1 00:00:14,600 --> 00:00:17,480 Speaker 1: Hey, everyone, Welcome to another episode of the Market Disruptor Show. 2 00:00:17,480 --> 00:00:20,000 Speaker 1: And today I'm sitting down with Luke Graman. He is 3 00:00:20,560 --> 00:00:22,640 Speaker 1: financial analyst, someone I've been following for a long time. 4 00:00:22,680 --> 00:00:25,119 Speaker 1: He's the founder and president of f F T T, 5 00:00:25,239 --> 00:00:27,760 Speaker 1: which is a financial newsletter. I'm focusing on the big 6 00:00:27,800 --> 00:00:30,280 Speaker 1: macro trends. Um I subscribe to it. A lot of 7 00:00:30,280 --> 00:00:32,800 Speaker 1: good information in there. And so anyway, look, so many 8 00:00:32,880 --> 00:00:34,440 Speaker 1: questions I have for you, and I'm excited to have 9 00:00:34,479 --> 00:00:37,159 Speaker 1: this conversation today. Thanks for everything, and I'm excited to 10 00:00:37,200 --> 00:00:39,920 Speaker 1: talk to you. I'm doing great, alright, alright, good, So yeah, 11 00:00:39,960 --> 00:00:42,480 Speaker 1: thanks for making the time to come here. So, UM, 12 00:00:42,520 --> 00:00:44,200 Speaker 1: I guess before we dive in, I got a bunch 13 00:00:44,240 --> 00:00:46,000 Speaker 1: of questions because I've been following your stuff for a 14 00:00:46,000 --> 00:00:48,760 Speaker 1: long time. But maybe just kind of give us the 15 00:00:48,800 --> 00:00:50,599 Speaker 1: background of what it is that you do and kind 16 00:00:50,600 --> 00:00:53,960 Speaker 1: of what you're focusing on. Sure, So the way we 17 00:00:54,040 --> 00:00:58,400 Speaker 1: phrase it as I aggregate a large amount of information 18 00:00:58,520 --> 00:01:03,560 Speaker 1: from a wide array of of publicly available UH data 19 00:01:03,600 --> 00:01:08,640 Speaker 1: sources and aggregate these data sources in a unique manner 20 00:01:09,080 --> 00:01:14,039 Speaker 1: trying to identify developing economic bottlenecks. Because I spent prior 21 00:01:14,080 --> 00:01:18,160 Speaker 1: to founding f f T T in early spent nearly 22 00:01:18,160 --> 00:01:22,160 Speaker 1: twenty years in equity research and equity sales on Wall Street. 23 00:01:22,720 --> 00:01:27,640 Speaker 1: What I found was that excess returns typically accrued to 24 00:01:28,400 --> 00:01:32,000 Speaker 1: those sectors that were positioned to either benefit from or 25 00:01:32,080 --> 00:01:35,520 Speaker 1: if you were short them, be hurt by the economic 26 00:01:35,520 --> 00:01:37,720 Speaker 1: bottlenecks where things just kind of come to a head. 27 00:01:37,720 --> 00:01:40,720 Speaker 1: And a perfect example I've used in the past is like, 28 00:01:40,840 --> 00:01:42,920 Speaker 1: if you could own the best home builder in two 29 00:01:42,920 --> 00:01:45,679 Speaker 1: thousand five, and if you own the best homebuild in 30 00:01:45,680 --> 00:01:49,080 Speaker 1: two thousand five, you only lost your money instead of 31 00:01:50,480 --> 00:01:53,000 Speaker 1: your money. And he just a real quick interruption to 32 00:01:53,080 --> 00:01:55,120 Speaker 1: let you know that this video is brought to you 33 00:01:55,240 --> 00:01:57,680 Speaker 1: add free by block Fire. Now they're giving you the 34 00:01:57,680 --> 00:02:00,560 Speaker 1: ability to hold your bitcoin and your crypt as it 35 00:02:00,600 --> 00:02:02,920 Speaker 1: goes up in value, and at the same time you 36 00:02:02,920 --> 00:02:05,360 Speaker 1: can earn high yielding interest on it, so you can 37 00:02:05,400 --> 00:02:08,359 Speaker 1: basically hold it for all the upside potential and then 38 00:02:08,400 --> 00:02:10,160 Speaker 1: you can make cash flow off of it at the 39 00:02:10,200 --> 00:02:14,079 Speaker 1: exact same time. Now, opening account super fast, super simple, 40 00:02:14,320 --> 00:02:17,000 Speaker 1: and they've offered to give me up the two dollars 41 00:02:17,000 --> 00:02:18,840 Speaker 1: for every sign up, but I told them, you know what, 42 00:02:19,000 --> 00:02:21,160 Speaker 1: let's give it back to you. So you can now 43 00:02:21,240 --> 00:02:23,840 Speaker 1: go and you can get the two fifty dollars whenever 44 00:02:23,880 --> 00:02:25,480 Speaker 1: you set up your account, and all us to do 45 00:02:25,520 --> 00:02:27,880 Speaker 1: is just check the link in the description for details, 46 00:02:28,080 --> 00:02:30,360 Speaker 1: set up an account super quick and easy, and turn 47 00:02:30,480 --> 00:02:33,480 Speaker 1: up to two fifty dollars brought to you by block fire. 48 00:02:33,520 --> 00:02:36,600 Speaker 1: So check them out, you know, vice versa in terms 49 00:02:36,600 --> 00:02:38,880 Speaker 1: of you know the fangs, right, if you're if you're 50 00:02:38,919 --> 00:02:42,359 Speaker 1: if you're own the worst fang over the last five years, 51 00:02:42,800 --> 00:02:45,600 Speaker 1: you're still pretty happy. And so there's been this big trend. 52 00:02:45,680 --> 00:02:49,160 Speaker 1: So we try to focus on from both a macroeconomic 53 00:02:49,240 --> 00:02:54,840 Speaker 1: and thematic standpoint, identifying these developing bottlenecks for our our clients. 54 00:02:55,040 --> 00:02:58,000 Speaker 1: And uh, that's that's what we do. It's a it's 55 00:02:58,000 --> 00:03:00,880 Speaker 1: a it's a fun job. I get to read and 56 00:03:01,120 --> 00:03:06,239 Speaker 1: interact extensively and learn every day, and uh it's it's 57 00:03:06,240 --> 00:03:09,519 Speaker 1: really a blessing to be able to do that. Yeah. 58 00:03:09,520 --> 00:03:11,919 Speaker 1: So for everybody that's tuning in listening right now, I 59 00:03:11,919 --> 00:03:15,000 Speaker 1: mean we're gonna go through UM We're gonna talk about deficits, 60 00:03:15,080 --> 00:03:18,359 Speaker 1: runaway spending, endless money printing, we're gonna talk about inflation 61 00:03:18,440 --> 00:03:21,640 Speaker 1: deflation assets that could benefit UM. So there's a lot 62 00:03:21,680 --> 00:03:23,720 Speaker 1: of stuff we're gonna cover. So everyone listening, just make 63 00:03:23,760 --> 00:03:25,360 Speaker 1: sure you're you're tuning in all the way to the end. 64 00:03:25,400 --> 00:03:29,720 Speaker 1: But I'm curious when you talk about economic bottlenecks. So, UM, 65 00:03:29,760 --> 00:03:32,840 Speaker 1: I guess you're looking for where money is maybe moving 66 00:03:32,880 --> 00:03:34,440 Speaker 1: from one asked to the next. I mean, what are 67 00:03:34,440 --> 00:03:37,600 Speaker 1: you referring to in the bottleneck? Sure, it's a great question. 68 00:03:38,280 --> 00:03:41,920 Speaker 1: What we're really looking for is where basically a rock 69 00:03:42,040 --> 00:03:44,640 Speaker 1: is meeting a hard place to be blunt. Um. You know, 70 00:03:44,640 --> 00:03:47,440 Speaker 1: where you're you get these two tectonic plates, or you 71 00:03:47,560 --> 00:03:51,480 Speaker 1: see things crowding into a an area where something has 72 00:03:51,520 --> 00:03:54,920 Speaker 1: to give, or where there's some sort of um you know, 73 00:03:55,520 --> 00:03:57,840 Speaker 1: force is building up, where there's likely to be some 74 00:03:57,920 --> 00:04:02,880 Speaker 1: sort of phase change or or significant UM you know 75 00:04:03,200 --> 00:04:09,119 Speaker 1: breakthrough in UH in economic developments. UH is really how 76 00:04:09,160 --> 00:04:12,800 Speaker 1: we think about it, right, and so it's um you know. 77 00:04:12,920 --> 00:04:15,360 Speaker 1: I'll use the housing example again. When you know two 78 00:04:15,400 --> 00:04:17,720 Speaker 1: thousand five, you had a set of circumstances all of 79 00:04:17,760 --> 00:04:20,880 Speaker 1: a sudden UH. In my former seat, when at the 80 00:04:20,920 --> 00:04:24,080 Speaker 1: firm I was at prior UH, we started hearing story 81 00:04:24,279 --> 00:04:27,200 Speaker 1: stories where credit was being cut off to the consumer. 82 00:04:27,200 --> 00:04:29,400 Speaker 1: Credit was being cut off the home equity lines. That's 83 00:04:29,400 --> 00:04:31,400 Speaker 1: an economic bottle neck because all of a sudden, you 84 00:04:31,440 --> 00:04:34,039 Speaker 1: have one set of expectation, which is home prices never fall. 85 00:04:34,440 --> 00:04:37,400 Speaker 1: At the same time you have uh you know, the 86 00:04:37,440 --> 00:04:40,120 Speaker 1: opposite side of credits being cut off, and one of 87 00:04:40,120 --> 00:04:43,359 Speaker 1: those two things was going to overtake the other. A 88 00:04:43,360 --> 00:04:46,160 Speaker 1: bottle neck was developing. And of course the resolution that 89 00:04:46,240 --> 00:04:49,479 Speaker 1: bottle neck was home prices fall, so on, so forth. 90 00:04:50,839 --> 00:04:55,000 Speaker 1: So the things that we are focused on trying to 91 00:04:55,040 --> 00:04:58,359 Speaker 1: identify in terms of what what what is a bottleneck? Yeah, 92 00:04:58,640 --> 00:05:00,760 Speaker 1: so I'm in sudden health and it and I was 93 00:05:01,040 --> 00:05:04,680 Speaker 1: developing real estate in southern California from ninety five till 94 00:05:04,680 --> 00:05:06,960 Speaker 1: two thousand and five. Well, I'll tell about two thousand seven, 95 00:05:07,400 --> 00:05:09,000 Speaker 1: and uh so I got caught up on the wrong 96 00:05:09,040 --> 00:05:12,039 Speaker 1: side of that bottleneck. Unfortunately, it was bad in California. 97 00:05:12,120 --> 00:05:15,520 Speaker 1: We lost in southern California, we lost and twelve months 98 00:05:15,560 --> 00:05:19,039 Speaker 1: it was insane. So so so you saw that and 99 00:05:19,200 --> 00:05:22,880 Speaker 1: using that that that historical reference, so you saw that 100 00:05:23,440 --> 00:05:26,560 Speaker 1: home building, home investing, home buying, I mean that was 101 00:05:26,600 --> 00:05:28,960 Speaker 1: just a runaway freight train. And then the bottleneck was 102 00:05:28,960 --> 00:05:31,800 Speaker 1: starting to form where credit was like, oh, shoot, credits 103 00:05:31,839 --> 00:05:34,600 Speaker 1: backing up, and it's probably gonna like you said, something 104 00:05:34,640 --> 00:05:36,760 Speaker 1: has to give. So then you see something, you see 105 00:05:36,760 --> 00:05:38,840 Speaker 1: an event like that, and then you go, Okay, something's 106 00:05:38,839 --> 00:05:42,320 Speaker 1: gonna give here. Most likely the runaway freight train is 107 00:05:42,320 --> 00:05:44,360 Speaker 1: gonna hit the brakes or go off the tracks, right, 108 00:05:44,600 --> 00:05:46,800 Speaker 1: and so then you look, you see that happening, and 109 00:05:46,839 --> 00:05:48,720 Speaker 1: then you decided to like get in a position where 110 00:05:48,720 --> 00:05:51,200 Speaker 1: you could benefit from that, maybe raising cash to take 111 00:05:51,200 --> 00:05:55,880 Speaker 1: advantage of the drop or something like that. Yep, that's 112 00:05:55,920 --> 00:05:59,040 Speaker 1: exactly right, and that's trying to do. And there's lay 113 00:05:59,080 --> 00:06:02,359 Speaker 1: it out as you know. Here's fact. We don't start 114 00:06:02,360 --> 00:06:05,800 Speaker 1: with a thesis. We start with observing. I'm just I've 115 00:06:05,839 --> 00:06:08,000 Speaker 1: equated myself to being, you know, the catfish at the 116 00:06:08,040 --> 00:06:09,840 Speaker 1: bottom of river. I'm just kind of laying down there 117 00:06:09,839 --> 00:06:12,040 Speaker 1: and I'm just waiting for stuff to float downstream and see. 118 00:06:12,600 --> 00:06:13,960 Speaker 1: You know, the way we do we do our work 119 00:06:14,040 --> 00:06:17,080 Speaker 1: is I just read extensively, eight to ten hours a day, 120 00:06:17,120 --> 00:06:19,400 Speaker 1: and I'm trying to and I don't know what I'm 121 00:06:19,400 --> 00:06:23,360 Speaker 1: looking for. But when I see things, I put them 122 00:06:23,360 --> 00:06:27,480 Speaker 1: in a cutting and then I get to time product 123 00:06:28,040 --> 00:06:30,680 Speaker 1: and I see, Okay, here's this, here's this, here's this 124 00:06:30,720 --> 00:06:32,600 Speaker 1: what is is there anything here? What's this telling me? 125 00:06:32,640 --> 00:06:35,559 Speaker 1: And I've always been blessed to be able to connect dots, 126 00:06:35,880 --> 00:06:37,479 Speaker 1: but a number of clients say, you have a PhD 127 00:06:37,480 --> 00:06:40,719 Speaker 1: and ABC. There's a range of potential outcomes and this 128 00:06:40,800 --> 00:06:43,080 Speaker 1: could happen, that could happen, this, this asset could win, 129 00:06:43,120 --> 00:06:46,400 Speaker 1: this asset could lose. However, you you know, however you 130 00:06:46,440 --> 00:06:47,960 Speaker 1: want to play that. If you want to be aggressive, 131 00:06:47,960 --> 00:06:49,560 Speaker 1: you can shure things. If you want to be conservative, 132 00:06:49,560 --> 00:06:51,479 Speaker 1: you raise cash if you want to, you know, or 133 00:06:51,600 --> 00:06:53,960 Speaker 1: on the other side, Hey, here's the you know, here's 134 00:06:53,960 --> 00:06:55,920 Speaker 1: a real crazy way to get along. Here's the sort 135 00:06:55,960 --> 00:06:58,760 Speaker 1: of chicken way to get long um something that's set 136 00:06:58,760 --> 00:07:00,560 Speaker 1: the benefit from some sort of a like like that. 137 00:07:00,600 --> 00:07:03,400 Speaker 1: But that's how we go about our process. Yeah. So 138 00:07:03,640 --> 00:07:06,279 Speaker 1: growing up in southern California, I'm a surfer. My family 139 00:07:06,360 --> 00:07:08,200 Speaker 1: is all surfers. All we do is take surfing trips 140 00:07:08,200 --> 00:07:11,080 Speaker 1: and surfing vacations. We chase storms all around the world 141 00:07:11,080 --> 00:07:13,120 Speaker 1: to find the big waves. And so I kind of 142 00:07:13,120 --> 00:07:15,920 Speaker 1: equate my investing the similar where like, I'm just trying 143 00:07:16,000 --> 00:07:18,000 Speaker 1: to read the storm where the storms are, So I 144 00:07:18,040 --> 00:07:20,200 Speaker 1: see a storm form and in Fiji. I know in 145 00:07:20,240 --> 00:07:22,440 Speaker 1: two weeks it's gonna send waves to a certain area, 146 00:07:22,440 --> 00:07:24,200 Speaker 1: and then I'll go there wait for that wave, and 147 00:07:24,200 --> 00:07:26,240 Speaker 1: then I'm just gonna write it. Right, I'm not trying 148 00:07:26,280 --> 00:07:27,840 Speaker 1: to create a wave, but I see where the storms 149 00:07:27,880 --> 00:07:30,360 Speaker 1: are for me, I positioned myself to where those waves 150 00:07:30,360 --> 00:07:32,640 Speaker 1: come in and then I go rite. And so, uh, 151 00:07:32,760 --> 00:07:36,920 Speaker 1: that's a great metaphor. Yeah, I'm curious. Just as a 152 00:07:36,960 --> 00:07:40,960 Speaker 1: side note, you say you spent about eight hours a day, um, reading, 153 00:07:41,000 --> 00:07:42,600 Speaker 1: How the heck do you find some time to tweet? 154 00:07:45,320 --> 00:07:48,080 Speaker 1: Some of the reading I do is on Twitter. Yeah, 155 00:07:48,160 --> 00:07:51,320 Speaker 1: you know, for whatever reason, Um, I can read really 156 00:07:51,360 --> 00:07:54,480 Speaker 1: fast and retain key pieces of content. Uh, And I 157 00:07:54,520 --> 00:07:56,680 Speaker 1: don't know, It's just something I've always been able to do. 158 00:07:56,920 --> 00:07:59,840 Speaker 1: And so it's you know, I'm there for a bit 159 00:08:00,000 --> 00:08:01,680 Speaker 1: and then there will be areas and you'll you can 160 00:08:01,920 --> 00:08:04,280 Speaker 1: I'm sure if they had analytics on my Twitter activity, 161 00:08:04,280 --> 00:08:06,080 Speaker 1: you can see when I'm reading, when I'm writing, when 162 00:08:06,080 --> 00:08:07,920 Speaker 1: i'm you know, when i'm because it's you know, high 163 00:08:07,920 --> 00:08:11,320 Speaker 1: intensity nothing, you know, so it tends to be you know, 164 00:08:11,360 --> 00:08:14,600 Speaker 1: a hundred or zero um, and so you know, there's 165 00:08:14,640 --> 00:08:16,600 Speaker 1: there's a little bit of both in depth sort of 166 00:08:16,640 --> 00:08:18,760 Speaker 1: real deep cycle reading, if you will. And then there's 167 00:08:18,800 --> 00:08:23,200 Speaker 1: also the scanning the you know, scanning the Twitter feed 168 00:08:23,240 --> 00:08:25,360 Speaker 1: for sort of like the energy off the Twitter feed. 169 00:08:25,400 --> 00:08:27,520 Speaker 1: You can kind of feel things of Okay, where is 170 00:08:27,560 --> 00:08:30,200 Speaker 1: the mood? Where is And I think there's real value 171 00:08:30,200 --> 00:08:33,319 Speaker 1: to that and I think it's something that you kind 172 00:08:33,320 --> 00:08:38,280 Speaker 1: of learn over time or or or can feel over time. Yeah. Yeah, So, um, 173 00:08:38,400 --> 00:08:41,360 Speaker 1: you have a quote on your website that says, before 174 00:08:41,440 --> 00:08:45,320 Speaker 1: you proceed, step back and look at the big picture. So, um, 175 00:08:45,400 --> 00:08:48,840 Speaker 1: when we're when you're stepped back today, Um, what is 176 00:08:48,880 --> 00:08:51,400 Speaker 1: the big picture that you're seeing? Or? Right, maybe a 177 00:08:51,400 --> 00:08:54,240 Speaker 1: better question is where's the big bottleneck that's being formed 178 00:08:54,320 --> 00:08:57,199 Speaker 1: right now that you're kind of focusing on. Sure, So 179 00:08:58,280 --> 00:09:01,680 Speaker 1: when I step back, I look back to you know, 180 00:09:01,720 --> 00:09:05,480 Speaker 1: I started in this business, I think, and we have 181 00:09:05,800 --> 00:09:10,760 Speaker 1: the the equity bubble dot com by equity bubble burst 182 00:09:10,760 --> 00:09:16,320 Speaker 1: in two thousand and policy makers famously, Paul Krugman wrote 183 00:09:16,320 --> 00:09:18,600 Speaker 1: an article about a Paul McCauley at PIMCO wrote about it, 184 00:09:18,920 --> 00:09:22,040 Speaker 1: we need to create a housing bubble to offset the 185 00:09:22,160 --> 00:09:26,760 Speaker 1: demand from the equity bubble bursting. Okay, objectively, you look 186 00:09:26,760 --> 00:09:30,520 Speaker 1: at the math makes sense. So we in equity bubble, 187 00:09:30,600 --> 00:09:33,520 Speaker 1: they kicked the problem upstairs to the housing market, and 188 00:09:33,600 --> 00:09:36,800 Speaker 1: by extension, the banking system, because the banks are lending, 189 00:09:36,880 --> 00:09:40,120 Speaker 1: making the loans to the housing market that bubble bursts. 190 00:09:40,440 --> 00:09:44,560 Speaker 1: We then kick that problem upstairs via the bailouts, to 191 00:09:44,640 --> 00:09:49,079 Speaker 1: the sovereign level. So now governments are backstopping banking system, 192 00:09:49,160 --> 00:09:53,000 Speaker 1: varying degrees of credit markets, sovereign debt market. And so 193 00:09:53,080 --> 00:09:57,040 Speaker 1: now we when you objectively take a little step back 194 00:09:57,080 --> 00:10:00,560 Speaker 1: and take a look, everyone says, well, the bubbles and bitcoin, 195 00:10:00,600 --> 00:10:02,120 Speaker 1: of the bubble, and housing and the bubbs in stocks, 196 00:10:02,120 --> 00:10:06,120 Speaker 1: the bubbles and everything and everything, the bubbles and everything. 197 00:10:06,160 --> 00:10:08,880 Speaker 1: But the thing that and everything bubble is the bubbles 198 00:10:08,880 --> 00:10:10,720 Speaker 1: and the currency, the bubbles and the sovereign debt and 199 00:10:10,720 --> 00:10:13,160 Speaker 1: by extension the currency and so because and one of 200 00:10:13,200 --> 00:10:15,920 Speaker 1: the reason I say that is we've kicked one bubble upstairs, 201 00:10:15,920 --> 00:10:19,480 Speaker 1: and we kicked another bubble, that bubble upstairs to the sovereign. 202 00:10:19,920 --> 00:10:22,160 Speaker 1: And it's you know, you and I look at me. 203 00:10:22,280 --> 00:10:24,000 Speaker 1: You know, probably about the same age you remember, you 204 00:10:24,040 --> 00:10:27,040 Speaker 1: know Superman growing up right where the Clark Kent and 205 00:10:27,040 --> 00:10:29,400 Speaker 1: and Lois Lane falls out of the building and he 206 00:10:29,480 --> 00:10:32,000 Speaker 1: catches her and he's I got you, and she says, 207 00:10:32,640 --> 00:10:35,600 Speaker 1: who's got you? And so in two thousand and eight, 208 00:10:35,720 --> 00:10:39,440 Speaker 1: the government caught the global economy and this is around 209 00:10:39,440 --> 00:10:41,760 Speaker 1: the world said I got you. And I think we're 210 00:10:41,760 --> 00:10:45,520 Speaker 1: now getting the point where people are realizing no one 211 00:10:45,559 --> 00:10:47,840 Speaker 1: has them. Uh, you know, no one has a sovereign 212 00:10:47,840 --> 00:10:50,160 Speaker 1: bond market. And so if you look fundamentally, if I 213 00:10:50,200 --> 00:10:52,240 Speaker 1: just took a step back and said, I'm going to 214 00:10:52,320 --> 00:10:57,800 Speaker 1: describe the the offering documents of the U S Treasury bond. Okay, 215 00:10:57,800 --> 00:11:00,680 Speaker 1: so you get less than zero less and one percent 216 00:11:00,800 --> 00:11:05,440 Speaker 1: for ten years. Issuance of treasury bonds has risen nine 217 00:11:05,559 --> 00:11:08,640 Speaker 1: and a half percent over the last twelve years, Kager, 218 00:11:09,320 --> 00:11:11,360 Speaker 1: So your issuance is growing. You're not being so your 219 00:11:11,400 --> 00:11:13,680 Speaker 1: issuance is growing at a eight hundred basis point premium 220 00:11:13,720 --> 00:11:17,240 Speaker 1: to your interest rate. Uh. This is a entity, the 221 00:11:17,320 --> 00:11:20,840 Speaker 1: US government that is a hundred thirty debt, the GDP. 222 00:11:21,080 --> 00:11:23,040 Speaker 1: And now let's debt the GDP. Let's look at it 223 00:11:23,080 --> 00:11:24,960 Speaker 1: on a on a float of if you look at 224 00:11:24,960 --> 00:11:28,640 Speaker 1: on a really the way you look at a business. 225 00:11:28,679 --> 00:11:30,240 Speaker 1: And then people say you can't look at business. But 226 00:11:30,280 --> 00:11:32,120 Speaker 1: just for sake of argument if we looked at it 227 00:11:32,160 --> 00:11:34,640 Speaker 1: as a security, if we looked at as an actual security, 228 00:11:35,400 --> 00:11:38,240 Speaker 1: you would say, okay, US tax receipts are three point 229 00:11:38,280 --> 00:11:41,840 Speaker 1: three trillion and dead is twenty seven trillion. So the 230 00:11:41,920 --> 00:11:44,880 Speaker 1: tax receipts are really just revenues. Right. So you have 231 00:11:44,920 --> 00:11:47,400 Speaker 1: an entity that's paying you one less than one percent. 232 00:11:48,320 --> 00:11:50,320 Speaker 1: The debt of that entity is growing at nine in 233 00:11:50,440 --> 00:11:54,240 Speaker 1: percent tager last twelve years. The outstanding debt this entity 234 00:11:54,360 --> 00:11:59,280 Speaker 1: has is nine times revenues. The OPE liabilities, which are 235 00:11:59,640 --> 00:12:02,520 Speaker 1: pench in and a pension obligations in the private sector. 236 00:12:02,559 --> 00:12:05,560 Speaker 1: The OPE liabilities of this entity are somewhere between a 237 00:12:05,600 --> 00:12:09,319 Speaker 1: hundred and two hundred trillion dollars or thirty two sixty 238 00:12:09,400 --> 00:12:13,360 Speaker 1: times revenues. And it's an entity that has not turned 239 00:12:13,360 --> 00:12:17,880 Speaker 1: a profit run a surplus in twenty plus years and 240 00:12:17,920 --> 00:12:20,360 Speaker 1: really only three times in the past fifty five years. 241 00:12:20,840 --> 00:12:22,440 Speaker 1: And so when if you took a step back and 242 00:12:22,480 --> 00:12:26,200 Speaker 1: looked at and this is the entity backstopping the whole 243 00:12:26,200 --> 00:12:29,960 Speaker 1: shooting match, you go, oh my god, there's and and 244 00:12:30,000 --> 00:12:33,120 Speaker 1: it's I'm picking on the US because the US is 245 00:12:33,120 --> 00:12:37,000 Speaker 1: in the worst shape um other than Japan, but it's 246 00:12:37,080 --> 00:12:38,760 Speaker 1: a similar problem around the world. And I also pick 247 00:12:38,800 --> 00:12:40,680 Speaker 1: on the US because the US is the reserve currency. 248 00:12:40,720 --> 00:12:42,480 Speaker 1: And when I say the problem, when you say, everyone's 249 00:12:42,480 --> 00:12:46,559 Speaker 1: saying it's an everything bubble, well it's it's like if 250 00:12:46,559 --> 00:12:48,679 Speaker 1: you asked a fish to describe its environment, the very 251 00:12:48,760 --> 00:12:50,840 Speaker 1: last thing the fish would describe would be the water. 252 00:12:51,160 --> 00:12:54,080 Speaker 1: And so everyone's busy pointing, will there's a bubble over here, 253 00:12:54,080 --> 00:12:55,520 Speaker 1: and there's a bubble over there, and there's a bubble 254 00:12:55,520 --> 00:12:59,120 Speaker 1: over here. And to us, the bottleneck the big bottle 255 00:12:59,120 --> 00:13:00,840 Speaker 1: like and I think it's biggest bottle like in a 256 00:13:00,880 --> 00:13:05,280 Speaker 1: hundred years. Is it's it's the sovereign debt market. It's 257 00:13:05,320 --> 00:13:07,720 Speaker 1: the treasury market. It's the sovereign debt market. More broadly 258 00:13:08,200 --> 00:13:13,599 Speaker 1: and by extension, it's the currency. Because ultimately one of 259 00:13:13,679 --> 00:13:15,320 Speaker 1: two things going to happen if you say there's a 260 00:13:15,360 --> 00:13:19,000 Speaker 1: sovereign debt bubble and you you can see, Um, there's 261 00:13:19,040 --> 00:13:21,839 Speaker 1: a great I m F. White paper put together by 262 00:13:22,400 --> 00:13:26,040 Speaker 1: Carmen Reinhardt and Bell and Sobronzia from I want to say, 263 00:13:27,120 --> 00:13:29,120 Speaker 1: and the title of the report is the Liquidation of 264 00:13:29,160 --> 00:13:31,360 Speaker 1: Government Debt. So it's funny that they've been telling us 265 00:13:31,360 --> 00:13:34,160 Speaker 1: what they're gonna do for the last five years, and 266 00:13:35,000 --> 00:13:40,640 Speaker 1: the really the one of the key charts. And as 267 00:13:40,800 --> 00:13:44,280 Speaker 1: as a subscribe to our our Tree Rinks newsletter, you've 268 00:13:44,280 --> 00:13:46,959 Speaker 1: probably seen the chart. But it shows sovereign debt to 269 00:13:47,040 --> 00:13:49,600 Speaker 1: GDP levels going back a hundred twenty years for advanced 270 00:13:49,600 --> 00:13:53,080 Speaker 1: economies and for developed developing economies. And once you get 271 00:13:53,080 --> 00:13:56,079 Speaker 1: to the levels we're at now, which are really unprecedented 272 00:13:56,120 --> 00:13:58,800 Speaker 1: in a hundred twenty years in the advanced economies. Ironically, 273 00:13:58,840 --> 00:14:01,559 Speaker 1: emerging markets are really much better off right now than 274 00:14:01,840 --> 00:14:04,680 Speaker 1: advanced economies. There's only a few ways out of this. 275 00:14:04,880 --> 00:14:09,679 Speaker 1: It is default to restructuring, inflation or or financial repression 276 00:14:10,120 --> 00:14:16,000 Speaker 1: or hyperinflation, and that's it. And so you say, okay, well, basically, 277 00:14:16,240 --> 00:14:18,880 Speaker 1: we kicked the equity bubble up to the banking sector. 278 00:14:18,920 --> 00:14:20,640 Speaker 1: We kicked the banking and housing bubble up to the 279 00:14:20,680 --> 00:14:23,240 Speaker 1: sovereign level. Now we have a sovereign debt bubble, and 280 00:14:23,240 --> 00:14:24,800 Speaker 1: one of two things is gonna happen. They're either going 281 00:14:24,840 --> 00:14:28,120 Speaker 1: to default on the sovereign debt. And you say, okay, well, 282 00:14:28,200 --> 00:14:30,600 Speaker 1: the odds of that happening are slim and not in 283 00:14:30,640 --> 00:14:32,840 Speaker 1: my view. And if if you believe that, as I do. 284 00:14:33,360 --> 00:14:37,360 Speaker 1: Then by default, the bubble is in the currency, because 285 00:14:37,400 --> 00:14:39,400 Speaker 1: you know, the central bank and the central banks are 286 00:14:39,400 --> 00:14:42,200 Speaker 1: going to create as much currency as needed to keep 287 00:14:42,280 --> 00:14:45,920 Speaker 1: that entity we were just describing before, who has impossibly 288 00:14:46,000 --> 00:14:49,960 Speaker 1: large obligations relative to revenues UH to keep to keep 289 00:14:50,000 --> 00:14:52,840 Speaker 1: those bonds money good, nominally money good. And so I 290 00:14:52,840 --> 00:14:55,760 Speaker 1: think that is really when I take a step back 291 00:14:56,040 --> 00:14:59,600 Speaker 1: to me, it is the biggest big trade, like I said, 292 00:14:59,600 --> 00:15:01,480 Speaker 1: in a hunter years, because we really haven't had a 293 00:15:01,480 --> 00:15:05,400 Speaker 1: global sovereign debt bubble since in the immediate aftermath of 294 00:15:05,400 --> 00:15:09,240 Speaker 1: World War two, UH. And in those cases, sovereign debt 295 00:15:09,480 --> 00:15:14,120 Speaker 1: basically went down against goal the neutrol serve asset at 296 00:15:14,160 --> 00:15:18,400 Speaker 1: the time, through the currency through currency depreciation anywhere from 297 00:15:18,600 --> 00:15:21,520 Speaker 1: eighteen months later to twelve years later. But they all 298 00:15:21,880 --> 00:15:24,320 Speaker 1: one after the other fell, and I think that's where 299 00:15:24,320 --> 00:15:28,480 Speaker 1: we are, which has a whole different a whole number 300 00:15:28,480 --> 00:15:30,640 Speaker 1: of different implications as we were talking about before, in 301 00:15:30,760 --> 00:15:33,160 Speaker 1: terms of what that means for a number of things. 302 00:15:33,240 --> 00:15:35,440 Speaker 1: I'll pause there because I went on for a bit, 303 00:15:35,480 --> 00:15:37,920 Speaker 1: but I think it's, uh, I think it's a really 304 00:15:37,920 --> 00:15:41,520 Speaker 1: important thing to be aware of. Yeah, So yeah, for sure, 305 00:15:41,560 --> 00:15:43,680 Speaker 1: it's it's the bottleneck that's forming. And then I guess 306 00:15:43,720 --> 00:15:45,800 Speaker 1: it just really comes down to how you interpret that 307 00:15:45,920 --> 00:15:48,960 Speaker 1: or what you think happens. Now, Um, a couple of things. 308 00:15:49,040 --> 00:15:50,520 Speaker 1: One one thing, I want to jump back to what 309 00:15:50,600 --> 00:15:53,600 Speaker 1: you said where you said that if you looked at 310 00:15:53,600 --> 00:15:55,360 Speaker 1: the government like a business or if you looked at 311 00:15:55,360 --> 00:15:57,560 Speaker 1: it like a household or whatever, and people say that 312 00:15:57,600 --> 00:16:01,640 Speaker 1: you can't do that, Um, but I think that you 313 00:16:01,720 --> 00:16:04,480 Speaker 1: can and you probably should because we actually live in 314 00:16:04,520 --> 00:16:07,520 Speaker 1: a world with laws and constraints and like not just 315 00:16:07,760 --> 00:16:11,240 Speaker 1: man made laws, but like natural laws in constraints and 316 00:16:11,280 --> 00:16:14,080 Speaker 1: so um. There's a quote that says you can choose 317 00:16:14,120 --> 00:16:18,200 Speaker 1: to ignore reality, but you cannot ignore, um, the consequences 318 00:16:18,200 --> 00:16:22,800 Speaker 1: of reality, and so um and so um, I kind 319 00:16:22,840 --> 00:16:24,600 Speaker 1: of agree with you. What would you say to people 320 00:16:24,640 --> 00:16:26,200 Speaker 1: who say that you can't look at the government like 321 00:16:26,200 --> 00:16:28,480 Speaker 1: a business or like a household? Why why is it different? 322 00:16:28,480 --> 00:16:30,680 Speaker 1: And why should why is that wrong? Why should we 323 00:16:30,720 --> 00:16:35,760 Speaker 1: look at it that way? So, in the short run, 324 00:16:35,840 --> 00:16:38,520 Speaker 1: those people are right, and the short run can run 325 00:16:38,560 --> 00:16:41,960 Speaker 1: for many decades and has run for many decades. In 326 00:16:42,000 --> 00:16:45,000 Speaker 1: the long run, those people are wrong, and they're wrong 327 00:16:45,080 --> 00:16:47,040 Speaker 1: for the exactly the reasons you just said, which is 328 00:16:47,080 --> 00:16:50,400 Speaker 1: there are ultimately constraints on the system that manifests us 329 00:16:50,400 --> 00:16:56,680 Speaker 1: either where government spending interfaces with UM reality in other words, uh, 330 00:16:56,800 --> 00:17:00,880 Speaker 1: it needs to buy raw materials, UM, whether you know, 331 00:17:00,960 --> 00:17:03,520 Speaker 1: you talk about things like climate change, whether you talk 332 00:17:03,560 --> 00:17:08,640 Speaker 1: about things like demographics, UM. Where the where it interfaces 333 00:17:08,680 --> 00:17:11,040 Speaker 1: with the real world is where they're wrong. And they 334 00:17:11,080 --> 00:17:13,480 Speaker 1: tend to be very very right for a very long time, 335 00:17:13,520 --> 00:17:16,320 Speaker 1: and then they tend to be very very wrong in 336 00:17:16,359 --> 00:17:19,080 Speaker 1: a very compressed period of time. And those compressed periods 337 00:17:19,119 --> 00:17:22,679 Speaker 1: of time UM tend to be forth turnings. UM. You 338 00:17:22,680 --> 00:17:24,800 Speaker 1: know where we're at to sort of mix my metaphors, 339 00:17:24,880 --> 00:17:29,120 Speaker 1: so to dig into that a little bit, you look 340 00:17:29,119 --> 00:17:31,760 Speaker 1: at it. And in a purely fiat currency system, the 341 00:17:31,800 --> 00:17:35,760 Speaker 1: reason I say they're right is ultimately the government on 342 00:17:35,880 --> 00:17:40,919 Speaker 1: some level does need to um take the other side. Right. 343 00:17:40,920 --> 00:17:42,480 Speaker 1: This is sort of the Keynsie And if if the 344 00:17:42,520 --> 00:17:45,239 Speaker 1: private sector just all stops all at once, you go 345 00:17:45,280 --> 00:17:49,280 Speaker 1: into sort of this uh death spiral, depression, etcetera. And 346 00:17:49,520 --> 00:17:51,080 Speaker 1: we saw that in the thirties, We saw that, I 347 00:17:51,080 --> 00:17:53,800 Speaker 1: want to say, in the eighteen seventies or eighteen eighties, UM, 348 00:17:53,840 --> 00:17:55,760 Speaker 1: where it just drags on and on and on their 349 00:17:55,840 --> 00:17:59,359 Speaker 1: severe social costs and ultimately usually let those things go 350 00:17:59,440 --> 00:18:03,040 Speaker 1: on to are there tend to be very draconian political 351 00:18:03,080 --> 00:18:09,280 Speaker 1: costs um where extremists get elected. And so that's I 352 00:18:09,359 --> 00:18:11,639 Speaker 1: think the idea that the government shouldn't be run as 353 00:18:11,640 --> 00:18:15,480 Speaker 1: a business, or the idea that the government shouldn't be 354 00:18:15,520 --> 00:18:19,000 Speaker 1: run as a business, has some merit or has some 355 00:18:19,040 --> 00:18:21,240 Speaker 1: good things to it from that standpoint. There, you know, 356 00:18:21,760 --> 00:18:23,880 Speaker 1: at its core, they're trying to avoid sort of this 357 00:18:24,760 --> 00:18:27,840 Speaker 1: long depression where you get into these political extremism and 358 00:18:28,080 --> 00:18:34,520 Speaker 1: and very bad things happening. However, the genesis of that 359 00:18:34,600 --> 00:18:36,879 Speaker 1: has been morphed into what we can do whatever we 360 00:18:36,920 --> 00:18:39,439 Speaker 1: want for as long as we want. We don't have to, 361 00:18:41,000 --> 00:18:43,520 Speaker 1: you know, Kenzie, and was originally we we the government 362 00:18:43,560 --> 00:18:46,640 Speaker 1: offsets the private sector in the good in the bad times, 363 00:18:47,400 --> 00:18:50,520 Speaker 1: and when the private sector is coming, it pulls its, 364 00:18:50,640 --> 00:18:52,679 Speaker 1: it pulls in the reins. And that has morphed into 365 00:18:52,720 --> 00:18:55,200 Speaker 1: the government spends a lot when times are good, and 366 00:18:55,200 --> 00:18:57,080 Speaker 1: it spends a lot a lot when times are bad, 367 00:18:58,680 --> 00:19:03,679 Speaker 1: and that ultimately is where the problem comes. And you 368 00:19:03,760 --> 00:19:08,040 Speaker 1: saw that really on a globe. You've seen it globally 369 00:19:08,160 --> 00:19:10,320 Speaker 1: for the first time. Since after World War One. We're 370 00:19:10,359 --> 00:19:14,560 Speaker 1: basically during into World War One, everybody was on a 371 00:19:14,560 --> 00:19:18,160 Speaker 1: gold standard of some sort, and then everyone the hostility started. 372 00:19:18,200 --> 00:19:19,959 Speaker 1: The first thing everybody did was golf goal so they 373 00:19:19,960 --> 00:19:22,440 Speaker 1: can create whatever obligation. You don't want to lose a 374 00:19:22,480 --> 00:19:27,280 Speaker 1: war for lack of gold convertibility, which is understandable, you 375 00:19:27,320 --> 00:19:29,840 Speaker 1: know again when you're acting for what's directly in front 376 00:19:29,880 --> 00:19:32,320 Speaker 1: of you. And everybody said, well, when we win, we'll 377 00:19:32,320 --> 00:19:35,160 Speaker 1: make the other guys pay for it. And so everybody said, 378 00:19:35,200 --> 00:19:36,720 Speaker 1: when we win, we're gonna make the other guys pay, 379 00:19:36,760 --> 00:19:39,560 Speaker 1: and of course one side one, one side lost, they 380 00:19:39,560 --> 00:19:42,480 Speaker 1: made them pay um. But then we get into this 381 00:19:42,520 --> 00:19:46,000 Speaker 1: political cost and you could never really get back to 382 00:19:46,080 --> 00:19:52,240 Speaker 1: where you were um. And that bursting of that sovereign 383 00:19:52,240 --> 00:19:54,320 Speaker 1: debt it leads it led to the bursting of the 384 00:19:54,359 --> 00:19:57,480 Speaker 1: sober global sovereign debt bubble back then, where there was 385 00:19:57,640 --> 00:19:59,760 Speaker 1: this belief going into the war, we'll make the other 386 00:19:59,760 --> 00:20:02,119 Speaker 1: side pay. Well. By the time the wars over, the 387 00:20:02,119 --> 00:20:06,200 Speaker 1: other sides broke, uh, and not just broke. The gold's 388 00:20:06,240 --> 00:20:09,280 Speaker 1: gone there, there's things destroyed. You've had a lost generation 389 00:20:09,280 --> 00:20:14,119 Speaker 1: of output, a lost generation of men um, political disruption 390 00:20:14,359 --> 00:20:18,440 Speaker 1: in Germany in Austria. That just a complete non noncapacity 391 00:20:18,440 --> 00:20:20,480 Speaker 1: of pace of Germany camp pay then all of a sudden, 392 00:20:20,720 --> 00:20:23,880 Speaker 1: UK's broke two and American has led money to all 393 00:20:23,920 --> 00:20:26,120 Speaker 1: of them, and America is not getting their money. UK 394 00:20:26,240 --> 00:20:27,840 Speaker 1: is not getting their money, Frances and not getting their money, 395 00:20:27,880 --> 00:20:30,520 Speaker 1: the Germans don't have any money, and so the whole 396 00:20:30,600 --> 00:20:33,280 Speaker 1: system that's where this. The government can do this and 397 00:20:33,280 --> 00:20:35,840 Speaker 1: shouldn't be running as a business. It's I think really 398 00:20:35,920 --> 00:20:40,800 Speaker 1: the last example of that happening um where the natural 399 00:20:40,880 --> 00:20:45,880 Speaker 1: laws just intervened. And once that happened, then you're left 400 00:20:45,880 --> 00:20:47,840 Speaker 1: with do we default on the debt or do we 401 00:20:47,920 --> 00:20:51,480 Speaker 1: hyper inflate? And uh, that's where you get to the 402 00:20:51,520 --> 00:20:54,520 Speaker 1: point where the promises of the sovereign went to you know, 403 00:20:54,600 --> 00:20:58,960 Speaker 1: stundent versus gold over a relatively short span of time. 404 00:20:59,000 --> 00:21:01,600 Speaker 1: And that's again long period of time doesn't matter, and 405 00:21:01,640 --> 00:21:03,879 Speaker 1: then it matters a lot, and the long period of 406 00:21:03,880 --> 00:21:06,720 Speaker 1: time and then it matters a lot. YEP. So I 407 00:21:06,760 --> 00:21:08,840 Speaker 1: want to get into some specifics and we'll talk about 408 00:21:08,880 --> 00:21:11,600 Speaker 1: the debt to GDP ratios, we'll talk about what that means, 409 00:21:11,640 --> 00:21:13,280 Speaker 1: the goal, what the Fed wants to do with gold 410 00:21:13,600 --> 00:21:15,240 Speaker 1: Bitcoin all those things and try to get into a 411 00:21:15,240 --> 00:21:16,879 Speaker 1: little bit more specifics. But before we do, I just 412 00:21:16,880 --> 00:21:18,480 Speaker 1: want to dive in a little bit deeper, just onto 413 00:21:18,520 --> 00:21:22,000 Speaker 1: this because you mentioned Kinsing economics, and so the government's 414 00:21:22,000 --> 00:21:23,960 Speaker 1: supposed to spend and kind of even out the gap, 415 00:21:24,080 --> 00:21:27,920 Speaker 1: so to speak. Right, Um, the other opposite kind of 416 00:21:27,960 --> 00:21:30,720 Speaker 1: school thought the Austrian economics, which a lot of people 417 00:21:30,720 --> 00:21:32,639 Speaker 1: don't really know a lot about today. But being in 418 00:21:32,680 --> 00:21:35,200 Speaker 1: the golden bitcoin, do you understand that? And I'm just 419 00:21:35,200 --> 00:21:39,320 Speaker 1: curious what lens you're looking at this from, because um, 420 00:21:39,520 --> 00:21:42,120 Speaker 1: ken Kensian believes we can just like spend and then 421 00:21:42,160 --> 00:21:44,600 Speaker 1: that kind of morse into this MMT theory where we 422 00:21:44,640 --> 00:21:47,480 Speaker 1: can just create as much money if we want. Austrians 423 00:21:47,480 --> 00:21:50,960 Speaker 1: believe that well, money isn't wealth. Wealth is goods and services, 424 00:21:51,480 --> 00:21:53,159 Speaker 1: and you just create more money and is chasing the 425 00:21:53,160 --> 00:21:55,800 Speaker 1: same good and services, which obviously creates that inflation. And 426 00:21:55,880 --> 00:21:58,400 Speaker 1: so the problem is you talk about the sovereign debt 427 00:21:58,440 --> 00:22:02,440 Speaker 1: bubble or this aunty bubble, but governments can't just print. 428 00:22:03,000 --> 00:22:06,440 Speaker 1: Creating currency doesn't create wealth. It's not it's not money 429 00:22:06,560 --> 00:22:08,080 Speaker 1: or whatever you want to use that as a word. 430 00:22:08,440 --> 00:22:11,320 Speaker 1: But Kensians and mm t believe you can. I'm curious 431 00:22:11,320 --> 00:22:12,840 Speaker 1: where you fall on that and how you look at 432 00:22:12,840 --> 00:22:15,879 Speaker 1: those two things versus compared to where we are today 433 00:22:15,920 --> 00:22:17,800 Speaker 1: and and what we're talking about with the government's printing 434 00:22:17,880 --> 00:22:23,639 Speaker 1: unlimited amounts of currency. So I I think when you 435 00:22:23,680 --> 00:22:26,080 Speaker 1: think about the Canadians tend to be right. They tend 436 00:22:26,119 --> 00:22:27,760 Speaker 1: to be very right for very long periods of time, 437 00:22:27,760 --> 00:22:29,760 Speaker 1: and then they tend to be very very wrong when 438 00:22:29,840 --> 00:22:33,679 Speaker 1: their policies caused the currency to break. UM and the 439 00:22:33,680 --> 00:22:36,440 Speaker 1: Austrians tend to be wrong, and the cold hashing is 440 00:22:36,480 --> 00:22:38,800 Speaker 1: cold hearted for a long periods of time and then 441 00:22:39,040 --> 00:22:43,760 Speaker 1: proven spectacularly right. You know, the was it Highker von 442 00:22:43,840 --> 00:22:46,280 Speaker 1: mess Or said, there's there's no means of stopping a 443 00:22:46,359 --> 00:22:48,960 Speaker 1: dead bubble. That you either have to go into a 444 00:22:49,000 --> 00:22:52,200 Speaker 1: deflation and work it off or you have a complete 445 00:22:52,200 --> 00:22:57,080 Speaker 1: catastrophe of the currency system involved. And UM where I 446 00:22:57,280 --> 00:23:00,960 Speaker 1: come down on it, I have influences of and to 447 00:23:01,200 --> 00:23:05,120 Speaker 1: me UM, I tend to try to be as pragmatic 448 00:23:05,200 --> 00:23:10,000 Speaker 1: as possible and while also working that in the context 449 00:23:10,160 --> 00:23:13,920 Speaker 1: of where the Austrians tend to be right in the 450 00:23:14,040 --> 00:23:17,800 Speaker 1: end um and because of it, because because of the 451 00:23:17,880 --> 00:23:21,280 Speaker 1: natural laws, it's because of the natural laws, and it's 452 00:23:21,320 --> 00:23:23,600 Speaker 1: and when you talk about the natural laws, the problem 453 00:23:23,720 --> 00:23:26,479 Speaker 1: with the Keynsie and the m m T view is 454 00:23:27,480 --> 00:23:31,800 Speaker 1: if you're going to UH say the government can can 455 00:23:32,000 --> 00:23:34,239 Speaker 1: can control as much or create as much currency as 456 00:23:34,240 --> 00:23:37,199 Speaker 1: they want and do whatever they want, you're right. But 457 00:23:37,280 --> 00:23:40,280 Speaker 1: there's an important caveat to that that they always leave 458 00:23:40,359 --> 00:23:43,840 Speaker 1: out some because they don't know some for maybe more 459 00:23:43,880 --> 00:23:49,800 Speaker 1: sinister reasons. But if you're going to allow the unbridled 460 00:23:49,800 --> 00:23:55,400 Speaker 1: emission of currency, you have to maintain control over very 461 00:23:55,480 --> 00:24:01,160 Speaker 1: sensitive subjects like population growth, um uh, emissions of of 462 00:24:01,359 --> 00:24:04,840 Speaker 1: raw material. You basically have to centrally plan if you're 463 00:24:04,840 --> 00:24:09,520 Speaker 1: gonna centrally plan your your your money emission, but you 464 00:24:09,640 --> 00:24:13,680 Speaker 1: don't centrally plan these natural rules like I said, population growth, 465 00:24:13,680 --> 00:24:16,360 Speaker 1: et cetera. Because really, what MMT, what Kenstons are doing 466 00:24:17,320 --> 00:24:22,200 Speaker 1: is fooling right there. They're they're pulling forward demand, they 467 00:24:22,200 --> 00:24:27,040 Speaker 1: are distorting economic signals in the short run to try 468 00:24:27,040 --> 00:24:29,520 Speaker 1: to smooth and they're making people believe things are actually 469 00:24:29,560 --> 00:24:32,200 Speaker 1: better than they are by adjusting the amount of the 470 00:24:32,320 --> 00:24:36,760 Speaker 1: signals in the market, which when trying to basically achieve 471 00:24:36,840 --> 00:24:40,640 Speaker 1: certain goals of smoothing on a modest level, okay, when 472 00:24:40,640 --> 00:24:45,000 Speaker 1: you're trying to prevent real bad political outcomes. Okay. But 473 00:24:45,119 --> 00:24:46,879 Speaker 1: the problem is, at some point you've got to go 474 00:24:47,000 --> 00:24:51,280 Speaker 1: back to letting the market really, because if you get 475 00:24:51,359 --> 00:24:55,720 Speaker 1: so far away from those natural laws, you get to 476 00:24:55,800 --> 00:25:00,680 Speaker 1: a point where reversing the Keynsian policies would be astrophic, 477 00:25:01,200 --> 00:25:03,439 Speaker 1: uh in a human toll and a human cost. And 478 00:25:03,480 --> 00:25:07,240 Speaker 1: at that point you're in this position which either you 479 00:25:07,320 --> 00:25:10,480 Speaker 1: kill the currency or you have a really really bad 480 00:25:10,480 --> 00:25:15,200 Speaker 1: outcome on the human cost and the natural law cost. 481 00:25:15,760 --> 00:25:18,560 Speaker 1: And they always choose the currency because nobody will right. 482 00:25:18,760 --> 00:25:23,280 Speaker 1: And so it really when you say in my Austrian 483 00:25:23,400 --> 00:25:26,840 Speaker 1: or am I Keynsie and I understand. I try to 484 00:25:26,920 --> 00:25:31,119 Speaker 1: understand both views really well, and I marry that with 485 00:25:31,640 --> 00:25:34,399 Speaker 1: the understanding of history and the understanding of human nature. 486 00:25:34,520 --> 00:25:36,800 Speaker 1: And so what I mean by that is people say, 487 00:25:37,320 --> 00:25:39,280 Speaker 1: was it the Fed's faulder? You know, why aren't you 488 00:25:39,320 --> 00:25:41,160 Speaker 1: Why aren't you harder on the Fed? And why aren't 489 00:25:41,160 --> 00:25:44,240 Speaker 1: you you know, you know, to me, it's it's it's 490 00:25:44,280 --> 00:25:46,879 Speaker 1: nobody's fault. It's human nature. You go back through time 491 00:25:47,320 --> 00:25:52,000 Speaker 1: time immemorial, it's it's it's greed and it's fear and 492 00:25:52,040 --> 00:25:56,399 Speaker 1: it's greed and it's fear, and it never changes. We 493 00:25:56,480 --> 00:25:58,640 Speaker 1: may be smarter, we may have more tech, we may 494 00:25:58,680 --> 00:26:01,040 Speaker 1: have cars, we may be able to have magic phones, 495 00:26:01,080 --> 00:26:03,240 Speaker 1: and we can talk to people, while the end of 496 00:26:03,240 --> 00:26:05,480 Speaker 1: the day, it's the same story as a thousand years ago, 497 00:26:05,520 --> 00:26:11,119 Speaker 1: two thousand years ago, five greed fear. And so the 498 00:26:11,359 --> 00:26:14,520 Speaker 1: challenge is that if you understand it's greed and fear, 499 00:26:15,280 --> 00:26:19,240 Speaker 1: what you find is that the amount of political courage 500 00:26:19,280 --> 00:26:22,440 Speaker 1: that is needed for a person or a small group 501 00:26:22,480 --> 00:26:25,680 Speaker 1: of people to really step up and do the very 502 00:26:25,760 --> 00:26:31,440 Speaker 1: difficult things politically to stop this train. Right this, Well, 503 00:26:31,480 --> 00:26:34,000 Speaker 1: we'll just spend a little more, We'll just spend the 504 00:26:34,160 --> 00:26:37,920 Speaker 1: the the amount of people in history, uh that can 505 00:26:37,960 --> 00:26:41,399 Speaker 1: stop this politically, there's just not that many politically, you know, 506 00:26:41,560 --> 00:26:44,880 Speaker 1: there's not that many politically brave people to start with. 507 00:26:45,000 --> 00:26:49,160 Speaker 1: And when you get into a representative democracy doesn't exist. 508 00:26:49,359 --> 00:26:52,040 Speaker 1: And then when you get into a representative democracy where 509 00:26:52,040 --> 00:26:54,680 Speaker 1: the government's you know, where it's purely fiat, and where 510 00:26:54,680 --> 00:26:57,320 Speaker 1: the debt of the government itself is the reserve asset 511 00:26:57,440 --> 00:27:00,240 Speaker 1: like it's been in the United States since nine you 512 00:27:00,280 --> 00:27:02,960 Speaker 1: are directly getting paid a lot of money not to 513 00:27:03,040 --> 00:27:06,320 Speaker 1: stop this train. You are being paid to accelerate this train. 514 00:27:07,119 --> 00:27:09,680 Speaker 1: And so it's really I try to I don't try 515 00:27:09,720 --> 00:27:12,600 Speaker 1: to go Kenzie or Austrian. I want to understand both 516 00:27:12,640 --> 00:27:15,760 Speaker 1: well and then understand it with this overlay of human nature. 517 00:27:16,600 --> 00:27:22,400 Speaker 1: And when you do that, it's it can be disconcerting, 518 00:27:22,480 --> 00:27:24,840 Speaker 1: but you just realize you try to try to be 519 00:27:24,840 --> 00:27:26,800 Speaker 1: as objective. I try to be as objective. It is 520 00:27:26,840 --> 00:27:31,760 Speaker 1: what it is and human nature, and Okay, this is 521 00:27:31,800 --> 00:27:33,679 Speaker 1: what's gonna happen. If this is how you know, it's 522 00:27:33,680 --> 00:27:35,760 Speaker 1: like Kerry McGuire, right, if this is where it's gonna happen, 523 00:27:35,800 --> 00:27:38,440 Speaker 1: this is where it's gonna happen. And at that point 524 00:27:38,520 --> 00:27:41,800 Speaker 1: I just try to take that approach for my clients, 525 00:27:42,160 --> 00:27:45,000 Speaker 1: for my readers and say, look, this is this is 526 00:27:45,040 --> 00:27:46,760 Speaker 1: where we're going. And I'm not gonna sit here and say, oh, 527 00:27:46,800 --> 00:27:49,720 Speaker 1: it's all offense fault. If everyone's got a little handed, 528 00:27:49,720 --> 00:27:51,480 Speaker 1: we all got a hand in this um. You know, 529 00:27:51,720 --> 00:27:53,600 Speaker 1: if you if you like your entitlement, if you like 530 00:27:53,640 --> 00:27:56,040 Speaker 1: your mortgage deduction, if you like you know, if you 531 00:27:56,160 --> 00:27:59,560 Speaker 1: whatever it is, it gets hard to stop. And so 532 00:27:59,640 --> 00:28:02,040 Speaker 1: that's where I shake out on it. Really, I I 533 00:28:02,119 --> 00:28:04,840 Speaker 1: understand being pragmatic and often say that, you know, we 534 00:28:04,840 --> 00:28:07,480 Speaker 1: we can't invest as we want things to be or 535 00:28:07,520 --> 00:28:10,000 Speaker 1: as we think things should be, but just as they are. 536 00:28:10,080 --> 00:28:12,160 Speaker 1: It is what it is, as you said. The only 537 00:28:12,200 --> 00:28:14,520 Speaker 1: thing though, is I think depending on which way you 538 00:28:14,600 --> 00:28:17,440 Speaker 1: view it, um, it can shift the way you look 539 00:28:17,440 --> 00:28:19,840 Speaker 1: at the outcome. Because if you believe that Kensan and 540 00:28:19,920 --> 00:28:21,520 Speaker 1: m M T will work, well, then shoot, this can 541 00:28:21,560 --> 00:28:24,359 Speaker 1: just go on forever. But if you understand that it can't, 542 00:28:24,359 --> 00:28:26,520 Speaker 1: that that doesn't work, like more Austrian, you'll realize that 543 00:28:26,560 --> 00:28:29,040 Speaker 1: this is probably coming to a head pretty soon exactly. 544 00:28:29,160 --> 00:28:31,960 Speaker 1: So it does change what you and how you interpret 545 00:28:32,000 --> 00:28:34,920 Speaker 1: the data. It is what it is. But um, so, 546 00:28:34,920 --> 00:28:37,399 Speaker 1: so to set this up a little bit, you know, um, 547 00:28:37,440 --> 00:28:40,440 Speaker 1: the debt to GDP is exploding. You talked about, Um, 548 00:28:40,480 --> 00:28:43,360 Speaker 1: you know these entitlements that we have I heard you 549 00:28:43,600 --> 00:28:46,560 Speaker 1: talking about like the big three that the government you know, 550 00:28:46,760 --> 00:28:49,040 Speaker 1: non negotiables I think you called them, right, which is 551 00:28:49,360 --> 00:28:52,560 Speaker 1: the interest on the debt, the military and the entitlements. 552 00:28:53,080 --> 00:28:56,440 Speaker 1: So those three are like a hundred of income of 553 00:28:56,440 --> 00:29:00,400 Speaker 1: tax receipts of of of of income, right, um. And 554 00:29:00,440 --> 00:29:02,480 Speaker 1: so we have that and You've also mentioned how the 555 00:29:02,520 --> 00:29:06,200 Speaker 1: government's never brought the debt down. The debt has only 556 00:29:06,240 --> 00:29:08,440 Speaker 1: gone up, right, so it's only going up now, we're 557 00:29:09,600 --> 00:29:14,320 Speaker 1: um and so now they're saying that will shoot if 558 00:29:14,360 --> 00:29:18,360 Speaker 1: we can grow the balance sheet, um, you know, below 559 00:29:18,520 --> 00:29:22,000 Speaker 1: the GDP growth, we could probably just keep this going forever. 560 00:29:23,080 --> 00:29:26,080 Speaker 1: And so given that, I mean, how how are you 561 00:29:26,120 --> 00:29:28,320 Speaker 1: looking at this debt to GDP model? I mean, we're 562 00:29:28,400 --> 00:29:30,280 Speaker 1: ready to just explode it. I mean, that's their license 563 00:29:30,320 --> 00:29:33,840 Speaker 1: to just keep printing money. It's incredible. Right, So two 564 00:29:33,920 --> 00:29:37,240 Speaker 1: or three weeks ago, um, you had a meeting of 565 00:29:37,240 --> 00:29:40,120 Speaker 1: the minds with the Brookings Institute and the Peterson Institute 566 00:29:40,160 --> 00:29:44,320 Speaker 1: to the biggest thing thanks in Washington. Really almost bipartisan, right. 567 00:29:44,360 --> 00:29:47,360 Speaker 1: The Peterson tends to be pretty fiscally conservative, Brookings maybe 568 00:29:47,360 --> 00:29:50,840 Speaker 1: a little bit more Keynsie and um and and they 569 00:29:50,840 --> 00:29:54,200 Speaker 1: did a zoom call and it was Bernankee and Summers 570 00:29:54,320 --> 00:29:59,080 Speaker 1: and rogue Off and Blanchard and Jason Furman, who was 571 00:29:59,280 --> 00:30:01,080 Speaker 1: probably the least one of those, but he was a 572 00:30:01,320 --> 00:30:07,040 Speaker 1: chief economic advisor to President Obama. Uh And and so 573 00:30:07,160 --> 00:30:09,880 Speaker 1: you've got two former i m F Chief economists, former 574 00:30:09,920 --> 00:30:13,360 Speaker 1: head of the Fed, former head of our former Secretary 575 00:30:13,360 --> 00:30:17,240 Speaker 1: of Treasury and the head of the Obama Economic Advisors, 576 00:30:17,920 --> 00:30:19,920 Speaker 1: and they all agree on the same thing, which is 577 00:30:20,800 --> 00:30:25,040 Speaker 1: the debt isn't a problem. Is long as we look 578 00:30:25,200 --> 00:30:28,640 Speaker 1: at the mp V the net present value of U 579 00:30:28,760 --> 00:30:31,320 Speaker 1: S GDP, which if we use the cbo S data 580 00:30:31,840 --> 00:30:34,760 Speaker 1: on interest rates, is about three point nine quadrillion dollars 581 00:30:34,800 --> 00:30:37,600 Speaker 1: And then at that rate, the trillion is not that 582 00:30:37,640 --> 00:30:42,320 Speaker 1: bad against three point nine quadrillion dollars um. But and 583 00:30:42,480 --> 00:30:44,920 Speaker 1: they went on to say that if we can if 584 00:30:44,960 --> 00:30:47,080 Speaker 1: the rate of if the interest rate we pay on 585 00:30:47,120 --> 00:30:49,520 Speaker 1: the debt is below the rate of nominal GDP growth, 586 00:30:50,040 --> 00:30:54,480 Speaker 1: then the mp V of of GDP is infinite and 587 00:30:54,560 --> 00:31:00,320 Speaker 1: debt doesn't matter at all. You go, holy cow. And 588 00:31:00,440 --> 00:31:05,440 Speaker 1: now academically their math is right. They are absolutely right 589 00:31:05,480 --> 00:31:08,520 Speaker 1: that as long as rates are below growth, it doesn't matter. 590 00:31:08,880 --> 00:31:13,040 Speaker 1: So then you go, what they're leaving out is how 591 00:31:13,040 --> 00:31:15,080 Speaker 1: are they going to keep rates below growth? And what 592 00:31:15,240 --> 00:31:18,080 Speaker 1: idiot is going to hold a you know, a one 593 00:31:18,160 --> 00:31:22,479 Speaker 1: percent a tenure treasury bond yielding ninety basis points when 594 00:31:22,560 --> 00:31:27,840 Speaker 1: GDPs four or three or two even for any extent rate, 595 00:31:27,880 --> 00:31:30,320 Speaker 1: you want to positive real rate, otherwise you are losing 596 00:31:30,680 --> 00:31:34,560 Speaker 1: real purchasing power. And the answer they don't. They never 597 00:31:34,600 --> 00:31:39,080 Speaker 1: address the issue, which to me, um, you know, it's 598 00:31:39,120 --> 00:31:42,160 Speaker 1: it's it's. It's one of those things where when somebody 599 00:31:42,200 --> 00:31:45,480 Speaker 1: doesn't say something obvious, it's because they don't have to. 600 00:31:45,800 --> 00:31:48,560 Speaker 1: It's because you know the answer already, you know, don't 601 00:31:48,600 --> 00:31:50,600 Speaker 1: make them say it. It's you know, you have to 602 00:31:50,600 --> 00:31:53,680 Speaker 1: ask so much of field curve control, what's that yield 603 00:31:54,520 --> 00:31:57,479 Speaker 1: curve control? That's exactly where this is going. They are 604 00:31:57,600 --> 00:31:59,720 Speaker 1: they know they're going to keep our the rate of 605 00:31:59,760 --> 00:32:02,200 Speaker 1: interest us below g the rate of growth on nominal 606 00:32:02,280 --> 00:32:06,200 Speaker 1: GDP growth, and and it's it was a fascinating thing 607 00:32:06,240 --> 00:32:08,280 Speaker 1: to me because it was just further confirmation we've been 608 00:32:08,280 --> 00:32:11,800 Speaker 1: writing about this for years saying, look, is this debt 609 00:32:11,840 --> 00:32:15,240 Speaker 1: problem gets worse, there's one way out of this. They're 610 00:32:15,240 --> 00:32:16,920 Speaker 1: gonna cap you. They're gonna do what they did after 611 00:32:16,960 --> 00:32:19,760 Speaker 1: World War two. Real rates, real interest rates, which is 612 00:32:19,800 --> 00:32:23,240 Speaker 1: a rate nominal interest rate minus inflation is going to 613 00:32:23,240 --> 00:32:28,720 Speaker 1: get really really negative. And uh, to hear these really 614 00:32:29,120 --> 00:32:33,360 Speaker 1: luminaries just talk about this just so lack of daisically 615 00:32:33,360 --> 00:32:36,200 Speaker 1: so they just just this, as long as long as 616 00:32:36,240 --> 00:32:38,480 Speaker 1: you know GDP is infinite, not mp B A GDP 617 00:32:38,600 --> 00:32:41,920 Speaker 1: is infinite. We keep our below cheating you go. They're 618 00:32:41,960 --> 00:32:44,800 Speaker 1: they're planning to whatever they have to do. When you say, okay, well, 619 00:32:44,800 --> 00:32:48,200 Speaker 1: what how do they keep our below? G the release vouse, 620 00:32:48,240 --> 00:32:50,400 Speaker 1: the FEDS balance sheet, the FENS balance sheet is what's 621 00:32:50,400 --> 00:32:53,440 Speaker 1: going to go up? Um, you know the dollar is 622 00:32:53,480 --> 00:32:55,400 Speaker 1: going to be the release valve. The dollar is going 623 00:32:55,480 --> 00:32:59,040 Speaker 1: to go down. And that's they're telling you what the 624 00:32:59,080 --> 00:33:01,920 Speaker 1: game plan is, and it really is. You know, when 625 00:33:01,920 --> 00:33:05,000 Speaker 1: you talk about bottlenecks, the bottle next the debt and 626 00:33:05,040 --> 00:33:06,760 Speaker 1: there's a couple of different ways it canna be released. 627 00:33:06,760 --> 00:33:12,680 Speaker 1: So we talked about deflation, restructuring, uh inflation or hyperinflation, 628 00:33:12,840 --> 00:33:15,240 Speaker 1: and so they're they're telling you they're going to financially 629 00:33:15,240 --> 00:33:18,600 Speaker 1: repress bond holders. And the risk is if this gets 630 00:33:18,640 --> 00:33:20,800 Speaker 1: away from them, that they have you know, a hyperinflation 631 00:33:20,840 --> 00:33:26,520 Speaker 1: of sorts um potentially. Yeah. So yeah, they put themselves 632 00:33:26,560 --> 00:33:28,000 Speaker 1: into in between a rock and a hard place, and 633 00:33:28,040 --> 00:33:30,800 Speaker 1: there's really only one or two options for them to 634 00:33:30,840 --> 00:33:34,520 Speaker 1: continue going. Um. And we kind of know, as you said, 635 00:33:34,560 --> 00:33:36,320 Speaker 1: human nature, so we kind of know which which path 636 00:33:36,320 --> 00:33:38,880 Speaker 1: they're going to choose. And now we've seen the FED 637 00:33:38,920 --> 00:33:43,200 Speaker 1: take on social justice issues. So now they're you know, 638 00:33:43,240 --> 00:33:44,800 Speaker 1: I said that when the whole when all you have 639 00:33:44,800 --> 00:33:46,360 Speaker 1: as a hammer, the whole world looks like a mail right. 640 00:33:46,400 --> 00:33:49,960 Speaker 1: And so now they want to fix gender inequality, incoming equality, 641 00:33:50,360 --> 00:33:52,440 Speaker 1: you know, climate change. But all they have is a 642 00:33:52,480 --> 00:33:56,120 Speaker 1: monetary tool or a fiscal tool. I guess now supposedly 643 00:33:56,200 --> 00:33:59,520 Speaker 1: or whatever. So um, that just only accelerates the problem. 644 00:33:59,600 --> 00:34:02,920 Speaker 1: I guess at the point I think, so you know, 645 00:34:02,960 --> 00:34:05,320 Speaker 1: people have asked me. I mean, for me, the FED 646 00:34:05,520 --> 00:34:09,040 Speaker 1: needs the balance sheet needs to grow, and for the 647 00:34:09,040 --> 00:34:11,160 Speaker 1: balance sheet to keep growing in a recovery, you need 648 00:34:11,200 --> 00:34:16,359 Speaker 1: to find other narratives that cover the political Uh why 649 00:34:16,400 --> 00:34:19,920 Speaker 1: does the balance sheet need to continue to grow? The 650 00:34:19,920 --> 00:34:22,320 Speaker 1: balance sheet needs to continue to grow if the United 651 00:34:22,320 --> 00:34:25,600 Speaker 1: States is not going to default on either entitlements, slashes 652 00:34:25,680 --> 00:34:31,200 Speaker 1: defense budget, or default on treasuries. In other words, Um, 653 00:34:31,239 --> 00:34:35,360 Speaker 1: if the if foreigners continue to not buy enough treasuries, 654 00:34:35,520 --> 00:34:37,600 Speaker 1: and they really can't when you look at it, we're 655 00:34:37,680 --> 00:34:42,160 Speaker 1: running up three trillion dollar deficit this year um normalized, 656 00:34:42,200 --> 00:34:44,320 Speaker 1: Say GDP really takes off, maybe it's a trillion and 657 00:34:44,320 --> 00:34:46,560 Speaker 1: a half. Two we get back there. You still look 658 00:34:46,600 --> 00:34:49,920 Speaker 1: at that number, and you go, nobody else in the 659 00:34:49,960 --> 00:34:53,600 Speaker 1: world has the balance sheet to buy those that kind 660 00:34:53,600 --> 00:34:55,520 Speaker 1: of debt, and they certainly don't have the balance sheet 661 00:34:55,520 --> 00:34:57,279 Speaker 1: to buy that kind of debt at negative real rates, 662 00:34:57,280 --> 00:34:59,799 Speaker 1: where we are stealing money back from them, right, And 663 00:35:00,000 --> 00:35:03,200 Speaker 1: so the release spell has to be the dollar it had. 664 00:35:03,280 --> 00:35:05,960 Speaker 1: You got to get the dollar down to reduce the deficits, 665 00:35:05,960 --> 00:35:09,040 Speaker 1: to reduce the carrying cost of those deficits, the ability 666 00:35:09,080 --> 00:35:11,239 Speaker 1: of those those other countries to buy those depthits if 667 00:35:11,280 --> 00:35:15,200 Speaker 1: they want to, and if not, in the meantime, someone 668 00:35:15,280 --> 00:35:18,360 Speaker 1: has to buy them. And if the US does not 669 00:35:18,440 --> 00:35:21,560 Speaker 1: have the private sector balance sheet either. That's ultimately why 670 00:35:22,040 --> 00:35:25,200 Speaker 1: repo rates spiked last fall. It's ultimately why the FED 671 00:35:25,280 --> 00:35:29,440 Speaker 1: had that. It's why treasury rates began rising sharply in March. 672 00:35:29,640 --> 00:35:32,400 Speaker 1: As stocks crashed, the treasury markets started crashing along with it. 673 00:35:32,680 --> 00:35:35,319 Speaker 1: The issue is nobody has the balance sheet at that point. 674 00:35:35,400 --> 00:35:38,880 Speaker 1: Everybody turns seller, foreigners turn seller, at treasury turn seller, 675 00:35:39,040 --> 00:35:41,520 Speaker 1: and the only person to buy is the FED. And 676 00:35:41,560 --> 00:35:45,200 Speaker 1: so that's why the balance sheet has to rise. Yeah, 677 00:35:45,239 --> 00:35:47,200 Speaker 1: so I wanna, I wanna, do you have a kind 678 00:35:47,200 --> 00:35:50,400 Speaker 1: of a unique cake on Gold's role in this and 679 00:35:50,440 --> 00:35:52,160 Speaker 1: why what they may want to do with gold to 680 00:35:52,239 --> 00:35:53,840 Speaker 1: kind of prevent that. But before we dip into that, 681 00:35:53,880 --> 00:35:57,080 Speaker 1: I wanted to talk about, um, talk about inflation. And 682 00:35:57,120 --> 00:35:59,200 Speaker 1: so the Fed keeps saying they can't get inflation. They 683 00:35:59,239 --> 00:36:01,680 Speaker 1: can't get inflation, and they're gonna let it run hot. 684 00:36:01,680 --> 00:36:03,719 Speaker 1: They're gonna now average it out over years, all these 685 00:36:03,719 --> 00:36:07,319 Speaker 1: different things. Um, But they go off of c p I. Right, 686 00:36:08,000 --> 00:36:11,799 Speaker 1: But the CPI and CPI continues to change. Right in 687 00:36:11,840 --> 00:36:14,719 Speaker 1: the eighties have changed and the nineties have changed. Um. 688 00:36:14,760 --> 00:36:17,840 Speaker 1: But at the same time, you and I everybody that 689 00:36:17,920 --> 00:36:21,400 Speaker 1: spends money knows that prices have gone absolutely crazy. I mean, 690 00:36:21,400 --> 00:36:23,759 Speaker 1: I'm in southern California. Homes have doubled in three in 691 00:36:23,760 --> 00:36:28,280 Speaker 1: the last three years, they've doubled. So the dollar has dropped, 692 00:36:28,280 --> 00:36:30,040 Speaker 1: you know, double right now, if you try to buy 693 00:36:30,040 --> 00:36:32,480 Speaker 1: a used car and RV a boat, I mean, good luck. 694 00:36:32,760 --> 00:36:35,920 Speaker 1: The prices have gone. Bicycles, mountain bikes, I mean, you 695 00:36:36,000 --> 00:36:39,080 Speaker 1: name it. My I'm a I'm a surfer, my surfboard shaper. 696 00:36:39,080 --> 00:36:41,920 Speaker 1: They have fifteen hundred boards on back order. They can't 697 00:36:41,920 --> 00:36:45,359 Speaker 1: feel right now like prices are going astronomal everything. I mean, 698 00:36:45,400 --> 00:36:47,360 Speaker 1: you name it, right, food. I used to go to 699 00:36:47,440 --> 00:36:49,919 Speaker 1: lunch for five bucks. It's twelve bucks today. I mean, hey, 700 00:36:50,040 --> 00:36:52,040 Speaker 1: just another quick interruption to let you know that this 701 00:36:52,120 --> 00:36:54,600 Speaker 1: video it's brought to you add free by Block five. 702 00:36:54,719 --> 00:36:57,160 Speaker 1: Now they allow you to hold onto your bitcoin and 703 00:36:57,200 --> 00:36:59,880 Speaker 1: your other cryptos for all the potential upside, and at 704 00:36:59,880 --> 00:37:02,759 Speaker 1: the same time you can earn high yielding interest on it, 705 00:37:02,840 --> 00:37:05,360 Speaker 1: so it basically cash flows. Now with block five you 706 00:37:05,400 --> 00:37:08,160 Speaker 1: can earn up to eight point six percent interest. You 707 00:37:08,160 --> 00:37:11,360 Speaker 1: can also borrow against your crypto as well. It's super fast, 708 00:37:11,400 --> 00:37:13,640 Speaker 1: it's super easy to set up an account, and right 709 00:37:13,680 --> 00:37:16,160 Speaker 1: now you can get up to two d and fifty dollars. 710 00:37:16,200 --> 00:37:18,360 Speaker 1: When you set up your account, check the link in 711 00:37:18,400 --> 00:37:20,759 Speaker 1: the description that I have for details in order to 712 00:37:20,800 --> 00:37:23,800 Speaker 1: claim that two and fifty dollars. Because Block five is 713 00:37:23,840 --> 00:37:25,480 Speaker 1: the future of finance. Just check the link in the 714 00:37:25,520 --> 00:37:27,879 Speaker 1: description for all the details of how to claim your 715 00:37:27,880 --> 00:37:31,839 Speaker 1: two and fifty dollars today. So how do you look 716 00:37:31,880 --> 00:37:33,800 Speaker 1: at that? I mean people say, well, you don't understand 717 00:37:33,800 --> 00:37:36,279 Speaker 1: CPI because CPI really encompasses all these things. But I 718 00:37:36,280 --> 00:37:39,000 Speaker 1: also understand that it substitutes things and it changes. And 719 00:37:39,000 --> 00:37:41,000 Speaker 1: if we look at how we measured in the eighties, 720 00:37:41,760 --> 00:37:45,120 Speaker 1: we show massive inflation. So when we talk about coming 721 00:37:45,200 --> 00:37:47,680 Speaker 1: inflation and what they're doing, and as you said, that's 722 00:37:47,719 --> 00:37:50,719 Speaker 1: one of the options is inflation. But then people would argue, no, 723 00:37:50,800 --> 00:37:52,960 Speaker 1: we're not having it because look at CPI. How do 724 00:37:53,000 --> 00:37:56,040 Speaker 1: you reconcile what people are really seeing versus what the 725 00:37:56,040 --> 00:38:05,040 Speaker 1: government's reporting. So one of the things about government again 726 00:38:05,080 --> 00:38:08,640 Speaker 1: this is goes back time immemorial. Once the government starts 727 00:38:08,640 --> 00:38:11,640 Speaker 1: to run into fiscal problems, one of the first tricks 728 00:38:11,719 --> 00:38:15,480 Speaker 1: is to start tinkering with CPI. Right that the inflation 729 00:38:15,600 --> 00:38:19,520 Speaker 1: rate um and it's critically important in in a government 730 00:38:19,520 --> 00:38:23,440 Speaker 1: that's a massive debtor, and particularly when the government that's 731 00:38:23,440 --> 00:38:25,239 Speaker 1: a massive debt or like the United States, when the 732 00:38:25,239 --> 00:38:28,440 Speaker 1: basis of their economy is so highly financialized, so highly 733 00:38:28,440 --> 00:38:33,640 Speaker 1: interest rate sensitive, it makes it doubly important to make 734 00:38:33,760 --> 00:38:37,720 Speaker 1: sure that the cp I is being calculated in service 735 00:38:37,760 --> 00:38:40,879 Speaker 1: to the bond market, which is to say, you need 736 00:38:41,120 --> 00:38:43,960 Speaker 1: you know, their goal seeking it h. We can debate 737 00:38:44,360 --> 00:38:47,880 Speaker 1: how much they're moving it to goal seek it uh, 738 00:38:48,239 --> 00:38:51,040 Speaker 1: but their goal seeking it and the the CPI needs 739 00:38:51,080 --> 00:38:54,600 Speaker 1: to be some level that is okay showing that the 740 00:38:54,600 --> 00:38:58,120 Speaker 1: FED is making gains, but you know, in their policy 741 00:38:58,160 --> 00:39:00,799 Speaker 1: to increase inflation, but not so much that the bond 742 00:39:00,800 --> 00:39:03,319 Speaker 1: market freaks out. Because at the bond market freaks out, 743 00:39:03,360 --> 00:39:05,440 Speaker 1: the US government can't pay its bills because when you 744 00:39:05,480 --> 00:39:09,760 Speaker 1: once you're a that the GDP your interests, and your GDP, 745 00:39:09,880 --> 00:39:11,840 Speaker 1: by the way, is highly interest rate sensitive. So the 746 00:39:11,920 --> 00:39:14,919 Speaker 1: higher rates go, the lower GDP is going to go uh, 747 00:39:14,960 --> 00:39:18,759 Speaker 1: and higher your interests gonna go. Uh. It's they're stuck 748 00:39:18,800 --> 00:39:20,440 Speaker 1: between this rock and a hard place. If we need 749 00:39:20,480 --> 00:39:23,160 Speaker 1: to show the FED having some success, and we need 750 00:39:23,200 --> 00:39:26,520 Speaker 1: to also make sure that the government, you know, is 751 00:39:26,560 --> 00:39:30,160 Speaker 1: not insolvent because rates arising. And so I think the 752 00:39:30,239 --> 00:39:32,960 Speaker 1: first answer is it's it's being goal seeking, has being 753 00:39:33,000 --> 00:39:34,719 Speaker 1: goal seek for a long time. And I think as 754 00:39:35,239 --> 00:39:36,759 Speaker 1: the long you know, you look at the history and 755 00:39:36,800 --> 00:39:39,200 Speaker 1: you can see it into the things you were just describing. 756 00:39:40,360 --> 00:39:42,520 Speaker 1: The longer this game goes on, the more egregious the 757 00:39:42,520 --> 00:39:46,600 Speaker 1: goal seeking gets, and ultimately it ties back to our 758 00:39:46,800 --> 00:39:51,120 Speaker 1: the earlier conversation we had about the natural world, the 759 00:39:51,680 --> 00:39:55,680 Speaker 1: real world, the natural laws, and it was interesting. I 760 00:39:55,719 --> 00:39:59,279 Speaker 1: had to charge. I did a presentation end of and 761 00:39:59,320 --> 00:40:01,880 Speaker 1: I borrowed it art that Ray Dalio put out publicly, 762 00:40:01,880 --> 00:40:07,359 Speaker 1: and it showed, uh, the amount of populism in Western elections, 763 00:40:07,760 --> 00:40:11,279 Speaker 1: and it showed like nineteen thirty one, it was a 764 00:40:11,360 --> 00:40:13,520 Speaker 1: real high number, and then it sort of trended down 765 00:40:13,719 --> 00:40:17,360 Speaker 1: and it was very low Western populism for the next 766 00:40:18,040 --> 00:40:22,040 Speaker 1: eighty years, and then all of a sudden in you 767 00:40:22,120 --> 00:40:25,239 Speaker 1: have all these populist outcomes Breggs and Trump and so 768 00:40:25,280 --> 00:40:30,160 Speaker 1: on so forth. And my point is with that, with 769 00:40:30,239 --> 00:40:33,200 Speaker 1: whether I made when I showed that chart was CPI 770 00:40:33,440 --> 00:40:35,839 Speaker 1: is low, right, CPI is low. CPI is low. See 771 00:40:35,920 --> 00:40:40,240 Speaker 1: we need higher CPI the election outcome. The natural world 772 00:40:40,360 --> 00:40:43,440 Speaker 1: is telling you that real living standards have been falling 773 00:40:43,520 --> 00:40:45,839 Speaker 1: for an extended period of time, because the only time 774 00:40:45,840 --> 00:40:49,640 Speaker 1: you get political populism is when real living standards fall 775 00:40:49,719 --> 00:40:51,560 Speaker 1: for an extended period of time. Now, in the thirties 776 00:40:52,000 --> 00:40:55,560 Speaker 1: you were having real living standards fall from deflation. Um, 777 00:40:55,719 --> 00:40:59,360 Speaker 1: they were falling nominally. Now we've had this. You know, 778 00:40:59,400 --> 00:41:02,160 Speaker 1: there's a chart, another chart using a presentation earlier this 779 00:41:02,239 --> 00:41:04,040 Speaker 1: year as a Bank of America char and it shows 780 00:41:05,160 --> 00:41:09,040 Speaker 1: UM the cost of thriving index. Right, So we can argue, 781 00:41:09,040 --> 00:41:10,920 Speaker 1: all right, you know, you need a car, you need education, 782 00:41:10,960 --> 00:41:12,560 Speaker 1: you need house, you need, you know, So there's the 783 00:41:12,719 --> 00:41:14,920 Speaker 1: we can argue the list of goods that they have 784 00:41:15,160 --> 00:41:18,400 Speaker 1: is that thriving, is that luxury or whatever. The point 785 00:41:18,480 --> 00:41:22,000 Speaker 1: was this it was fifty of the median household income 786 00:41:22,040 --> 00:41:26,760 Speaker 1: and it's now, excuse me, the five It took twenty 787 00:41:26,760 --> 00:41:30,359 Speaker 1: five weeks of the median household income to afford these things, 788 00:41:31,000 --> 00:41:34,640 Speaker 1: and in eighteen or twenty it's now fifty three weeks. 789 00:41:35,080 --> 00:41:37,120 Speaker 1: The problem being there's only fifty two weeks in a year. 790 00:41:37,480 --> 00:41:40,520 Speaker 1: And this this then ties into that natural law. So 791 00:41:40,960 --> 00:41:44,160 Speaker 1: at any rate, what I'm saying is is that the 792 00:41:44,239 --> 00:41:47,840 Speaker 1: populism we're seeing would tell you the inflation is being 793 00:41:47,880 --> 00:41:50,560 Speaker 1: and that's what we're seeing it show up. Um, that's 794 00:41:50,600 --> 00:41:54,239 Speaker 1: the first that's the first warning signal in my view. Yeah, 795 00:41:54,239 --> 00:41:57,160 Speaker 1: I mean, pre pre pandemic. I think there was eight 796 00:41:57,200 --> 00:41:59,840 Speaker 1: countries in the world that had over a million people 797 00:42:00,080 --> 00:42:04,120 Speaker 1: each protesting. Um, so obviously Hong Kong we know about, 798 00:42:04,200 --> 00:42:08,799 Speaker 1: Obviously Lebanon, Argentina, Venezuela, all three your frands had it. 799 00:42:08,800 --> 00:42:11,080 Speaker 1: I mean there was eight countries with a million people each, 800 00:42:11,120 --> 00:42:13,120 Speaker 1: and and it's happening still today. We just don't hear 801 00:42:13,120 --> 00:42:15,440 Speaker 1: a lot about it. But we'll kind of move past that. 802 00:42:15,480 --> 00:42:17,759 Speaker 1: But but to summarize what you were saying, I guess 803 00:42:17,880 --> 00:42:19,480 Speaker 1: is kind of what I was saying, which is we 804 00:42:19,560 --> 00:42:21,960 Speaker 1: are seeing inflation and we can see that expressed through 805 00:42:22,000 --> 00:42:25,800 Speaker 1: popular populism, even though CPI may not be showing it. 806 00:42:26,360 --> 00:42:29,560 Speaker 1: So um, yeah, so that's interesting. Now, um, digging into 807 00:42:29,600 --> 00:42:33,200 Speaker 1: gold a little bit. So you've talked about how um 808 00:42:33,400 --> 00:42:38,040 Speaker 1: central banks might actually want or need to see gold's 809 00:42:38,080 --> 00:42:41,520 Speaker 1: price rise, which seems really weird because most people would 810 00:42:41,520 --> 00:42:43,880 Speaker 1: think that gold is the enemy of the Fed, right, 811 00:42:43,880 --> 00:42:46,479 Speaker 1: they want us to use a fake money, not gold, um, 812 00:42:46,560 --> 00:42:48,600 Speaker 1: and they've probably worked really hard to manipulate the price 813 00:42:48,600 --> 00:42:51,439 Speaker 1: of gold down. But you're you have this theory. I think, 814 00:42:51,520 --> 00:42:53,160 Speaker 1: if I'm reading it correctly, that you think there's a 815 00:42:53,200 --> 00:42:55,480 Speaker 1: reason why the Fed might actually need or want the 816 00:42:55,480 --> 00:42:58,719 Speaker 1: price of gold to go up. Yeah. I think I 817 00:42:58,760 --> 00:43:02,600 Speaker 1: think they actually do. And I think it's one of 818 00:43:02,640 --> 00:43:05,720 Speaker 1: these things where again it's a long cycle thing where 819 00:43:05,800 --> 00:43:07,399 Speaker 1: you know, the Kansians are right for a long time, 820 00:43:07,440 --> 00:43:10,640 Speaker 1: and then the Austrians are right and nothing. It's the 821 00:43:10,680 --> 00:43:12,879 Speaker 1: same type of dynamic here where for a long period 822 00:43:12,920 --> 00:43:15,360 Speaker 1: of time, gold is the enemy, and then once you 823 00:43:15,360 --> 00:43:19,839 Speaker 1: get too far into this fiat debasement thing. They need 824 00:43:19,960 --> 00:43:23,439 Speaker 1: negative real rates. Uh, they need to demonstrate that real 825 00:43:23,520 --> 00:43:26,920 Speaker 1: rates are significantly negative. Um. And if you look at 826 00:43:26,960 --> 00:43:29,560 Speaker 1: the correlation between real rates, if you invert them and 827 00:43:29,560 --> 00:43:31,279 Speaker 1: then you put it over the gold price, it is 828 00:43:31,719 --> 00:43:38,600 Speaker 1: perfectly it is perfectly uh correlated nearly. And so when 829 00:43:38,600 --> 00:43:43,279 Speaker 1: we talk about what Rogue Golf and Blanche Heart and 830 00:43:43,280 --> 00:43:46,680 Speaker 1: all these guys just said on Bernankee and Summers and 831 00:43:47,239 --> 00:43:49,400 Speaker 1: just said, as we need our below g right, we 832 00:43:49,480 --> 00:43:52,600 Speaker 1: need the rate of interest below growth or else we're screwed. 833 00:43:54,400 --> 00:43:57,040 Speaker 1: The rate of interest below growth or we're screwed. And 834 00:43:57,160 --> 00:44:01,160 Speaker 1: golden and golden being flatted down, those are mutually exclusive 835 00:44:01,200 --> 00:44:05,120 Speaker 1: because if goals flatted down, real rates are rising. And 836 00:44:05,200 --> 00:44:07,920 Speaker 1: so if gold is actually falling, what it's telling you 837 00:44:08,000 --> 00:44:09,880 Speaker 1: is real rates are rising. What's telling you, as the 838 00:44:09,960 --> 00:44:13,840 Speaker 1: U S is fiscal situation, Western sovereigns fiscal situation more broadly, 839 00:44:14,480 --> 00:44:17,279 Speaker 1: is becoming more untenable because once you're at these debt 840 00:44:17,360 --> 00:44:19,440 Speaker 1: levels a few positive real rates, they're doc it's over. 841 00:44:19,480 --> 00:44:22,440 Speaker 1: They're they're gonna default or their fed's gonna have to 842 00:44:22,480 --> 00:44:24,680 Speaker 1: buy it all at some point in not too distant 843 00:44:24,680 --> 00:44:27,640 Speaker 1: future with printed money. And so that's why I say 844 00:44:27,640 --> 00:44:31,800 Speaker 1: that is it ultimately, um, gold rising helps these guys. 845 00:44:31,800 --> 00:44:36,360 Speaker 1: It creates the view in the market of hey, gold's rising, 846 00:44:36,400 --> 00:44:40,720 Speaker 1: real rates you know, inflation. They it starts to change 847 00:44:40,719 --> 00:44:44,799 Speaker 1: that mentality in a market based way. Right, you start 848 00:44:44,800 --> 00:44:46,839 Speaker 1: getting gold going, the algoris are gonna start. Oh, real 849 00:44:46,920 --> 00:44:48,520 Speaker 1: rates are getting worse. You are right, you're getting worse, 850 00:44:48,560 --> 00:44:54,200 Speaker 1: and and that that paradoxically helps them. Got it. That's interesting. 851 00:44:54,680 --> 00:44:57,279 Speaker 1: So if we start trying to figure now that we've 852 00:44:57,320 --> 00:45:01,680 Speaker 1: kind of identified these bottlenecks, the governments of been defaulting 853 00:45:01,719 --> 00:45:04,360 Speaker 1: for fifty plus years. There the debts continue to explode. 854 00:45:04,400 --> 00:45:07,160 Speaker 1: We know, human nature rock and a hard place they 855 00:45:07,200 --> 00:45:08,960 Speaker 1: have to do it. There's the release valve, and you've 856 00:45:09,040 --> 00:45:11,240 Speaker 1: kind of given it, you know, two options, right, inflation 857 00:45:11,320 --> 00:45:13,160 Speaker 1: or deflation, And that seems to be the raging debate 858 00:45:13,160 --> 00:45:15,799 Speaker 1: everybody wants to know. Um. I think it's a more 859 00:45:15,920 --> 00:45:18,160 Speaker 1: nuanced argument than just one or the other. I mean, 860 00:45:18,200 --> 00:45:22,560 Speaker 1: maybe it's both. Um, maybe maybe we have massive deflation, 861 00:45:22,600 --> 00:45:24,239 Speaker 1: but we also see prices going through at the same 862 00:45:24,280 --> 00:45:26,680 Speaker 1: time or something. But what do you see? So you've 863 00:45:26,680 --> 00:45:29,480 Speaker 1: you've given us hey there's two options right to release valves. 864 00:45:29,880 --> 00:45:32,120 Speaker 1: Which one are you leaning towards. I guess in your 865 00:45:32,320 --> 00:45:37,440 Speaker 1: your endgame, I lean towards inflation. And you know in 866 00:45:37,520 --> 00:45:40,719 Speaker 1: that it's something we've long been saying reading about, which 867 00:45:40,760 --> 00:45:47,720 Speaker 1: is governments owe a bunch of money and they're unlikely 868 00:45:47,719 --> 00:45:50,799 Speaker 1: to default on those promises, and so they're likely to 869 00:45:50,840 --> 00:45:54,680 Speaker 1: print those promises. And as they do that, people say, well, 870 00:45:54,680 --> 00:45:56,720 Speaker 1: the banks aren't lending. You know, then so the deflation 871 00:45:56,719 --> 00:46:00,600 Speaker 1: area and the banks aren't lending to the private sector. 872 00:46:00,600 --> 00:46:03,840 Speaker 1: They're right overall, they're right. When you look at the 873 00:46:03,960 --> 00:46:08,080 Speaker 1: data though of bank lending, what you see is really interesting, 874 00:46:08,080 --> 00:46:14,359 Speaker 1: which is, overall bank loan growth has been flat down 875 00:46:14,400 --> 00:46:18,440 Speaker 1: this year. Last I checked, it was running down. However, 876 00:46:18,480 --> 00:46:21,920 Speaker 1: within that their loans to the US government, their holdings 877 00:46:21,920 --> 00:46:24,360 Speaker 1: of U S treasuries, and and bank holding of treasury 878 00:46:24,440 --> 00:46:27,520 Speaker 1: is a loan to the government. Um, some people would 879 00:46:27,600 --> 00:46:29,520 Speaker 1: argue that, I don't think it's an argument at all. 880 00:46:29,640 --> 00:46:31,920 Speaker 1: You own a bond, A bond is no different than alone. 881 00:46:33,160 --> 00:46:35,480 Speaker 1: Holdings of treasuries by the US banking system had been 882 00:46:35,560 --> 00:46:39,480 Speaker 1: rising twenty year over year at an annualized rate this year. 883 00:46:40,800 --> 00:46:44,880 Speaker 1: As you look from may on. And so while overall 884 00:46:45,000 --> 00:46:50,200 Speaker 1: lending is flat to down, underneath you've got the biggest 885 00:46:50,200 --> 00:46:53,160 Speaker 1: debt or borrowing more and more and people say, well, 886 00:46:53,200 --> 00:46:55,799 Speaker 1: that's just borrowing, it's not spending. Well yeah, with this hand, 887 00:46:56,239 --> 00:46:58,480 Speaker 1: what's the government doing with the money. They're spending it 888 00:46:59,320 --> 00:47:01,040 Speaker 1: and they're just add it to the total, right they 889 00:47:01,080 --> 00:47:04,320 Speaker 1: they never pay that debt off. And so I think 890 00:47:05,080 --> 00:47:08,360 Speaker 1: we're in this sort of transition period where we're starting 891 00:47:08,360 --> 00:47:12,680 Speaker 1: to see inflation. It's not obvious yet, but at once 892 00:47:13,000 --> 00:47:16,520 Speaker 1: there's that sort of magic crossover point where the majority 893 00:47:16,520 --> 00:47:21,160 Speaker 1: of bank balance sheets become treasuries. Right so, right now 894 00:47:21,160 --> 00:47:22,719 Speaker 1: it's I want to say five seven percent of the 895 00:47:22,760 --> 00:47:27,960 Speaker 1: banking system is treasuries. Uh, it was fifty percent treasuries. 896 00:47:28,200 --> 00:47:31,839 Speaker 1: And that's where I think this movie is going. And 897 00:47:31,920 --> 00:47:35,520 Speaker 1: when that happens, then you know, as that happens as 898 00:47:35,560 --> 00:47:38,200 Speaker 1: a crossover point where all of a sudden, loan growth 899 00:47:38,320 --> 00:47:40,040 Speaker 1: is growing, people go, oh my gosh, banks long growth 900 00:47:40,080 --> 00:47:41,640 Speaker 1: is going, and they're gonna go look and say where's 901 00:47:41,680 --> 00:47:43,640 Speaker 1: it growing at. They're gonna go, oh god, it's the government. 902 00:47:43,960 --> 00:47:46,480 Speaker 1: And every year the government, we know that girl, one's 903 00:47:46,520 --> 00:47:48,880 Speaker 1: gonna spend more because there's seventy million baby boomers and 904 00:47:48,880 --> 00:47:50,719 Speaker 1: they owe that money, and the defense departments and a 905 00:47:50,760 --> 00:47:53,400 Speaker 1: great power competent with China, they're gonna spend that money. 906 00:47:53,640 --> 00:47:55,799 Speaker 1: And the interest is the interests rates are already zero 907 00:47:55,840 --> 00:47:57,840 Speaker 1: that whatever that nut is ain't going any lower in 908 00:47:57,880 --> 00:48:01,919 Speaker 1: all likelihood um. And so that's I think we're really 909 00:48:01,920 --> 00:48:05,440 Speaker 1: in a transition period where you're seeing signs of inflation. 910 00:48:05,440 --> 00:48:08,160 Speaker 1: We've talked about the you know, the hidden inflation, if 911 00:48:08,160 --> 00:48:09,719 Speaker 1: you will, but I think it's going to start to 912 00:48:09,719 --> 00:48:13,040 Speaker 1: become more obvious as the US specifically, but Western sovereigns 913 00:48:13,040 --> 00:48:18,240 Speaker 1: more broadly, uh basically have as these promises they've made 914 00:48:18,360 --> 00:48:20,880 Speaker 1: go from off balance sheet to on balance sheet. Right 915 00:48:20,880 --> 00:48:23,040 Speaker 1: when you talk about the hundred trailion two hun trillion 916 00:48:23,200 --> 00:48:25,600 Speaker 1: entitlements was all held off balance sheet, and there's very 917 00:48:25,600 --> 00:48:27,520 Speaker 1: little in reserve that was held against it. And so 918 00:48:27,600 --> 00:48:31,439 Speaker 1: as those, because of demographics come on balance sheet, that's 919 00:48:31,520 --> 00:48:34,279 Speaker 1: cash out. That is a treasury that needs to be 920 00:48:34,320 --> 00:48:37,800 Speaker 1: bought by somebody, probably the FED or the US banking 921 00:48:37,840 --> 00:48:41,600 Speaker 1: system all outs equel um. Then I think we're gonna 922 00:48:41,600 --> 00:48:44,319 Speaker 1: start transitioning to a much more inflationary period over the 923 00:48:44,360 --> 00:48:49,279 Speaker 1: next you know, twelve eighteen months, twenty four months and 924 00:48:49,280 --> 00:48:52,000 Speaker 1: then beyond. Okay, good, so that was gonna be My 925 00:48:52,040 --> 00:48:53,839 Speaker 1: next question is trying to nail you down a little 926 00:48:53,840 --> 00:48:56,440 Speaker 1: bit more on this because you know we hate that, right, 927 00:48:56,520 --> 00:48:59,759 Speaker 1: you know, the one and the went, it's and and 928 00:48:59,760 --> 00:49:02,239 Speaker 1: and what I believe, you know, what's pretty easy, right, 929 00:49:02,239 --> 00:49:04,319 Speaker 1: we know what's inevitable. But the wind is always is. 930 00:49:04,320 --> 00:49:07,759 Speaker 1: It was always difficult or possible. But I was just 931 00:49:07,840 --> 00:49:10,040 Speaker 1: curious kind of you know, a lot of a lot 932 00:49:10,080 --> 00:49:12,520 Speaker 1: of analysts were have been calling for this, you know, 933 00:49:12,600 --> 00:49:15,360 Speaker 1: big crash next year, next twelve eighteen months, whatever, this 934 00:49:15,520 --> 00:49:20,719 Speaker 1: deflationary crash, stock market, you know, sixty crash, whatever, and 935 00:49:20,760 --> 00:49:23,719 Speaker 1: then the government's response to that is to blow it 936 00:49:23,760 --> 00:49:25,120 Speaker 1: all back up again. So it was kind of like 937 00:49:25,160 --> 00:49:29,160 Speaker 1: a deflation then inflation. I'm starting to stay see we'll 938 00:49:29,160 --> 00:49:32,160 Speaker 1: shoot if Biden wins and and yelling goes in. I mean, 939 00:49:32,200 --> 00:49:35,040 Speaker 1: maybe we don't have that deflation first, and now maybe 940 00:49:35,040 --> 00:49:37,920 Speaker 1: we just keep going straight up from here. Um, And 941 00:49:37,960 --> 00:49:39,840 Speaker 1: I guess that's kind of what you're saying. You're leaning 942 00:49:39,840 --> 00:49:42,640 Speaker 1: more towards we maybe don't have that big deflation next 943 00:49:42,719 --> 00:49:45,840 Speaker 1: year first, we just kind of keep going up they're acting, 944 00:49:45,960 --> 00:49:50,360 Speaker 1: they're preemptively acting. That's my base case, I mean, but 945 00:49:50,400 --> 00:49:53,120 Speaker 1: it's I would never say never on a crash, right, 946 00:49:53,160 --> 00:49:55,680 Speaker 1: I mean, my base case is that they probably just 947 00:49:55,800 --> 00:49:59,600 Speaker 1: kind of just keep on going. And you saw in 948 00:49:59,680 --> 00:50:04,799 Speaker 1: March the you know one, going into that crash, what 949 00:50:04,840 --> 00:50:08,920 Speaker 1: we've been saying was if equities fall ten to fifteen 950 00:50:08,960 --> 00:50:12,359 Speaker 1: percent and stayed down, you will quickly see the US 951 00:50:12,440 --> 00:50:14,440 Speaker 1: have a fiscal problem. You will see the treasury market 952 00:50:14,440 --> 00:50:16,960 Speaker 1: begin to break. And people thought it was ludicrous at 953 00:50:16,960 --> 00:50:21,000 Speaker 1: the time, and so the market crashed NFL fifty Margaret 954 00:50:21,120 --> 00:50:23,800 Speaker 1: done about all of a sudden, the treasury treasure market 955 00:50:23,800 --> 00:50:27,759 Speaker 1: starts breaking, treasury you'll start rising rapidly. And to me, 956 00:50:27,840 --> 00:50:31,640 Speaker 1: it was an absolute aha moment. It was very validating 957 00:50:31,640 --> 00:50:35,640 Speaker 1: on some level. But that to me was a key 958 00:50:35,719 --> 00:50:38,680 Speaker 1: moment because that that tells you it was wrong. It 959 00:50:38,719 --> 00:50:43,640 Speaker 1: was ten to fifteen It was actually fifteen, uh, but 960 00:50:43,680 --> 00:50:45,440 Speaker 1: it was close enough for government work, shall we say. 961 00:50:45,480 --> 00:50:48,839 Speaker 1: And and the big picture is is that stocks could 962 00:50:48,920 --> 00:50:52,160 Speaker 1: fall very, very sharply. At some point on that down 963 00:50:52,360 --> 00:50:55,279 Speaker 1: fifty sixty whatever you're talking about, you're gonna start seeing 964 00:50:55,360 --> 00:51:00,279 Speaker 1: yields and you're not gonna be allowed to happen in 965 00:51:00,360 --> 00:51:02,800 Speaker 1: my view, just politically, and that's a separate discussion. Is 966 00:51:02,840 --> 00:51:04,880 Speaker 1: that the right thing to do or not? It is 967 00:51:04,920 --> 00:51:10,120 Speaker 1: what it is. Uh and so to me my base 968 00:51:10,160 --> 00:51:13,440 Speaker 1: cases they paper over it. There is risk. You have 969 00:51:13,520 --> 00:51:16,800 Speaker 1: some sort of big risk off air pocket. With that said, 970 00:51:17,200 --> 00:51:22,360 Speaker 1: I think for plus of traders, people investors, it's going 971 00:51:22,440 --> 00:51:25,600 Speaker 1: to be untradeable, even more untradable than what we saw 972 00:51:25,800 --> 00:51:29,359 Speaker 1: in March, where you're either there you weren't. If you're 973 00:51:29,400 --> 00:51:31,320 Speaker 1: gonna trade it, I would trade it. Try to trade 974 00:51:31,320 --> 00:51:34,399 Speaker 1: it with options and with derivatives of where there's sort 975 00:51:34,400 --> 00:51:36,520 Speaker 1: of the fine downside and you either make a lot 976 00:51:36,560 --> 00:51:39,840 Speaker 1: or you lose. You you lose your investment because the 977 00:51:40,760 --> 00:51:44,400 Speaker 1: severity of the fiscal situation is such that if stocks 978 00:51:44,440 --> 00:51:46,680 Speaker 1: were to fall sharply and stay down, you're gonna start 979 00:51:46,680 --> 00:51:50,480 Speaker 1: talking about risk of sovereign defaults around the world, and 980 00:51:50,520 --> 00:51:53,799 Speaker 1: at that point all better off. You know, when the 981 00:51:53,800 --> 00:51:57,040 Speaker 1: when the risk free asset underpinning everything defaulse. What's what's 982 00:51:57,080 --> 00:51:59,759 Speaker 1: the value of stock when the risk when when you 983 00:51:59,760 --> 00:52:04,200 Speaker 1: know your collateral supporting the stock is defaulting with I 984 00:52:04,239 --> 00:52:06,600 Speaker 1: don't know, So when you say it's untradeable. You mean, 985 00:52:06,640 --> 00:52:09,160 Speaker 1: it might be so fast that you really can't capture it, 986 00:52:09,239 --> 00:52:11,359 Speaker 1: kind of like March, but even more compressed. So most 987 00:52:11,400 --> 00:52:14,680 Speaker 1: people probably just write it right through. Um exactly if 988 00:52:14,760 --> 00:52:16,960 Speaker 1: if I'm summarizing what you're saying, I mean, it almost 989 00:52:16,960 --> 00:52:19,359 Speaker 1: seems like especially going back to the debt to GDP thing, 990 00:52:19,400 --> 00:52:21,680 Speaker 1: and now you know, looking at the market, um, the 991 00:52:21,719 --> 00:52:24,440 Speaker 1: Fed almost needs the stock market to stay high because 992 00:52:24,480 --> 00:52:26,879 Speaker 1: of that GDP number, Like they can't let it fall 993 00:52:26,920 --> 00:52:29,680 Speaker 1: otherwise their debt to GDP is completely out of whack. 994 00:52:29,800 --> 00:52:33,120 Speaker 1: So they're super incentivized to keep it up, not not 995 00:52:33,200 --> 00:52:35,319 Speaker 1: just to save the boomers, but because of their own 996 00:52:35,360 --> 00:52:38,160 Speaker 1: need to have that GDPU there O need no And 997 00:52:38,200 --> 00:52:41,319 Speaker 1: we first we first identified this issue back in for 998 00:52:41,400 --> 00:52:43,560 Speaker 1: our for our clients, and we said we you know, 999 00:52:44,239 --> 00:52:46,920 Speaker 1: it struck up relations with the accountant and pointing me 1000 00:52:46,960 --> 00:52:48,600 Speaker 1: some i r S data And you start digging into 1001 00:52:48,640 --> 00:52:53,000 Speaker 1: the data and you realize that two d if you 1002 00:52:53,000 --> 00:52:56,320 Speaker 1: look at net capital gains plus taxable i ra A distributions, 1003 00:52:56,840 --> 00:53:01,680 Speaker 1: those two numbers are around two of annual growth in 1004 00:53:01,719 --> 00:53:05,920 Speaker 1: personal consumption expenditures in the United States and PC is 1005 00:53:06,160 --> 00:53:09,160 Speaker 1: it's basically consumer spending so it's about two thirds of GDP. 1006 00:53:09,680 --> 00:53:13,160 Speaker 1: It's about a fourteen trillion dollar line item. And so 1007 00:53:13,200 --> 00:53:14,800 Speaker 1: it's not to say people are taking money out of 1008 00:53:14,840 --> 00:53:18,480 Speaker 1: net capital gains and in iras and immediately buying boats, 1009 00:53:18,480 --> 00:53:20,800 Speaker 1: shopping at Walmart, whatever. And PC is a wide category. 1010 00:53:20,800 --> 00:53:22,720 Speaker 1: There's some healthcare services stuff in it. But the point 1011 00:53:22,800 --> 00:53:26,319 Speaker 1: is is that mathematically it is almost impossible for PC 1012 00:53:26,680 --> 00:53:30,520 Speaker 1: to grow if those two line items aren't doing their part. 1013 00:53:30,680 --> 00:53:33,800 Speaker 1: If which means if stocks aren't rising, assets aren't rising, 1014 00:53:34,239 --> 00:53:37,120 Speaker 1: and if PC is not growing, it's almost mathematically impossible 1015 00:53:37,120 --> 00:53:39,640 Speaker 1: for GDP to rise. And if GDP is not rising, 1016 00:53:39,719 --> 00:53:41,960 Speaker 1: like we were just saying, once you get to a 1017 00:53:41,960 --> 00:53:44,759 Speaker 1: certain level on debt, you're screwed because now you're right 1018 00:53:44,800 --> 00:53:46,359 Speaker 1: as above your rate of growth, you're into a debt 1019 00:53:46,400 --> 00:53:50,160 Speaker 1: desk spiral. And importantly, this is just net capital gains 1020 00:53:50,160 --> 00:53:53,280 Speaker 1: plus taxable ira A distributions. Especially you being out in California, 1021 00:53:53,320 --> 00:53:56,840 Speaker 1: I'm sure you've seen this firsthand, is stock options incentive. 1022 00:53:56,840 --> 00:53:59,160 Speaker 1: Stock is not included in any of those either of 1023 00:53:59,200 --> 00:54:03,880 Speaker 1: those numbers is taxed as ordinary income. And so what 1024 00:54:03,880 --> 00:54:06,400 Speaker 1: what you take a step back and I realized this was, 1025 00:54:06,480 --> 00:54:10,240 Speaker 1: oh my god, there is no economy unless stocks rise 1026 00:54:10,400 --> 00:54:15,439 Speaker 1: at infinitum on low volatility. And the first real big 1027 00:54:15,480 --> 00:54:20,520 Speaker 1: acid test of that thesis was in when smpe the 1028 00:54:20,560 --> 00:54:22,800 Speaker 1: fourth quarter and then all of a sudden, the consumer 1029 00:54:22,840 --> 00:54:26,360 Speaker 1: spending numbers in December and January were the worst for December, January, 1030 00:54:26,360 --> 00:54:30,920 Speaker 1: se and and people say, oh my gosh, you you 1031 00:54:30,960 --> 00:54:32,880 Speaker 1: were right. And it was one of these sort of 1032 00:54:32,960 --> 00:54:35,520 Speaker 1: you know, I had the hypothesis. I believe the math. 1033 00:54:35,640 --> 00:54:38,520 Speaker 1: You can never tell with government statistics entirely right, I 1034 00:54:38,520 --> 00:54:40,560 Speaker 1: feel like you know it. But then when it happened 1035 00:54:40,560 --> 00:54:44,160 Speaker 1: and then boom, immediately consumer spending does what it does. 1036 00:54:45,800 --> 00:54:50,319 Speaker 1: They're stuck. They they've created this system and now they're 1037 00:54:50,320 --> 00:54:52,279 Speaker 1: having to deal with it, and it's it's it puts 1038 00:54:52,280 --> 00:54:56,439 Speaker 1: them in a corner. Yeah, hey, I know we've gone 1039 00:54:56,440 --> 00:54:57,880 Speaker 1: a little bit long. I had it maybe like a 1040 00:54:57,920 --> 00:55:00,840 Speaker 1: couple more questions, you a few more minutes. Yeah, absolutely, 1041 00:55:01,880 --> 00:55:03,680 Speaker 1: There's so many ways we could go down. I've been 1042 00:55:03,680 --> 00:55:05,600 Speaker 1: trying to kind of keep us on track, but uh, yeah, 1043 00:55:05,640 --> 00:55:08,720 Speaker 1: I know, I know we're going to a live bit long. Um. Okay, 1044 00:55:08,760 --> 00:55:12,480 Speaker 1: So based off of all that, then if we're translating that, 1045 00:55:12,560 --> 00:55:15,040 Speaker 1: we've identified where you're looking at the bottlenecks, we've identified 1046 00:55:15,080 --> 00:55:18,040 Speaker 1: the problems, the solutions they potentially have, which ones you 1047 00:55:18,080 --> 00:55:21,560 Speaker 1: think are most inevitable? Probably? Um? So, then I guess 1048 00:55:21,719 --> 00:55:24,760 Speaker 1: where does that put us as investors? Like the thesis 1049 00:55:24,800 --> 00:55:27,719 Speaker 1: is that, um, get out of currency because it's gonna 1050 00:55:27,760 --> 00:55:32,239 Speaker 1: crash and move into hard real assets. Um, that's you know, gold, bitcoin, commodities, 1051 00:55:33,160 --> 00:55:35,520 Speaker 1: or is that? Or or by by anything? Is that? 1052 00:55:35,719 --> 00:55:37,560 Speaker 1: Is that? By stocks, by real estate, by anything that's 1053 00:55:37,560 --> 00:55:40,719 Speaker 1: gonna go up because they're gonna be printing to infinity. Yeah, 1054 00:55:40,760 --> 00:55:42,520 Speaker 1: if I had five seconds to say it, I want 1055 00:55:42,520 --> 00:55:45,400 Speaker 1: to own hard assets that are nobody else's liability. So 1056 00:55:45,440 --> 00:55:49,200 Speaker 1: it's gold, it's bitcoin, it's so over then it starts 1057 00:55:49,239 --> 00:55:52,600 Speaker 1: to get you know, yeah, commodities, certain types of real estate, 1058 00:55:52,640 --> 00:55:55,239 Speaker 1: because I think real estate is in ways and in transition, 1059 00:55:55,760 --> 00:56:00,000 Speaker 1: certain types of equities, etcetera. But broadly speaking, yes, it's 1060 00:56:00,040 --> 00:56:04,920 Speaker 1: it's they have a problem. The bubble is in. It's 1061 00:56:04,960 --> 00:56:07,319 Speaker 1: not in everything bubble and assets, it's everything. It's a 1062 00:56:07,320 --> 00:56:09,840 Speaker 1: bubble in in sovereign debt and as a result in currencies. 1063 00:56:10,600 --> 00:56:13,960 Speaker 1: When you talk about that, um, it's and everything bubble. 1064 00:56:13,960 --> 00:56:15,640 Speaker 1: Everything's up. I mean all three indexes are at the 1065 00:56:15,719 --> 00:56:19,040 Speaker 1: high all time highs gold silver, you know, not silver up, golden, 1066 00:56:19,080 --> 00:56:20,799 Speaker 1: bitcoin or all time highs, and real estates at all 1067 00:56:20,800 --> 00:56:22,839 Speaker 1: time high I mean everything, But isn't that A lot 1068 00:56:22,880 --> 00:56:26,760 Speaker 1: of that is just the dollar has lost its purchasing 1069 00:56:26,760 --> 00:56:30,759 Speaker 1: power compared to those assets. So I mean it's really yeah, 1070 00:56:30,920 --> 00:56:35,160 Speaker 1: In short, I mean it is. It's it's if you 1071 00:56:35,480 --> 00:56:40,320 Speaker 1: adjust the SMP for the Fed's balance sheet. Um, the 1072 00:56:40,960 --> 00:56:43,480 Speaker 1: SMP absolutely pulled the nineteen and people all the time 1073 00:56:43,480 --> 00:56:47,400 Speaker 1: you see the charts, right, and um, I think it's 1074 00:56:47,400 --> 00:56:51,560 Speaker 1: important when people show thee down stayed down eight percent. Short, 1075 00:56:51,600 --> 00:56:54,359 Speaker 1: I think it's critical to note that was against goal, 1076 00:56:54,400 --> 00:56:57,200 Speaker 1: that wasn't against dollars, right, that the that the dollar 1077 00:56:57,360 --> 00:57:00,840 Speaker 1: was gold backed and paid at twenty ounce, and the 1078 00:57:00,880 --> 00:57:06,720 Speaker 1: doubt fell or from thirty three against gold, not against dollars. 1079 00:57:06,920 --> 00:57:12,719 Speaker 1: And so it's important to say to to distinguish differentiate 1080 00:57:12,800 --> 00:57:17,920 Speaker 1: between what it's falling against, so against gold, s and 1081 00:57:17,960 --> 00:57:20,800 Speaker 1: p still is not back to September highs if I 1082 00:57:20,920 --> 00:57:23,720 Speaker 1: last time I checked, it's bounced, you know, recently, but 1083 00:57:23,760 --> 00:57:28,560 Speaker 1: it's still not back against bitcoin. Of course, everything's collapsed. Um, 1084 00:57:28,680 --> 00:57:33,160 Speaker 1: And that's probably the best expression of what's what's happening? 1085 00:57:33,480 --> 00:57:38,080 Speaker 1: Um where you know, let let's tell you what's happening. Right, 1086 00:57:38,080 --> 00:57:39,960 Speaker 1: It's almost like super Bowl tickets in a way, right, 1087 00:57:39,960 --> 00:57:41,880 Speaker 1: if FED can say I always thought it would be 1088 00:57:41,920 --> 00:57:44,680 Speaker 1: interesting for the FED to run monetary policy and calculate 1089 00:57:44,720 --> 00:57:47,479 Speaker 1: inflation based on super Bowl tickets because it's the same game, 1090 00:57:48,120 --> 00:57:51,280 Speaker 1: it's the same stadium, it's the same I mean, the 1091 00:57:51,560 --> 00:57:54,800 Speaker 1: marginal entertainment value of super Bowl fifty is no different 1092 00:57:54,800 --> 00:57:57,880 Speaker 1: than super Bowl twenty five, so on so forth. And 1093 00:57:57,960 --> 00:58:00,360 Speaker 1: yet the prices, you know, what are the scalping rates, right, 1094 00:58:00,400 --> 00:58:03,520 Speaker 1: I mean they are you know, you adjust for population, 1095 00:58:03,560 --> 00:58:05,640 Speaker 1: maybe you adjust for certain amounts of monitory. It would 1096 00:58:05,640 --> 00:58:09,440 Speaker 1: be a great tool to to to the problem is 1097 00:58:09,440 --> 00:58:11,000 Speaker 1: that it would bankrupt the US because they would have 1098 00:58:11,000 --> 00:58:12,880 Speaker 1: the race race to seven or eight percent. Right, Well, 1099 00:58:12,920 --> 00:58:15,960 Speaker 1: that's what the CPI would should measure. But instead the CPI, 1100 00:58:16,040 --> 00:58:18,520 Speaker 1: instead of they would measure the cause of super Bowl 1101 00:58:18,520 --> 00:58:20,680 Speaker 1: tickets in the basket. But today they'd give you the 1102 00:58:20,720 --> 00:58:24,160 Speaker 1: price of tickets to your local Pop Warner Football league. 1103 00:58:25,480 --> 00:58:27,760 Speaker 1: They would have swapped that out of the CPI basket. Right. 1104 00:58:27,800 --> 00:58:30,120 Speaker 1: That's kind of hot work, and that's the challenge this 1105 00:58:30,240 --> 00:58:32,920 Speaker 1: is a challenge for investors, right because it's it's quickly 1106 00:58:32,960 --> 00:58:36,400 Speaker 1: becoming you know, you're you know you you buy bonds 1107 00:58:36,440 --> 00:58:39,000 Speaker 1: where diamonds by bonds, where cubics are conium by bonds, 1108 00:58:39,000 --> 00:58:41,080 Speaker 1: where a cracker jack on a string around your neck. 1109 00:58:41,120 --> 00:58:43,840 Speaker 1: And that's that's where this is going. It's where you know, 1110 00:58:43,920 --> 00:58:48,760 Speaker 1: unfortunately again, unless one of a couple of things happen, 1111 00:58:48,800 --> 00:58:52,920 Speaker 1: all of which are fairly um eventful in terms of 1112 00:58:52,960 --> 00:58:58,280 Speaker 1: either cuts or geopolitical etcetera. Um, that's kind of where 1113 00:58:58,280 --> 00:59:02,000 Speaker 1: you're at. And it's it's it's like I said, it 1114 00:59:02,080 --> 00:59:04,200 Speaker 1: is what it is. Yeah. Yeah, So that's kind of 1115 00:59:04,200 --> 00:59:06,400 Speaker 1: a thesis that I've been digging out and kind of 1116 00:59:06,400 --> 00:59:08,920 Speaker 1: talking about right moving out of as they're printing more 1117 00:59:08,960 --> 00:59:12,120 Speaker 1: fake counterfeit money, we want to buy real assets like 1118 00:59:12,160 --> 00:59:14,280 Speaker 1: hard things and and so, um, I kind of see 1119 00:59:14,280 --> 00:59:16,360 Speaker 1: it's a gold bitcoin. You've talked about gold miners and 1120 00:59:16,400 --> 00:59:17,960 Speaker 1: things like that get a little bit leverage on the 1121 00:59:17,960 --> 00:59:21,000 Speaker 1: gold things like that. Now, UM, I did see you 1122 00:59:21,000 --> 00:59:23,680 Speaker 1: say that you thought maybe in the short term gold 1123 00:59:23,800 --> 00:59:26,280 Speaker 1: might do better, And I'm guessing you think that's because 1124 00:59:26,480 --> 00:59:29,520 Speaker 1: the FED has an incentivized reason to push that higher. 1125 00:59:30,720 --> 00:59:33,440 Speaker 1: Or am I reading that wrong? You know what I was? 1126 00:59:34,920 --> 00:59:39,520 Speaker 1: I I'm trying to think how to phrase this best. 1127 00:59:39,840 --> 00:59:43,439 Speaker 1: I think there is a possibility that gold that there 1128 00:59:43,440 --> 00:59:46,600 Speaker 1: will I think there's a possibility, if not a likelihood, 1129 00:59:46,920 --> 00:59:50,120 Speaker 1: that there will be one last So if you look 1130 00:59:50,120 --> 00:59:52,760 Speaker 1: at the bitcoin to gold ratio, right, it has gone 1131 00:59:52,880 --> 00:59:55,560 Speaker 1: up into the right. In other words, bitcoin is outperform 1132 00:59:55,640 --> 00:59:59,280 Speaker 1: gold number of cold bounces to buy a bitcoin as 1133 00:59:59,320 --> 01:00:02,720 Speaker 1: res in steadily. My view is there is a moment 1134 01:00:02,800 --> 01:00:07,320 Speaker 1: coming where that will drop one last time. In other words, 1135 01:00:07,400 --> 01:00:11,600 Speaker 1: gold will be revalued higher by central banks out of necessity, 1136 01:00:11,720 --> 01:00:16,520 Speaker 1: or there will be some sort of geopolitical what have you. Um. 1137 01:00:16,720 --> 01:00:18,440 Speaker 1: And that's why I would not want to sell all 1138 01:00:18,560 --> 01:00:20,160 Speaker 1: you know, you have this, you know, sell all your 1139 01:00:20,160 --> 01:00:22,120 Speaker 1: gold by bitcoin. I don't think that's the right thing 1140 01:00:22,160 --> 01:00:27,200 Speaker 1: to do. And so it's I think if setting that aside, 1141 01:00:27,240 --> 01:00:30,720 Speaker 1: I think bitcoin continues to outperform gold. But I just 1142 01:00:30,760 --> 01:00:33,720 Speaker 1: think you want to be cognizant of you know, hey, 1143 01:00:33,760 --> 01:00:37,800 Speaker 1: this because central banks have gold and they don't have 1144 01:00:37,800 --> 01:00:42,600 Speaker 1: a bitcoin because of the US government. You know, something 1145 01:00:42,600 --> 01:00:44,200 Speaker 1: we've talked about and one of the things we talked 1146 01:00:44,200 --> 01:00:46,360 Speaker 1: about as it related to that in terms of that 1147 01:00:46,440 --> 01:00:50,400 Speaker 1: could be a driver for gold in this relative short run. 1148 01:00:50,520 --> 01:00:53,520 Speaker 1: Is conceivably one way for the US to get out 1149 01:00:53,520 --> 01:00:56,320 Speaker 1: of its fiscal problem is just have Treasury tell to 1150 01:00:56,400 --> 01:01:00,680 Speaker 1: FED to remonetize the goal ten dollars announced. If you 1151 01:01:00,720 --> 01:01:02,760 Speaker 1: look at how that is calculate or how that would 1152 01:01:02,760 --> 01:01:08,880 Speaker 1: flow through the finances, that would effectively that whatever amount 1153 01:01:08,920 --> 01:01:10,920 Speaker 1: that is, and I forget off the top of my head, 1154 01:01:10,920 --> 01:01:13,600 Speaker 1: but you know, multiple trillions of dollars that would basically 1155 01:01:13,680 --> 01:01:17,360 Speaker 1: be credited to the Treasury's general account with the FED, 1156 01:01:17,960 --> 01:01:20,640 Speaker 1: and then the Treasury could then spend those dollars directly 1157 01:01:20,680 --> 01:01:24,240 Speaker 1: into the U s economy on infrastructure, U B I, war, 1158 01:01:24,400 --> 01:01:26,640 Speaker 1: whatever they want to spend the money on the point 1159 01:01:26,720 --> 01:01:31,920 Speaker 1: is is that it would be an increase in um. 1160 01:01:32,040 --> 01:01:35,480 Speaker 1: The spending of the Treasury would be an increase in 1161 01:01:35,560 --> 01:01:38,520 Speaker 1: g d P without a commensurate rise in the debt, 1162 01:01:38,520 --> 01:01:40,480 Speaker 1: and so it would be a big deleveraging event. And 1163 01:01:40,520 --> 01:01:43,760 Speaker 1: so when I take a step back and look at, Gosh, 1164 01:01:43,800 --> 01:01:47,080 Speaker 1: how bad the US's fiscal position is. Yes, it's good 1165 01:01:47,120 --> 01:01:50,080 Speaker 1: for bitcoin, Yes it's good for gold. You hear a 1166 01:01:50,080 --> 01:01:52,000 Speaker 1: lot of people say, well, it's way better for bitcoin 1167 01:01:52,120 --> 01:01:54,960 Speaker 1: for all the reasons, and I agree. The one thing 1168 01:01:55,000 --> 01:01:57,400 Speaker 1: that bitcoin doesn't have, or the biggest thing arguably that 1169 01:01:57,440 --> 01:02:00,600 Speaker 1: bitcoin doesn't have that gold does, is that the government 1170 01:02:00,600 --> 01:02:03,640 Speaker 1: could get out of its predicament. They could deliver uh 1171 01:02:03,720 --> 01:02:08,120 Speaker 1: significantly using the gold there um. And that's why I 1172 01:02:08,120 --> 01:02:10,560 Speaker 1: think that that could happen as it gets when I say, 1173 01:02:10,720 --> 01:02:13,720 Speaker 1: in the relative short term, um, you know, the situation 1174 01:02:13,760 --> 01:02:16,320 Speaker 1: is getting desperate, particularly if there's a second wave basically 1175 01:02:16,400 --> 01:02:18,640 Speaker 1: of of of COVID that shuts us all back down. 1176 01:02:18,640 --> 01:02:20,560 Speaker 1: So that's the thought process there. I think they both 1177 01:02:20,600 --> 01:02:23,960 Speaker 1: are winners. Yeah, I think you know, gold has five 1178 01:02:24,000 --> 01:02:26,240 Speaker 1: thousand years of history, and as you've already made the case, 1179 01:02:26,280 --> 01:02:28,120 Speaker 1: I mean, central banks are are using it, and they 1180 01:02:28,200 --> 01:02:30,880 Speaker 1: use it for their reserves, balance sheets, et cetera. And 1181 01:02:31,280 --> 01:02:33,560 Speaker 1: they're not gonna dump their gold to buy bitcoin. I mean, 1182 01:02:33,680 --> 01:02:35,800 Speaker 1: not not in the near term, in the next you know, 1183 01:02:36,040 --> 01:02:38,760 Speaker 1: five years, whatever, ten years, and so in the event 1184 01:02:38,800 --> 01:02:41,320 Speaker 1: of a currency crisis, the only way to maybe bring 1185 01:02:41,360 --> 01:02:43,640 Speaker 1: trust back into a currency might be to try to 1186 01:02:43,640 --> 01:02:45,320 Speaker 1: back it with something and maybe that's where you get 1187 01:02:45,320 --> 01:02:50,080 Speaker 1: that ten evaluation kind of number. So I think that's possible. 1188 01:02:50,080 --> 01:02:52,000 Speaker 1: It's a long shot, but I mean, shoot, if the 1189 01:02:52,040 --> 01:02:54,440 Speaker 1: currencies collapse, they may not have a choice, and so 1190 01:02:54,640 --> 01:02:57,840 Speaker 1: that might be it. But um, in regards to that, 1191 01:02:57,880 --> 01:03:00,800 Speaker 1: you did say something earlier. You said that quote it's 1192 01:03:00,880 --> 01:03:04,200 Speaker 1: no one's fault. Um, kind of like when in regards 1193 01:03:04,200 --> 01:03:05,720 Speaker 1: to the debt and the spending that we have, it's 1194 01:03:05,760 --> 01:03:08,560 Speaker 1: no one's fault. It's human nature. And you're and you're right. 1195 01:03:08,600 --> 01:03:10,920 Speaker 1: I mean we we understand human nature, and human nature 1196 01:03:11,040 --> 01:03:13,320 Speaker 1: since the beginning of time has always tried to devalue 1197 01:03:13,320 --> 01:03:16,120 Speaker 1: currency has always tried to create money for alchemy whatever. Right, Um, 1198 01:03:16,160 --> 01:03:18,400 Speaker 1: so we know it is human nature. But I think 1199 01:03:18,520 --> 01:03:21,360 Speaker 1: that is the big difference with bitcoin versus gold is 1200 01:03:21,400 --> 01:03:24,000 Speaker 1: it takes human nature out of things. And so that 1201 01:03:24,040 --> 01:03:25,600 Speaker 1: was kind of a tweet dead that was going around, 1202 01:03:25,640 --> 01:03:28,320 Speaker 1: I think made with with Preston and uh like it 1203 01:03:28,400 --> 01:03:30,360 Speaker 1: was like, you know, the reason why bitcoin is better 1204 01:03:30,400 --> 01:03:33,320 Speaker 1: is because it takes that out. Gold leads to the centralization. 1205 01:03:33,440 --> 01:03:35,200 Speaker 1: In order for me to send it to you in Ohio, 1206 01:03:35,280 --> 01:03:38,560 Speaker 1: I'm gonna have to package it with armed guards and 1207 01:03:38,600 --> 01:03:40,600 Speaker 1: mail it right where a bitcoin can be transferred and so. 1208 01:03:40,800 --> 01:03:42,520 Speaker 1: But but the big thing is what you just said, 1209 01:03:42,560 --> 01:03:45,120 Speaker 1: it's no one's fault and it's human nature. Bitcoin takes 1210 01:03:45,120 --> 01:03:48,920 Speaker 1: that human nature element out of it. But yeah, it's 1211 01:03:48,920 --> 01:03:52,120 Speaker 1: all time frames and and trying to guess that is difficult. 1212 01:03:52,160 --> 01:03:55,320 Speaker 1: And if things blow up, I mean, then change what 1213 01:03:55,400 --> 01:03:58,400 Speaker 1: is it? Lennon said, Right, decades happen in days or whatever. 1214 01:03:58,480 --> 01:04:02,280 Speaker 1: So yeah, I think that's I think that's right. I mean, 1215 01:04:02,280 --> 01:04:04,920 Speaker 1: I think ultimately the big point bitcoin does take that 1216 01:04:05,120 --> 01:04:07,760 Speaker 1: it is it's the hardest money there is, you know, 1217 01:04:07,840 --> 01:04:12,560 Speaker 1: they're um, it does. It takes the human element away. 1218 01:04:12,720 --> 01:04:19,080 Speaker 1: And fascinatingly, the success of bitcoin brings the revaluation of 1219 01:04:19,120 --> 01:04:21,200 Speaker 1: gold and makes it more likely, it brings it forward 1220 01:04:21,240 --> 01:04:26,880 Speaker 1: because ultimately, you look at this and what do we 1221 01:04:26,880 --> 01:04:28,840 Speaker 1: need central banks for? Right? It takes it out of 1222 01:04:28,880 --> 01:04:32,920 Speaker 1: their hands, and the human nature being what it is, 1223 01:04:33,520 --> 01:04:36,320 Speaker 1: they're not going to stand by and do nothing. Um. 1224 01:04:36,400 --> 01:04:38,040 Speaker 1: And I mean we've already seen that a bit. And 1225 01:04:38,080 --> 01:04:41,400 Speaker 1: I you know the fact that you know they're they're 1226 01:04:41,400 --> 01:04:43,040 Speaker 1: they're going to try to regulate it. They'll they'll do 1227 01:04:43,120 --> 01:04:45,640 Speaker 1: some regulation, but I'm not worried about that. I think 1228 01:04:45,640 --> 01:04:48,640 Speaker 1: it's you know, ultimately, probably if anything good for a 1229 01:04:48,640 --> 01:04:52,959 Speaker 1: bitcoin um in terms of its institutional acceptance and growth, 1230 01:04:53,000 --> 01:04:58,680 Speaker 1: from that standpoint, Um, but I think that the more 1231 01:04:58,760 --> 01:05:01,440 Speaker 1: the more successful bi point gets, the more likely a 1232 01:05:01,480 --> 01:05:07,240 Speaker 1: revaluation of gold becomes, uh, simply because you know, again 1233 01:05:07,360 --> 01:05:10,480 Speaker 1: human nature, they can control gold. So like, hey, let's 1234 01:05:10,480 --> 01:05:12,680 Speaker 1: make gold look more attractive, to start to pull the 1235 01:05:12,720 --> 01:05:14,560 Speaker 1: appeal away from bitcoin a little bit, so we can 1236 01:05:14,560 --> 01:05:16,880 Speaker 1: still control it in gold. I guess I think I 1237 01:05:16,880 --> 01:05:19,480 Speaker 1: think something like that. And then also as well is 1238 01:05:19,520 --> 01:05:22,800 Speaker 1: as you know, as you start you know more uh, 1239 01:05:22,840 --> 01:05:27,400 Speaker 1: you know, digitizing assets around the world, you know, definancializing 1240 01:05:27,440 --> 01:05:31,400 Speaker 1: assets around the world. You what you're really doing is 1241 01:05:31,440 --> 01:05:34,480 Speaker 1: taking rehypothecation out of the mix right where you have 1242 01:05:34,520 --> 01:05:37,560 Speaker 1: the same asset pledged however many times and and supporting 1243 01:05:37,560 --> 01:05:41,840 Speaker 1: a certain amount. And what that suggests is that if 1244 01:05:41,880 --> 01:05:47,800 Speaker 1: you believe that digitization of assets is an inevitable trend 1245 01:05:48,960 --> 01:05:52,480 Speaker 1: over the next ten years, then an asset play for 1246 01:05:52,560 --> 01:05:56,400 Speaker 1: people would be to own the assets currently that the 1247 01:05:56,520 --> 01:06:01,720 Speaker 1: most financialized, the most rehypothecated. And arguably there's nothing that's 1248 01:06:01,720 --> 01:06:06,800 Speaker 1: been more rehypothecated than gold and sober and so. And 1249 01:06:06,840 --> 01:06:08,560 Speaker 1: what I mean by that as a hundred paper promises 1250 01:06:08,560 --> 01:06:11,080 Speaker 1: out maybe more, maybe fifty or whatever, but there's fifty 1251 01:06:11,640 --> 01:06:14,040 Speaker 1: and maybe more. Paper promises out for gold for every 1252 01:06:14,080 --> 01:06:17,960 Speaker 1: physical ounce that exists is the estimated numbers. No one 1253 01:06:18,000 --> 01:06:20,920 Speaker 1: knows for sure. It's a very opaque market. And so 1254 01:06:21,560 --> 01:06:25,160 Speaker 1: if you do get a digitization of assets where suddenly 1255 01:06:25,320 --> 01:06:29,160 Speaker 1: that leverage is taken out of the system, uh, the 1256 01:06:29,200 --> 01:06:31,120 Speaker 1: only way to fix that is by the price going 1257 01:06:31,160 --> 01:06:34,080 Speaker 1: up enormously as those assets are digitized. Now we can 1258 01:06:34,120 --> 01:06:36,400 Speaker 1: make the case, well, no one's gonna want gold because 1259 01:06:36,400 --> 01:06:39,840 Speaker 1: a block because a bitcoin. In that case it goes maybe, 1260 01:06:39,920 --> 01:06:43,120 Speaker 1: but I think six billion people with five thousand years 1261 01:06:43,120 --> 01:06:45,880 Speaker 1: of history, you know, with gold of five thousand years 1262 01:06:45,920 --> 01:06:48,480 Speaker 1: of history, you know, six billion people in Eurasia probably 1263 01:06:48,520 --> 01:06:50,439 Speaker 1: get the last word on that. I have a hard 1264 01:06:50,480 --> 01:06:52,600 Speaker 1: time believing culturally that will be removed. And so my 1265 01:06:52,680 --> 01:06:56,440 Speaker 1: guess is, um that the way it's resolved is is, 1266 01:06:56,720 --> 01:06:59,880 Speaker 1: you know, sort of by a significant run up in 1267 01:06:59,880 --> 01:07:03,840 Speaker 1: the underlying value. Yeah, yeah, good stuff. All right, Well, 1268 01:07:03,920 --> 01:07:05,400 Speaker 1: I think we're gonna ahead and wrap it up there. 1269 01:07:05,480 --> 01:07:07,600 Speaker 1: You've given us more than enough of your time, and 1270 01:07:07,600 --> 01:07:11,240 Speaker 1: definitely the big picture, you've identified the bottlenecks where you 1271 01:07:11,280 --> 01:07:14,440 Speaker 1: see the two options, which one you think is most likely? 1272 01:07:14,480 --> 01:07:16,720 Speaker 1: And then how we play that. So you've definitely given 1273 01:07:16,800 --> 01:07:19,320 Speaker 1: us more than enough. It's been an amazing conversation. I 1274 01:07:19,600 --> 01:07:22,280 Speaker 1: appreciate your time. Um. So, I guess what's the best 1275 01:07:22,280 --> 01:07:24,440 Speaker 1: place for people to follow you more? I mean, obviously 1276 01:07:24,440 --> 01:07:26,920 Speaker 1: we already talked about your active on Twitter. Um is 1277 01:07:26,960 --> 01:07:28,280 Speaker 1: that the best place to keep up with you? Or 1278 01:07:28,320 --> 01:07:31,120 Speaker 1: you also have the newsletter as well? Yeah? We you 1279 01:07:31,200 --> 01:07:33,680 Speaker 1: check out our website F F T T dash LLC 1280 01:07:34,320 --> 01:07:36,720 Speaker 1: dot com find out more information about what we're up to, 1281 01:07:36,760 --> 01:07:38,880 Speaker 1: and if you're interested, to find out more about our 1282 01:07:38,920 --> 01:07:42,840 Speaker 1: different research product offerings. We've got retail product offering also 1283 01:07:42,880 --> 01:07:46,400 Speaker 1: some institutional offerings as well. And uh, a lot of 1284 01:07:46,400 --> 01:07:48,959 Speaker 1: great feedback on that newsletter you're referring to tree rings. 1285 01:07:48,960 --> 01:07:51,040 Speaker 1: And then of course, like you said, pretty pretty active 1286 01:07:51,040 --> 01:07:52,800 Speaker 1: on Twitter at at Luke Crome and l u K 1287 01:07:52,960 --> 01:07:55,360 Speaker 1: E g R O M E N. Got it all right. 1288 01:07:55,360 --> 01:07:56,800 Speaker 1: We'll make sure to link all that in the notes 1289 01:07:56,840 --> 01:08:00,280 Speaker 1: down below. And thanks Luke so much. Thanks for having 1290 01:08:00,280 --> 01:08:01,439 Speaker 1: me on. It was a great talking to the market. 1291 01:08:01,520 --> 01:08:03,840 Speaker 1: A lot of fun and happy holidays to you, all right, 1292 01:08:03,840 --> 01:08:08,640 Speaker 1: Thanks all right, good stuff, Thank you. Sorry we went 1293 01:08:08,640 --> 01:08:11,800 Speaker 1: a little bit long, but it's okay. There's great about 1294 01:08:12,440 --> 01:08:15,920 Speaker 1: what's that there there is. It's fascinating how much is going. 1295 01:08:15,960 --> 01:08:19,559 Speaker 1: I mean, my my thinking on bitcoin and goal keeps 1296 01:08:19,600 --> 01:08:22,040 Speaker 1: evolving really quite frankly. I mean it was. I mean 1297 01:08:22,080 --> 01:08:25,960 Speaker 1: I've owned bitcoin since UM and I talked to a 1298 01:08:26,000 --> 01:08:29,519 Speaker 1: couple they put me on. I recently bought it because 1299 01:08:29,560 --> 01:08:31,240 Speaker 1: I have a relationship with a couple of guys who 1300 01:08:31,280 --> 01:08:34,559 Speaker 1: made their first fortune shorting sub prime mortgages and then 1301 01:08:34,640 --> 01:08:37,479 Speaker 1: they owned I don't know how much. They're one of 1302 01:08:37,520 --> 01:08:39,680 Speaker 1: these guys that were down buying bitcoin at you know, 1303 01:08:40,280 --> 01:08:44,320 Speaker 1: a Guatemala you know, two bucks, right, you know, and 1304 01:08:45,520 --> 01:08:48,120 Speaker 1: they made their second fortune that way, and they get 1305 01:08:48,120 --> 01:08:51,080 Speaker 1: turned me onto. I owned a bunch, but I sold 1306 01:08:51,280 --> 01:08:54,560 Speaker 1: most of it as startup capital for F F T T, 1307 01:08:54,800 --> 01:08:56,320 Speaker 1: which was not a bad thing I had. I had 1308 01:08:56,320 --> 01:08:58,519 Speaker 1: a hundred acre farm and I sold bitcoin as my 1309 01:08:58,520 --> 01:09:01,960 Speaker 1: startup capital, so it wasn't a bad thing. Um. I 1310 01:09:02,000 --> 01:09:07,280 Speaker 1: probably ended up slightly ahead actually surprisingly uh. But now 1311 01:09:07,600 --> 01:09:15,400 Speaker 1: really seeing the the evolution of bitcoin, the institutionalization of it, UM, 1312 01:09:15,600 --> 01:09:17,360 Speaker 1: I think you're seeing the government start to bless it 1313 01:09:17,439 --> 01:09:21,000 Speaker 1: quite frankly, Like my view on that is really shifting. Yeah. Well, 1314 01:09:21,080 --> 01:09:23,880 Speaker 1: Larry Fink, Larry Fink gave it, gave it his a 1315 01:09:23,920 --> 01:09:27,880 Speaker 1: word of blessing, right, So uh, I mean you have that, 1316 01:09:27,960 --> 01:09:30,839 Speaker 1: and I mean, yeah, it's uh, it's it's definitely definitely 1317 01:09:30,840 --> 01:09:33,840 Speaker 1: something amazing. I mean I started, I started my whole 1318 01:09:33,880 --> 01:09:36,200 Speaker 1: thing just to talk about bitcoin, so that that's like 1319 01:09:36,240 --> 01:09:38,000 Speaker 1: all of them. But I became a gold bug after 1320 01:09:38,000 --> 01:09:40,519 Speaker 1: two thousand getting wiped out in real estate. I learned 1321 01:09:40,520 --> 01:09:42,280 Speaker 1: how to make money really well. Sold a couple of 1322 01:09:42,280 --> 01:09:45,120 Speaker 1: businesses I did. I had a fortune on the internet company, 1323 01:09:45,520 --> 01:09:47,920 Speaker 1: um and uh then I got wiped out and I'm like, 1324 01:09:47,920 --> 01:09:50,680 Speaker 1: what is this whole financial casino thing going on over here? Right? 1325 01:09:50,720 --> 01:09:52,320 Speaker 1: And so I learned about gold and so I've always 1326 01:09:52,360 --> 01:09:55,240 Speaker 1: been this gold bug, um and I and I still am. 1327 01:09:55,360 --> 01:09:58,639 Speaker 1: But I just I think it's kind of a generational shift. 1328 01:09:58,680 --> 01:10:00,720 Speaker 1: Whereas you said, five thousand years of history and the 1329 01:10:00,720 --> 01:10:03,439 Speaker 1: boomers and the central banks, but the millennials are going 1330 01:10:03,479 --> 01:10:05,719 Speaker 1: to buy a bitcoin, and it's like that generational shift. 1331 01:10:05,840 --> 01:10:08,200 Speaker 1: Maybe people won't sell their goal for bitcoin, but all 1332 01:10:08,240 --> 01:10:10,439 Speaker 1: the new money will go to bitcoin almost maybe a thing. 1333 01:10:10,520 --> 01:10:13,880 Speaker 1: So yeah, I think it's yeah, I think it's generational. 1334 01:10:13,920 --> 01:10:16,919 Speaker 1: I also think too, there's you know, um, there's the Giants, 1335 01:10:16,920 --> 01:10:19,800 Speaker 1: and then there's everybody else, right, so like you know, 1336 01:10:20,040 --> 01:10:22,240 Speaker 1: Saudi and Russia, and you know, when you're talking about 1337 01:10:22,240 --> 01:10:25,400 Speaker 1: trillions and trillions and trillions, like they're not they're not 1338 01:10:25,439 --> 01:10:28,640 Speaker 1: gonna not anytime soon. Like you said, what about what 1339 01:10:28,760 --> 01:10:32,400 Speaker 1: about this though? So um, there's about somewhere between thirty 1340 01:10:32,439 --> 01:10:37,160 Speaker 1: to forty trillion parked and offshore bank accounts, and those 1341 01:10:37,160 --> 01:10:39,320 Speaker 1: bank accounts have been getting seized. I mean it's been 1342 01:10:39,479 --> 01:10:42,439 Speaker 1: happening more and more and more. And if there's thirty 1343 01:10:42,479 --> 01:10:45,120 Speaker 1: to forty trillions in offshore bank accounts, I mean, what's bitcoin. 1344 01:10:45,920 --> 01:10:48,840 Speaker 1: It's an unseasable Swiss bank account in your head, and 1345 01:10:48,880 --> 01:10:51,439 Speaker 1: like how much of that market could have grabbed. It's 1346 01:10:51,439 --> 01:10:54,360 Speaker 1: way bigger than goal. It's it's absolutely you. And that's 1347 01:10:55,120 --> 01:10:59,080 Speaker 1: that's really It's like one of the where my thinking 1348 01:10:59,160 --> 01:11:03,240 Speaker 1: keeps evolving of exactly in that way, where to me 1349 01:11:04,040 --> 01:11:05,960 Speaker 1: sell golden by bitcoin, I think it's the wrong thing 1350 01:11:05,960 --> 01:11:10,439 Speaker 1: to do. I think it's sell by bitcoin, sell you know, 1351 01:11:10,960 --> 01:11:13,880 Speaker 1: you know, keep his little kid basically run the CA. 1352 01:11:14,160 --> 01:11:17,679 Speaker 1: I think people should keep more cash in their balance 1353 01:11:17,720 --> 01:11:20,960 Speaker 1: sheet than the US government has. In other words, when 1354 01:11:21,000 --> 01:11:24,280 Speaker 1: you go back to that deflationary, you know, collapse, right, 1355 01:11:24,280 --> 01:11:26,080 Speaker 1: I don't think it's gonna last very long. You want 1356 01:11:26,080 --> 01:11:27,880 Speaker 1: to make sure you have enough cash that you can 1357 01:11:27,920 --> 01:11:32,800 Speaker 1: survive that period and go broke one day later than 1358 01:11:32,840 --> 01:11:35,120 Speaker 1: the US government will go broke. And we know that 1359 01:11:35,240 --> 01:11:37,679 Speaker 1: number is not that long. And so all the other 1360 01:11:37,720 --> 01:11:40,960 Speaker 1: cash that you would keep there. You know, again, everyone's 1361 01:11:41,000 --> 01:11:44,040 Speaker 1: business is concerned different, but your whatever your cash burn 1362 01:11:44,080 --> 01:11:46,040 Speaker 1: rate is, keep it a day, a week, a month longer, 1363 01:11:46,120 --> 01:11:48,280 Speaker 1: whatever you're comfortable within the U. S. Government. And then 1364 01:11:48,600 --> 01:11:55,200 Speaker 1: like you said, um, it's it's you know, Bitcoin clearly 1365 01:11:55,240 --> 01:12:00,920 Speaker 1: gaining share, um um. And and that's um, that's very 1366 01:12:00,960 --> 01:12:04,679 Speaker 1: it's it's just because it is such a hard when 1367 01:12:04,680 --> 01:12:06,439 Speaker 1: you look at these when you look at the issues 1368 01:12:06,479 --> 01:12:10,479 Speaker 1: that I've been identifying for so long, I think it 1369 01:12:10,640 --> 01:12:12,719 Speaker 1: is finally getting you know, it had to proof of work, 1370 01:12:12,840 --> 01:12:16,400 Speaker 1: but I think in the last twelve months it's really 1371 01:12:16,400 --> 01:12:19,040 Speaker 1: been sort of proof of concept right where the institutions 1372 01:12:19,040 --> 01:12:21,439 Speaker 1: are now going okay, and it to your point, it 1373 01:12:21,479 --> 01:12:27,040 Speaker 1: could evolve super fast. Yeah, I'm curious, Um, is this 1374 01:12:27,280 --> 01:12:30,240 Speaker 1: uh this as you're saying, hold hold cash like one 1375 01:12:30,320 --> 01:12:32,519 Speaker 1: day longer than what they can do, and you know 1376 01:12:32,520 --> 01:12:34,679 Speaker 1: the whole thing that we've been setting up. Are you 1377 01:12:34,760 --> 01:12:37,920 Speaker 1: sitting back almost licking your chops, like this is gonna 1378 01:12:37,920 --> 01:12:40,360 Speaker 1: be the biggest event of my life kind of a 1379 01:12:40,400 --> 01:12:43,320 Speaker 1: thing like looking at it more like, hey, this is 1380 01:12:43,360 --> 01:12:46,759 Speaker 1: gonna be so big, and people are most people get wrecked, 1381 01:12:46,880 --> 01:12:48,720 Speaker 1: some people are gonna come out ahead, and like the 1382 01:12:48,760 --> 01:12:51,040 Speaker 1: wealth transfer and like this is like I'm gonna I'm 1383 01:12:51,040 --> 01:12:54,360 Speaker 1: gonna like, I'm I'm ready for this or uh, I 1384 01:12:54,400 --> 01:12:56,320 Speaker 1: don't know. Are you looking at like that at all? 1385 01:12:56,439 --> 01:12:59,160 Speaker 1: Or is it more like fearful or and I get 1386 01:12:59,200 --> 01:13:00,760 Speaker 1: I get a lot of people gonna be damage. I'm 1387 01:13:00,760 --> 01:13:09,800 Speaker 1: just talking about you personally. Personally, I'm I'm I'm gonna 1388 01:13:09,800 --> 01:13:15,760 Speaker 1: be just finding it. Um that's you know. But it's 1389 01:13:15,760 --> 01:13:19,680 Speaker 1: gonna be one of these things where I think it 1390 01:13:19,720 --> 01:13:23,080 Speaker 1: could end up really really good for everybody involved, or 1391 01:13:23,080 --> 01:13:26,240 Speaker 1: it could end up in an utter catastrophe. And so 1392 01:13:26,360 --> 01:13:28,800 Speaker 1: I know where I'm at. I'm excited about where I'm at. 1393 01:13:29,560 --> 01:13:32,840 Speaker 1: I'm gonna be fine either way. Where I start, where 1394 01:13:32,840 --> 01:13:38,280 Speaker 1: where I'm looking for is almost the derivative of If 1395 01:13:38,320 --> 01:13:41,640 Speaker 1: this is managed properly, we could have the biggest economic 1396 01:13:41,720 --> 01:13:47,240 Speaker 1: boom since after World War Two and if it's not 1397 01:13:47,360 --> 01:13:50,080 Speaker 1: managed properly, we're gonna have the biggest captasity. We're gonna 1398 01:13:50,080 --> 01:13:52,720 Speaker 1: have a catastrophe, the biggest catastrophe since World War Two. 1399 01:13:53,000 --> 01:13:56,400 Speaker 1: U One of the big advantages to doing what I 1400 01:13:56,439 --> 01:13:59,679 Speaker 1: do in Cleveland, out of Cleveland is is from amercro 1401 01:13:59,720 --> 01:14:01,120 Speaker 1: pers back and for a long time ago you're doing 1402 01:14:01,200 --> 01:14:05,160 Speaker 1: macro in Cleveland. It's but it's becoming really an advantage. 1403 01:14:05,160 --> 01:14:09,559 Speaker 1: It's become really an advantage. Is people on the coast 1404 01:14:09,640 --> 01:14:12,720 Speaker 1: haven't lost. They haven't lost in fifty years. They had 1405 01:14:12,720 --> 01:14:14,160 Speaker 1: a little you know, and then the White bound in 1406 01:14:14,160 --> 01:14:15,720 Speaker 1: the way. It was bad, but it was it was 1407 01:14:15,840 --> 01:14:18,679 Speaker 1: down up, it was it was sort of right. Well, 1408 01:14:18,880 --> 01:14:20,400 Speaker 1: it's from two thousand and eight. I mean it dropped 1409 01:14:20,400 --> 01:14:24,120 Speaker 1: fifty and twelve months, it bottomed in about two twelve thirteen, 1410 01:14:25,080 --> 01:14:29,120 Speaker 1: and it came back by two thousen right, so it's 1411 01:14:29,160 --> 01:14:32,000 Speaker 1: back gets you. It's a down and up. And but 1412 01:14:32,080 --> 01:14:35,000 Speaker 1: for fifty years it's like and then particularly in the 1413 01:14:35,000 --> 01:14:39,559 Speaker 1: East coast of Washington, they've never really lost. Whereas I've 1414 01:14:39,640 --> 01:14:43,639 Speaker 1: seen I've lived. Yeah, I've watched us lose to China. 1415 01:14:43,680 --> 01:14:46,720 Speaker 1: People say, well, we can't lose to China. America. I 1416 01:14:46,760 --> 01:14:50,760 Speaker 1: mean Cleveland. I watched it, yea like, so they're doing 1417 01:14:50,800 --> 01:14:52,439 Speaker 1: these things, when are we going to wake up? And 1418 01:14:52,439 --> 01:14:55,200 Speaker 1: we're starting to wake up and and um, you know, 1419 01:14:55,240 --> 01:14:57,160 Speaker 1: I think COVID was a big role in that. When 1420 01:14:57,320 --> 01:14:59,439 Speaker 1: you get the East Coast going, wait, we can't get 1421 01:14:59,479 --> 01:15:01,519 Speaker 1: supplies as we have to bang China for them, which 1422 01:15:01,520 --> 01:15:05,280 Speaker 1: was effectively what was happening. Um, then all of a sudden, 1423 01:15:05,280 --> 01:15:07,400 Speaker 1: that's I think it changed the views. I think COVID 1424 01:15:07,479 --> 01:15:11,760 Speaker 1: changed a lot of views about where we were really 1425 01:15:11,760 --> 01:15:14,200 Speaker 1: positioned as a country. And so I think if we 1426 01:15:14,280 --> 01:15:17,360 Speaker 1: start doing some things that you know, when you talk 1427 01:15:17,400 --> 01:15:24,200 Speaker 1: about infrastructure, when you talk about reassuring what have you. Um, oh, 1428 01:15:24,320 --> 01:15:27,240 Speaker 1: it could be so good when you rebalance things rather 1429 01:15:27,400 --> 01:15:30,280 Speaker 1: than you know, we run these big deficits and people 1430 01:15:30,320 --> 01:15:33,040 Speaker 1: and the treasury export business get rich here and people 1431 01:15:33,160 --> 01:15:37,920 Speaker 1: in the export goods export business in Asia get rich, uh, 1432 01:15:37,920 --> 01:15:42,080 Speaker 1: and their country gets you know, you start to basically 1433 01:15:42,120 --> 01:15:44,400 Speaker 1: go in the other direction and sort of everybody can win. 1434 01:15:45,240 --> 01:15:48,760 Speaker 1: The loser in that cases bondholders and at the end 1435 01:15:48,800 --> 01:15:53,320 Speaker 1: of the day, you know, bond holders increasingly central banks 1436 01:15:53,520 --> 01:15:55,519 Speaker 1: and if central banks lose, what do they have to 1437 01:15:55,560 --> 01:15:58,000 Speaker 1: stay solvent that tells it takes you back to cold 1438 01:15:58,040 --> 01:15:59,800 Speaker 1: in some way right where you want to own some 1439 01:16:00,040 --> 01:16:03,679 Speaker 1: old because goal is probably the collateral that gets written 1440 01:16:03,760 --> 01:16:07,920 Speaker 1: up to keep their balance sheet, you know. Okay, but 1441 01:16:08,040 --> 01:16:10,040 Speaker 1: that's where I'm really at with it, which is I 1442 01:16:10,160 --> 01:16:13,360 Speaker 1: do think it's gonna be the biggest event in our lifetimes. 1443 01:16:13,840 --> 01:16:18,040 Speaker 1: I do think that. And then okay, what does that mean? 1444 01:16:18,439 --> 01:16:20,559 Speaker 1: Is that really good or really bad? But I think 1445 01:16:20,600 --> 01:16:22,960 Speaker 1: we're sort of coming up on that fork in the 1446 01:16:23,080 --> 01:16:26,920 Speaker 1: road and you know, like, uh, what's his name? The 1447 01:16:27,200 --> 01:16:29,880 Speaker 1: Yankees Catcher? Uh, Yogi Berra? Right, when you come to 1448 01:16:29,960 --> 01:16:33,400 Speaker 1: a fork in the road, take it. Well, the I 1449 01:16:33,439 --> 01:16:35,479 Speaker 1: guess the big thing is like, you know, if you're 1450 01:16:35,520 --> 01:16:38,040 Speaker 1: on a deserted, deserted island with a with a billion dollars, 1451 01:16:38,120 --> 01:16:40,120 Speaker 1: what good does that billion dollars do you? Um? And 1452 01:16:40,240 --> 01:16:42,719 Speaker 1: so you could do super good, but if the majority 1453 01:16:42,760 --> 01:16:45,519 Speaker 1: of people do really really bad, what good is that? Right? So, 1454 01:16:46,280 --> 01:16:48,160 Speaker 1: and that's how I've had that discussion with a couple 1455 01:16:48,200 --> 01:16:49,920 Speaker 1: of guys near a couple of bitcoin guys like, well, 1456 01:16:50,040 --> 01:16:53,160 Speaker 1: the third party, non trusted third party is is a 1457 01:16:53,240 --> 01:16:59,240 Speaker 1: huge advoutage. Agree, I get it. That said, if the 1458 01:16:59,280 --> 01:17:03,240 Speaker 1: world's melting down like where you know, no truth. You know, 1459 01:17:03,680 --> 01:17:05,720 Speaker 1: a brick of firewood is gonna be you know, you 1460 01:17:05,800 --> 01:17:08,479 Speaker 1: know five bitcoin, you know it's you know, otherwise you're 1461 01:17:08,479 --> 01:17:11,920 Speaker 1: gonna freeze, you know. Yeah, Okay, well again thanks for 1462 01:17:12,160 --> 01:17:14,400 Speaker 1: thanks for being so generous with your time. It was great. 1463 01:17:14,600 --> 01:17:16,880 Speaker 1: Um so absolutely thanks for having me on Mark. We'll 1464 01:17:16,920 --> 01:17:19,920 Speaker 1: catch you on Twitter. That sounds great, but take care alright, 1465 01:17:19,920 --> 01:17:20,240 Speaker 1: bye bye