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Peter St. Onge

lines on the record: 67
first: 2023-09-27
most recent: 2023-09-27
sittings or episodes: 1
sources: podcast

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“Moment China is definitely deflationary. Most of that is coming from manufacturing. They have overcapacity in a lot of areas. The Chinese government, like our own government, identifies industries that it wants to give capital to, so green above all. They have industrial policy where they look at semiconductors or other industries that they want to dominate. And so they give them preferential access to capital, as does our government, by the way, in all of those. And what's happening in China is kind of a concentrated version of what happens here, which is that those investments typically fail because governments are really, really bad. It's not just they're bad at picking winners. I mean, they are, but in addition to that, of course, the process gets corrupted, right? So the likelihood that the taxpayer money is actually going to go to the correct company is essentially zero. Most likely it is just going to be lost. And so in China's case, they've got that problem in manufacturing. They have overcapacity.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“If that advances, then a lot of those could also come back, but really either of those two scenarios are sort of black swans. They're not necessarily likely, right, that financial markets are suddenly going to become extremely unpopular or that foreigners are suddenly going to dump their dollar, which aren't necessarily likely, but they are interesting because they would catastrophically affect the dollar. They would both lead to enormous inflation because you have this massive overhang of dollars that are currently kind of out of the game and they would be coming back into the game and circulation in the U.S.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“That's essentially occupied at the casino. And so if the casino empties out, if markets decline and people sort of pull out of the casino and get back to the real world, it is possible that there could be a lot of money that floods out of that. Normally when people are looking at that sort of financial black hole, like where did all those extra dollars go? The other usual suspect is going overseas. If you're a rich Mexican, for example, you are not holding a whole lot of Mexican pesos, right? From hard-earned experience, you know that that's not where to park your fortune. So you might have a little bit of pesos for monthly usage and then to the extent you have cash or treasuries, which is a cash substitute, you might have those parked in dollars. And so that's absorbed a lot of those dollars. And if D-$$8.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“But anyway, right. So that's kind of a big mystery where the extra two or three percent goes. People usually assume that it bleeds overseas or bleeds into free markets or black markets. But that's an interesting question that a big amount of it may be soaked up into financial markets. And what that implies is that that was 2-3% per year. So that might be quite a large aggregate number.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“That's an interesting question. And right, a lot of that money is going to be absorbed from the perspective of money printing financial markets occupy the money. Okay, so if we sort of zoom out, inflation is a question of how much money is chasing, how much goods. And so when people are taking some of that money and they're playing in a casino, for example, then the money is occupied and it's not chasing goods, right? So in the sense of inflation, when money is going and being passed around on financial markets, it's not being saved, but it looks like savings. It kind of comes out of the game temporarily. And so that's an interesting question. What percent of that four sort of extra four percent because the economy hasn't grown 4% for a very long time, right? So, I mean, there is something like 2 or 3 percent overhang that's kind of a mysterious, but it's like you can detect that there's a hidden planet from its gravity field, okay? But like you can't actually see the planet. And so people usually assume that best maybe foreigners saving or maybe it's cartels would generally save a lot of dollars because they're apparently more prudent than the federal government.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“He's got to keep some of it. Yeah, right, exactly. For the midterms. And so he's got to keep some of that for the 2024 election here. So when they just added like a tiny amount, like 600,000 barrels just to drop in the bucket, I guess, to like show people that they're prudent about such things. But yeah, they're going to try to take the edge off of any hikes by draining that out. And the problem, of course, is that the strategic petroleum reserve is supposed to be there for wartime. It's like if there's a war and supplies interrupted, you want enough gasoline for the ambulances. So that's supposed to be kind of the family jewels. You don't go selling that out for elections, but apparently that's what they're up to.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“No, I was going to say, I really like that QE for oil. That's exactly what it is. And they have to keep their powder dry because they use that SPR, at least Biden did, to buy the last election. Right. So he flushed out a huge share of it, something like 30% or more of it. He flushed out and that got oil price or gas prices low for the election”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Is starting to go up again. And so if that continues, then the Fed is going to be a lot more concerned. It's going to get people upset about, they're already upset about their grocery bills, but that'll get them upset about the gas pump again. And then that leads to congressional pressure. So the Fed is kind of back to the corner at this point. They won't say no to the government. They're sort of stuck with these high rates. And they're just basically waiting for the economy to die so that that'll cut down inflation. And if sufficient millions of jobs are lost, then at that point they can declare victory and then they can go back to start to normalize rates and that not until that happens are we going to see these sort of financial stresses and the bank crises stop.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Water and saying that it'll be some time before rates come back down. And then just in the past two months now, sort of, if we want to get the latest stories for what's going on in inflation, the past two months now, inflation just started to rise again, largely because energy”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And that's now happening really coordinated across the world, so even China is slowing. And then the other reason is that the world sort of routed around Mr. Putin's war. So initially there were some shocks to energy markets. Europe wasn't buying. It was buying elsewhere. A lot of sort of energy supply chains had to get rejigged. And at that point, a lot of that has already been digested. So energy prices have been coming down. That was bringing down headline inflation. And so the administration was declaring victory. The Fed was not because the Fed could see the underlying numbers, which is the core inflation. That's excluding food and energy. That's really the number that the Fed sort of grades itself on. And corn inflation has been stuck really for about a year. If we compare the absolute worst of the inflation last year or two years ago, core has only come down about half point. It's really pretty stuck. So the Fed is still concerned. That's why they've been sort of pouring cold.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“On vacations or something tends to stay put. So they knew that from 2008. They pumped out trillions in 2008. A lot of us said you're going to see bad inflation. We didn't get the inflation. The reason is because the banks held on to it. So that's what they've been doing so far. And so where we stand at the moment is that for the past year or so, inflation has been coming down. It has largely been coming down because of energy prices. So energy usually energy falls whenever the world economy is slowing.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Since the 1970s, since Paul Boker, so it was really an epic level of rate hikes. And then, of course, a lot of us warned that if you do it that quick, you're going to break something, specifically something in the financial sector, which is very top heavy. So it's very vulnerable. And of course, that's what happened in March when the banks started going under. They responded by pushing out, I call them pre-bailouts, but they basically pushed out trillions of guarantees and open windows. asset values. They did a lot of things that in the private sector you would get like a 20-year sentence for. But of course, this is par for the course when it comes to our ruling thieves. They headed that off with yet more trillions of money. That money doesn't immediately lead to inflation. They knew that from 2008 because when you bail out banks, the banks tend to hold on to it. They don't go out and spend it on.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Of the inflation, which was obscene levels of government spending, and then it tells the government you guys got to cut back, you got to lower the spending, you got to get rid of the deficits. In fact, Powell could have forced them to do that if he simply said, I'm not going to buy government bonds anymore. I'm going to sell them instead. He could have actually forced the feds to end the deficits. But that's a politically costly thing to do to the people who run your organization, right? The Fed exists at Congress's pleasure and they can always change the rules on that. So instead of doing that, he said, okay, The offensive spending, I'm not going to complain about that. That's probably going to continue. And so what are my other options if I want to reduce the amount of spending in the economy? I want to reduce the amount of money that's out there chasing goods. And the only man left standing is to crush the private sector. And the way they do that is by hiking interest rates. Up they went. The fastest rise in about 50 years.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Jump up. So right around almost to the day that Joe Biden came into office, of course you can't cause inflation in six hours. But anyway, right around January of, what is it, 21, inflation started picking up. And then by about the middle of the year, we were at the point where it was really hitting 1970s levels. And so that was something that people didn't think was going to happen again for a long time, that the Fed had sort of learned its lesson back in the 70s and you can't let the money supply run so fast. But that's really what got us into trouble in the first place. And then at that point, the Fed did panic. They are afraid of high inflation because it calls into question their own independence. And so they sort of panicked interest rates. Now, if we sort of pause the story there for a moment, once inflation started taking off, the Fed really had two options. Okay, one option would have been that it identifies the source.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Canada, and they had these CERB. It was basically a universal basic income that was implemented nationwide. It was astoundingly expensive. The only way that they could have done that is by printing gobs of money. So in the case of the US, it took about six to seven trillion dollars is how much the increase the money supply during COVID. So it went from about $15 trillion to about $212. Now, if you print that much money all at once, every school of economics, even Paul Krugman, even the Marxists, they all know that is going to lead to extreme inflation. So to a first approximation, that's going to give you something like 40% inflation. It's not going to happen all at once, but it's going to come all over time. Initially, we didn't see that because the economy was flat on its back. You had supply chains were choked. People were staying home to save lives. And then once the economy started normalized a little bit, then you started seeing that.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And the remaining 2% bleeds over into higher prices. And that they don't fear because they have these paid PhDs who sort of lecture the public how, you know, this is just part of free market capitalism and this is the price of progress. Is that everything that's going to get a little bit more expensive every year? So were they really as scared is when inflation gets away from them and gets up into 5, 7, 9 percent because they know that at that point voters get angry if voters could angry, Congress gets angry, and then Congress can put a leash on them. So why did it get out of hand this time? And the core sort of the original sin here was in order to buy the COVID lockdowns, it was fantastically expensive. This is really everywhere in the world that went through lockdowns. They had to absolutely pump out money in order to bribe voters into doing it. So when the lockdowns first came in, I was up in.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so kind of big picture the central banks try to print as much money as they can get away with. That's why they created them. They essentially finance government deficits and debt in exchange for printing money. The trick in central banking is it's like being a gasoline thief. The trick in that gig is don't take too much at once. If you're ripping off all the neighbors, it's okay if you take a little half gallon a night from everybody. For goodness sakes, do not drain one guy's tank all at once. He's going to notice that. And then the gig's up. Central banks try to keep price hikes to a minimum in practice about 2% is what they have kind of through trial and error discovered that voters are willing to put up with. And so that means that they typically print something like 6% of the money supply. Essentially, four of that is soaked up in population growth or economic growth.”
2023-09-27 · We Study Billionaires · BTC149: Parallels to the Roman Empire w/ Dr. Peter St. Onge (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT