hi this is mike maloney with adam taggart once again adam how are you doing i'm doing just great mike happy to be back for another week with you great uh you know i've been noticing signs up at restaurants and i've been talking with restaurant owners and they're having the same problem that i've been having on my little farm we just can't get anybody to work uh when people do work there they quit at the drop of a hat now people just aren't keeping their jobs and i'm seeing


uh all of these uh people uh that are working at restaurants being very demoralized they're they're worn out they work every day they're working extra hours to cover all of the people that have quit so we've got an article about that and i want to know your take on this and then i will do some more complaining in just a little while sure well let's let's uh let's reference here this article that you mentioned uh so our story of the day folks and by the way we've got a lot of


material to go through in this week's video so stick around especially with a an excellent meme of the day right at the end so make sure you stick around for that one but yeah this week's story of the day comes to us from the foundation for economic education it's titled california restaurant goes viral after apologizing to customers and roasting the government and mike this is exactly what you were just talking about there um this uh small business called taco loco put this sign up on their doors it says


to our loyal customers sadly due to government and state handouts no one wants to work anymore therefore we are short staffed please be patient with our staff that did choose to come to work today to serve you thank you for your business we sincerely appreciate it you know this poor small business is just emblematic of what you were talking about mike um uh i think back to charlie munger's famous quote uh for those that don't know charlie munger he's warren buffett's long-time right-hand man and he says you show me


the incentive and i'll show you the outcome and i think this is a perfect example of that most folks don't realize this but there are still 14 million americans on some for some form of unemployment insurance most of that still extraordinary support coming from the covid pandemic and when you pay people enough money that staying at home is more preferable than going to work particularly if you're going to work you know a highest intensity back-breaking you know low-paying job people are going to choose to stay at


home and collect those checks so we have created a pandemic here mike of people that have a mal incentive to not work and that's you know rippling through the economy you've got tons and tons of available job openings that can't be filled you've got restaurants that are not able to take advantage of this resumption of demand from people trying to go back to their regular lives and you're getting the employees that are going to work are getting burned out and demoralized so it's pretty bad yeah you know in this


article it does say that in california an unemployed household can earn the equivalent of 109 000 annually from welfare alone uh so uh there is you know when the uh pandemic started um a co-worker told me that his brother-in-law who was a long-haul trucker uh quit and is being paid more to stay at home than the grueling hours that he used to put in driving all over the country and he was much happier being paid to stay at home and be with the kids and all of that kind of stuff than being out on the road so he was


going to take advantage of it for as long as it can possibly last and i'm seeing this all over i mean i i talk with you know i was at the supermarket a few days ago last week and i spent 50 minutes in the checkout line trying to get to the cash register and i saw uh you know i saw the manager i saw these extra cashiers just standing around doing nothing and i said look i will i'll pay them 20 bucks each if they will open up and the manager said he can't do that that he would be breaking the law and he


could lose his job they have to take a certain amount of break minutes they all wanted these cashiers wanted to open up more checkout counters and and uh and get rid of these lines this uh huge backup that they had with uh people waiting with their shopping carts going way back into the shopping aisles so that people couldn't even uh navigate the shopping aisles and yeah he said that he could lose his job if he did that and so they had to take their breaks but he also told me that he had uh you know he was advertising for work


for employees everywhere and nobody is answering any of the ads and i'm getting the same story from all of the restaurant owners uh there's a restaurant here with a big sign in the window that says servers and mixologists wanted so does it remember when uh sanitation workers used to be garbage men now mixologists used to be bartenders so he's trying to get bartenders and uh and and servers to work and you know we only had like i don't know i had um we've got a lot of hurricane damage


that we're cleaning up and we'll be rebuilding some structures up on my little farm and they we had like nine nine employees and one day six of them got together and quit because we do everything by the book we have to be uh ver walk the real straight narrow when it comes to legality and in puerto rico a business files a tax return every month and when the workers realized that they weren't being paid under the table and they were going to lose their benefits because they they also there's


a high usage of food stamps uh basically you know they just call them coupons here but it's a a it looks like a credit card now and you just um swipe that thing and then i see somebody buying like 500 worth of groceries they swipe this card and then they open their wallet and they hand the guy 20 bucks cash for the things the cigarettes and alcohol and there's a couple of items that the government doesn't pay for and uh and it's you know i live in sort of a touristy area it's a very


mixed community but even here there's a tremendous amount it's probably as much as 50 of the time that i'm behind somebody i can see the the cash registers screen they've got them facing not the cashier but the person that is behind you in line and so whoever is behind you gets to see everything that's happening on uh your uh bill and i see this uh this discount that they all get and then they pay cash and you you know as i see people with 20 500 worth of groceries pay for it with a 20


bill and get changed back the rest is on the taxpayer well this is this is crazy and mike this is a classic example of why you don't want the government coming up with solutions uh oftentimes to the problems that it created um you and i talked at the end of uh after we turned the camera off last week about uh you know the unintended consequences that almost inevitably arise when the government tries to impose a solution on a system and we talked about um a really interesting example that i want to


mention here super briefly just before i do though i do want to let folks know that this isn't just mike and i slinging opinions here i want to put up a chart really briefly here that shows empirically that the um those 14 million households i mentioned that are still on uh some ford of unemployment support um the federal pandemic extraordinary employment support is set to expire on labor day but a number of u.s states about half of them have opted out of the program early and if you look at this chart it shows you that


the unemployment rate is notably lower in the states that opted out early versus the states that are still in it so it's not just our opinion the the empirical data is actually showing that if you remove these incentives then people are motivated to go back and actually get those jobs um so on to the unintended consequences example mike you and i were talking about back in the 70s when we had the oil embargo and gas prices shot to the roof you remembered a time where you said that to manage the long lines at the gas


station you could only go get gas on a certain day if your license plate ended in an even or odd number right yeah it was a huge inconvenience for people and if if somebody forgot to top off their tank on their day then they were really in trouble and if you were traveling on on a long trip driving los angeles to san francisco you had to plan your trip around what day you could drive and what day you couldn't yeah you're kind of out of luck but you could almost say all right well i understand what the authorities were


trying to do they're trying to ration limited gas supplies a similar program was tried in mexico uh years ago where they were trying to curtail both congestion on the roadways and emissions they had a lot of smog problems and so they implemented the exact same thing which is you could drive your car to work uh you know on on a monday if you were in an even number and tuesday if you were an odd number and it alternated after that so what happened was they were providing a male incentive to folks to go out


and buy a second car that had a license plate that was the opposite of their other car right so they now had two cars one with an even license plate one with an odd license plate so you had twice as many cars on the road which actually increased the congestion problem but also because they were buying a second car to get around this rule they were buying these old beater cars that actually had really poor emissions standards and so they were actually increasing the admissions problem at the same time


it's just classic examples where the government comes up with a uniform solution tries to apply it to everybody and not thinking through that they're providing all sorts of male and misincentives for people to try to get around the solution that they're putting in place yeah there's always unintended consequences when you don't allow the free market to make these choices and when it's uh somebody's you know one person's bright idea well the only thing i'll add on to that


is is one last image here before we move on to the the tweet of the day um this is my favorite demotivational poster um and uh it says something akin to uh uh government um if you hate the problems we create just where do you get a load of our solutions right as you and i talk about mike here when the government tries to get in the way the free market in most cases it just creates a bigger mess than was there in the first place yes absolutely all right well moving on to the tweet of the day um inflation is definitely now


is now definitely crept into the mainstream mindset and uh today's tweet of the day uh is a tweet from pomp um and he shows here that uh searches for inflation or hashtag inflation um is now trending in the united states uh when he posted uh this update there were already over 6 000 tweets tagged with the inflation term so um this uh tbd whether it's still going to be transitory or not but it seems like more and more people are certainly paying attention and uh what do you take from all this tweet


volume mike uh i think they're absolutely right i was just watching a video of john williams of shadow government statistics and i think everybody should go to his website take a look at it and if some if people want to sign up for a year and support what he's doing that's good because he sort of haunts the government and comes up with the calculations like for instance the inflation calculation he uses the original metrics before they started doing all of the hedonic adjustment replacement


and uh and substitutions that they are doing and it's the inflation rate now is a lot higher than the 5.4 percent that the government is telling us it is i just looked up you know i just looked up a product that i buy like about once a year and suddenly it's up about 50 from last year it's it's an leak when i go to the supermarket i'm seeing meats about 20 over where they were last year uh you know luckily i've been sort of able to refrain from buying a lot of lumber i'm waiting for the lumber prices


to come back down but yeah inflation uh should be on everybody's minds and they have to figure out the best way to protect themselves from it because one of the problems with inflation uh you usually have to you know once uh your standard of living drops to make up for you know the difference between inflation and your salary you have to go and ask for a raise after a while you you typically only anybody that's getting a salary or on a payroll uh the raises don't automatically inflation adjust i don't


know if they do it for government workers they might government workers always get a little bit better than what the private individual gets so what's your take yeah well i think my only point on this is just you know inflation is a tax on the purchasing power of our currency and so if you're concerned about inflation which mike says you're rightly uh concerned to be and as as i am too um you really got to think of it as just an attack on the purchasing power of your currency and then the question


you'd ask yourself is how am i going to protect from that um obviously precious metals gold and silver very important tool for doing so it's one of the main reasons why mike and we all come on these videos every week to help remind people that but at the end of the day if you're concerned about inflation then you really need to be concerned about what am i going to do to make sure that the dollars i'm getting paid in or euros i'm getting paid in whatever your your main currency is how are you going


to protect them from further debasement yeah when they talk about the fed thinks it's transient inflation this is all the currency that they created for this pandemic starting to come back to haunt us they create a whole bunch of currency they hand it out they dilute the currency supply and it's the equivalent you know you've got a certain amount of purchasing power in your dollar if they dilute the currency supply and you have the same number of goods and services in this case we have a fewer number of goods and


services with a far greater amount of currency chasing after it it's the same thing as making the dollars smaller and smaller and smaller it has less purchasing power because the federal reserve and the banking system are cutting the currency supply up into finer and finer pieces each piece cannot hold as much purchasing power uh when they do this and so this flash inflation was baked into the cake uh i still believe though that we're going to go through some whip saws here so we're going to see


just some sort of inflation inflation deflation stagflation in deflation it's all going to happen at once every inflation yeah yeah all right well let's move on to the chart of the day but before we do just a quick reminder folks if you are enjoying this conversation and you like these series please hit the like button on this video as well as the subscribe button if you haven't subscribed to this channel yet it's literally just right down there below the video player here that you're


watching all right so moving on to the chart of the day uh here we have a very important point being raised that i think is is really um underestimated or at least i think overly ignored in today's market which is that we have a really dangerous concentration of uh the market's total value uh happening in fewer and fewer stocks uh and so this tweet shows uh some charts that are comparing the s p 500 the performance of the s p 500 today versus what the s p 500 performance would be with just the top five companies removed


and you can see here that the index would be performing substantially lower if these top five five companies weren't really pulling it all along with them and the problem that we have with this concentration risk which by the way you see this type of concentration risk at the end of a market cycle where um more and more of the players begin to struggle and so the market's being carried forward by fewer and fewer participants so when you get down to the point where we are right now where we have


you know five main companies and these are the the the fangs uh facebook apple amazon uh microsoft and google um most people don't realize but but most index funds now or most mutual funds have exposure to these top five stocks they're they're in pretty much every allocation that's out there so that if these stocks begin to stumble pretty much absolutely everything they'll take absolutely everything down with them mike mike what's your thoughts here i am just noticing the acceleration of this


when i look at this chart you know i look back in in 2018 uh the spread between the uh these five comp the the s p and the top five uh tech companies uh was much smaller you know you go back to the beginning here this is a cumulative divergence but uh when you look at the spread it really takes off toward the end of 2019 and increases and increases and it seems to be uh diverging at a greater rate and the chart below verifies that from mid 2019 until uh mid uh that big steep slope that's where


these big stocks the five big tech stocks ran away with the total uh market capitalization and then you had one with the market cap and the earnings that you wanted to talk about didn't you adam i did yeah just very briefly i wanted to put it up here and show folks uh just how extreme things have become so you did mention mike it's sort of this acceleration that we've been seeing over the past you know five years or so um so if you're looking at this chart here it shows you that you know sort of the


historic average for the top five companies in the s p is probably around i don't know 10 12 or so but that zoomed up to 25 at the uh beginning of 2020 last year it's come down a little bit but it's still at 21 i mean it's higher than it has ever been at least in the past you know 50 years i um to mention to people here is this does sort of mark uh market peaks like you were saying the end of a cycle if you look at the bubble in 2000 just before the crash it was it hit that 18 level and we're way beyond that


right and like and like i said you know these stocks these five stocks increasingly are carrying the entire market and it's not like these are risk with stocks i mean if you look at levels of valuation you know these stocks are trading in most cases that sort of ridiculous price to earnings ratios um they're also increasingly getting called out by the governments of the world and including the us government for anti-trust concerns right so there's risk that they may get broken up uh you're increasingly seeing


consumer pushback on some of these companies you know either boycotts or the demonization of social media or whatnot so you know it's it's not like these stocks are you know utilities necessarily and super duper safe they've got a fair amount of risk baked into them already so you know we've got pretty much the entire market standing on the shoulders of just these five players and if they stumble again they can take the entire system down with them yeah okay so all right so yeah let's move on to uh the comment of


the day um and this i thought was a really interesting comment by steve buller he says he went to cuba for his honeymoon a few years ago when obama opened up travel it was wonderful beautiful and felt very safe even in the heart of havana the people were kind and very entrepreneurial by that i mean they all hustled to make a buck in a communist country where the average salary was 24 for us dollars per month at the time people who owned property could airbnb to americans like us for 24 a night taxis would charge 10 to drive


across town and high-end food was cheap for anyone with a dollar this is evidence of our strong currency and the follies of communism yes but also of individuals ingenuity and perseverance they've put up with a lot and have the right to be upset i wish we would take some lessons from it and let free market reign now mike in last video she did make some comments about cuba um what do you have to say to steve's comments here uh i just i he's just hit the nail right on the head you know we


started this with the government government meddling in employment and how hard it is uh to get the employment and you know uh when six of our nine workers got together one day and quit because they they realized we were reporting their income to the government and they could lose their coupons and their unemployment and everything else that they were getting they made the choice not to work so what this is saying is the government system doesn't work and wherever a black market breaks out a black market


is the free market made illegal that's all it is it's a great way to say it that's a great way to say it all right well look um as we wrap up here we're just about to get to the meme of the day um two quick reminders one if you have not yet gotten a copy of mike's free book make sure you go get a copy of that now that's at goldsover.com free book and is the absolute best resource for both explaining why gold and silver are one of the best protections for your wealth that you can buy


as well as explaining to you the best ways to go out there and purchase it and then secondly if you want to see me in the interviews that i do with top experts on uh currency finance economics et cetera go to wealthyon.com we had an excellent interview last week too by the way one with matt tybee uh the famous uh journalist who coined the term vampire squid for goldman sachs where he talks about how he is seeing an uncomfortable number of echoes of the excesses that led up to the 2008 crisis he's seeing those today


and we also had a great discussion with fed watcher axel merk on whether the fed is actually beginning to lose control of this system all right so now uh mike let's get to the meme of the day show us what you got it's pretty quick at this point i would feel safer if coronavirus held a press conference telling us how it's going to save us from the government i want to thank everybody for watching the video and thank you adam a pleasure as always mike