Silver vs Fiat: The Fall of Minimum Wage in Real Terms | Mike Maloney
Summary
TLDRThis video script argues that the US minimum wage has effectively fallen by over 70% in the past 61 years, using the example of silver quarters' value compared to the Federal Reserve notes. It suggests that inflation, a tool of wealth transfer, has disproportionately benefited the top 10%, while the rest suffer from reduced purchasing power. The speaker critiques the concept of minimum wage, its impact on unemployment, and the Federal Reserve's role in inflation, advocating for a return to 'real money' to address economic inequality.
Takeaways
- 💼 The speaker argues that the minimum wage has effectively fallen by more than 70% over the last 61 years, using a comparison to the value of silver quarters in 1963.
- 💡 Luke Groman's tweet is highlighted as a source of inspiration, suggesting his unique perspective on economic issues is valuable.
- 🏦 The speaker criticizes the US CPI (Consumer Price Index) calculations, claiming they undervalue the true inflation rate and its impact on purchasing power.
- 📉 The labor share of corporate profits is said to be at multi-decade lows, indicating a shift in wealth distribution favoring the top 10%.
- 🌐 The speaker suggests that the Federal Reserve's policies are responsible for wealth inequality and economic dysfunction, advocating for its dissolution.
- 💰 The concept of 'fiat currency' is contrasted with 'real money' (silver), emphasizing the devaluation of the former over time.
- 📊 The speaker uses a mathematical analogy to demonstrate the decline in the purchasing power of the dollar, particularly against silver.
- 🚀 The current federal minimum wage is compared to the historical value of silver quarters, showing a significant decrease in real terms.
- 🍔 The speaker discusses the economic implications of artificially high minimum wages, such as increased unemployment and reduced job availability.
- 🏛️ The speaker criticizes government interventions like minimum wage laws and fees on services, arguing they disrupt economic equilibrium and lead to unintended consequences.
- 🌟 The speaker concludes by advocating for a return to 'money' (as opposed to currency) to address issues like unemployment and wealth inequality, suggesting a clearer economic perspective.
Q & A
What is the main argument presented in the video script regarding the minimum wage?
-The main argument is that the minimum wage has effectively fallen by more than 70% over the last 61 years when compared to its purchasing power in terms of silver, and that this decline in purchasing power is not visible to most people.
What does the script suggest about the distribution of wealth in the United States?
-The script suggests that wealth has been increasingly concentrated in the hands of the top 10%, partly due to the decline in the purchasing power of the minimum wage.
What is the 'CP Lie' mentioned in the script, and why was this term coined?
-The 'CP Lie' refers to the Consumer Price Index (CPI), which the speaker accuses of underreporting inflation and thus hiding the true extent of the decline in the purchasing power of the minimum wage. The term was coined by the speaker in his first book to highlight this perceived deception.
How does the script connect the minimum wage to the concept of 'real money' and 'fiat currency'?
-The script contrasts 'real money', represented by silver dollars in the past, with 'fiat currency', the Federal Reserve notes of today. It argues that the value of the minimum wage in terms of 'real money' has significantly decreased when compared to its value in 'fiat currency'.
What is the speaker's view on the current state of labor share and political dysfunction in the United States?
-The speaker believes that the labor share of corporate profits is near multi-decade lows and that political dysfunction is at multigenerational highs, both of which are driven significantly by high income inequality.
What is the speaker's opinion on the current federal minimum wage and its effects?
-The speaker criticizes the federal minimum wage, suggesting that it is too low and that attempts to raise it artificially can lead to unemployment and economic dysfunction.
How does the script use the example of silver quarters to illustrate the decline in the minimum wage's purchasing power?
-The script uses the example of silver quarters, which were worth $1.25 each in 1963, to show that the equivalent value in today's currency would be $25, but the purchasing power of that amount has significantly diminished, as it would only equate to $10.81 in terms of 1963 dollars.
What is the speaker's stance on raising the minimum wage to an artificially high level?
-The speaker is against raising the minimum wage to an artificially high level, such as $10,000 per hour, arguing that it would lead to economic imbalances and make goods and services unaffordably expensive.
What evidence does the script provide to support the claim that raising the minimum wage can lead to job losses?
-The script cites examples such as California fast food workers losing jobs after the minimum wage was raised to $20 per hour, and a 45% decrease in Uber Eats deliveries in Seattle after a $4.99 fee was mandated to support drivers.
What is the speaker's view on the Federal Reserve and its role in economic inequality?
-The speaker is highly critical of the Federal Reserve, accusing it of either being incompetent for not understanding the wealth transfer effects of its policies, or immoral for knowingly causing such effects. The speaker calls for the dissolution of the Federal Reserve.
How does the script explain the concept of inflation as a form of theft?
-The script likens inflation to a form of theft where a 'slice' is taken from the total currency supply, reducing the value of everyone's money without them noticing, thus transferring wealth from the many to the few.
Outlines
💼 The Decline of Minimum Wage Value
The speaker begins by discussing the concept of inflation and its impact on the value of currency. They argue that the minimum wage has significantly decreased in real value over the past 61 years, using a tweet by Luke Groman as a reference. The speaker points out that in 1963, the minimum wage was equivalent to five silver quarters, which had a real value of $25. According to the speaker, the U.S. CPI calculations indicate that this amount is now only worth $10.81. They further explain that the difference in value has been absorbed by the top 10% of the population, highlighting issues such as labor share and corporate profits. The speaker emphasizes the importance of understanding the difference between money and currency, and how inflation stealthily reduces the purchasing power of currency.
💸 Current Minimum Wage and Economic Consequences
In this paragraph, the speaker discusses the current federal minimum wage of $7.25 per hour and compares it to the historical value of the minimum wage in terms of silver quarters. They calculate that the current minimum wage is equivalent to 1.45 silver quarters, indicating a 71% decrease in value since 1963. The speaker criticizes the idea of artificially raising the minimum wage, arguing that it leads to economic imbalances and unemployment. They provide examples such as the impact of a $20 minimum wage in California and a $4.99 fee on Uber Eats in Seattle, which resulted in job losses. The speaker suggests that the Federal Reserve's policies contribute to wealth inequality and calls for a return to a system based on real money, rather than fiat currency.
🏦 Inflation and the Invisible Theft of Currency
The speaker concludes by emphasizing the invisible nature of inflation and its impact on wealth distribution. They describe how the Federal Reserve targets a certain rate of inflation, which they equate to a form of theft from the public. The speaker argues that the current inflation rate is manipulated to appear lower than it actually is, thereby understating the extent of the theft. They advocate for a shift from fiat currency to real money to eliminate the 'fog' of misunderstanding that currency creates. The speaker suggests that eliminating minimum wage and returning to a money-based system could help address issues like unemployment and wealth inequality. The paragraph ends with a call to action for viewers to understand the difference between money and currency and to think critically about the economic policies that affect their lives.
Mindmap
Keywords
💡Inflation
💡Minimum Wage
💡Purchasing Power
💡Fiat Currency
💡Wealth Inequality
💡CPI (Consumer Price Index)
💡Silver Quarters
💡Labor Share
💡Political Dysfunction
💡Economics
💡Federal Reserve
Highlights
The video argues that the minimum wage has effectively fallen by over 70% in the last 61 years.
Luke Groman's tweet is used to illustrate the decline in the real value of the minimum wage.
In 1963, the minimum wage was equivalent to five silver quarters, which today would be worth $25.
According to CPI calculations, $125 from 1963 is only worth $10.81 today.
The difference in value has been transferred to the top 10% of earners.
Labor share of corporate profits is at multi-decade lows, and political dysfunction is at multigenerational highs.
The speaker introduces the term 'CP Lie' to describe the discrepancy between CPI calculations and real-world value.
Silver is used as a measure to expose the lie of inflation and currency devaluation.
The current Federal Reserve notes are considered 'fake' compared to the 'real money' of silver dollars.
The dollar has fallen to 1/12th of its value in terms of purchasing power against silver.
The current federal minimum wage is $7.25 per hour, which is a significant decrease in real value compared to 1963.
The video suggests that raising the minimum wage can lead to unemployment and economic inefficiency.
Examples of California and Seattle are given where high minimum wages have led to job losses.
The Federal Reserve is criticized for its role in wealth transfer and inflation targeting.
The video argues for the dissolution of the Federal Reserve and a return to 'real money' to fix unemployment and wealth inequality.
The difference between currency and money is emphasized as a key to understanding economic issues.
The video concludes by stating that understanding the difference between currency and money can clear the fog and provide clarity on economic matters.
Transcripts
you take a little slice out of the
middle through
inflation you give everybody else what
is left but it's all distributed sliced
up into uh these units of currency and
nobody can see the value that you have
stolen from everybody
[Music]
else in this video I'm going to attempt
to prove to you that the minimum wage
has actually Fallen by More than 70%
over the last 61 years yes the minimum
wage has gone down by More than 70% over
the past 61 years and for that I'm going
to use this brilliant tweet by Luke
growman Luke groman has a great mind and
I love how he looks at things a
different way it's really worth paying
attention to him he's a great guy this
ceases to be an intellectual exercise
once you realize hey you minimum wage
was five silver quarters
a25 in
1963 those silver quarters are worth $25
now us CPI calculations say that that
$125 is only worth
$10.81
now uh the diff the $14 and 19 C
difference has gone to the US top 10%
labor share share of corporate profits
is near multi-decade lows uh us
political dysfunction is at
multigenerational highs driven in no
small part by the highest income
inequality in nearly 100 years now this
is absolutely true but I want to try and
dig a Little Deeper Than This uh so
let's let's take this apart here uh
first of all us minimum wage was five
silver qu ERS of real money silver which
was
1.25 silver dollars
125% of a silver dollar in 1963 five
silver quarters each quarter being 25%
one quarter of a silver dollar so that
was you know you've got four of those
equal a dollar right that's a dollar but
it was a dollar of money those five
silver quarters of money are now worth
$25 of national fiia currency Federal
Reserve notes so the five silver
quarters of money five silver a buck 25
of money is now worth
$25 of national fiat currency fiat
currency Federal Reserve notes the fake
stuff the US CP lie a term that I coined
in my first book uh the the the guide to
investing in gold and silver back in
2008 I made that term up the cply
calculations say that
$125 is only worth $10 81 now and I that
probably should be phrased that
$125 of
1963 money dollars is now only worth
$10.81 of 2024 National Fiat Federal
Reserve notes uh now this is the lie
though and silver is exposing that lie
it to to buy a buck 25 of the of silver
from
1963 now costs
$25 so um uh and I do want to point out
here 25 divided five is five right
except that's five silver quarters a
quarter of a dollar this isn't
$5 so the in in $25 there are actually
100 quarters right so you've got 100
divided by five that means it's that uh
silver that the dollar has fallen in in
purchasing power against silver uh
$25 buys five silver quarters um if you
take this divided by that you end up
with 20 if you take 100 divided by five
you end up with 20 uh so the dollar has
fallen to 12th of its value that is
95% uh fall in purchasing power of
national fiat currency Federal Reserve
notes they are not money this is
currency difference between money and
currency is very very clear here uh uh
so the difference has gone to the top
10% now I do want to point out
five silver quarters was minimum wage
what's minimum wage today minimum wage
this is the US Department of Labor
minimum wage is
$725 per hour now that's Federal uh
minimum wage it's not uh you know
California and Seattle and and people
that are just like dreaming uh that that
where bureaucrats are trying to dictate
what they think is fair
and try to disregard economics and when
you disregard economics you always get
punished well not those bureaucrats
they're doing well they get these uh you
know six figure paychecks uh it it's
punishing the people that they're
dictating this minimum wage thinking
that they are uh defending it so when
they try and dictate the $20 minimum
wage so let's take these five silver
quarters of minimum wage and and now uh
it costs $25 for those five silver
quarters 25 divided 5 is $5 each right
so you take this minimum wage of
$725 per hour and if we take um the
7.25 uh divided by um the
$5 quarter each quarter now costs $5 you
end up with
1.45
quarters so let's go to a percentage
calculator minimum wage used to be five
silver quarters now it is 1.45 quarters
and that is a fall of
71% minimum wage has literally Fallen by
71% since
1963 it's a different way of looking at
things now now let's look you know I
wish that we could create a minimum wage
that would work I think everybody should
get paid uh 50 bucks no 100 bucks an
hour no a th000 bucks an hour I think
it's better 10,000 bucks an hour that's
what we should pay people because that
would be great wouldn't it if all of us
including somebody working at McDonald's
flipping hamburgers could get paid
10,000 bucks an hour well wait a minute
wouldn't that mean that a hamburger
would cost about 50 million bucks when
you for somebody that goes to McDonald's
I haven't eaten there in I don't know
it's been decades uh but uh there
there's sort of a choice um
economics it's supply and demand and
when you raise the price you reduce
demand and so you raise the the price of
a job of of pay you're going to reduce
the demand of how many people want to
create the how how many people want to
pay somebody how many people can afford
to pay somebody and so here is the proof
uh or here's some of the things we're on
the brink of an unemployment Fiasco
unless the federal fed steps in fast
actually what they didn't need to do is
step out fast not step in the FED needs
to go away actually millions of
Americans could lose their job so this
is somebody not looking at the
fundamentals that that wrote this
article that doesn't really understand
the real economics behind it uh when you
raise minimum wage so California raised
it up to 20 bucks an hour 10,000
California fast food workers mfed thanks
to $20 minimum wage and so uh you raise
it up and all these people lose their
job you need further proof Seattle
mandates a
$4.99 fee on Uber Eats so let's just
call that five bucks to help drivers
deliveries crash by
45% okay every time uh if you're an Uber
driver whether you're accepting a ride
or an Uber Eats delivery every time you
accept a delivery that's another job
you've just been hired well there's
45% Less jobs available because of some
bureaucrat deciding this is fair I'm
going to help drivers I'm going to help
them by eliminating 45% % of the
potential job openings that they've got
so uh you know J Powell now these
people in chapter four of the great gold
and silver Rush of the 21st century I
talked about the wealth transfer that
these people are causing and I said that
there are a bunch of very smart PhD
economists and if they do not understand
the wealth transfer that they are
causing then they are incompetent and do
not belong in their jobs if they do
understand the wealth transfer that they
are causing then they are immoral and
they belong in jail and there is no
middle ground here they either
understand it or they don't understand
it so it's one or the other they're
incompetent Federal Reserve needs to be
dissolved and they need to lose their
jobs or they are immoral and they belong
in jail because now Federal JP palal
signals growth growing confidence that
the US inflation is moving towards the
2% Target in other words they have
targeted 2% as of the amount of theft
the amount that they are going to steal
from you each year they are going to
take 2% of your income due to inflation
uh now they accidentally created so much
currency during the pandemic that for a
while it was a stated you know according
to the their measures of inflation the
CPI the CP Li uh it was like up to 9%
that they were stealing from you every
single year taking 9% of your savings
your pay uh taking 9% of your purchasing
power each year uh but it was actually
far more than that if you look at the
price of real goods and services they
pick and choose how they measure and
then they adjust it they always adjust
it to make it look better so that their
uh their theft does not look as
egregious but they are now tar you know
they've been targeting 2% theft instead
of 9% or 16% or 20% or whatever the
theft really was so that's how much
they're going to steal from you in the
future and you want to see how this
works because the the average person
never sees this it is invisible the way
that they do it so I want to show you
the best explanation I've seen of this
you take the current currency Supply
this is the whole thing you take a Big
Slice out of the middle inflation you
take the rest of the currency Supply and
you cut it up into little currency units
called dollars and nobody can see the
robbery that has just been committed the
theft uh let me show you this once again
here you take a little slice out of the
middle through
inflation you give everybody else what
is left but it's all distributed sliced
up into uh these units of currency and
nobody can see the value that you have
stolen from everybody else the way to
fix this uh you can fix unemployment by
getting rid of minimum wage you can fix
uh the wealth inequality the income
inequality uh by getting rid of uh
currency and going back to money uh the
difference with with minimum wage the
difference between a million dollars of
income per year and uh
$20,000 worth of income if you if you
you're you know you make a deal with
somebody to work for $20,000 a year
that's your income the difference
between a million and 20,000 is less
it's it's less uh there's less
inequality than a million and zero which
is happen which is what happens when you
dictate a minimum wage a lot of people
have zero income because they don't have
a wage this is just a different way of
looking at things and hopefully when you
know the difference between currency and
money you can then uh analyze things
like this and see through the fog
whenever you use currency there is a fog
that you cannot see through when you
think of things in terms of money it
lifts the fog and you can see clearly I
want to thank you for watching we'll see
you next time
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