Name: "Most People Have No Idea What Is Coming”
Uploaded: 2025-08-30T18:02:52.000Z
Duration: 16 min 33 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

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His deal with Intel is going to profoundly change the entire course of the US economy.

At first glance, it seems like a great deal for the American people.

Finally, the American people are getting something for their money.

Because the government has received a 10 percent stake in Intel since Biden has awarded Intel about 8 billion dollars through Chips and Science Act.

It might seem like Donald Trump has assigned a good deal with Intel because for decades, the American government has helped many corporations with tax breaks, loans, and grants, and now the American government is getting something in return.

However, if you dig into this deal, it is actually a disaster for the US economy.

And if you think that I am exaggerating, let me explain.

That deal also gives an option to the US government.

The US government will be able to buy another 5 percent stake in the company at 20 dollars per share.

And the rationale behind this deal is that Intel is the only company in America that both designs and manufactures chips, so it's a strategic interest of the United States to make sure that the US government has a grip over this company.

However, it is going to lead to a disaster.

Whenever the government buys a company or has a stake in a business, that business is going to become inefficient because there is a conflict of interest.

If Intel, for example, wants to become more efficient, it might need to fire people.

But firing people, politically unpopular.

So that will lead the company to be inefficient every single time whenever any government across the globe buys any corporation.

Secondly, it makes or creates unfair competition.

In a free market, whoever builds the product at the best possible price, with the best possible technology, should actually win the market.

But in this case, when government owns or has a stake in a particular company, then that company will be treated differently.

The government might provide it with grants.

The government might provide it with government-backed loans.

The government might provide it with some kind of help because the government has a stake in that business, which is going to create unfair competition.

It will also prevent innovation in the long run. 20 years ago, Intel was the largest and the most successful chip manufacturing company in the world.

Today, it is overtaken by Nvidia and AMD.

Because the free market decided that AMD or Nvidia's chips and AMD's chips are far better than Intel.

And that's why Intel is going down and Nvidia is the most valuable company in the world.

Over the last 40 years, China has made a huge progress.

China has created some of the most valuable and most successful companies in the world.

But have you heard of that company 20 years ago?

Most of the successful Chinese corporations are heavily being backed by the Chinese government, which is why they are so successful.

In the long run, all of these corporations turn into a disaster.

Because the government starts backing a certain company because it has a stake in that company or because there are different reasons why you want that company to be successful.

In the short run, it is going to quickly expand and take market share because there is money being thrown into that business.

However, in the long run, it will simply turn into one giant inefficient business that if you pull out the plaque, which is the government money, this company is going to disappear.

This company will find out that they have been misusing that money, they have not been as efficient as possible because they don't have to be accountable.

If it's a privately owned business, the CEO of that business and the management of that shareholders, which is why they are trying to maximize their efficiency and be as profitable as possible.

But if it's a state-owned or state-backed corporation, they don't have that problem, which is why if you stop sponsoring them, if you stop funding them, they will find out that they cannot compete in the free market.

China spent 300 billion dollars on Evergrande.

Evergrande was the largest real estate company in the world because it received 300 billion dollars from the Chinese company or the Chinese government.

In the short run, it quickly expanded and became the second world's largest developer in China and the most successful real estate company in the world.

However, in 2021, when we realize that most of that money was inefficient and if the government funding will stop to Evergrande, the Evergrande will have to default on their loans.

So in 2021, the company files for bankruptcy.

When you have unlimited money that is coming from the government, you can expand very quickly, but the moment that money stops flowing into you, what is going to happen to the company?

And you might think that this is just one case, but if you look at every single case when the government or any government, not just the United States or China, has backed and owned a certain corporation, that corporation have become very inefficient.

Tesla is the most successful EV company in the world, but if you look at their numbers, BYD has already exceeded Tesla.

For example, in 2024, BYD has sold 4.3 million cars, which is far more than Tesla that has sold 1.8 million cars.

And that's because BYD is heavily being backed by the Chinese government.

Yes, Tesla is also backed by the US government to a certain extent, but the comparison is nowhere close.

Without government money, BYD would not be what it is today.

Tesla has benefited from the US government, but that's absolutely nothing compared to BYD.

So BYD is supposed to be much more successful than Tesla.

But if you look at their revenue, BYD made slightly more money than Tesla.

Tesla made 97 billion dollars, BYD 107 billion dollars.

So how is it possible that BYD sells 2.5 times more cars than Tesla and yet their revenue is very similar, almost very similar.

But if you look at net profit, things get way worse.

Tesla made 97 billion dollars, 7 billion dollars of net profit, while BYD made 5.6 billion dollars, even though that BYD sold 2.5 times more cars.

So Tesla is much more profitable because Tesla is accountable to its shareholders.

Tesla must make sure that they are as efficient as possible and they are building or using the money and allocating the capital as efficiently as possible.

BYD does not have that problem, BYD can simply continue selling their cars at a loss.

But what happens when you pull out the plaque?

What happens when the government money dries up?

What happens when the government stops supporting you?

Suddenly you realize that your business is very inefficient and if you want to continue being in business and do not file for bankruptcy, you have to raise your prices.

Then you raise your prices, you suddenly realize that you cannot compete with Tesla and you start going out of business.

And that's why, in the short run, government backing companies might actually have an edge.

But in the long run, only private companies dominate any industry.

Let me give you an example from the United States.

So in 1970, the US government decides that it's going to nationalize the postal service.

What happened at the end of the day is that USPS simply became a giant corporation that is extremely inefficient.

And last year, USPS has reported a loss of 9.4 billion dollars.

So this company is costing the government almost 10 billion dollars.

Now the real question is that, why is that happening?

Why can't they turn USPS into at least self-funded corporation?

I am not saying that USPS should be a profitable business.

All I am saying is that maybe USPS should not be making a profit, but at least it must break even.

That is not happening for 3 reasons that we have discussed earlier.

The business is inefficient due to conflict of interest.

Firing people in USPS is extremely unpopular because it's politically unpopular.

But maybe as a business, you must do that because it is costing you so much money and that is not the best use of capital.

And it happens in every single part of the business.

FedEx is competing with USPS to a certain extent, but there are services that FedEx cannot provide because FedEx is accountable to the shareholders, while USPS does not have to be profitable.

There is unlimited money that is coming from the government.

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"Most People Have No Idea What Is Coming”

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