthem. The printing presses were also nationalised,
123. 13:22with only officially sanctioned writers  able to publish books and write plays.
124. 13:28Thousands of posters would be produced to make him  appeal to every aspect of society; to the worker
125. 13:34he was a common man, smoking a pipe and riding  the subway with his fellow citizens. To families,
126. 13:40he was a father figure, beloved by children who  would present him with flowers and adoring smiles,
127. 13:46and to soldiers he was the defender  of Mother Russia, a great general,
128. 13:51wearing a military uniform and leading the Soviet  armies to victory during the second world war.
129. 13:57“The best fortress which a prince can  possess is the affection of his people”
130. 14:03Every citizen of the Soviet Union, no  matter their age would be targeted by
131. 14:08Stalin's propaganda machine. In 1935,  the phrase, "Thank You Dear Comrade
132. 14:14Stalin for a Happy Childhood!" appeared  above doorways at nurseries, orphanages,
133. 14:19and schools. People's homes would also begin  incorporating private "Stalin rooms" a place
134. 14:26featuring his portrait, where they could fully  dedicate themselves to their beloved leader.
135. 14:31Known by titles such as ‘Brilliant Genius of  Humanity’ and ‘Gardener of Human Happiness’,
136. 14:36Stalin was known to receive standing ovations  after his speeches. Most would last upwards of
137. 14:4315 minutes, with the secret police carefully  watching the crowd and arresting the first
138. 14:48person to stop applauding, a crime punishable  by 10 years of hard labour in the Gulag.
139. 14:58With complete control over the information his  citizens received, Stalin’s cult of personality
140. 15:03would be extremely effective, with him  being loved by the general population,
141. 15:07many of whom believed the country  would completely collapse without him.
142. 15:13Stalin’s death would see a massive  outpouring of grief with citizens
143. 15:17from across the empire travelling to Moscow to  pay their respect. Even prisoners in the Gulag,
144. 15:23many of whom Stalin had sent there himself, are  known to have wept at the news of his passing.
145. 15:30With Machiavelli's book by his side, Stalin  had managed to convince an entire nation of his
146. 15:36greatness, to feel genuine love for him, all the  while committing numerous atrocities against them.
147. 15:43But it's not just those in the past that  use Machiavelli's teachings… For politicians
148. 15:48in the present are just as duplicitous,  they just use different means of control…
149. 15:52Means less obvious to the common man…
150. 15:55Modern mass media has made the most  tyrannical leaders fiercely beloved…
151. 15:59Even by the subjects they’ve taken advantage of…
152. 16:02But influence and resources in the hands  of a tiny few eventually leads to unrest…
153. 16:07It cripples even the most powerful empires.
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170. 17:31Perhaps I can help you Chuck.
171. 17:33I think the election was a victory for good  government. It might also be called a victory
172. 17:38for propaganda, but that would have been equally  true if our opponent had won. But how can you
173. 17:43study it? Well, you can begin by investigating  techniques of propaganda. You’ll find that the
174. 17:49purpose of most propaganda is to persuade people  to believe something, to do something, or to buy
175. 17:54something. I find it interesting and there is  plenty to study. Here I have but a few of the many
176. 17:59books on the subject. Hitler and Nazi Germany had  a campaign of propaganda that ran over many years.
177. 18:05Then there is a wealth of propaganda to study  on the subject of Russia and Communism. There
178. 18:10is propaganda to study in our own American  elections, national as well as local. And in
179. 18:15many of the major issues on which elections often  hinge. Well if I don’t learn about propaganda,
180. 18:21it won’t be because there is no way to study it.  That’s right Chuck, remember the techniques of
181. 18:25propaganda and use the procedure we outlined as a  powerful force. So powerful that your study . . .
182. 18:32YOUR STUDY of propaganda is important not  only to you, but to me and to the world.
183. 18:41“In general people judge more by  appearances than first-hand experience,
184. 18:45because everyone gets to see you but  hardly anyone deals with you directly.
185. 18:49Everyone sees what you seem to be, few  have experience of who you really are”
186. 18:55Modern politicians prioritise one  thing above all else; their appearance.
187. 19:01Machiavelli argues that rulers should cultivate  the appearance of virtue, to present themselves
188. 19:07as virtuous and moral, even if they do  not necessarily act that way in private.
189. 19:12“A new ruler ‘cannot always act in ways that  are considered good’, but it is crucial that
190. 19:18he should nevertheless appear to be good,  and especially that he should appear to
191. 19:23be ‘exceptionally compassionate,  loyal, humane, honest and devout”
192. 19:28But what is the best way for a  modern politician to appear virtuous?
193. 19:32The answer is to spend, spend and spend. Who  doesn't want more money for infrastructure
194. 19:38projects, education, healthcare or social  services? The more money a politician spends,
195. 19:44the more they are seen as compassionate and  the higher their chances of re-election.
196. 19:48But this hasn't always been the case.  Historically, this way of appealing to
197. 19:53the masses has always ended in disaster  and looks a little something like this:
198. 19:58A ruler comes to power and embarks  on a large amount of spending on
199. 20:02public projects. The people are pleased  and happy with the many benefits they
200. 20:06receive from the government. Their taxes  are then raised to pay for the spending.
201. 20:10They then begin to hate the leader and  then the leader is removed from power.
202. 20:15As Machiavelli argues, generosity is  self-defeating, the more you spend,
203. 20:20the more you will need to tax, and the  more you tax, the more you will be hated.
204. 20:25“Above all, he mustn’t seize other  people’s property. A man will sooner
205. 20:30forget the death of his father  than the loss of his inheritance.”
206. 20:34But modern politicians have found a sneaky  and deceiving way around this. A way most
207. 20:39people are completely unaware of:  something called Inflation Tax.
208. 20:44Have you ever wondered why things  used to be so much cheaper? In 1971,
209. 20:49a new house cost $25,000 and the average  rent was only $150 dollars per month.
210. 20:57A movie ticket would cost $1.50,
211. 20:59Eggs 45c per dozen and gasoline would set you  back a whopping 40c per gallon at the pump.
212. 21:07Even a Harvard Education would cost you  just $2,600 for a full year of tuition.
213. 21:14So why are things so much more expensive today?  The answer is simple: The government prints money,
214. 21:20as much as they like, in unlimited  amounts. The more money they print,
215. 21:23the less money is worth, and as a result,  the prices of goods and services go up.
216. 21:29But you might be asking yourself a question, how  are they able to print so much money? They’re able
217. 21:34to do this because of the type of money we have,  a type of money called FIAT. But to understand
218. 21:40what FIAT is, we first have to understand  what money is and where FIAT has come from.
219. 21:46Before money existed, humans had to  barter, that is, goods and services
220. 21:51had to be traded for other goods and services,  a cow for a sheep, an apple for an orange. But
221. 21:57this system was incredibly inefficient, and  not everyone wanted what you had to trade.
222. 22:02And so would rise a form of money, a medium  of exchange, a unit of measurement and
223. 22:08a store of value, that everyone agreed  to use so they wouldn't need to barter.
224. 22:13In ancient societies, money would first  appear in the form of Sea Shells and Beads,
225. 22:18things that were all small, similar in  size, durable and easily identifiable.
226. 22:23Factors that are common occurrences for forms of  money across different cultures and timeframes.
227. 22:28As civilisations evolved and become more  advanced, money would begin to appear in the
228. 22:34form of precious metals, usually silver or gold,  that were then melted down and formed into coins.
229. 22:41This form of money would last  for thousands of years, until,
230. 22:45in the modern age, we have adopted paper as our  form of money. However, this paper was not like
231. 22:51the fiat money we have today, instead, it  was something called Representative Money,
232. 22:56a piece of paper that represented  something else of intrinsic value.
233. 23:01Rather than have to carry around  a lot of heavy metal coins,
234. 23:05people would deposit their money into banks,  who in turn would issue them paper banknotes,
235. 23:11which represented the amount of  precious metals they had exchanged.
236. 23:15These banknotes, a new form of currency,  would then circulate around the economy,
237. 23:20and at any time, could be redeemed  for their value in silver or gold.
238. 23:25In the 18th and 19th centuries, governments  and central banks would adopt this system
239. 23:30and apply it to their national  currencies, for example in 1934,
240. 23:35under what was known as The Gold Standard, a  $35 bill would be backed by 1 ounce of gold.
241. 23:42It was important that paper money was backed  by gold, as it imposed limits on government
242. 23:47spending. They wouldn't be able to print  more money, without in turn increasing the
243. 23:52amount of gold they held in reserve.  As a result, prices remained stable,
244. 23:57and people were able to save without the fear of  inflation eroding away their purchasing power.
245. 24:03But not all countries and governments  had precious metals backing their money,
246. 24:07and as a result, the governments printed too much,
247. 24:10hyperinflation ensued and both the  currency and economy collapsed.
248. 24:20Before the Great War, Germany was a wealthy  nation, with its currency backed by gold.
249. 24:27They were a world leader in manufacturing, with  unravelled expertise, in optics, chemicals,
250. 24:33and machinery. The German Mark, the British  Shilling, the French Franc, and the Italian Lira
251. 24:39all had about equal value, with 4 units of each  currency able to be exchanged for 1 U.S Dollar.
252. 24:47However, in 1914, at the start of the First  World War, Germany abandoned the Gold Standard
253. 24:53and resorted to printing money in order to fund  the conflict. But this policy worked to no avail,
254. 24:59and by the end of the war in 1918, Germany  was surrounded, its allies were defeated,
255. 25:04with inflation beginning to take a toll on the  population, prices having doubled since the
256. 25:10start of the conflict. As a result, Germany was  forced to surrender, and 7 months later in 1919,
257. 25:17they signed the Treaty of Versailles, which  named Germany as solely responsible for the
258. 25:22outbreak of the War, and demanded that huge  reparations be paid to the Allied forces.
259. 25:28The Germans would refer to this  agreement as the “Article of Shame”.
260. 25:33But these reparations, which totalled two  years of its pre-war GDP, would prove too
261. 25:39costly for the German state to bear. Resources  would soon begin to be stipped and taken from
262. 25:45their country as forms of repayment,  including goods produced in factories,
263. 25:49their livestock and raw materials  such as lumber, iron and coal.
264. 25:55As these assets flowed out of the country, the  state would resort to printing vast quantities
265. 26:00of money in order to pay the workers  and finance government expenditure.
266. 26:04As the Reichsbank, Germany's central bank began to  print more and more, it was hard to stop, with the
267. 26:11government enlisting 130 companies to help churn  out piles of increasingly worthless paper notes.
268. 26:18The more they printed the  less the currency was worth,
269. 26:21and hyperinflation soon arrived upon the  doorsteps of every household in the country.
270. 26:28Do you remember that 4 German marks in  1913 were worth around 1 U.S. dollar? Well,
271. 26:34the government printed so much money, that  by the end of 1923, it wouldn't cost 4,
272. 26:40or 40 or even 400 marks to purchase 1  U.S Dollar, but instead 4.2 billion.
273. 26:49Prices for everyday items would begin to spiral  out of control, with wheelbarrows needed to
274. 26:55transport people's money to local stores. A loaf  of bread, that had cost 250 marks in January 1923
275. 27:02would cost more than 200 billion in November. Cash  would be burned for fuel, children would use paper
276. 27:10notes as building blocks and create kites for  their entertainment. Eventually, It ended up
277. 27:16costing more to print 1 note than the note itself  was worth, with the currency soon collapsing.
278. 27:22The German Mark would serve as a lesson of  history and a warning to future economies that
279. 27:28a currency backed by nothing, will eventually be  worth nothing. With the destruction and carnage
280. 27:34financial collapse brings about, giving tyrants  and despots the opportunity to seize control.
281. 27:41At Bretton Woods, New Hampshire, Delegates from  44 Allied and associate countries arrived for
282. 27:51the opening of the United Nations  Monetary and Financial Conference.
283. 27:55After the Second World War, the United  States had emerged as a financial superpower,
284. 28:00having accumulated over 80%  of the world's gold supply.
285. 28:04And so, they would sort to position themselves,  as the leader of a new global monetary system,
286. 28:09one that would promote peace and stability, that  would help prevent the outbreak of another war.
287. 28:15To negotiate this new system, 44  nations from around the globe would
288. 28:20travel to Bretton Woods in New Hampshire,  where they would all mutually agree upon
289. 28:24a new framework by which the world's  currencies were exchanged and valued.
290. 28:28Under this new system, nations, instead  of pegging their currencies to gold,
291. 28:33as had been done under the gold standard, would  instead peg their currencies to the U.S Dollar,
292. 28:38which in turn was pegged to gold at $35 per ounce.
293. 28:43The world was effectively  back on the Gold Standard,
294. 28:46countries could trade their  currencies for U.S Dollars,
295. 28:49which, then could be exchanged for gold. The  U.S Dollar was now the world's reserve currency.
296. 28:57However, fast forward 30 years and history would  begin to repeat itself. Much like the Romans,
297. 29:03The Chinese, The Spanish, The British, The  Germans and all rulers and governments that
298. 29:09have come before, The United States fell into the  same trap. They began to spend beyond their means.
299. 29:16Overly ambitious projects like “The Great  Society'', social programmes aimed at
300. 29:21eradicating poverty were introduced, and The  Vietnam War, a geopolitical conflict aimed
301. 29:27at stopping the spread of Communism, began to  soak up vast sums of government expenditure.
302. 29:33Foreign nations, realising the U.S.  government had printed more money to
303. 29:37fund these ventures than they had in  gold reserves, would begin to panic,
304. 29:40and started the process of swapping their  dollars for gold. With the nation's gold
305. 29:45reserves being depleted, Richard Nixon on  August 15th 1971, would address the nation
306. 29:52via Television and declared that he was stopping  the international convertibility of USD into gold.
307. 29:58Accordingly, I have directed the  Secretary of the Treasury to take
308. 30:03the action necessary to defend the  dollar against the speculators.
309. 30:08I have directed Secretary Connally to suspend  temporarily the convertibility of the dollar
310. 30:13into gold or other reserve assets, except  in amounts and conditions determined to be
311. 30:19in the interests of monetary stability and  in the best interests of the United States.
312. 30:25With the Dollars link to gold being severed,  the Bretton Woods system had come to an end,
313. 30:29with the age of Fiat currency emerging. All the  world's currencies were now backed by nothing.
314. 30:36What would result is one of  the greatest heists in history,
315. 30:40an act of deception so big that even  Machiavelli would look on with astonishment.
316. 30:45No longer would governments around the world  have to raise excess funds via taxes, something
317. 30:51Machiavelli had warned against, instead they were  now free to print as much money as they wished.
318. 30:57They could now steal their population's wealth  without them even realising it, because although
319. 31:02the amount of money in their bank account stayed  the same, the value of that money went down.
320. 31:08For example, if you had saved $1  dollar in your bank account in 1913,
321. 31:12the same year the Federal Reserve was  created, that dollar would only be
322. 31:17worth 4 cents today. In just 100 years, the  dollar has lost 96% of its purchasing power.
323. 31:25But since 1971, the United States Government  hasn't just printed a lot of money,
324. 31:30they have embarked on the greatest spending spree  of any nation at any point in recorded history.
325. 31:37Let's take a look at their national debt.
326. 31:40Since its founding in 1776, through the American  Revolution, the Civil War, as well as the
327. 31:47First and Second World Wars, by 1971, the U.S.  national debt stood around $400 billion dollars.
328. 31:54What had taken nearly 200 years to accumulate,  would now be dwarfed by comparison. Just 50 years
329. 32:01since the dollar had left the gold standard, the  national debt now stands at $31 trillion dollars.
330. 32:08There were no world wars, no great depressions,  but with fiat money now under government control,
331. 32:14they have managed to accumulate  $31 trillion dollars of debt.
332. 32:19So, what are the costs of this?  Well, the cost is Inflation Tax:
333. 32:24The more money the government prints, the  less the dollar is worth. And the less
334. 32:29the dollar is worth, the more expensive  things become in relation to the dollar.
335. 32:33In other words, prices will keep going up as your  purchasing power goes down. It's a sneaky way of
336. 32:40taxing your savings without the government  having to take the money from you directly.
337. 32:45As you can see, when money is sound, that is  backed by something of intrinsic value like gold,
338. 32:51prices remained stable for hundreds of years.
339. 32:54People were able to save and hand  that money, that store of value,
340. 32:58down to the next generation. But in 1971, that  all changed, and prices begin to take off.
341. 33:06Take Campbell's Soup for example, prices  remained relatively stable for decades,
342. 33:11but then 1971 rolls around, and  the price begins to explode.
343. 33:16What's worse, is inflation tax doesn't just show  up in the price, you can also have something
344. 33:22called “Shrink-flation” where the price remains  the same but the product is reduced in size.
345. 33:28Whether it is electricity, food or fruit,
346. 33:30the case remains the same. Since  1971, prices have begun to rise.
347. 33:37But it's not just consumer items that are affected  by inflation tax, it's EVERYTHING in the economy.
348. 33:43Since 1971, productivity has increased by  nearly 250%, but compensation has remained flat.
349. 33:51Productivity has increased, but  compensation has moved sideways.
350. 33:56This can also be seen in the  cost of education. While the
351. 34:00average earnings for those between  22-27 years old have barely moved,
352. 34:04the cost to attend higher education has  skyrocketed. Most young adults today now
353. 34:10have to saddle themselves with massive debt’s  just to be able to afford to go to college.
354. 34:14And then when they graduate, they face another  huge problem. The cost of housing. Since 1971,
355. 34:22the value of homes has gone parabolic, far  exceeding income growth during the same period.
356. 34:28In the 1950s, 60’s and 70’s, it would  take on average 2.5 years of your labour,
357. 34:34in order to save up and purchase a house. By 2020  that figure has risen to 7 years. House prices
358. 34:42have risen so much, you now need to work nearly 3  times longer, just in order to buy the same house.
359. 34:49The American Dream, the old tale of  each according to their own ability,
360. 34:53where an average family could accumulate  a modest fortune and own a small plot of
361. 34:58land with a house and a little white picket  fence, was now out of reach for most Americans.
362. 35:04The American Dream was slowly turning into the  American Nightmare, where even the most basic
363. 35:10of goods and services were becoming  unaffordable for the average citizen.
364. 35:15So what did they do? They turned to debt,  easy credit that would allow them to live
365. 35:21the same life as their parents. While  everything got more expensive, Americans
366. 35:26would borrow and borrow while accumulating  the most debt of any generation in history.
367. 35:33Inflation hurts everyone, but it hurts one  group, in particular, the hardest, the poor.
368. 35:39The wealthy know the game that is being played,  and that's why they protect themselves against
369. 35:44inflation by owning assets, such as gold,  real estate, stocks, bitcoin and rare art.
370. 35:51When the government prints more  money these assets, on average,
371. 35:55over time increase in value, but for the  poor, who hold most of their wealth in cash,
372. 36:00the value of their money is totally destroyed and  they are crushed by the rising cost of living.
373. 36:07Inflation is the most destructive disease  known to modern societies there is nothing
374. 36:12which will destroy a society so thoroughly  and so fully as letting inflation run riot.
375. 36:19Inflation doesn't arise because you’ve got  consumers who are spendthrift they've always
376. 36:23been spendthrift. it doesn't arise because you've  got businessmen who are greedy they've always been
377. 36:29greedy. Inflation arises because we as citizens  have been asking you as politicians to perform
378. 36:35an impossible task. We've been asking you to  spend somebody else's money on us but not to
379. 36:40spend our money on anybody else. Everybody talks  against inflation but what he means is that he
380. 36:46wants the prices of the things he sells to go up  and the prices of the things he buys to go down.
381. 36:53The real tax on the American  people is not what you label taxes,
382. 36:56it's total spending. If Congress spends  50 billion dollars more than it takes in,
383. 37:01if Government spends 50 billion dollars, who  do you suppose pays that 50 billion dollars?
384. 37:05The Arab Sheikhs aren't paying it. Santa Claus  isn't paying it. The Tooth Fairy isn't paying it.
385. 37:10You and I as taxpayers are paying it  indirectly through hidden taxation
386. 37:15But it's not just the United States and  the Dollar that are experiencing Inflation.
387. 37:20Whether you hold the Nigerian Naira,  the Argentine Peso or the Turkish Lira,
388. 37:25governments around the world  are stealing the wealth of
389. 37:28their populations as inflation erodes  away their currencies purchasing power.
390. 37:34So, what's going to happen from here? Well,  it's going to get a lot worse, everywhere.
391. 37:40Governments and politicians in the U.S. and  around the world are not interested in the
392. 37:45long-term trajectory of their nations. Instead,  they are solely focused on the election cycle,
393. 37:51what they can promise now, and what  will garner them the most votes.
394. 37:55They are interested in POWER. And if they have to  spend vast sums of money on different programs in
395. 38:02order to bribe the public to vote for them, that  is what they are going to do. And why wouldn't
396. 38:07they? They no longer have to raise taxes from  the population in order to fund these projects.
397. 38:12They simply print the money, hold  on to power for as long as they can,
398. 38:16and the population is none the wiser as to  why everything around them is crumbling.
399. 38:23Unfortunately, the debt in most nations  is already too large to be paid back,
400. 38:27so more money will need to be issued  in order to pay it off. In other words,
401. 38:32the debt is already so high, the only way  forward is for nations to print more money
402. 38:38and in doing so, inflate their way out  until their currencies are worthless.
403. 38:43The debt to GDP ratio in the United States is  already over 130%, that’s double the size of
404. 38:50the economy and higher than during World War  2. By 2050, that ratio is expected to exceed
405. 38:57200% of GDP, totalling more than 100 trillion  dollars of debt. By the end of the century,
406. 39:05in the year 2,100, just 73 years from now,  if politicians carry on down the same path
407. 39:11of money printing they are currently on, the  national debt will exceed 1 quadrillion dollars.
408. 39:18Whether it be 10, 50 or 100 years from now,
409. 39:21sooner or later the chickens are coming  home to roost, As Machiavelli has said:
410. 39:27“If you’re determined to have people think of  you as generous, you’ll have to be lavish in
411. 39:31every possible way; naturally, a ruler who follows  this policy will soon use up all his wealth to the
412. 39:38point that, if he wants to keep up his reputation,  he’ll have to impose special taxes and do
413. 39:44everything a ruler can to raise cash. His people  will start to hate him and no one will respect
414. 39:50him now he has no money. Since his generosity  will have damaged the majority and benefited
415. 39:56only a few, he’ll be vulnerable to the first bad  news, and the first real danger may well topple
416. 40:02him. When he realizes this and tries to change his  ways, he’ll immediately be accused of frugality.”
417. 40:13As of 2023, global debt has reached a record $300 trillion dollars
418. 40:18This equates to $37,500 for every person on the planet
419. 40:28"Paper money is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted"
420. 40:37Thomas Jefferson, 1813