Furious Friday – Part 2

Cannibalism, Nazism and property rights

Welcome to Part Two! If you haven’t already...listen to Part 1 before jumping into this episode Let’s look at these claims:
  1. Means of production owned by the public or state
    1. This removed property rights – Which is the foundation of wealth accumulation
    2. Think of a group assignment – social loafing
    3. Property rights lead to incentives
      • Zimbabwe – Took property rights away – expropriated land and property rights
      • China – Introduced property rights – Incentivised farmers – reduced starvation
      • Australia – Same thing – gave the convicts rights – as was only way to get them to work – Joke: ‘pretend to pay us, so we pretend to work’
  1. Equal opportunity for all
    1. I have an issue with this – it is equal outcome for all, NOT equal opportunity (unless zero)
    2. The outcome is nobody can get ahead, so they have zero opportunity
      • You want to start a business? You can’t!
      • You want to buy a house? You can’t!
      • You want to save for yourself? Well, you don’t get paid…and the government can take all your savings anyway
  1. Economic activity and productions are planned by central planning
    1. There is no feedback system here – so no recourse for when things go wrong
      • State gets it wrong – tough luck
    2. Free market gets it wrong – that person goes out of business and someone else prospers
      • New Coke – That was a decision that was corrected quickly due to feedback from the market
    3. Forced Labour
      • Uzbekistan – Cotton industry – Millions of people a year are forced to work on cotton fields – Doctors, teachers, businessmen
      • Not just adults – Children aged 11-15 in September – Forced to
    4. Price Controls = Mass starvation
      • Creates shortages as no incentives to create more
      • Example – you are a farmer – it costs you $10 to produce a bag of apples, BUT the Government will only allow you to sell the bag for $5… will you continue to work for a $5 loss?
John Oliver – Venezuela
  1. No facts – Funny guy, but he kept saying “if only”, “If only” the oil prices kept going up, “if only” Chávez had stayed alive…
  2. He forgot one “if” – if only they hadn’t destroyed the most productive oil company through having the government take control
  3. ‘Epic mismanagement’ – that is inevitable in a socialist society – free market isn’t
    • Give all the power to the top to control – the workers don’t make decisions
  1. Socialism leads to lower inequality
    • Sadly, again not true
    • Creates higher inequality as power is centralised – no free market or ability to improve yourself
    • And at the same time – wealth plummets and poverty sets in for the masses.
    • No middle classes here – simply poverty and ultra-wealthy (the State)
Example: Let’s go through the list of countries with Socialist ruling parties – 15 in total.
 Country GDP per capita Gini coefficient Less than $2 per day Top 10%
Angola 42.7 30%
Bolivia $2,934 45.8 7% 93.9
Congo $669 40.2 77%
Ecuador $3,720 46.5 4% 35.2
El Salvador $4,622 46.9 2% 38.6
Ethiopia $720 33.2 34% 6.6
Guinea-Bissau $738 50.7 67% 19
Greece $15,558 35.8 10.2
Mozambique $1,113 45.6 69% 18.8
Nepal 32.8 15% 15.8
Nicaragua $1,947 46.6 11% 31
Portugal $17,089 35.6 15
Tanzania $490 37.8 47% 9.2
Uruguay $10,285 41.7 0.1% 11.8
Venezuela $7,232 46.9 10% 18.8
Australia $27,193 32

12.5
*Data sourced from the World Bank via Wikipedia. Greece and Portugal – those stats are from 2015. Government was only elected in 2015, so give it some time Heaven and hell I’m not religious, but I do believe in Heaven and hell – Look at some parts of the world – they are living in hell! Examples of Socialism/Communism implemented faithfully – Starvations and killings
  1. China – Mao – 61 million – Starvation lead to cannibalism in both
  2. Russia – 45 million
  3. North Korea – Forced labour camps – mass starvation
  4. Germany – Hitler was a socialist – Nazi = National Socialist German Workers’ Party
    • Unemployed promised work and bread
  5. Today: Venezuela – population has lost average of 19kg in weight per individual since Maduro took over
  6. Capitalism – I guess is responsible for deaths as well – Obesity and smoking – but it’s the individuals choice at least!
    • Unless you are Bernie Sanders – ‘bread lines are a good thing’
The unfortunate thing   It does work in the short term (social proof) – but then stagnates as there is no incentive for further growth
  1. Venezuela – Poverty halved in the beginning due to taking all of privately owned business and giving it away – how did that work out?
  2. Oil rich having largest reserves in the world – but no means of getting it out of the ground – They have to import it
  3. Price controls and creating more money – that is what happens when State gets their hands-on the money supplyPrint, print, print = Hyperinflation and no ability to transact!
Socialists are Hypocrites!
  1. Stating that there is “discrimination”, but now they engage in it with socially engineered policies which discriminates against those who have something
  2. To get the outcomes they want, they discriminate against the rich through taxes
Socialism works from manipulating the masses – take from those who, unfortunately, are the productive ones (hence why they have the wealth in the first place) Two fish
  1. Sail fish – fastest fish – over 100km per hour – if in a pond that dries up, it will die
  2. Sea Horse – Less than 1/100th of a kilometre per hour in a large ocean prospers
  3. Destroys society – nobody can swim faster than the pack
Compared to Capitalism Capitalism affords economic freedom, consumer choice, and economic growth.
  1. Socialism, which is an economy controlled by the state and planned by a central planning authority, provides for a greater social welfare …
  2. As Thatcher famously and correctly said, “The problem with socialism is that you eventually run out of other people’s money.”
Thanks for listening… Next Friday’s episode – we’ll look at why free markets lead to a better life for you and how to build wealth within that system.

Say What Wednesdays: Swiping left and swiping right – living in a cashless society

Say What Wednesdays Swiping left and swiping right - living in a cashless society Welcome to Say What Wednesday! Today’s question comes from Katherine. “I heard a story on Hack the other day about Sweden becoming a cashless society – Can you explain this further? Is...

Can shares be leveraged as part of a property purchase?

Welcome to Finance and Fury, The Say What Wednesday Edition I would like to start by saying a big thank you for the knowledge you have passed onto myself and the community. My question lies around equity, if you have a considerable amount of money in shares, say 200k,...

Furious Fridays: Why must Governments and Central Banks force inflation on a Nation?

Welcome to Finance and Fury, the Furious Friday edition! I’ve been thinking a lot about what we are taught in economics, the basic ‘101’. Specifically, if you print a lot of money you get hyper-inflation. There are plenty of stories to back this up Germany Weimar...

Can investing using environmental, social and governance scores help to outperform the market?

Welcome to Finance and Fury - Is ESG investing the way of the future and good for your portfolio? Within the last few years, large publicly listed companies and investment managers investment are really paying attention to what is known as an ESG score – which stands...

The Great Debate! Managed Funds vs ETFs vs LICs…what they are, how they work and what’s best to invest in

Episode 9 The Great Debate! Managed Funds vs ETFs vs LICs...what they are, how they work and what's best to invest in. The debate! (it’s not time for a math debate, there will be numbers) Please do listen to our episode “Pay yourself” first The choices are: Managed...

A simple way to outperform the market – follow the Fed!

Welcome to Finance and Fury. This episode – be looking at one of the simplest ways to potentially generate alpha and outperform the broader market It’s been a decade since financial markets have become increasingly centrally-planned by central banks and with this -...

Pay more in taxes, electricity prices and costs of goods, or the climate will change!

Welcome to Finance and Fury, The Furious Friday edition Today – cover Resource control over an economy/society – Energy, food, water – Many SDGs – 7, 13, 15, 16 – Mainly focus on 7 and 13 – this is the core of most SDGs – justifications for them anyway Goal 13:...

The magic trick to paying off a mortgage in a shorter time frame

Episode 24 The magic trick to paying off a mortgage in a shorter time frame In this episode we discuss the magic trick to paying off a mortgage in a shorter time frame, to save thousands in interest costs. The trick is that there is no magic trick - plain and simple....

Introducing the great reset and what is on the agenda of the World Economic Forum.

Welcome to Finance and Fury, the Furious Friday edition. I hope you are all going well. This episode is all about “the great reset”. It sounds like some weird, out there agenda, but it is carried out by some of the most influential organisations on earth. I want to...

What would you do if you won the lotto?

Welcome to Finance and Fury Have you ever thought about What would you do if you won the lotto? What would you do with it? This depends on many things: the size, type of lifestyle, and how much you value money now. Today: Talk about how winners end up with no money...

Pin It on Pinterest

Share This