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Chapter 1: What does it mean to be a trillionaire?
Okay, welcome back to Gary's Economics. Today we are going to explain everything you need to know about the world's first trillionaire. Okay, so this week, the world got its first trillionaire. It is Elon Musk. Congratulations to Elon Musk. We're going to explain to you everything that means today. The first thing is what is a trillionaire? What is a trillion?
We've had this long running problem in explaining inequality with the fact that like a billion dollars is like so much money that it's like impossible to conceptualize. And people don't understand the difference between a million, which is like quite a lot of money, but like amount that
Nowadays a lot of ordinary people will accumulate especially in countries like the UK the US and a billion which is like Oh my god, like it's insane so much money I think the best the best example we've had to explain the difference between a million and a billion up till now is a million minutes is just under two years and a billion minutes is just under 2000 years.
So a million minutes ago was a couple of years ago. A billion minutes ago was like Roman Empire. The problem you have is if you try to extend that to a trillion, then you say like a trillion minutes is just under two million years. And then once again, you're back with the problem of this number is so big that the human brain can't comprehend it. So we probably have to go down to seconds.
A million seconds is a week and a half. A billion seconds is 32 years, and a trillion seconds is 32,000 years. Basically, a trillion is just an unbelievably stupidly enormous number, and it's really hard to just understand how big it is.
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Chapter 2: What assets does Elon Musk own that contribute to his wealth?
I think one of the best ways to understand the wealth of the super rich is to look at the passive income that they receive from the ownership of that wealth. So we often use the statistic that if you look at somebody who's worth a billion dollars or a billion pounds at a rate of 5%, they will make something like a million dollars or a million pounds a week.
If we extend that to a trillion, then we see if somebody's worth a trillion dollars, then they will make every year $50 billion. They'll make a billion dollars a week. I think probably the one that's maybe easiest to understand is that a trillionaire making passive income at a rate of 5% will make $137 million every day, $5.7 million every hour. It's about $100,000 a minute, $1,600 a second.
So that is the passive income that Elon Musk will be making every single day, every single second. He'll be making about $1,600 every single minute. He'll be making about $100,000 passive income, not from his work, just from the assets that he owns without even getting out of bed. So that's the number, the number trillion itself. It's ungodly large. It's absolutely enormous.
And the second thing is this thing people have been speaking about quite a lot this week, which is that one trillion dollars is assets that Elon Musk owns. It is not money in a bank. So some people have been saying, oh, well, it doesn't matter because it's not like money in a bank.
The truth is, it's probably much more dangerous for somebody like Elon Musk to own real assets, which is like real physical infrastructure out there in the world. things that you need, things that your government need, things that your country needs, rather than just money in a bank.
In this specific case, Elon Musk is a trillionaire because he owns, well, he already owned Twitter and Tesla, but he also owns about half of SpaceX, which sends rockets into space. He owns a ton of satellites. That was floated on the stock market last week and basically traders think that this company is worth $2 trillion and Elon Musk owns about half of it.
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Chapter 3: Should the public be concerned about Elon Musk's wealth?
So just his ownership in SpaceX itself is worth nearly a trillion dollars. I'm not an expert on SpaceX and obviously there's going to be some speculation about whether SpaceX really is worth a trillion dollars.
When somebody owns assets that are worth a trillion dollars, if somebody owns a company that's worth a trillion dollars, that is either because it is making an enormous amount of profit or traders think that in the future it will make an enormous amount of profit. So this is it basically.
Elon Musk, like all billionaires, like all trillionaires, even like all millionaires, he owns real physical infrastructure. It is physical infrastructure which Economists and traders, a lot of them believe you're going to need your country's going to need. He's going to own the satellites that's going to be used in things like weather forecasting and the military.
Your government's going to need it. And when you need it, you're going to have to pay Elon Musk to use those things. And that is why Elon Musk is worth a trillion dollars. I think one of the most interesting things about Elon Musk suddenly becoming a trillionaire is this happened. I'm filming this on the 16th of June. This happened less than a week ago and it was quite sudden.
Suddenly Elon Musk is a trillionaire and Elon Musk didn't actually do anything on the day last week when he became a trillionaire. What happened was because he suddenly sold some stocks in SpaceX and he did that. on the stock markets, we suddenly were able to get like a valuation of what SpaceX was worth until he tried to sell some shares of SpaceX last week.
We didn't know how much SpaceX was worth. And once we have sort of asked the markets, asked the traders to determine how much SpaceX is worth, We can see that it's probably worth something like two trillion dollars.
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Chapter 4: How could the rise of trillionaires affect future generations?
That makes Elon Musk a trillionaire. The fact is, Elon Musk already owned half of SpaceX before last week. He owned it last year. So actually, Elon Musk has probably been a trillionaire for quite some time. And we only just really realised last week. And I think the thing you need to recognise about this is I think what this shows is how incredibly naive we are being as a society about
the danger potentially posed by these trillionaires because Elon Musk has been a trillionaire for some time and somehow we only realized it last week. I think this really highlights a little bit of the absurdity that we have at the moment, which is at the moment we are simply not accurately calculating how rich the rich are. You see this all the time.
If you look at things like the Sunday Times Rich List in this country where you have things like suddenly Rishi Sunak, the former UK prime minister, he's famous now, so he appears on the rich list. What we people who have been looking at inequality for some time have known for a long time is that we are not really making much serious effort to track how rich the rich are.
And this is another really good example of that. Elon Musk has been a trillionaire for some time and suddenly we've realised that. So the first thing you can learn from this is that we as a society are not really making any serious attempt to measure how rich the rich are or how fast their wealth is growing.
all right so my next question here is should you be worried just very coincidentally somebody um pointed something out to me in the first video i ever shot on this channel so um i started this channel in june 2020 so it's probably something like the six year anniversary of uh this channel perhaps maybe today cheers to gary's economics and all of you watchers
Somebody pointed out something in the first ever video, and I'm going to just show you a little clip of the first video we ever put out on the channel. This is a little clip about the enormous amount of money that the UK government gave out during COVID. This was right at the beginning of COVID. And at that time, the total amount of money given out was about 300 billion pounds.
It ended up being more than a trillion.
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Chapter 5: Is society facing a return to feudalism due to wealth concentration?
But there's one little clip, which I think was really interesting in the context of Elon Musk becoming a trillionaire.
£300 billion is an enormous amount of money. It's £4,500 for every single man, woman and child in the country. It's more than three times the net worth of Jeff Bezos, the world's richest man.
So this was sent to me this week that just six years ago when I started this channel I was talking about this unbelievable enormous amount of money 300 billion pounds and at the time that was three times the worth of the world's richest man who was at the time Jeff Bezos and now just six years later we are in a situation where that is
less than a third of the wealth of who is now the world's richest man Elon Musk so what this shows you is that in just six years we've gone from 300 billion was three times the wealth of the world's richest man to like the world's richest man is three times richer than 300 billion pounds like a 9x increase it's scary basically but I think what this shows you and the reason I wanted to cover it today
is I think it really shows you that the things that I talk about on this channel, and I've been really focusing for a long time on just some simple concepts, which is if you allow there to exist a relatively almost completely untaxed billionaire class, just through the powers of compound interest, their wealth will grow incredibly
quickly and they will start to basically gobble up all of the wealth of the rest of society and that's why you will lose your wealth and I think this week the week that we have sort of officially established the world's first trillionaire is just a great moment to sort of sit back and realize like that these things that I've been saying and these things that I've been predicting and in that video itself I make a prediction that we're going to see enormous rapid increases in the wealth of the richest people in the world
are happening and they are true and and that in a sense that they were always inevitable to happen because you know if we go back to those numbers you know we're talking about somebody who's worth a trillion dollars is going to be making 137 million dollars every day once you know that simple fact that a trillion dollars is going to give you 137 million dollars a day passive income
And you have any understanding of like how compound growth works or how exponential growth works. And it's not just Elon Musk, other billionaires, they are going to use this enormous passive income to buy more assets from ordinary people, from the rest of society.
Those assets will give them more passive income and they will use that increased passive income to buy more assets that those assets will give them more passive income. And I think it was very clear and it has been very clear really for as long as we have had an untaxed billionaire class.
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Chapter 6: What historical parallels can be drawn with colonialism and the Industrial Revolution?
You know, that's a rate of about 40 percent annual growth in 2020. you know, Western economies are growing about 1%. So I think what we can see just in this one simple news story, we should be able to see like a relatively clear vision of the future, which is that Western economies grow at 1%.
And the growth of specifically Elon Musk is perhaps bigger than other billionaires, obviously, because he's become the world's richest man. But, you know, if he's going at 40%, other billionaires are growing at, say, 10, 20% in economies that are growing 1%.
what you will see, what we are seeing is just basically the very aggressive gobbling up and sucking in an exponential accelerating rate of all of the wealth. And what you really need to understand is this is not like an an abstract thing that happens in a world that you are not in. That includes the gobbling up of your wealth. So when you see Elon Musk
becoming a trillionaire what I want you to see in that is the homelessness of your kids and your grandkids this is like the inevitable logical consequence of the incredibly rapid untaxed wealth growth of not just Elon Musk but the entire billionaire class is it is simply impossible for you and your family and your community and your kids
to compete for asset ownership in a world where there are men who are accumulating wealth at a rate of $137 million a day in a way that is exponentially growing. So, I mean, that is what is happening and that is what will happen, basically. You know, 137 million dollars a day. There's essentially nothing he can do with that. It starts to take on its own, basically, its own physics. Once you have
a wealth of that size, which is growing at an exponential rate of 40% a year, you don't need to be a mass genius to recognize he will own everything. He will own your house. He will own your country. He will own your government.
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Chapter 7: How does wealth inequality impact asset ownership across society?
He will own the media. And obviously, it's no coincidence that we have seen Elon Musk move into significant ownership of the media. That's not just Elon Musk. Jeff Bezos has bought the Washington Post. Elon Musk, of course, has bought Twitter. He will increasingly influence your government.
You know, we all saw Elon Musk make a pretty aggressive attempt to take control of American government policy. He's becoming increasingly influential in British politics, European politics. He's a big donor of political movements and political parties. But I don't want to like overemphasize because I think other people will be speaking about the influence that the billionaire class
definitely is having and will have on politics and media and the political conversation what i really want to focus on because i think this is what is really not being spoken about enough on the news is just quite simply what this means for asset ownership um once you have this class with this unbelievably enormous amount and not only is it enormous but it's exponentially growing of like daily income daily passive income daily compounding interest um
it's just like really like blatantly obvious that what they will do is buy more and more and more assets and what that will do is push asset prices further and further and further up and what that will do over time is squeeze other members of society away from owning assets. I think probably the correctest way to understand the role that these super billionaires or in this case a trillionaire
Elon Musk, Jeff Bezos. And I want you to recognize these guys are just sort of the most visible examples. We're seeing hundreds and hundreds and hundreds of billionaires across the world and centi-millionaires. The numbers of these people are enormously growing. The best way to visualize these people is basically like black holes in your economy in the sense of these enormous sources
of gravity that really cannot help but to just suck everything around them in. And if you have that amount of passive income, there is really nothing you can do but buy all of the assets in the entire world and squeeze everybody out of asset ownership.
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Chapter 8: What actions can individuals take to address wealth inequality?
So when you see that $1 trillion, And when you see that number growing, what I want you to see is the loss of your family home, the loss of assets of your kids, the loss of your government assets, the closure of your welfare state, all of the things that we have seen over the last 20 years as this billionaire class has grown.
I want you to be able to look into the future and see what the consequence of that will be in the future. The aggressive, unbelievably rapid accumulation of assets by the billionaire class is not even just the cause of, it is the same thing as the loss of your family's assets, the loss of your government's assets. Our economies are not growing rapidly.
Their wealth is growing rapidly because they are taking assets from you.
okay so you know this is this is out of the bag really I think this like trillionaire thing I'd like you to talk about it and push it around I know it's incredibly depressing because when you see it this is like this is like the end really this is like you know you're here and you you're watching you know the nuclear bombs flying and you're seeing the mushroom clouds going up and you're knowing like okay that's it like you know we're we're gonna poison the atmosphere and it's gonna be a nuclear fallout like when you see
Elon Musk's trillion dollars. I want you to understand this is the end of the welfare state. This is the end of this kind of golden period of history, in the West at least, these sort of 70 years we've had of good living standards for ordinary working people, ordinary working people being able to afford housing and education and healthcare. When you see Elon Musk, one trillion dollars.
I want you to understand that that is what is written on the gravestones of your kids and your community.
We are going to go back to the world that, you know, our great grandparents and our great great grandparents lived in of extreme inequality, extreme poverty of, you know, just really extremely terrible living conditions because these two things are just not logically, consistently possible at the same time.
we must make a choice as a society between one of two things either we accept that we have an untaxed billionaire class and we will own nothing and our kids will be poor or we tax the very rich these are basically only two options and it's clear what we're doing at the moment so I just want you to understand this will continue this is the end if we don't stop it but of course we can
And if you do want to stop it, I think it's pretty clear what you and we need to do. You need to support, obviously, tax wealth, not work movement. And this is what the battle is. And I think when I see this trillionaire story, what that says to me is it's very important that
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