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Ep. 591: Jeffrey Tucker Interview with Michael Covel on Trend Following Radio

Jeffrey Tucker
Jeffrey Tucker

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Jeffrey Tucker is an American economics writer of the Austrian School, an advocate of anarcho-capitalism and Bitcoin, and has authored seven books. Jeffrey’s new book, coming out September 2017, is titled “Right Wing Collectivism: The Other Threat to Liberty.”

Michael and Jeffrey start the conversation talking information. Regimes come and go, but information we share with one another cuts through governments. Interactions with others and the tools we use to spread information are what shapes history, rather than governments trying to put their spin on it. Government officials are not visionaries, they do not define the world, they do not create history. They spend their term in office gearing up to get elected for their next term in office. The more responsibility taken out of government’s hands the better. This leads us to Bitcoin…

Why is Bitcoin so important? Bitcoin represents freedom. It’s an international currency, trades the same globally and has increased in value over time. Jeffery has been studying monetary theory since he was an undergraduate. He wrote his thesis on the gold standard and assumed he had the monetary system figured out. So naturally, when Bitcoin came out, he dismissed the idea. After a few years went by, he was forced to acknowledge the advancement of crypto currency. He now looks at markets far differently than he did in the first part of his career. He knows that the markets know much more than any person could ever understand.

Jeffrey switches the conversation to another passionate subject for him, child labor laws. Youth have bought into the idea of needing a college degree to get the right job. Parents see pushing higher education on their children as a way of guaranteeing their children’s success. Unfortunately, degrees are not necessary in today’s age. Youth unemployment and child labor is a major leading factor to issues later in life. Many kids never have their first job until after they graduate from college and every year thousands of college students graduate still dependent on their parents.

Michael and Jeffrey finish up the podcast discussing corporate taxes and building digital walls. The American economy would experience spectacular gains if corporate taxes were slashed. Cutting personal income tax would be nice, however corporate income taxes being cut is the first phase of reform. Our economy also is being hurt by slowing down the flow of information and trying to block it. Is the world going in the direction of building digital walls? Are governments slowing down growth potential by blocking information? Absolutely.

In this episode of Trend Following Radio:

  • Liberty
  • Friedrich Hayek
  • Crypto currency
  • Ledger technology
  • Block chains
  • Excessive waves of hysteria
  • College debt
  • Tax laws
  • Trump administration
  • Nation state
  • Building blocks for a civilized society

“Government doesn’t really try anymore, and that is a good thing.” – Jeffrey Tucker

Mentions & Resources:

Listen to this episode:

 

“Why Greece’s Lenders Need to Suffer”

A recent interchange with [prominent trader appearing on my podcast]:

Name: Read: “Why Greece’s Lenders Need to Suffer”

Covel: Great ending paragraph:

“There is an unsentimental logic to markets. If you make a bad investment, you are supposed to pay the full price — because if you don’t pay the full price, you will keep making bad investments. The only way to get the bond market back to its historic role is to make bondholders feel real fear that they might lose money if they make bad decisions. We need the market to reward bets that are economically wise, instead of those that are politically savvy.”

Wonder if we ever get there….

Name: We will get back there because our government will run out of money like the Greeks’ government. Ours will be painful too.

College: A Debt Cyclone Engineered by the Loving State

Sure, college is good for some, but many entering “the system” just get ripped off. This excerpt mirrors many of my views:

“Since 1985, college tuition has increased at nearly 500 times the rate of inflation. (See: College tuition has jumped by 500% since 1985) Can you imagine the same jump in any other area? Food, housing, medicine, energy? If everything we need to live increased in price at the same rate as college tuition, there would be a national riot in about 10 minutes. So what really happened in the marketplace to allow college to get so expensive? Is it really all because Republicans want to raise the rates on student loans?

Think about it. Universities get to decide how much money to charge their students. Likewise, parents and students decide if they can afford to pay it. It’s a pretty simple proposition. But when the government suddenly makes hundreds of billions of dollars in student loans readily available — under the popular (and voter-friendly) theory that “everyone should go to college” — we see an unintended consequence. We see colleges suddenly motivated to charge more money. A lot more. And so they embark on their own PR campaigns to boost enrollment. They hire ad agencies and publicists and lobbyists and go about the business of persuading people to “invest in their future.” And most importantly, they provide an admissions department to help arrange for an affordable student loan. This is what’s been happening for the last 40 years.

If blame is your thing, there’s plenty to go around. Republicans and Democrats have both allowed a trillion dollars of public money to flow freely between students and colleges with no real accountability for the results. And millions of well-intended parents and guidance counselors are still pushing the idea that a four-year degree is the only viable path to happiness. This in spite of the fact that the vast majority of available jobs no longer require a diploma — they require the willingness to learn a useful skill. And that kind of training does not demand the type of massive borrowing that has put college graduates a trillion dollars in the hole.

To be clear, I’m not anti-college; I’m anti-debt. If you can afford it, by all means go for it. But I reject the idea that a four-year school is the best path for the most people. I went on Piers Morgan Live because I have a scholarship fund that trains people for jobs that actually exist, while rewarding the kind of work ethic I think we need to encourage. I want to spread the word.”

Shout to Cullen Roche at www.pragcap.com for the find.

Should You Invest in Biblical Finance such as Suggested by Dave Ramsey

An excerpt:

Ramsey is overtly religious, and his for-profit Financial Peace University is billed as “a biblically based curriculum that teaches people how to handle money God’s ways.”

Found this intro:

Please don’t add your religious insights to your investing insights. Ramsey is wise to talk of cutting up your credit cards, but biblical finance such as outlined in the Dave Ramsey Five Foundations, is not the wise path.

Dave Ramsey Photograph
Dave Ramsey preaching the 5 Foundations of finance.

For a more scientific approach to investing and improving your financial circumstances take a look at my books.

Merchants of Debt

My favorite excerpt from Merchants of Debt:

“Most people feel intimidated when seeking a loan. Bankers like to view potential borrowers with suspicion…dallying a bit before deciding whether a borrower is sufficiently creditworthy. But George Roberts of KKR never asked to borrow money. He always asked if his bankers could raise a loan for him. The slight difference in wording proved crucial. Suddenly Roberts controlled the situation. The bankers, even if they represented a giant institution a thousand times KKR’s size, were the ones put to the test.”

Nice.

Note: The author George Anders appeared on my podcast in 2018.

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