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Speaker 1: When the dollar breaks, assets you think are the safest

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Speaker 1: don't protect you. They fail first. And that's not a theory,

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Speaker 1: it's how every monetary system in history actually unravels. So

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Speaker 1: I want to show you how people actually lose wealth

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Speaker 1: in sovereign debt crisises, why so called safe assets turn

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Speaker 1: into traps, and why this time looks nothing like two

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Speaker 1: thousand and eight. Now. I've spent my career studying macro cycles,

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Speaker 1: monetary systems, and how wealth actually survives stress. And if

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Speaker 1: you stay till the end, I'll show you the one

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Speaker 1: mistake almost everyone makes right before things break. So let's

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Speaker 1: go all right, so jumping right in, here's why this

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Speaker 1: actually matters to you. Right. This isn't some abstract macro discussion.

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Speaker 1: This isn't about winning an argument on Twitter. This directly

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Speaker 1: affects your money. It affects your security and the options

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Speaker 1: that you're going to have over the next decade. And

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Speaker 1: most people think that the risk shows up like as

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Speaker 1: a sudden crash, Like one morning you wake up, the

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Speaker 1: dollar's gone, everything's on fire, and it's obvious what to do.

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Speaker 1: But historically that's not how this plays out out. The

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Speaker 1: real damage happens quietly over time, while people still feel safe.

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Speaker 1: Right now, we're in a sovereign debt environment. And that's

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Speaker 1: not an opinion, right, that's the math. The US federal

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Speaker 1: debt has passed thirty eight trillion dollars. The interest on

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Speaker 1: that debt is now one of the top three largest

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Speaker 1: line items in the federal budget. It's larger than the

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Speaker 1: national defense in some quarters. Now. Of course, the interest

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Speaker 1: has to be paid before anything else. So when people

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Speaker 1: say we're going to grow away out of it, where

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Speaker 1: the Fed's just going to handle it, that ignores how

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Speaker 1: these systems actually resolve themselves, because they don't resolve just

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Speaker 1: by default. They resolve by debasement. And debasement doesn't show

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Speaker 1: up as a headline event. It shows up as a

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Speaker 1: higher tax. It shows up as shrinking insurance coverage, declining services,

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Speaker 1: new rules, new fees, new friction. And that's the part

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Speaker 1: that most people completely miss because while everyone is watching

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Speaker 1: the dollar, they're not watching what's happening to the assets

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Speaker 1: they're hiding in. You see homes that look valuable on paper,

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Speaker 1: harder to ensure, savings that are in interest are losing

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Speaker 1: purchasing power. Assets that can't move, can't exit. They can't

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Speaker 1: defend themselves when the rules change, and the cost of misunderstanding.

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Speaker 1: This isn't short term volatility, it's long term damage. You

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Speaker 1: don't lose everything in a day, but you do lose

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Speaker 1: optionality slowly, and by the time you realize it, you're trapped. Okay,

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Speaker 1: so that's why this matters. But let's take a look

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Speaker 1: at sort of what I would call the official story.

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Speaker 1: The story most people are told is pretty straightforward. The

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Speaker 1: US dollar is the world's reserve currency. It's backed by

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Speaker 1: the largest economy on Earth. It's backed by the deepest

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Speaker 1: capital markets, the strongest military, and because of that, the

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Speaker 1: US has more room to maneuver than any country in history.

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Speaker 1: When debt gets high, the thinking goes that, you know,

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Speaker 1: we have options. We can grow away out of it.

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Speaker 1: We can manage inflation. The Federal Reserve can raise rates,

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Speaker 1: they can cut rates, they can expand the balance sheet,

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Speaker 1: they can contract it. If things get really unstable, then

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Speaker 1: money can flow into the dollar, not out of it.

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Speaker 1: And of course if inflation shows up, there are safe assets,

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Speaker 1: right real estate, gold, bitcoin, other hard assets things that

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Speaker 1: have worked before. Now, this framework didn't come out of nowhere.

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Speaker 1: It's grounded in history. Right after World War Two, the

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Speaker 1: US came out as the dominant industrial and financial power.

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Speaker 1: Brent Woods put the dollar at the center of the

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Speaker 1: global system, and even after we left the gold standard

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Speaker 1: in nineteen seventy one, the dollars stayed dominant because global trade,

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Speaker 1: oil markets, and the financial plumbing were all dollar denominated.

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Speaker 1: So when people say the dollar is not going to fail,

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Speaker 1: what they really mean is that the systems it survived

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Speaker 1: a lot. Right. It survived inflation in the seventies, right,

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Speaker 1: didn't kill it survived the tech bubble in two thousand,

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Speaker 1: the great financial crash like COVID didn't kill it. So

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Speaker 1: if you zoom out history, the logic seems pretty reasonable.

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Speaker 1: Smart people believe this story because parts of it are true.

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Speaker 1: Reserve currencies don't just collapse overnight. They don't just disappear,

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Speaker 1: and that's exactly why this framework feels so comfortable. But

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Speaker 1: this is where the problem actually starts. Okay, so there's

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Speaker 1: three cracks forming that break this story completely apart. And

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Speaker 1: these are not hypotheticals or predictions. These are things that

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Speaker 1: are already happening. So let's start with just crack number one,

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Speaker 1: which is enforcement now This is the most important one.

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Speaker 1: It's the one that most people probably have never thought of.

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Speaker 1: They completely ignore. Let's say, like real estate, for example. Right,

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Speaker 1: real Estate's not a self contained asset. It only works

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Speaker 1: if a whole chain of institutions work with it. You

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Speaker 1: need courts, police, fire protection, insurance, markets, permitting utilities. And

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Speaker 1: if any of that chain weakens, the asset weakens, right,

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Speaker 1: even if the price hasn't caught up yet. And this

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Speaker 1: isn't theoretical again, right, Like, just take a look at

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Speaker 1: what happened in California and the fires that we had

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Speaker 1: up in Pacific Palisades. Let's say that you had properties

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Speaker 1: that were worth millions of dollars on paper, prime real estate,

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Speaker 1: highly desirable zip codes. But then fire hits the state

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Speaker 1: and the city fire protection broke down, there was no water,

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Speaker 1: there wasn't enough manpower, and the entire area burned down.

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Speaker 1: Then insurance coverage disappeared or become prohibitively expensive, and then

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Speaker 1: after the damage, home owners can't even rebuild. Permits got delayed,

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Speaker 1: approvals got tied up. Regulation stack on top of more regulations,

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Speaker 1: so you end up in this situation where someone technically

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Speaker 1: owns a valuable asset, but you can't ensure it, you

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Speaker 1: can't rebuild it, and you can't realistically use it. So

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Speaker 1: at that point, what do you actually own? This is

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Speaker 1: the enforcement problem. Ownership isn't just a deed. Ownership is

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Speaker 1: the ability to use, defend, and restore an asset when

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Speaker 1: something goes wrong like this. Now, real estate only feels

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Speaker 1: like a hard asset because the state has historically been

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Speaker 1: strong enough to enforce and support it. But in a

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Speaker 1: sovereign debt crisis, in a sovereign debt environment, that same

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Speaker 1: state is under pressure. Right, the budgets are tight. Services

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Speaker 1: degrade extraction increases not because anybody woke up evil, but

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Speaker 1: because the math forces it. And when that happens, assets

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Speaker 1: that are fixed, in place and dependent on enforcement become

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Speaker 1: the easiest targets. So that's crack number one. Number two

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Speaker 1: is the difference between nominal value and real value. You see,

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Speaker 1: most people look at prices only in dollars, and of

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Speaker 1: course in dollar terms, assets look like they've done great,

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Speaker 1: but dollars themselves they've been changing. So to understand what's

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Speaker 1: actually happening, you have to change the measuring stick. Let

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Speaker 1: me give you two examples. So first Let's look at stocks.

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Speaker 1: If you look at say the S and P five hundred,

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Speaker 1: the benchmark, and you price it in dollars since around

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Speaker 1: the year two thousand, it looks like a massive success story.

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Speaker 1: But if you price the S and P five hundred

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Speaker 1: not in dollars, but in gold, you get a completely

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Speaker 1: different picture. One unit of the SMP costs roughly five

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Speaker 1: to five and a half ounces of gold, which was

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Speaker 1: an extreme valuation. Today that ratio is closer to about

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Speaker 1: one to one and three quarters. Same companies, same index,

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Speaker 1: but a different unit of account. What that tells you

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Speaker 1: is not that stocks crashed, but that over the last

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Speaker 1: twenty plus years, stocks have lost purchasing power relative to

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Speaker 1: hard money. So, even with dividends included, a long term

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Speaker 1: SMP investor has not kept with gold from that peak.

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Speaker 1: Not a clean straight line, but in real terms the

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Speaker 1: dilution is obvious. Let's look at housing. In dollar terms,

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Speaker 1: US home prices their way up, but again that's in dollars.

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Speaker 1: What if we measure them in something else. If we

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Speaker 1: take the media and US home prices and compare them

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Speaker 1: to the expansion of the US M two money supply,

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Speaker 1: the relationship is almost unmistakable. As the money supply expanded,

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Speaker 1: especially after twenty ten, and then dramatically after twenty twenty,

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Speaker 1: home prices rose right alongside right, not perfectly, not exactly,

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Speaker 1: but closely enough that housing starts to look less like

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Speaker 1: a wealth generator and more like an expression of monetary expansion.

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Speaker 1: In other words, homes didn't get more valuable, the measuring

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Speaker 1: stick got bigger. So on paper, looking at the SMP

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Speaker 1: five hundred er homes, you feel richer, but in real

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Speaker 1: terms you've mostly just kept pace with inflation while taking

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Speaker 1: on more leverage, more taxes, more insurance risk, and more

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Speaker 1: regulatory exposure. That's the second crack, all right in Crack

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Speaker 1: number three is mobility, And let's talk about this one.

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Speaker 1: It's important, right, Almost nobody really thinks through this one.

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Speaker 1: You see, most assets people call safe are safe only

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Speaker 1: if you don't have to move. They live inside one jurisdiction,

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Speaker 1: under one set of rules, one enforcement regime, and that

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Speaker 1: includes say physical gold. Right. Gold's valuable, of course, but

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Speaker 1: it's not very mobile, right, especially in a crisis in

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Speaker 1: the US and in most countries, you're required to declare

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Speaker 1: anything over ten thousand dollars if you cross border with it,

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Speaker 1: that applies to cash, that applies to gold, that applies

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Speaker 1: to valuables. And in a real crisis, those rules tighten up,

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Speaker 1: not loosen. And we've seen this before, like, for example,

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Speaker 1: when families had to flee Iran during the nineteen seventy

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Speaker 1: nine revolution. Many of them couldn't take their gold with them.

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Speaker 1: The borders were closed, assets were seized, capital controls went

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Speaker 1: up overnight. The same thing and countless other crisis as sense.

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Speaker 1: People technically own their assets, but they couldn't move them.

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Speaker 1: And when you can't move your wealth, you don't control it.

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Speaker 1: Now bring that back to theay. When people are forced

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Speaker 1: to leave countries, whether because of political instability, financial collapse,

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Speaker 1: capital controls, they don't flee with gold bars. They flee

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Speaker 1: with what they can move. This is why capital controls

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Speaker 1: matter so much. They don't announce collapse. They quietly trap

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Speaker 1: capital limits on transfers, limits on with draws, reporting requirements,

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Speaker 1: force conversions. Everything still looks legal, it looks orderly, but

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Speaker 1: the mobility is gone. And without mobility you don't have optionality.

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Speaker 1: So even assets that hold value in theory can fail

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Speaker 1: you in practice if they can't move when the rules

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Speaker 1: change that's the third crack. And when you zoom out

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Speaker 1: and you see these three cracks together, you realize that

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Speaker 1: this isn't random, right, This isn't new, This is a pattern.

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Speaker 1: Sovereign debt crisises don't usually end with dramatic collapse. They

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Speaker 1: end with slow extraction. Empires don't fall first, they hollow

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Speaker 1: out first. The currency keeps working, markets keep trading. Life

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Speaker 1: looks kind and normal. But underneath it all the system

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Speaker 1: starts leaning harder. It leans on whatever can't move, whatever

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Speaker 1: can't resist, whatever still looks valuable on paper, fixed assets,

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Speaker 1: permissioned assets, assets tied to local enforcement. And we've seen

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Speaker 1: this again and again. High debt leads to more regulation,

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Speaker 1: higher taxes, capital controls, and shrinking services. And again it's

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Speaker 1: not all at once, it's not an event, it's piece

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Speaker 1: by piece. And every time the same mistake gets repeated.

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Speaker 1: People prepare for collapse when the real danger is compression.

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Speaker 1: They stockpile assets that did well in the last cycle

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Speaker 1: without realizing that the framework has changed, so they end

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Speaker 1: up holding wealth that looks safe, it feels conservative, and

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Speaker 1: is quietly being squeezed from every side. That's the pattern, right,

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Speaker 1: It's not about panic or chaos or pressure. Now, once

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Speaker 1: you understand that, you'll stop asking, you know, will the

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Speaker 1: dollar fail? You'll start asking a much better question, like

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Speaker 1: what breaks first when the system is under stress? Okay,

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Speaker 1: so if the old story is breaking, we need to

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Speaker 1: talk about the framework behind, because this isn't about picking

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Speaker 1: the right asset, it's about using the right lens. The

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Speaker 1: old framework assumes stability. It assumes the rules stay the same.

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Speaker 1: It assumes that enforcement is reliable. It assumes that the

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Speaker 1: currency holds value well enough over time. Now, under those conditions,

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Speaker 1: traditional safe assets they make sense, real estate, stocks, bonds, gold.

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Speaker 1: That framework worked for decades, which is why people trust it.

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Speaker 1: But here's the problem. We're no longer in a low debt,

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Speaker 1: stable system environment. We're in a sovereign debt environment. And

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Speaker 1: in that environment, the assumptions behind the old framework they

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Speaker 1: all start to fail. So then you need a new framework.

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Speaker 1: The new framework doesn't ask has this asset been safe before?

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Speaker 1: It asks a different question first, how permissioned is it?

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Speaker 1: Does this asset require the state to enforce ownership, to

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Speaker 1: approve usage or allow transfer. Because the more permission it needs,

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Speaker 1: the more exposed it is. When the system is under stress. Second,

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Speaker 1: how mobile is it? Can it move across borders? Can

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Speaker 1: it exit system when rules change, or is it fixed

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Speaker 1: in place subject to you know, whatever comes next. Mobility

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Speaker 1: isn't just convenience. Mobility is optionality. And third, what unit

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Speaker 1: of account are you measuring it in? Now? If the

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Speaker 1: price is rising because the measuring stick is shrinking, that's

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Speaker 1: not wealth creation. So you have to ask whether it

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Speaker 1: preserves purchasing power relative to scace goods and real inputs.

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Speaker 1: And finally, how easy is it to extract from? Is

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Speaker 1: it visible? Is it taxable? Is it trapped? Because every

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Speaker 1: sovereign debt cycle, governments don't go after what can move,

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Speaker 1: They go after what's easy. So this framework isn't about

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Speaker 1: predicting collapse. It's about understanding pressure. When debt is high

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Speaker 1: and options are limited, systems don't break evenly. They squeeze

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Speaker 1: what's fixed, what's permissioned, and what feels safest on paper. Okay,

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Speaker 1: So with that framework in place, let's apply it to

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Speaker 1: what we're seeing right now. Okay, now, let's actually apply

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Speaker 1: it to framework because this is where a lot of

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Speaker 1: confusion gets cleared up. So start with bitcoin, right People

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Speaker 1: argue about bitcoin's price all the time, like, that's not

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Speaker 1: the interesting part here. What matters is how it scores

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Speaker 1: under this framework. Right, It doesn't rely on local enforcement,

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Speaker 1: it doesn't need courts to validate ownership, it doesn't need

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Speaker 1: permission to move. It's measured in its own unit of account,

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Speaker 1: not one that can be expanded. It will like the dollar.

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Speaker 1: And that's why it behaves differently. That's why it's completely

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Speaker 1: different under stress, not because it's immune to volatility, but

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Speaker 1: because it's structurally outside the system. Now, look at traditional markets, stocks, bonds,

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Speaker 1: real estate. They still function, but they're increasingly driven by policy,

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Speaker 1: by interest rate, by liquidity programs, regulatory decisions. And that

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Speaker 1: brings us to a very important point. This is not

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Speaker 1: two thousand and eight. In two thousand and eight, the

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Speaker 1: problem was leverage and solvency. Banks were overextended, credit froze,

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Speaker 1: assets collapsed fast. That was a crash. Today the problem's

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Speaker 1: much different. Today. The system is solvent, but it's overloaded.

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Speaker 1: Debt's too high. Rates can't they high for that long,

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Speaker 1: and growth can't outpace obligations. So instead of a sudden collapse,

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Speaker 1: you get something else. You get compression. Asset prices don't

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Speaker 1: necessarily crash, they get pinned, real returns start going down,

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Speaker 1: they shrink, and policy becomes more aggressive. Volatility shows up

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Speaker 1: in bursts instead of breaks. And we can just look

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Speaker 1: at government behavior. Right when debt gets this large, policy

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Speaker 1: stops being about optimization and starts being about control. Higher taxes,

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Speaker 1: more reporting, more friction, not because of ideology, but because

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Speaker 1: the math leaves just fewer choices. So when you put

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Speaker 1: all this together, bitcoin's behavior, asset price, inflation, policy pressure,

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Speaker 1: capital controls becoming more normalized, It's not chaos. It's a

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Speaker 1: high debt system under stress doing exactly what these systems

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Speaker 1: always do. Okay, So with that in mind, what does

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Speaker 1: this actually mean for you? Well, what it certainly doesn't

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Speaker 1: mean is trying to time a collapse right, It doesn't

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Speaker 1: mean predicting the next crisis, and it definitely doesn't even

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Speaker 1: mean panicking. Those are all reactions, and reactions they're usually

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Speaker 1: wrong or expensive. What it does mean is that the

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Speaker 1: way you evaluate risk has to change in this environment.

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Speaker 1: Volatility isn't the real danger. Volatility is visible. The volatility

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Speaker 1: is priced in. The real danger is structure. Assets that

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Speaker 1: look stable on paper but depend heavily on enforcement, on policy,

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Speaker 1: on weakening currency. That's where people get trapped. So instead

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Speaker 1: of asking is this asset conservative or has this work?

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Speaker 1: Before you start asking better questions, what assumptions does this

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Speaker 1: asset rely on? What breaks if the rules change, what

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Speaker 1: happens if taxes rise, if insurance disappears, what if capital

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Speaker 1: movement gets restricted? Because in a compression environment, the system

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Speaker 1: doesn't take everything at once, It takes a little everywhere

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Speaker 1: over time. Higher taxes here, lower real returns here, more

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Speaker 1: friction less optionality, and most people don't notice it until

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Speaker 1: they realize they have fewer choices than they thought. So

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Speaker 1: the goal here isn't to avoid risk entirely, because that's impossible.

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Speaker 1: The goal is to avoid being stuck to favor optionality

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Speaker 1: over rigidity, structure over yield, resilience over appearance is because

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Speaker 1: in this kind of cycle, wealth doesn't disappear overnight, but

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Speaker 1: it does get boxed in. Okay, So with that perspective,

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Speaker 1: let's talk about who this is really for and what

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Speaker 1: the next step actually looks like. Okay, so while most

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Speaker 1: people they're still waiting for a crash, they're watching headlines,

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Speaker 1: they're looking for a moment when everything finally breaks. But

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Speaker 1: serious as investors. They don't wait for events. Right. We

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Speaker 1: study the structure, we understand that the biggest losses, they

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Speaker 1: don't come from panic. They come from being positioned for

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Speaker 1: a world that just no longer exists. And this isn't

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Speaker 1: about being bearished. It's not about being bullish either. It's

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Speaker 1: about recognizing that the rules are changing slowly, maybe unevenly,

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Speaker 1: and mostly without announcement. People who miss that they keep

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Speaker 1: optimizing for yield, for safety, for what worked last time.

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Speaker 1: People who see it, though, optimize for optionality, for mobility,

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Speaker 1: for resilience. That's the difference. The next question isn't what

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Speaker 1: do I buy? It's what else am I misunderstanding? So

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Speaker 1: in this next video, I break down how this same

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Speaker 1: compression dynamic is playing out across markets right now, why

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Speaker 1: things aren't crashing, why they're melting, and why that matters

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Speaker 1: more now than people realize. So watch that next, because

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Speaker 1: this story doesn't end right here, and I'll see you

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Speaker 1: over there.