1 00:00:13,720 --> 00:00:17,079 Speaker 1: The central banks backs are against the wall. They're running 2 00:00:17,120 --> 00:00:20,040 Speaker 1: out of tools, and what options do they have left? 3 00:00:20,160 --> 00:00:23,119 Speaker 1: Should they save the bond market or do they save 4 00:00:23,200 --> 00:00:26,279 Speaker 1: the currencies? Now, there's no one better to take a 5 00:00:26,320 --> 00:00:28,639 Speaker 1: look at what's going on with the central banks the 6 00:00:28,680 --> 00:00:33,080 Speaker 1: tools that are left. Will we face inflation, deflation and 7 00:00:33,120 --> 00:00:36,800 Speaker 1: the macroeconomic view than Lynn Alden. That's what I'm sitting 8 00:00:36,840 --> 00:00:39,360 Speaker 1: down with today. We have been putting trying to put 9 00:00:39,400 --> 00:00:40,920 Speaker 1: this interview together for a long time, and I was 10 00:00:40,960 --> 00:00:44,560 Speaker 1: so excited to finally get this done. Lynn drops absolute 11 00:00:44,680 --> 00:00:46,599 Speaker 1: fire and if you want to know what is going 12 00:00:46,640 --> 00:00:49,600 Speaker 1: to happen with the currency, with the bonds, but even 13 00:00:49,680 --> 00:00:52,240 Speaker 1: on a bigger level, what's happening with the central bank 14 00:00:52,240 --> 00:00:55,120 Speaker 1: digital currencies, and even one level above that with the 15 00:00:55,120 --> 00:00:58,440 Speaker 1: i M F SDRs digital currencies on that level, and 16 00:00:58,480 --> 00:01:01,680 Speaker 1: then into traditional safety even assets including her opinions on 17 00:01:01,760 --> 00:01:04,959 Speaker 1: gold where that's at and bitcoin as well. We cover 18 00:01:05,080 --> 00:01:07,880 Speaker 1: it all with probably one of the best macro economists 19 00:01:08,120 --> 00:01:11,880 Speaker 1: um analysts on YouTube today in the market today, and 20 00:01:11,880 --> 00:01:13,399 Speaker 1: that is Len Alden. So let's go ahead and just 21 00:01:13,440 --> 00:01:16,200 Speaker 1: jump right into it. Hey, everyone, welcome to another episode 22 00:01:16,240 --> 00:01:18,560 Speaker 1: of the Market Disruptors Show. And today I am joined 23 00:01:18,560 --> 00:01:22,040 Speaker 1: by Lynn Alden, who probably doesn't need much of an introduction. Um. 24 00:01:22,120 --> 00:01:24,600 Speaker 1: She is a macro analyst that's really been making a 25 00:01:24,640 --> 00:01:26,840 Speaker 1: lot of noise in the scene, really good insights. He's 26 00:01:26,880 --> 00:01:30,280 Speaker 1: the founder of len Aldon Investment Strategy. And Lynn, I'm 27 00:01:30,319 --> 00:01:32,360 Speaker 1: so excited to have you on today. You're happy to 28 00:01:32,400 --> 00:01:33,960 Speaker 1: be here. Yeah, it's been a lot long time in 29 00:01:34,000 --> 00:01:35,920 Speaker 1: the coming to to finally be in your show. So 30 00:01:36,160 --> 00:01:37,920 Speaker 1: I know we were planning on a little while ago, 31 00:01:38,040 --> 00:01:40,560 Speaker 1: and you know, we finally got to make it happen. Yeah, yeah, 32 00:01:40,640 --> 00:01:42,319 Speaker 1: I am glad to make it happen. I've been watching 33 00:01:42,319 --> 00:01:43,920 Speaker 1: your stuff for a long time and yes, we've been 34 00:01:43,920 --> 00:01:46,880 Speaker 1: talking about it. I'm also paid subscriber to your newsletter 35 00:01:46,880 --> 00:01:49,560 Speaker 1: and I recommend that to everybody as well too. Um, 36 00:01:49,720 --> 00:01:53,520 Speaker 1: some great insights there, definitely helpful, helpful for me. But um, 37 00:01:53,560 --> 00:01:54,720 Speaker 1: I know a lot about who you are, But why 38 00:01:54,720 --> 00:01:56,680 Speaker 1: don't you give us a little bit of background of 39 00:01:56,760 --> 00:01:58,880 Speaker 1: kind of what what brought you here and what you're 40 00:01:58,920 --> 00:02:01,720 Speaker 1: doing in the space. Sure, yes, my my background as 41 00:02:01,720 --> 00:02:04,720 Speaker 1: a blend of engineering and finance. Uh, and so I've 42 00:02:04,760 --> 00:02:07,840 Speaker 1: had a lifelong interested investing and finance. But when it 43 00:02:07,880 --> 00:02:10,280 Speaker 1: came time to go to university, I focused on engineering 44 00:02:10,320 --> 00:02:11,919 Speaker 1: instead because I also, you know, a big fan of 45 00:02:11,960 --> 00:02:14,440 Speaker 1: technology and and kind of the importance of that has 46 00:02:14,480 --> 00:02:16,919 Speaker 1: in the world as I worked as an engineer, but 47 00:02:16,960 --> 00:02:20,200 Speaker 1: then I kind of shifted more towards engineering management and 48 00:02:20,280 --> 00:02:23,200 Speaker 1: running the finances of an engineering facility. Uh. And then 49 00:02:23,240 --> 00:02:26,640 Speaker 1: over time, you know, made my investment in research. You know, 50 00:02:26,680 --> 00:02:28,960 Speaker 1: I started a company to focus on uh, you know, 51 00:02:29,040 --> 00:02:32,600 Speaker 1: retail investing and institutional investing. Uh, you know, for for 52 00:02:32,680 --> 00:02:34,400 Speaker 1: kind of that blend. So you know a lot of 53 00:02:34,680 --> 00:02:37,919 Speaker 1: businesses focused on either purely the retail side or purely 54 00:02:37,960 --> 00:02:40,359 Speaker 1: the institutional side, whereas one of my goals was to 55 00:02:40,400 --> 00:02:44,680 Speaker 1: kind of make institutional level research like widely available. Hey guys, 56 00:02:44,720 --> 00:02:47,000 Speaker 1: let me just interrupt this interview real quick, just to 57 00:02:47,040 --> 00:02:50,280 Speaker 1: plug the show sponsor, and that is Block five. Now. 58 00:02:50,320 --> 00:02:54,120 Speaker 1: Block five is doing amazing things in the bitcoin finance space. 59 00:02:54,280 --> 00:02:56,040 Speaker 1: As a matter of fact, they've cracked some really big 60 00:02:56,040 --> 00:02:59,240 Speaker 1: news by bringing on the x c ftc UM chair 61 00:02:59,320 --> 00:03:02,400 Speaker 1: Chris gian carlow Um and they are one of the 62 00:03:02,440 --> 00:03:06,359 Speaker 1: most transparent, most heavily regulated UM companies inside the United States, 63 00:03:06,400 --> 00:03:08,760 Speaker 1: which gives me a lot of trust into what their 64 00:03:08,760 --> 00:03:11,359 Speaker 1: services are. Now. I've recently did a video talking about 65 00:03:11,360 --> 00:03:14,560 Speaker 1: how to retire off bitcoin, and you can do that 66 00:03:14,600 --> 00:03:18,280 Speaker 1: by leveraging debt and interest against bitcoin. And Block five 67 00:03:18,760 --> 00:03:21,480 Speaker 1: is the number one company in the United States or 68 00:03:21,480 --> 00:03:23,959 Speaker 1: maybe in the world to go to and use UM. 69 00:03:24,280 --> 00:03:26,400 Speaker 1: They are leading the charges or paying interest on your 70 00:03:26,400 --> 00:03:28,280 Speaker 1: bitcoin if you park it with them, or you can 71 00:03:28,360 --> 00:03:30,640 Speaker 1: borrow against it. Now, as I broke down in that video, 72 00:03:30,840 --> 00:03:33,240 Speaker 1: you can borrow against your bitcoin, and when you take 73 00:03:33,320 --> 00:03:36,400 Speaker 1: debt against it, it's not taxable. It's not a taxable event. 74 00:03:36,560 --> 00:03:38,080 Speaker 1: You can use that debt for anything that you want, 75 00:03:38,120 --> 00:03:40,640 Speaker 1: including to live off of, to leverage up and buy more, 76 00:03:40,800 --> 00:03:43,120 Speaker 1: or roll it into another asset. UM you can do 77 00:03:43,200 --> 00:03:45,640 Speaker 1: something like I've done recently, like sell some real estate 78 00:03:45,840 --> 00:03:48,640 Speaker 1: put that money into bitcoin. Now as that bitcoin price 79 00:03:48,680 --> 00:03:50,840 Speaker 1: has risen, I'm able to borrow against it and go 80 00:03:50,920 --> 00:03:53,280 Speaker 1: back and buy the same real estate or something similar, 81 00:03:53,440 --> 00:03:56,480 Speaker 1: and I still own the bitcoin, and I also own 82 00:03:56,560 --> 00:03:58,600 Speaker 1: the new asset as well. Lots of ways you can 83 00:03:58,600 --> 00:04:01,880 Speaker 1: do this. UM and block is the company that I recommend. 84 00:04:02,040 --> 00:04:03,880 Speaker 1: Down in the description, I have a link that you 85 00:04:03,880 --> 00:04:05,600 Speaker 1: can click on. If you choose to use that link, 86 00:04:05,640 --> 00:04:07,240 Speaker 1: you can earn up the two d fifty dollars in 87 00:04:07,280 --> 00:04:10,240 Speaker 1: bitcoin just for using that link. So check out blockline now. 88 00:04:10,880 --> 00:04:13,120 Speaker 1: Which is funny because even the institutions still like that 89 00:04:13,160 --> 00:04:15,280 Speaker 1: because they you know, they can they actually can read 90 00:04:15,280 --> 00:04:17,520 Speaker 1: it instead of just pretending they can understand it. And 91 00:04:17,600 --> 00:04:19,560 Speaker 1: so it's basically trying to you know, present things in 92 00:04:19,600 --> 00:04:22,000 Speaker 1: plain English, and so it's kind of appropriate for a 93 00:04:22,000 --> 00:04:25,120 Speaker 1: pretty wide audience of skill levels. Uh. And so that's 94 00:04:25,160 --> 00:04:26,960 Speaker 1: kind of my background. I you know, I focus on 95 00:04:27,080 --> 00:04:30,359 Speaker 1: individual equities. That's kind of where my bread and butter was, 96 00:04:30,400 --> 00:04:32,960 Speaker 1: as well as commodities. But because we're in such a 97 00:04:32,960 --> 00:04:35,839 Speaker 1: macro heavy environment, I've had to incorporate a lot of 98 00:04:35,839 --> 00:04:39,440 Speaker 1: macro analysis into my research because those some of the 99 00:04:39,480 --> 00:04:41,000 Speaker 1: big trends that you you don't want to be on 100 00:04:41,040 --> 00:04:43,479 Speaker 1: the wrong side of when you're picking which sectors or 101 00:04:43,480 --> 00:04:46,640 Speaker 1: which type of assets to be invested in. Yeah, definitely, 102 00:04:47,120 --> 00:04:50,400 Speaker 1: it almost seems like that that bigger picture is easier 103 00:04:50,440 --> 00:04:53,320 Speaker 1: to see than the shorter term picture maybe as well. 104 00:04:54,000 --> 00:04:58,240 Speaker 1: Um having that engineering background, I haven't seen them. I'm 105 00:04:58,279 --> 00:05:01,760 Speaker 1: guessing you probably have you done some interviews with Preston Pish? 106 00:05:01,920 --> 00:05:05,440 Speaker 1: Oh yeah, definitely. Yeah. Yeah, another another engineer in the 107 00:05:05,520 --> 00:05:07,279 Speaker 1: in the in the space, and I guess, uh, I 108 00:05:07,279 --> 00:05:10,120 Speaker 1: guess it lends to that kind of analytical thinking, right, 109 00:05:10,400 --> 00:05:12,160 Speaker 1: maybe maybe that's one reason why you look at all 110 00:05:12,160 --> 00:05:14,240 Speaker 1: the numbers and stuff makes sense for you. That's the 111 00:05:14,240 --> 00:05:17,480 Speaker 1: shared background. Yeah, it's a very quantified background. Uh yeah, 112 00:05:17,640 --> 00:05:19,799 Speaker 1: just you know, I often, you know, my my background 113 00:05:19,839 --> 00:05:22,720 Speaker 1: specifically was control systems. And whenever you have like a 114 00:05:22,839 --> 00:05:25,159 Speaker 1: you know, like a say, some sort of variable happens 115 00:05:25,160 --> 00:05:26,960 Speaker 1: and kind of pushes the system one way, whether there's 116 00:05:26,960 --> 00:05:29,200 Speaker 1: a logical system or mechanical system, the whole point of 117 00:05:29,200 --> 00:05:31,400 Speaker 1: a control systems there's some sort of feedback response that 118 00:05:31,400 --> 00:05:33,680 Speaker 1: generally pushes back the other direction and gets it back 119 00:05:33,720 --> 00:05:35,800 Speaker 1: on target. And that's one way that I think about 120 00:05:35,839 --> 00:05:38,360 Speaker 1: all the policy responses that happen. And so one thing 121 00:05:38,360 --> 00:05:41,479 Speaker 1: that investors often miss is the policy response. And so 122 00:05:41,480 --> 00:05:43,320 Speaker 1: they often, you know, they look at the economy, they 123 00:05:43,320 --> 00:05:45,080 Speaker 1: say this is going to play out, but then it's 124 00:05:45,160 --> 00:05:47,440 Speaker 1: very hard to predict kind of the policy response that 125 00:05:47,760 --> 00:05:50,680 Speaker 1: either either central banks or fiscal policymakers are gonna come 126 00:05:50,720 --> 00:05:52,880 Speaker 1: in and push back on. Where's one thing I try 127 00:05:52,880 --> 00:05:57,160 Speaker 1: to do is is incorporate the expected you know, policy 128 00:05:57,160 --> 00:05:59,279 Speaker 1: response that they're going to have rather than you know, 129 00:05:59,360 --> 00:06:01,840 Speaker 1: kind of be caught guard by it. So kind of 130 00:06:01,839 --> 00:06:04,040 Speaker 1: like chest like playing a couple moves ahead, like if 131 00:06:04,080 --> 00:06:06,320 Speaker 1: this happens, the response will probably be this, which will 132 00:06:06,360 --> 00:06:10,560 Speaker 1: then cause this to happen. Yeah, pretty much something like that. So, um, 133 00:06:10,640 --> 00:06:12,800 Speaker 1: let's let's go ahead and jump in and um, I 134 00:06:12,839 --> 00:06:16,120 Speaker 1: guess um, you know, current curious on what your views 135 00:06:16,160 --> 00:06:19,159 Speaker 1: are on like the current stage that we're in. And 136 00:06:19,560 --> 00:06:21,440 Speaker 1: a couple of things that you know, I think a 137 00:06:21,480 --> 00:06:23,400 Speaker 1: lot of people have been looking at is, you know, 138 00:06:23,480 --> 00:06:26,120 Speaker 1: bond yields have been going up pretty dramatically. Of course 139 00:06:26,240 --> 00:06:28,479 Speaker 1: on a on a long enough timeframe, they've they're way down, 140 00:06:29,040 --> 00:06:31,080 Speaker 1: but they're but they're coming up, and it seems like, 141 00:06:31,120 --> 00:06:33,080 Speaker 1: you know, there's a little bit of maybe concern there. 142 00:06:33,080 --> 00:06:35,440 Speaker 1: And at the same time they're printing trillions and trillions 143 00:06:35,480 --> 00:06:38,120 Speaker 1: of dollars. We've seen the dollar index kind of crashing. 144 00:06:38,200 --> 00:06:40,280 Speaker 1: That's been stabilizing as well, and it seems like maybe 145 00:06:40,279 --> 00:06:42,279 Speaker 1: there's a little bit of a balancing act that the 146 00:06:42,279 --> 00:06:44,200 Speaker 1: FED is trying to deal with between the bonds and 147 00:06:44,200 --> 00:06:46,240 Speaker 1: the currencies. Is do you see that at all or 148 00:06:46,400 --> 00:06:48,640 Speaker 1: what have you seen between those two. But yeah, I 149 00:06:48,640 --> 00:06:50,280 Speaker 1: think so. I mean, we've we've gotten past some of 150 00:06:50,279 --> 00:06:52,440 Speaker 1: the really extreme moves of last year, and so we 151 00:06:52,520 --> 00:06:55,080 Speaker 1: have had a degree of relative stability, you know, in 152 00:06:55,120 --> 00:06:58,160 Speaker 1: recent months. You know that that still could be somewhat fragile. 153 00:06:58,440 --> 00:06:59,720 Speaker 1: You could say, we can you know, we can call 154 00:06:59,800 --> 00:07:02,240 Speaker 1: us of a counter rally and some of the things, so, 155 00:07:02,320 --> 00:07:04,560 Speaker 1: you know, a counter rally and the dollar, uh, you know, 156 00:07:04,680 --> 00:07:07,800 Speaker 1: correction in precious metals. Uh. You know that we've even 157 00:07:07,800 --> 00:07:09,960 Speaker 1: had in the past month kind of a correction in 158 00:07:09,960 --> 00:07:12,600 Speaker 1: in some of the digital assets as well. Uh. And 159 00:07:12,680 --> 00:07:14,160 Speaker 1: so you know, we kind of you know, we can 160 00:07:14,200 --> 00:07:16,120 Speaker 1: only kind of move so far so fast before you 161 00:07:16,160 --> 00:07:17,880 Speaker 1: naturally have kind of a you know, kind of a 162 00:07:17,920 --> 00:07:21,640 Speaker 1: bounce back mechanism. And so the general, the big picture 163 00:07:21,680 --> 00:07:24,040 Speaker 1: trend of where I see we are is towards the 164 00:07:24,160 --> 00:07:26,680 Speaker 1: end of a long term death cycle. And so that's 165 00:07:26,680 --> 00:07:28,880 Speaker 1: a concept that is populized by Ray Dalio, but it's 166 00:07:28,920 --> 00:07:30,840 Speaker 1: something that I've done a lot of independent research on 167 00:07:30,880 --> 00:07:32,880 Speaker 1: as well, which is the idea that you know, if 168 00:07:32,880 --> 00:07:34,280 Speaker 1: you if you if you look at the short term 169 00:07:34,280 --> 00:07:37,000 Speaker 1: business cycle, you know, the five tenure credit cycle, you 170 00:07:37,040 --> 00:07:39,120 Speaker 1: build up leverage, then you have sort of you know, 171 00:07:39,640 --> 00:07:43,320 Speaker 1: either policy error or external catalyst, you know, uh, you know, 172 00:07:43,400 --> 00:07:46,160 Speaker 1: kind of tax that very fragile leverage system. You have 173 00:07:46,440 --> 00:07:49,680 Speaker 1: a de leveraging recession. But then pause makers come in 174 00:07:49,680 --> 00:07:52,040 Speaker 1: and they kind of short circuit that the leveraging process, 175 00:07:52,040 --> 00:07:55,320 Speaker 1: so they cut industrates, they do physical responses, and you know, 176 00:07:55,360 --> 00:07:57,840 Speaker 1: so that the economy never de leverages back down to 177 00:07:57,920 --> 00:07:59,360 Speaker 1: where it was at the start of the cycle. So 178 00:07:59,400 --> 00:08:02,600 Speaker 1: if you string multiple of those short term business cycles together, 179 00:08:03,000 --> 00:08:05,080 Speaker 1: you get higher and higher debt as a percentage of 180 00:08:05,080 --> 00:08:07,920 Speaker 1: GDP UH, and you get lower and lower interest rates, 181 00:08:08,440 --> 00:08:10,720 Speaker 1: and eventually that you know, that kind of compounds over 182 00:08:10,760 --> 00:08:13,239 Speaker 1: decades until you hit the zero bound in interest rates. 183 00:08:13,480 --> 00:08:15,840 Speaker 1: Then they then they turned to asset purchases as their 184 00:08:15,880 --> 00:08:18,720 Speaker 1: next set of policy tools. At that point, debt as 185 00:08:18,760 --> 00:08:21,160 Speaker 1: a percentage of GDPs so high that if you have 186 00:08:21,200 --> 00:08:24,400 Speaker 1: any disruption to cash flows, UH, it can be catastrophic. 187 00:08:24,400 --> 00:08:26,440 Speaker 1: And that's where you get some of the really extreme 188 00:08:26,960 --> 00:08:29,960 Speaker 1: uh fiscal responses. And the last time we were an 189 00:08:30,040 --> 00:08:32,960 Speaker 1: environment like this was the and so you know, we 190 00:08:33,040 --> 00:08:35,520 Speaker 1: have you know, the five send your business cycle, but 191 00:08:35,559 --> 00:08:37,520 Speaker 1: then on top of that, we have this multi decade 192 00:08:37,559 --> 00:08:39,840 Speaker 1: kind of long term death cycle and used to The 193 00:08:39,840 --> 00:08:41,480 Speaker 1: big difference at the end of a long term debt 194 00:08:41,520 --> 00:08:45,079 Speaker 1: cycle is that you usually have some degree of currency devaluation, uh, 195 00:08:45,200 --> 00:08:46,839 Speaker 1: you know. And it could be an abrupt one from 196 00:08:46,880 --> 00:08:49,439 Speaker 1: from high inflation, or it could be a more prolonged 197 00:08:49,440 --> 00:08:52,240 Speaker 1: one of just holding indest rates below the prevailing inflation 198 00:08:52,360 --> 00:08:54,560 Speaker 1: rate for a while. Uh, and or you can have 199 00:08:54,600 --> 00:08:56,840 Speaker 1: some combination of the two. And so that's kind of 200 00:08:56,880 --> 00:08:59,680 Speaker 1: the the overall environment that I see us navigating. And 201 00:08:59,760 --> 00:09:02,120 Speaker 1: part are the reason that the responses were so big 202 00:09:02,360 --> 00:09:04,480 Speaker 1: in this procession is because we're already you know, kind 203 00:09:04,480 --> 00:09:06,520 Speaker 1: of stretched about as far as we can go in 204 00:09:06,640 --> 00:09:10,720 Speaker 1: terms of debt and leverage in the system. Yeah. So um, 205 00:09:10,760 --> 00:09:13,120 Speaker 1: when you talk about debt to GDP, I mean, I 206 00:09:13,160 --> 00:09:17,079 Speaker 1: know we're we're extremely high right now, Um whatever pushing 207 00:09:17,080 --> 00:09:19,400 Speaker 1: a PC. I know something that I've kind of looked 208 00:09:19,440 --> 00:09:21,360 Speaker 1: at it was like this Kinsey and multiplier where you 209 00:09:21,440 --> 00:09:23,760 Speaker 1: kind of get into this death debt spiral, or at 210 00:09:23,800 --> 00:09:26,520 Speaker 1: least a debt spiral where you're not getting the growth 211 00:09:26,520 --> 00:09:28,640 Speaker 1: out of the debt that that that's been added. And 212 00:09:28,679 --> 00:09:31,079 Speaker 1: it seems like I guess the Kinsey multipliers like over 213 00:09:31,840 --> 00:09:34,600 Speaker 1: debt to GDP. Obviously we're way over that. Uh. When 214 00:09:34,640 --> 00:09:37,240 Speaker 1: we've seen other countries go past this hundred and thirty mark, 215 00:09:37,360 --> 00:09:39,400 Speaker 1: like Greece or whatever, it seems like there's almost no 216 00:09:39,559 --> 00:09:42,240 Speaker 1: coming back out of that. Um have you seen the 217 00:09:42,280 --> 00:09:45,160 Speaker 1: same thing. So somewhat that's like a more it's it's 218 00:09:45,200 --> 00:09:47,040 Speaker 1: one of those things where it's hard to prove causation 219 00:09:47,120 --> 00:09:49,560 Speaker 1: there because what you can observe is that the strong 220 00:09:49,640 --> 00:09:52,400 Speaker 1: correlation that as you get more debt, you also get 221 00:09:52,440 --> 00:09:54,679 Speaker 1: generally get less growth. And of course the tricky thing 222 00:09:54,720 --> 00:09:56,760 Speaker 1: is there is saying that you know, is there are 223 00:09:56,760 --> 00:09:59,200 Speaker 1: the reason that that passmakers are taking all that debt 224 00:09:59,200 --> 00:10:01,720 Speaker 1: out is because as they have slow in growth? Or 225 00:10:01,840 --> 00:10:04,360 Speaker 1: is that debt causing the slower growth? And so I 226 00:10:04,360 --> 00:10:07,080 Speaker 1: think I think the more fundamental underlying thing is is 227 00:10:07,120 --> 00:10:10,080 Speaker 1: demographics uh and some of the fiscal uh you know 228 00:10:10,280 --> 00:10:12,960 Speaker 1: uh decisions that that some countries have made. But then 229 00:10:13,000 --> 00:10:15,480 Speaker 1: on top of that you can exacerbate that with certain 230 00:10:15,480 --> 00:10:18,800 Speaker 1: monetary responses and things like that, and so overall, you know, 231 00:10:18,920 --> 00:10:21,240 Speaker 1: debt I view more as you know, what is being 232 00:10:21,280 --> 00:10:24,160 Speaker 1: spent on more so than than the exact level. And 233 00:10:24,240 --> 00:10:25,800 Speaker 1: you know, as an example, if you look at, say 234 00:10:25,840 --> 00:10:29,440 Speaker 1: the the Interstate highway system under the Eisenhower administration. That 235 00:10:29,520 --> 00:10:31,679 Speaker 1: was an example of a very you know, uh, a 236 00:10:31,720 --> 00:10:34,440 Speaker 1: smart investment you could call a big civil works projects 237 00:10:34,440 --> 00:10:37,840 Speaker 1: that that boosted productivity, whereas other types of spending are 238 00:10:37,880 --> 00:10:41,160 Speaker 1: are sometimes less productive and therefore don't contribute to growth, 239 00:10:41,160 --> 00:10:43,480 Speaker 1: but then they do contribute to debt. In addition, we 240 00:10:43,480 --> 00:10:46,120 Speaker 1: can separate public debt from private debt because they actually 241 00:10:46,160 --> 00:10:50,880 Speaker 1: have very different effects on inflation versus deflation. So if 242 00:10:50,880 --> 00:10:53,240 Speaker 1: you look back, for example, in the nineteen thirties and forties, 243 00:10:53,520 --> 00:10:55,320 Speaker 1: you had kind of one to punch at the end 244 00:10:55,360 --> 00:10:56,839 Speaker 1: of a long term debt cycle. So it wasn't like 245 00:10:56,880 --> 00:10:59,080 Speaker 1: all the debt went up at the same time. Instead, 246 00:10:59,120 --> 00:11:00,880 Speaker 1: you had a private debt bubble and then a public 247 00:11:00,880 --> 00:11:03,560 Speaker 1: debt bubble. So the private debt bubble peaked in the 248 00:11:03,640 --> 00:11:06,720 Speaker 1: in the really early nineteen thirties, uh, you know, during 249 00:11:06,760 --> 00:11:09,439 Speaker 1: the big you know crash and the Great Depression and 250 00:11:09,440 --> 00:11:11,560 Speaker 1: the bank failures. Uh, so you have you had debt 251 00:11:11,559 --> 00:11:14,160 Speaker 1: as a presentative GDP from the private sector reached very 252 00:11:14,240 --> 00:11:17,040 Speaker 1: high levels while public debt was still pretty low. But 253 00:11:17,120 --> 00:11:19,280 Speaker 1: then you know, all the responses to kind of you know, 254 00:11:19,320 --> 00:11:21,439 Speaker 1: try to drag the economy out of that, create a 255 00:11:21,480 --> 00:11:25,079 Speaker 1: lot of new based new base money expand the broad money. Uh. 256 00:11:25,080 --> 00:11:26,720 Speaker 1: You know, you know, then you had of course, you 257 00:11:26,760 --> 00:11:28,679 Speaker 1: had populism, that you had World War two, so of 258 00:11:28,760 --> 00:11:31,400 Speaker 1: course you had that kind of external fiscal uh, you 259 00:11:31,440 --> 00:11:34,040 Speaker 1: know response. And then therefore in the forties you got 260 00:11:34,040 --> 00:11:36,360 Speaker 1: that public debt bubble. And a big difference is that 261 00:11:36,440 --> 00:11:39,000 Speaker 1: the private debt bubble, especially as an online tends to 262 00:11:39,040 --> 00:11:42,760 Speaker 1: be disinflationary, whereas the public debt bubble tends to be 263 00:11:42,800 --> 00:11:45,440 Speaker 1: more inflationary. And if you fast forward to you know, 264 00:11:45,960 --> 00:11:48,640 Speaker 1: the Great Financial Crisis, in many ways, that looked a 265 00:11:48,640 --> 00:11:50,520 Speaker 1: lot if you look at those really long term century 266 00:11:50,600 --> 00:11:52,800 Speaker 1: charts of the long term debt cycle and kind of 267 00:11:52,840 --> 00:11:56,000 Speaker 1: the fiscal uh and and monetary uh you know policy 268 00:11:56,040 --> 00:11:58,880 Speaker 1: mix Uh, that period looked a lot like the nineteen 269 00:11:58,880 --> 00:12:01,319 Speaker 1: twenty nine crash, that kind of private debt bubble coming 270 00:12:01,360 --> 00:12:04,520 Speaker 1: to a crescendo. Uh, and then you know, deleveraging. And 271 00:12:04,559 --> 00:12:06,480 Speaker 1: then you know, in the response after that, we had 272 00:12:06,640 --> 00:12:09,079 Speaker 1: you know, kind of a mixed environment of certain types 273 00:12:09,160 --> 00:12:12,679 Speaker 1: of disinflation. So you had good disinflation, you had commodity disinflation, 274 00:12:12,920 --> 00:12:15,080 Speaker 1: but then of course you had health care inflation, you 275 00:12:15,160 --> 00:12:19,240 Speaker 1: had you know, education, childcare inflation, so you have that 276 00:12:19,320 --> 00:12:22,800 Speaker 1: kind of mixed in policy response. But then in the twenties, 277 00:12:22,840 --> 00:12:25,000 Speaker 1: that's now we're getting kind of the public debt bubble. 278 00:12:25,040 --> 00:12:27,960 Speaker 1: We're getting kind of the nineteen forties environment of you know, 279 00:12:28,400 --> 00:12:32,520 Speaker 1: massive increase in broad mind supply, massive increase in federal deficits, 280 00:12:32,679 --> 00:12:34,800 Speaker 1: try to kind of drag the economy out of that, 281 00:12:35,120 --> 00:12:37,120 Speaker 1: and that tends to be more inflationary in the grand 282 00:12:37,160 --> 00:12:39,520 Speaker 1: scheme of things. So that's kind of how I'm looking 283 00:12:39,559 --> 00:12:42,160 Speaker 1: that play out, is kind of monitoring private debt and 284 00:12:42,240 --> 00:12:44,760 Speaker 1: public debt somewhat separately and seeing how they're interplaying with 285 00:12:44,800 --> 00:12:47,880 Speaker 1: each other. Yeah, I like that. Um, you know, it's 286 00:12:47,880 --> 00:12:51,200 Speaker 1: such a nuanced discussion, right, where like you're saying, not 287 00:12:51,280 --> 00:12:53,719 Speaker 1: all debt is good in different types of debt public debt, 288 00:12:53,760 --> 00:12:56,560 Speaker 1: private debt, but also how that debt is used makes 289 00:12:56,559 --> 00:12:58,720 Speaker 1: a big difference. So to your point, eyes and how 290 00:12:58,760 --> 00:13:00,480 Speaker 1: are building broads and bridges put a lot of people 291 00:13:00,520 --> 00:13:03,600 Speaker 1: to work, helped build that economy back up, so that 292 00:13:03,640 --> 00:13:06,280 Speaker 1: debt hopefully got more growth than what they spent, whereas 293 00:13:06,280 --> 00:13:08,559 Speaker 1: today we're seeing a lot of debt seems like going 294 00:13:08,559 --> 00:13:11,720 Speaker 1: into kind of black holes that probably isn't going to um, 295 00:13:11,760 --> 00:13:14,520 Speaker 1: you know, relate or bring anything back. So to your point, 296 00:13:14,520 --> 00:13:19,000 Speaker 1: it's very nuanced. Um And and the inflation argument or 297 00:13:19,080 --> 00:13:22,440 Speaker 1: inflation versus debate deflation debate is also pretty nuanced. I 298 00:13:22,440 --> 00:13:25,320 Speaker 1: want to jump into that, but before we do, UM, 299 00:13:25,360 --> 00:13:27,480 Speaker 1: you were talking about, you know, the debt to GDP 300 00:13:27,640 --> 00:13:31,880 Speaker 1: it's being high. I'm curious. It seems like, um, you know, 301 00:13:32,679 --> 00:13:35,960 Speaker 1: the markets really play a lot into that GDP as well, 302 00:13:36,440 --> 00:13:40,320 Speaker 1: and maybe the Fed Central Banks have a pretty strong 303 00:13:40,440 --> 00:13:43,040 Speaker 1: reason to try to keep those markets propped up, or 304 00:13:43,040 --> 00:13:45,840 Speaker 1: that debt to GDP could even shoot way higher. Is 305 00:13:45,840 --> 00:13:48,000 Speaker 1: there some something that you're seeing there? Is there? Is 306 00:13:48,040 --> 00:13:51,000 Speaker 1: that true? Well, there's a couple kind of bottlenecks that 307 00:13:51,040 --> 00:13:53,600 Speaker 1: they've been kind of bouncing around on since we saw 308 00:13:53,640 --> 00:13:56,880 Speaker 1: that start to play out in late where they're trying 309 00:13:56,920 --> 00:14:00,480 Speaker 1: to do quantitative tightening. But then they had that repo 310 00:14:00,600 --> 00:14:04,000 Speaker 1: spike in September nineteen and so the Federal Reserve is 311 00:14:04,040 --> 00:14:08,840 Speaker 1: forced to abruptly stop quantitative tightening and shift towards quantitative easing. UH. 312 00:14:08,840 --> 00:14:10,679 Speaker 1: Initially they didn't want to call it that, but they 313 00:14:10,720 --> 00:14:13,280 Speaker 1: were explaining the balance sheet by buying T bills, uh, 314 00:14:13,320 --> 00:14:14,920 Speaker 1: and that helped put out the fire on the repo 315 00:14:15,040 --> 00:14:18,400 Speaker 1: market because ultimately we essentially had was an oversupply of 316 00:14:18,440 --> 00:14:21,800 Speaker 1: T bills relative to reserves. So they increased reserves, you know, 317 00:14:21,800 --> 00:14:24,200 Speaker 1: by creating new base money to buy some of those 318 00:14:24,240 --> 00:14:27,360 Speaker 1: tea bills and kind of you know, essentially monetized part 319 00:14:27,360 --> 00:14:30,040 Speaker 1: of the US deficit. And then it became more explicitly 320 00:14:30,120 --> 00:14:33,560 Speaker 1: QWI when you had the you know, the pandemic, because 321 00:14:33,600 --> 00:14:35,360 Speaker 1: you know, prior to the pandemic, they couldn't call it. 322 00:14:35,400 --> 00:14:36,960 Speaker 1: I mean you couldn't. You're right in the middle of 323 00:14:36,960 --> 00:14:39,640 Speaker 1: an economic expansion. You can't say we're just expanding the 324 00:14:39,640 --> 00:14:41,720 Speaker 1: balance sheet because you know, for fun, we're just doing it, 325 00:14:41,760 --> 00:14:43,960 Speaker 1: you know, for it basically didn't they didn't have the 326 00:14:44,000 --> 00:14:46,000 Speaker 1: cover to say, yeah, we're actually doing it because we 327 00:14:46,040 --> 00:14:48,520 Speaker 1: have a problem. Uh. Instead, you know, once you had 328 00:14:48,560 --> 00:14:50,480 Speaker 1: the pandemic, you can say, okay, now we have an 329 00:14:50,520 --> 00:14:52,840 Speaker 1: economic shocks, we have to do QUWI. So they were 330 00:14:52,880 --> 00:14:54,800 Speaker 1: they were you know, more directly calling it QUI at 331 00:14:54,840 --> 00:14:58,120 Speaker 1: that point. And then even then in March, you know, 332 00:14:58,160 --> 00:15:01,080 Speaker 1: when the markets crashed, aw really bonds did well I 333 00:15:01,080 --> 00:15:03,720 Speaker 1: mean bonds sensed out that crash coming, bond yields went 334 00:15:03,720 --> 00:15:06,040 Speaker 1: down to bond prices went up. But during the heart 335 00:15:06,040 --> 00:15:09,240 Speaker 1: of the crisis, as the dollars spiked, uh, you had 336 00:15:09,280 --> 00:15:11,240 Speaker 1: you had the forward sector, You're having to begin kind 337 00:15:11,240 --> 00:15:13,080 Speaker 1: of forced selling some of the treasuries in order to 338 00:15:13,120 --> 00:15:15,920 Speaker 1: raised dollars. Uh. And you had other entities than you know, 339 00:15:15,960 --> 00:15:18,200 Speaker 1: with leveraged uh, you know, kind of risk parity funds 340 00:15:18,200 --> 00:15:20,200 Speaker 1: having to sell from the treasuries as you actually had 341 00:15:20,240 --> 00:15:21,880 Speaker 1: to sell off in the treasure market at the at 342 00:15:21,920 --> 00:15:24,280 Speaker 1: the worst part of recession. Uh. And so the federals 343 00:15:24,280 --> 00:15:25,920 Speaker 1: eve had to come in and buy a trillion dollars 344 00:15:25,960 --> 00:15:28,560 Speaker 1: with the treasuries in three weeks. Uh. To to kind 345 00:15:28,560 --> 00:15:31,200 Speaker 1: of reliquidfy markets you had you had, you know, addition 346 00:15:31,240 --> 00:15:32,880 Speaker 1: to the yield spike, and you had the bid ask 347 00:15:32,960 --> 00:15:35,320 Speaker 1: spread just blew out. So the market was essentially a 348 00:15:35,320 --> 00:15:36,880 Speaker 1: liquid broken and it's supposed to be one of the 349 00:15:36,920 --> 00:15:39,920 Speaker 1: most liquid markets in the world, the treasure market. Uh. 350 00:15:39,960 --> 00:15:42,040 Speaker 1: And so you know, they they've they've kind of been 351 00:15:42,080 --> 00:15:46,480 Speaker 1: flirting around the issue of finding out where these bottlenecks are, 352 00:15:46,920 --> 00:15:49,480 Speaker 1: letting them, letting them play out. But then immediately responding 353 00:15:49,800 --> 00:15:52,560 Speaker 1: very quickly. Uh. And so that's a different environment than 354 00:15:52,680 --> 00:15:54,880 Speaker 1: say that you know, the nineteen thirties as an example, 355 00:15:55,120 --> 00:15:57,000 Speaker 1: and even a somewhat different environment than we had in 356 00:15:57,360 --> 00:15:59,640 Speaker 1: n h AS nine, which is that they're much faster 357 00:16:00,000 --> 00:16:02,240 Speaker 1: when something breaks in order to respond. You can even 358 00:16:02,240 --> 00:16:05,000 Speaker 1: go back a little bit further and look at that 359 00:16:05,000 --> 00:16:08,720 Speaker 1: that quarter four period where you know the famous pal 360 00:16:08,760 --> 00:16:10,960 Speaker 1: pivot where you know, they said they're on autopilot, they 361 00:16:11,000 --> 00:16:13,320 Speaker 1: said they're going to raise rates. He started to get 362 00:16:13,360 --> 00:16:15,120 Speaker 1: a self in the equity market at the end of 363 00:16:15,120 --> 00:16:18,360 Speaker 1: the year, but then under the surface, you had no 364 00:16:18,440 --> 00:16:20,600 Speaker 1: junk bonds issued for six weeks, right, so you had 365 00:16:20,640 --> 00:16:22,960 Speaker 1: a complete freeze in the in the high old credit market. 366 00:16:23,360 --> 00:16:26,160 Speaker 1: And and and you know, pausemakers like Power were aware 367 00:16:26,160 --> 00:16:28,440 Speaker 1: of that, and so they were forced to basically, you know, 368 00:16:28,600 --> 00:16:32,240 Speaker 1: shift more dubbish. Uh. So that's essentially what their regime 369 00:16:32,280 --> 00:16:35,040 Speaker 1: has been, which is, you know, responding to fires when 370 00:16:35,080 --> 00:16:37,480 Speaker 1: they happen, rather than you know, kind of moving ahead 371 00:16:37,520 --> 00:16:42,000 Speaker 1: of fires. Yeah. So it kind of takes us into 372 00:16:42,040 --> 00:16:45,359 Speaker 1: that next kind of inflation versus deflation you know conversation. 373 00:16:45,920 --> 00:16:50,080 Speaker 1: And um, again, that's a very that's a very nuanced discussion. Um, 374 00:16:50,120 --> 00:16:53,440 Speaker 1: but it seems like they're fighting deflation, but probably more 375 00:16:53,520 --> 00:16:56,280 Speaker 1: like deflation of assets. Right, So they keep saying they 376 00:16:56,280 --> 00:16:58,240 Speaker 1: can't get the inflation they want, they can't get it. Well, 377 00:16:58,240 --> 00:16:59,880 Speaker 1: I think I think they've got it now. I think 378 00:17:00,000 --> 00:17:01,760 Speaker 1: it's a little bit over their their target at this point. 379 00:17:01,800 --> 00:17:04,680 Speaker 1: But um, the deep But then at the same time, 380 00:17:04,680 --> 00:17:07,440 Speaker 1: we're seeing prices of everything going through the roof, from 381 00:17:07,960 --> 00:17:10,760 Speaker 1: used cars to use bicycles all the way to all 382 00:17:10,760 --> 00:17:13,440 Speaker 1: types of financial assets and all those types of things. Um. 383 00:17:13,520 --> 00:17:15,760 Speaker 1: So the deflation that they're afraid of, I mean, is 384 00:17:15,800 --> 00:17:17,760 Speaker 1: that really in the markets. That's what they're worried about. 385 00:17:17,760 --> 00:17:21,200 Speaker 1: Stocks dropping, you know, real estate dropping, bonds crashing, things 386 00:17:21,240 --> 00:17:24,440 Speaker 1: like that. Yeah, they were, well they were pretty expressit. Uh, 387 00:17:24,560 --> 00:17:27,399 Speaker 1: you know a decade ago when they point out that 388 00:17:27,440 --> 00:17:29,600 Speaker 1: they wanted to do the wealth effect. So they pretty 389 00:17:29,640 --> 00:17:32,320 Speaker 1: much said they wanted to cause asset price inflation. Uh. 390 00:17:32,400 --> 00:17:34,600 Speaker 1: You know, they just you know, described a little bit 391 00:17:34,640 --> 00:17:37,080 Speaker 1: more plately. Uh. And so that was their goal was 392 00:17:37,119 --> 00:17:40,719 Speaker 1: to basically increase you know, housing costs again, increase uh 393 00:17:40,720 --> 00:17:42,960 Speaker 1: the stock market again. Uh. And if you do a 394 00:17:42,960 --> 00:17:45,480 Speaker 1: lot of monetary policy without doing a lot of fiscal policy. 395 00:17:45,520 --> 00:17:47,440 Speaker 1: That that's what that's what we tend to get. Now, 396 00:17:48,080 --> 00:17:50,920 Speaker 1: there were still disinflationary forces over the course that decade 397 00:17:50,960 --> 00:17:53,560 Speaker 1: because for example, uh, you know, about a decade ago, 398 00:17:53,680 --> 00:17:56,199 Speaker 1: you had a period of commodity over supply. You had 399 00:17:56,240 --> 00:17:58,760 Speaker 1: to slow down in China, and so we we've been 400 00:17:58,840 --> 00:18:01,920 Speaker 1: kind of working through this commodity over supply for a while. 401 00:18:02,160 --> 00:18:04,240 Speaker 1: We also, of course had the rise of shale oil, 402 00:18:04,240 --> 00:18:06,919 Speaker 1: which was largely and profitable, but it's still contributed to 403 00:18:07,400 --> 00:18:09,320 Speaker 1: h you know, a ton of extra supply and therefore 404 00:18:09,359 --> 00:18:12,119 Speaker 1: pre low prices across the board. And so we've been 405 00:18:12,160 --> 00:18:15,119 Speaker 1: in that kind of distanslation in commodity environment, but we 406 00:18:15,160 --> 00:18:17,960 Speaker 1: had to target you know, inflation in asset prices, inflation 407 00:18:18,040 --> 00:18:22,120 Speaker 1: and healthcare inflation, and education inflation and childcare things like that. 408 00:18:22,320 --> 00:18:25,119 Speaker 1: Where you had you know, deflation in electronic goods, you 409 00:18:25,160 --> 00:18:29,160 Speaker 1: had deflation in commodities, deflation due to technology and kind 410 00:18:29,160 --> 00:18:32,080 Speaker 1: of offshoring things like that. Uh. And so you know, 411 00:18:32,160 --> 00:18:36,199 Speaker 1: from their perspective, uh, you know, they would prefer to 412 00:18:36,200 --> 00:18:39,280 Speaker 1: say the inflation rate to be higher than the treasure yields, right, 413 00:18:39,320 --> 00:18:41,679 Speaker 1: because that's how you can you can stop you know, 414 00:18:41,760 --> 00:18:44,879 Speaker 1: debt as a percentage of GDP, uh from from continue 415 00:18:44,920 --> 00:18:47,920 Speaker 1: to grow to control if they have you know, the 416 00:18:48,080 --> 00:18:51,760 Speaker 1: essentially nominal GDP growing faster than the combination of debt 417 00:18:51,800 --> 00:18:54,800 Speaker 1: issuance and as a percentage of GDP and interest rates. 418 00:18:55,320 --> 00:18:57,320 Speaker 1: But of course, I mean that's a really bad environment 419 00:18:57,320 --> 00:18:59,679 Speaker 1: if you're holding cash re bonds and so there's no 420 00:18:59,760 --> 00:19:02,640 Speaker 1: free lunch. I mean, someone somewhere is getting screwed over. 421 00:19:02,760 --> 00:19:06,399 Speaker 1: Sometimes there's certain policy regimes where the debtors are getting 422 00:19:06,400 --> 00:19:08,760 Speaker 1: screwed over, and there are other times where the the 423 00:19:08,920 --> 00:19:11,800 Speaker 1: you know, the the people that own the debt, that 424 00:19:11,840 --> 00:19:14,280 Speaker 1: the creditors are getting screwed over. And so in this 425 00:19:14,359 --> 00:19:17,239 Speaker 1: environment of high leverage, they they're they're trying to err 426 00:19:17,240 --> 00:19:20,720 Speaker 1: on the side of essentially the creditors getting uh, you know, 427 00:19:20,840 --> 00:19:23,720 Speaker 1: screwed over. But instead of kind of abrupt kind of 428 00:19:23,760 --> 00:19:26,680 Speaker 1: nominal losses, they prefer, you know to basically just failed 429 00:19:26,680 --> 00:19:28,520 Speaker 1: to keep up with inflation. And that's what you saw 430 00:19:28,600 --> 00:19:33,199 Speaker 1: back in say the nineteen seventies and forties, these inflationary decades. Ironically, 431 00:19:33,240 --> 00:19:35,600 Speaker 1: they tend to deleverage things because the bonds failed to 432 00:19:35,640 --> 00:19:38,320 Speaker 1: keep up with inflation. But you don't want to be 433 00:19:38,320 --> 00:19:40,640 Speaker 1: the ones holding those assets, and that's a pretty big 434 00:19:40,680 --> 00:19:44,280 Speaker 1: pool of assets. Yeah, definitely. I guess that you kind 435 00:19:44,280 --> 00:19:45,800 Speaker 1: of talked about that, and that's what I was trying 436 00:19:45,840 --> 00:19:47,439 Speaker 1: to figure out, is like, what are they trying to 437 00:19:47,480 --> 00:19:51,240 Speaker 1: optimize for, because to your point, you know, electronics coming 438 00:19:51,240 --> 00:19:53,600 Speaker 1: down and deflationary source of things like that, And for 439 00:19:53,920 --> 00:19:55,480 Speaker 1: I guess it depends on which side, as you said, 440 00:19:55,480 --> 00:19:57,080 Speaker 1: which side you're on, But it seems like that would 441 00:19:57,160 --> 00:20:00,280 Speaker 1: be good things for most people if prices were coming down, Um, 442 00:20:00,600 --> 00:20:03,000 Speaker 1: asset prices. I guess if you're holding asset prices, you 443 00:20:03,000 --> 00:20:04,440 Speaker 1: want them to go up. If you're if you want 444 00:20:04,440 --> 00:20:06,240 Speaker 1: to buy them, you want them to be down, right, 445 00:20:06,240 --> 00:20:08,919 Speaker 1: So I guess it depends. But like overall, it seems 446 00:20:08,960 --> 00:20:11,720 Speaker 1: like if most people had their cost of living going down, 447 00:20:11,800 --> 00:20:13,800 Speaker 1: that would be a good thing, and asset prices going 448 00:20:13,880 --> 00:20:16,080 Speaker 1: up at the same time, that would be kind of 449 00:20:16,119 --> 00:20:18,320 Speaker 1: a good thing. So um, I guess kind of the 450 00:20:18,640 --> 00:20:21,640 Speaker 1: question was are they really trying you know, I guess 451 00:20:21,640 --> 00:20:23,720 Speaker 1: they're kind of targeting the CPI basket, which is like 452 00:20:23,760 --> 00:20:26,200 Speaker 1: this consumer price of goods basket. But it seems like 453 00:20:26,240 --> 00:20:29,080 Speaker 1: the big risk of deflation is in the markets like stocks, 454 00:20:29,080 --> 00:20:33,239 Speaker 1: could crash, the real estate could crash, and that's like 455 00:20:33,280 --> 00:20:35,960 Speaker 1: a massive deflation hit. So you think that's what they're 456 00:20:35,960 --> 00:20:38,160 Speaker 1: trying to optimize for. I mean, even though they're always 457 00:20:38,160 --> 00:20:40,720 Speaker 1: talking about CPI pretty much, I mean, they're trying to 458 00:20:40,800 --> 00:20:43,359 Speaker 1: keep asset prices up there also, you know, they're increasing 459 00:20:43,440 --> 00:20:46,359 Speaker 1: talking about kind of nominal GDP targeting, you know, again, 460 00:20:46,400 --> 00:20:49,359 Speaker 1: trying to have nominal GDP higher than uh, some of 461 00:20:49,400 --> 00:20:52,479 Speaker 1: those industrates and some of the debt accumulation levels. And 462 00:20:52,520 --> 00:20:55,320 Speaker 1: of course, you know, the perspective will depend on if 463 00:20:55,320 --> 00:20:59,240 Speaker 1: you're the monetary authority or the fiscal authority. So as consumers, 464 00:20:59,480 --> 00:21:03,280 Speaker 1: we genterly would prefer you know, price deflation while still 465 00:21:03,320 --> 00:21:05,480 Speaker 1: having our jobs. So we don't want some some sort 466 00:21:05,480 --> 00:21:08,720 Speaker 1: of economic contraction. But we want technology and things like 467 00:21:08,760 --> 00:21:11,280 Speaker 1: that to to lower prices over time so that our 468 00:21:11,280 --> 00:21:13,840 Speaker 1: money goes further. And that's you know, that's normally the 469 00:21:14,080 --> 00:21:16,600 Speaker 1: best case scenario. The only time that's bad is if 470 00:21:16,600 --> 00:21:19,000 Speaker 1: you have a debt bubble, right, because then the real 471 00:21:19,080 --> 00:21:21,440 Speaker 1: value of your debt goes up relative to your incomes 472 00:21:21,440 --> 00:21:23,639 Speaker 1: and things like that. So if you if you had 473 00:21:23,680 --> 00:21:26,440 Speaker 1: avoided that in the first place, uh, then that that 474 00:21:26,480 --> 00:21:29,080 Speaker 1: deflation is really good. But what policymakers are afraid of 475 00:21:29,160 --> 00:21:31,040 Speaker 1: is that because we've had this, you know, this kind 476 00:21:31,040 --> 00:21:33,480 Speaker 1: of mix of of lower industrates and and you know, 477 00:21:33,600 --> 00:21:36,280 Speaker 1: different types of policy mixes, we've we've kind of encouraged 478 00:21:36,280 --> 00:21:38,879 Speaker 1: this big debt build up and now you know, they 479 00:21:38,960 --> 00:21:41,800 Speaker 1: basically have to in their view, inflated away before they 480 00:21:41,800 --> 00:21:44,080 Speaker 1: can they can kind of stabilize. And so if you're 481 00:21:44,119 --> 00:21:46,840 Speaker 1: the feder Reserve, you're trying to hold yields lower than 482 00:21:46,880 --> 00:21:50,080 Speaker 1: the inflation rate. You're trying to be accommodative, uh and 483 00:21:50,359 --> 00:21:54,640 Speaker 1: kind of you know, trying to balance between you know, uh, 484 00:21:55,160 --> 00:21:58,200 Speaker 1: causing asset bubbles, but then also you know, not wanting 485 00:21:58,200 --> 00:22:00,600 Speaker 1: to crash the market. So that's their perspect active. And 486 00:22:00,640 --> 00:22:03,040 Speaker 1: if your fiscal passmakers mainly you want to get votes 487 00:22:03,200 --> 00:22:05,760 Speaker 1: every two years or four years or whatever the case 488 00:22:05,800 --> 00:22:09,080 Speaker 1: may be, and you want to avoid you know, rising populism, 489 00:22:09,080 --> 00:22:11,199 Speaker 1: you want to avoid uh, you know, things like that 490 00:22:11,280 --> 00:22:13,119 Speaker 1: from their perspective. And so you can, you know, depending 491 00:22:13,119 --> 00:22:15,840 Speaker 1: on which side you know, where you work. Essentially, if 492 00:22:15,840 --> 00:22:17,480 Speaker 1: you if you're if you're the Fed, if you're in 493 00:22:17,560 --> 00:22:21,200 Speaker 1: the Congress, you have kind of two different things. You're balancing. Yeah, 494 00:22:21,560 --> 00:22:23,320 Speaker 1: so the tools as you're kind of laying them out, 495 00:22:23,400 --> 00:22:26,400 Speaker 1: the monetary or the fiscal, monetary being like issuing more 496 00:22:26,440 --> 00:22:29,280 Speaker 1: debt to the banks. Monetary or fiscal actually like putting 497 00:22:29,280 --> 00:22:31,280 Speaker 1: money out of the streets into kind of people's hands. 498 00:22:31,680 --> 00:22:34,720 Speaker 1: And it seems like, you know, I mean, I guess 499 00:22:34,720 --> 00:22:37,159 Speaker 1: as a central bank, Uh, what's the quote if if 500 00:22:37,200 --> 00:22:38,600 Speaker 1: all you have as a hammer, the whole world looks 501 00:22:38,600 --> 00:22:40,160 Speaker 1: like a nail, and they really only have a couple 502 00:22:40,160 --> 00:22:43,080 Speaker 1: of tools, um, And really it's you know, monetary tools. 503 00:22:43,119 --> 00:22:45,680 Speaker 1: And so that's kind of like interest rates and increasing 504 00:22:45,680 --> 00:22:49,400 Speaker 1: the debt supply the money supply. But with interest rates, 505 00:22:49,680 --> 00:22:53,320 Speaker 1: I mean they're already almost down to zero nominally we 506 00:22:53,320 --> 00:22:54,919 Speaker 1: can talk about real rates, et cetera, which I do 507 00:22:54,960 --> 00:22:56,760 Speaker 1: want to get to, um, but it seems like a 508 00:22:56,840 --> 00:22:59,760 Speaker 1: lot of those tools they're basically running out of. Right, 509 00:22:59,760 --> 00:23:02,600 Speaker 1: interest straits are down to zero, debts at all time high, 510 00:23:02,640 --> 00:23:05,120 Speaker 1: economy is not growing, so the debt to GDP is 511 00:23:05,119 --> 00:23:07,280 Speaker 1: is tough to move. I mean, do you see that 512 00:23:07,320 --> 00:23:09,359 Speaker 1: they're like running out of tools? I mean, like how 513 00:23:09,480 --> 00:23:12,320 Speaker 1: much further can this can be kicked down the road? Uh? 514 00:23:12,320 --> 00:23:14,520 Speaker 1: So the Federal Reserve, I do view them as as 515 00:23:14,520 --> 00:23:16,320 Speaker 1: towards the end of their rope in terms of tools, 516 00:23:16,320 --> 00:23:18,160 Speaker 1: and so they really only have two tools and then 517 00:23:18,200 --> 00:23:21,960 Speaker 1: they mostly it's interest rate manipulation uh and asset purchases 518 00:23:22,119 --> 00:23:24,919 Speaker 1: or sales in some cases UH. And they have some 519 00:23:24,960 --> 00:23:27,160 Speaker 1: other tools around the margin, like lending facilities and things 520 00:23:27,200 --> 00:23:30,359 Speaker 1: like that, but ultimately comes down to controlling the controlling 521 00:23:30,640 --> 00:23:34,040 Speaker 1: the price of money UH and buying assets. Now, the 522 00:23:34,080 --> 00:23:36,920 Speaker 1: fiscal authorities, they they're the ones that you know, they 523 00:23:36,920 --> 00:23:39,720 Speaker 1: can say, send cash to people, uh, but then they 524 00:23:39,800 --> 00:23:42,080 Speaker 1: you know, they have to issue debt to do it. Uh. 525 00:23:42,119 --> 00:23:44,280 Speaker 1: And so you have kind of I've described it as 526 00:23:44,320 --> 00:23:45,920 Speaker 1: like you know, if you have like a movie where 527 00:23:45,920 --> 00:23:47,959 Speaker 1: they're going to launch like a nuclear missile, and like 528 00:23:47,960 --> 00:23:49,600 Speaker 1: two generals have to put their keys in at the 529 00:23:49,600 --> 00:23:52,159 Speaker 1: same time too. So I view I view policy tools 530 00:23:52,160 --> 00:23:55,000 Speaker 1: and fiscal tools kind of like the two keys there 531 00:23:55,160 --> 00:23:58,240 Speaker 1: when it comes to generating inflation. Uh. And so if 532 00:23:58,280 --> 00:24:01,960 Speaker 1: you just have the moth monetary policy, that's not generally 533 00:24:02,080 --> 00:24:04,680 Speaker 1: very inflationary on its own because you can't directly get 534 00:24:04,680 --> 00:24:07,280 Speaker 1: money to people, right, so the Federal Reserve can't send 535 00:24:07,320 --> 00:24:09,920 Speaker 1: money to people. All they can do is control indust 536 00:24:10,000 --> 00:24:12,600 Speaker 1: rates uh, and they can increase amount of bank reserves 537 00:24:12,600 --> 00:24:14,680 Speaker 1: in the system, but then those start banking system because 538 00:24:14,680 --> 00:24:17,159 Speaker 1: banks aren't doing loans uh, and so you have reserves 539 00:24:17,200 --> 00:24:19,320 Speaker 1: go up, you recapitalize the banks, but it doesn't actually 540 00:24:19,359 --> 00:24:20,960 Speaker 1: get out into the public. On the other hand, the 541 00:24:20,960 --> 00:24:23,199 Speaker 1: fiscal authority can send money to whoever they want as 542 00:24:23,240 --> 00:24:25,560 Speaker 1: long as they have a consensus, but they have to 543 00:24:25,680 --> 00:24:28,560 Speaker 1: issue bonds to do it, and then therefore someone has 544 00:24:28,560 --> 00:24:30,800 Speaker 1: to buy those bonds, which sucks money out of the system. 545 00:24:31,280 --> 00:24:33,680 Speaker 1: But then if you combine the two and the Treasury 546 00:24:33,760 --> 00:24:36,280 Speaker 1: sends money to people, they issue bonds, which the Federal 547 00:24:36,320 --> 00:24:38,600 Speaker 1: Reserve creates new based money and buys those bonds and 548 00:24:38,720 --> 00:24:41,680 Speaker 1: holds them forever, well, then you're just literally essentially creating 549 00:24:41,720 --> 00:24:44,439 Speaker 1: new based money and directing it into the economy. And 550 00:24:44,480 --> 00:24:46,399 Speaker 1: that's how you get say that the you know, the 551 00:24:47,359 --> 00:24:49,920 Speaker 1: broad money supply year of year change that we had, 552 00:24:50,119 --> 00:24:52,840 Speaker 1: you know, and so that tends to be a more 553 00:24:52,880 --> 00:24:56,280 Speaker 1: inflationary environment, especially if they were to sustain it for 554 00:24:56,320 --> 00:24:58,639 Speaker 1: several years. And so I think, you know, as you 555 00:24:58,680 --> 00:25:01,960 Speaker 1: go forward, obviously right now we're having some base effects, right, 556 00:25:02,000 --> 00:25:05,520 Speaker 1: so we're comp in say March April May June. You're 557 00:25:05,520 --> 00:25:08,160 Speaker 1: comparing it to the period which was like the kind 558 00:25:08,160 --> 00:25:10,479 Speaker 1: of the disinflationary crunch they had during the worst part 559 00:25:10,520 --> 00:25:12,480 Speaker 1: of the lockdown, and so we're gonna get some pretty 560 00:25:12,520 --> 00:25:14,960 Speaker 1: high base effects that we're probably gonna see, uh, you know, 561 00:25:15,000 --> 00:25:17,159 Speaker 1: even even official cp I, we're probably gonna see it 562 00:25:17,160 --> 00:25:19,399 Speaker 1: over three percent year of a year. But then the 563 00:25:19,400 --> 00:25:21,879 Speaker 1: big question is going forward, Uh, you know, what are 564 00:25:21,880 --> 00:25:23,480 Speaker 1: we gonna do with Are they going to do like 565 00:25:23,480 --> 00:25:26,320 Speaker 1: an infrastructure bill that also gets monetized, Are they gonna 566 00:25:26,359 --> 00:25:28,719 Speaker 1: do another round of aid things like that, And some 567 00:25:28,800 --> 00:25:30,760 Speaker 1: of those if they were to continue, could be pretty 568 00:25:30,960 --> 00:25:34,480 Speaker 1: uh inflationary to a certain extent, especially because you know, 569 00:25:34,480 --> 00:25:37,320 Speaker 1: a lot of economists don't incorporate, say the current situation 570 00:25:37,359 --> 00:25:40,000 Speaker 1: of commodity markets. Uh. And so of course you know 571 00:25:40,040 --> 00:25:43,199 Speaker 1: that kind of say fifteen year cycle of commodity supply 572 00:25:43,280 --> 00:25:46,639 Speaker 1: and commodity demand has a big impact on inflation. And 573 00:25:46,680 --> 00:25:48,919 Speaker 1: so when you're in a period of commodity over supply, 574 00:25:49,480 --> 00:25:51,800 Speaker 1: as you were for the past decade, uh, you know, 575 00:25:51,880 --> 00:25:53,800 Speaker 1: that tends to keep a lid on on most types 576 00:25:53,840 --> 00:25:56,639 Speaker 1: of inflation, whereas when you're in a period of you know, 577 00:25:56,640 --> 00:25:59,000 Speaker 1: you say, you haven't done a lot of capex. Uh, 578 00:25:59,040 --> 00:26:01,919 Speaker 1: you know, you haven't kind of brought new minds to market. 579 00:26:02,280 --> 00:26:04,480 Speaker 1: You haven't found like new new big you know, we 580 00:26:04,520 --> 00:26:07,240 Speaker 1: haven't done the investment. If you were to get that 581 00:26:07,280 --> 00:26:10,560 Speaker 1: increase in commodity demand, well then uh, you know, you 582 00:26:10,600 --> 00:26:13,119 Speaker 1: have higher commodity prices. And that's where we're seeing. We're 583 00:26:13,119 --> 00:26:14,439 Speaker 1: starting to see that kind of show up in the 584 00:26:14,440 --> 00:26:17,399 Speaker 1: market where many commodities are still below where they were 585 00:26:17,520 --> 00:26:20,159 Speaker 1: tended fifteen years ago. With some exceptions like beef, lumber, 586 00:26:20,400 --> 00:26:22,560 Speaker 1: gold touch new all time highs. Most of them are 587 00:26:22,560 --> 00:26:24,840 Speaker 1: still below their all time highs, but they're starting to 588 00:26:24,880 --> 00:26:27,320 Speaker 1: break out from their their big declining trend they had, 589 00:26:27,680 --> 00:26:29,679 Speaker 1: and so it does look like theies could be a 590 00:26:29,720 --> 00:26:34,280 Speaker 1: more inflationary decade with tighter commodity markets. Uh, big, big 591 00:26:34,280 --> 00:26:37,320 Speaker 1: increase in the broad money supply and that money getting 592 00:26:37,320 --> 00:26:39,639 Speaker 1: to people rather than just stuck in the banking system, 593 00:26:39,880 --> 00:26:41,959 Speaker 1: which of course can benefit some people. But then you 594 00:26:41,960 --> 00:26:44,840 Speaker 1: have that that that risk of inflation where you you 595 00:26:44,880 --> 00:26:46,720 Speaker 1: increase the broad mind supplied by a lot, but you 596 00:26:46,720 --> 00:26:50,720 Speaker 1: haven't increased the goods and services by an equal amount. Yeah, yeah, 597 00:26:50,800 --> 00:26:52,520 Speaker 1: we've seen that we can see that in the precious 598 00:26:52,520 --> 00:26:54,800 Speaker 1: metals market, I mean gold and silver, right, the physical 599 00:26:54,880 --> 00:26:56,840 Speaker 1: is very very difficult to get and it looks like, yeah, 600 00:26:56,880 --> 00:26:59,720 Speaker 1: there hasn't been that much investment into that space, which 601 00:26:59,720 --> 00:27:01,800 Speaker 1: of if we've been in a long term downtrend bear 602 00:27:01,920 --> 00:27:04,239 Speaker 1: market in that so you haven't had that investment. So 603 00:27:04,400 --> 00:27:06,359 Speaker 1: you're saying just a little bit of money would increase 604 00:27:06,400 --> 00:27:09,479 Speaker 1: that demand, but then the actual physical wouldn't be there 605 00:27:09,480 --> 00:27:13,160 Speaker 1: to back that up, which then push the prices up. Yeah. Um, 606 00:27:13,240 --> 00:27:16,640 Speaker 1: so that's a lot. I mean, we're we're getting towards 607 00:27:16,680 --> 00:27:18,159 Speaker 1: the end of the rope, you know, I think from 608 00:27:18,200 --> 00:27:20,520 Speaker 1: a from an outside perspective to the to the casual 609 00:27:20,600 --> 00:27:23,040 Speaker 1: kind of observer of the markets. Right, you can look 610 00:27:23,080 --> 00:27:25,480 Speaker 1: at like the two thousand and eight Great Financial Crash, 611 00:27:25,520 --> 00:27:28,159 Speaker 1: which was obviously different, but I mean it was a 612 00:27:28,240 --> 00:27:30,760 Speaker 1: monetary crash, the financial markets crash, but you know, it 613 00:27:30,840 --> 00:27:34,240 Speaker 1: took the stock markets whatever six seven years to get 614 00:27:34,280 --> 00:27:37,400 Speaker 1: back to like their previous all time high. Um, whereas 615 00:27:37,480 --> 00:27:39,439 Speaker 1: now we have we had, you know, one of the 616 00:27:39,440 --> 00:27:41,640 Speaker 1: fastest and deepest crashes in history, and it bounced back 617 00:27:41,640 --> 00:27:45,560 Speaker 1: in in months. Um, have they figured this out? Have 618 00:27:45,680 --> 00:27:47,600 Speaker 1: they got it fixed? I mean, you have like obviously 619 00:27:47,600 --> 00:27:51,159 Speaker 1: two different situations, but we have this whole uh, you know, 620 00:27:51,440 --> 00:27:53,800 Speaker 1: this whole pandemic that we're dealing with, which still keeps 621 00:27:53,800 --> 00:27:56,080 Speaker 1: the economy running at a much lower rate than it 622 00:27:56,119 --> 00:27:58,119 Speaker 1: normally would as far as you know, restaurants open and 623 00:27:58,160 --> 00:28:01,200 Speaker 1: supply chains maxed out, etcetera. Um, but at the same 624 00:28:01,440 --> 00:28:03,440 Speaker 1: and then we have this ninth this whatever it is, 625 00:28:03,480 --> 00:28:05,520 Speaker 1: eighty ninety or credit cycle that we're kind of coming 626 00:28:05,560 --> 00:28:08,320 Speaker 1: to the end as well. Um, have we just skipped 627 00:28:08,359 --> 00:28:10,960 Speaker 1: over that whole kind of reset of two eight that 628 00:28:11,000 --> 00:28:13,080 Speaker 1: we would normally see and we're when we're just going 629 00:28:13,119 --> 00:28:14,760 Speaker 1: past it, or you think that's still kind of right 630 00:28:14,760 --> 00:28:16,960 Speaker 1: there somewhere in front of us. So I think it's 631 00:28:17,000 --> 00:28:19,879 Speaker 1: it's somewhat different in the sense that back then because 632 00:28:19,920 --> 00:28:22,560 Speaker 1: we had you know, banks for example, were highly leveraged, right, 633 00:28:22,600 --> 00:28:24,320 Speaker 1: so if you look at at you know, how much 634 00:28:24,400 --> 00:28:27,040 Speaker 1: cash they had set aside, uh, they had you know, 635 00:28:27,119 --> 00:28:29,520 Speaker 1: if if as the prices declined by almost any amount, 636 00:28:29,560 --> 00:28:32,199 Speaker 1: they were broadly in solvent. Uh. And so what you 637 00:28:32,240 --> 00:28:34,600 Speaker 1: had was a real estate bubble, you had you know, 638 00:28:34,640 --> 00:28:37,200 Speaker 1: really loose credit. You had a banking kind of highly 639 00:28:37,280 --> 00:28:40,040 Speaker 1: leveraged system. So that all imploded, and that's that's the 640 00:28:40,040 --> 00:28:43,200 Speaker 1: most distintolationary type of of of kind of outcome you 641 00:28:43,200 --> 00:28:47,480 Speaker 1: can have. That's somewhat similar to we had in except 642 00:28:47,480 --> 00:28:49,560 Speaker 1: you know, this time there was FDC insurance and things 643 00:28:49,640 --> 00:28:52,600 Speaker 1: like that. So because because the deck can just go 644 00:28:52,720 --> 00:28:56,520 Speaker 1: up and smoke just like that exactly, Whereas then during 645 00:28:56,560 --> 00:29:00,200 Speaker 1: the banks had a very different situation where you know, 646 00:29:00,320 --> 00:29:02,760 Speaker 1: they because the you know, the QUEI happened, because the 647 00:29:03,000 --> 00:29:06,840 Speaker 1: troubled ASCID relief program happened, they were they were essentially deleveraged, 648 00:29:06,880 --> 00:29:09,240 Speaker 1: filled up with tons of cash, but then they still 649 00:29:09,240 --> 00:29:11,200 Speaker 1: weren't lending it out. So in many ways they actually 650 00:29:11,200 --> 00:29:12,840 Speaker 1: had a very strong balance sheet because they had a 651 00:29:12,840 --> 00:29:15,360 Speaker 1: lot of money plowed into cash and treasuries. Uh, and 652 00:29:15,400 --> 00:29:16,960 Speaker 1: they weren't really lending it out. So it's kind of 653 00:29:17,000 --> 00:29:19,120 Speaker 1: the opposite issue where they instead of taking a lot 654 00:29:19,160 --> 00:29:21,960 Speaker 1: of risk, they were they were actually playing it very conservatively. Uh. 655 00:29:22,040 --> 00:29:25,880 Speaker 1: And so we went into this crisis, banks weren't very leveraged. However, 656 00:29:25,960 --> 00:29:28,360 Speaker 1: that you know that we still had you know, highly 657 00:29:28,520 --> 00:29:31,120 Speaker 1: kind of vulnerable parts of the economy, so we had 658 00:29:31,200 --> 00:29:34,080 Speaker 1: very high wealth concentration, so we had a big percentage 659 00:29:34,080 --> 00:29:36,040 Speaker 1: of the population living page check to paycheck, and then 660 00:29:36,080 --> 00:29:38,520 Speaker 1: we we had shutdowns and things like that, so their 661 00:29:38,560 --> 00:29:42,560 Speaker 1: income sources disrupted. And overall, big difference between and just 662 00:29:42,800 --> 00:29:45,480 Speaker 1: Nate is the size of the fiscal response. And so 663 00:29:45,720 --> 00:29:47,920 Speaker 1: you know, last time we didn't really print a ton 664 00:29:47,960 --> 00:29:49,360 Speaker 1: of money. If you looked at say that you know, 665 00:29:49,440 --> 00:29:51,880 Speaker 1: the bank reserves, they went up, they skyrocketed, but the 666 00:29:51,920 --> 00:29:54,400 Speaker 1: actual broad money supply didn't really go up last time 667 00:29:54,480 --> 00:29:56,120 Speaker 1: any more than normal. Like if you just looked at 668 00:29:56,120 --> 00:29:58,200 Speaker 1: broad money supply year of year, you wouldn't be to 669 00:29:58,280 --> 00:30:01,080 Speaker 1: tell where that where that crisis ha happened. Uh. And 670 00:30:01,160 --> 00:30:03,560 Speaker 1: so that's because you know, our fiscal response was we 671 00:30:03,600 --> 00:30:05,760 Speaker 1: had like cash for clunkers, we had you know, I 672 00:30:05,800 --> 00:30:07,880 Speaker 1: think we had little things around the margins, but we 673 00:30:07,880 --> 00:30:10,640 Speaker 1: didn't just like hand money out, whereas in twenty we 674 00:30:10,680 --> 00:30:12,480 Speaker 1: handed a lot of money out. So we actually kind 675 00:30:12,480 --> 00:30:15,480 Speaker 1: of prevented some of those solvency issues. But the real 676 00:30:15,560 --> 00:30:18,400 Speaker 1: limited there is that if you were to get inflation 677 00:30:18,920 --> 00:30:21,520 Speaker 1: while you have debt to GDP that's high, Uh, they 678 00:30:21,520 --> 00:30:23,480 Speaker 1: wouldn't be able to afford to raise industrates, and so 679 00:30:23,560 --> 00:30:26,040 Speaker 1: probably you get something like yield curve control which is 680 00:30:26,040 --> 00:30:27,840 Speaker 1: what they had in the nineteen forties, which is again 681 00:30:27,840 --> 00:30:30,960 Speaker 1: why this policy mixed somewhat similar to the nineteen forties 682 00:30:31,000 --> 00:30:33,920 Speaker 1: policy mix, and therefore you risk a higher amount of 683 00:30:33,920 --> 00:30:36,920 Speaker 1: currency deviation this time around compared to what they risk 684 00:30:37,040 --> 00:30:39,040 Speaker 1: next time. So it's kind of like they're they're kind 685 00:30:39,040 --> 00:30:41,600 Speaker 1: of playing with different sort of limits. Last time it 686 00:30:41,680 --> 00:30:45,440 Speaker 1: was a more banking crisis disinflationary outcome, whereas this time 687 00:30:45,480 --> 00:30:49,000 Speaker 1: it's it's it's potentially more inflation outcome because you've disrupted 688 00:30:49,040 --> 00:30:51,240 Speaker 1: the amount of supplies and services in the economy, but 689 00:30:51,280 --> 00:30:55,239 Speaker 1: then you greatly increase the broad mind supply. So do 690 00:30:55,320 --> 00:30:59,520 Speaker 1: you think they've sidestep disaster or um or before we 691 00:30:59,560 --> 00:31:01,280 Speaker 1: get to that, let's let's not let's not jump into 692 00:31:01,320 --> 00:31:03,680 Speaker 1: that question. Well we'll come back to that, but um, 693 00:31:03,720 --> 00:31:06,000 Speaker 1: you know, you look at the macro picture and and 694 00:31:06,200 --> 00:31:07,760 Speaker 1: and I, like I said, subscribe to your stuff, So 695 00:31:07,800 --> 00:31:10,480 Speaker 1: I see you you cover a lot of ground. And 696 00:31:10,520 --> 00:31:12,400 Speaker 1: so if we if we kind of take a step 697 00:31:12,440 --> 00:31:14,680 Speaker 1: back even bigger than that, I think, you know, when 698 00:31:14,680 --> 00:31:17,520 Speaker 1: you look at the macro, we started out talking about 699 00:31:17,600 --> 00:31:20,440 Speaker 1: the systems and kind of push pull and like policy response, 700 00:31:20,520 --> 00:31:22,560 Speaker 1: So we're looking at like a macro picture, we can 701 00:31:22,600 --> 00:31:26,120 Speaker 1: see the world is also changing pretty rapidly. Uh, it 702 00:31:26,120 --> 00:31:29,920 Speaker 1: seems like globalism is still kind of coming tighter and tighter. Right. 703 00:31:29,960 --> 00:31:32,000 Speaker 1: We see what the World Economic Forum is trying to do, 704 00:31:32,480 --> 00:31:35,760 Speaker 1: but also like the i m F and they're talking about, 705 00:31:35,960 --> 00:31:38,280 Speaker 1: you know, now there's this new SDR issuance that they're 706 00:31:38,280 --> 00:31:41,880 Speaker 1: trying to get through. Um they've even talked about, you know, 707 00:31:42,040 --> 00:31:44,239 Speaker 1: rolling out their own digital currency and things like that 708 00:31:44,320 --> 00:31:46,800 Speaker 1: and so um at some point, we've seen the dollar 709 00:31:47,720 --> 00:31:51,280 Speaker 1: d dollarization of a lot of nations kind of falling down, 710 00:31:51,680 --> 00:31:54,400 Speaker 1: and so there's there's there's a bunch of different levels 711 00:31:54,440 --> 00:31:56,040 Speaker 1: out there, right, But I mean, the US can continue 712 00:31:56,040 --> 00:31:59,160 Speaker 1: their policy fiscal policies which only hurts the dollar. UM 713 00:31:59,840 --> 00:32:02,160 Speaker 1: or seeing the de dealarization happening across the world, and 714 00:32:02,240 --> 00:32:03,800 Speaker 1: now we're seeing the i m F kind of trying 715 00:32:03,800 --> 00:32:05,680 Speaker 1: to roll out their own fiat currency. That's like a 716 00:32:05,800 --> 00:32:09,080 Speaker 1: layer above. So how do you take all that into consideration? 717 00:32:09,520 --> 00:32:11,400 Speaker 1: I guess, and I guess maybe you keep a more 718 00:32:11,440 --> 00:32:13,360 Speaker 1: global view than just a kind of a US centric 719 00:32:13,440 --> 00:32:15,720 Speaker 1: view on that. Absolutely, Yeah, And to go back to 720 00:32:15,720 --> 00:32:18,360 Speaker 1: your previous question, I think the risk here in the twenties, 721 00:32:19,080 --> 00:32:21,720 Speaker 1: basically the mix of pause responses. I think that the 722 00:32:21,960 --> 00:32:25,440 Speaker 1: biggest risk could be stagflation, which is somewhat different risk 723 00:32:25,480 --> 00:32:27,120 Speaker 1: than we had in the twenty tents, which was kind 724 00:32:27,120 --> 00:32:29,400 Speaker 1: of a stagnation like uh, you know, kind of slow 725 00:32:29,440 --> 00:32:33,000 Speaker 1: nominal GDP growth. Uh, and you had those issues play out. 726 00:32:33,040 --> 00:32:36,080 Speaker 1: Whereas now, because the fiscal response is so bigger, instead 727 00:32:36,080 --> 00:32:39,080 Speaker 1: of say a giant nominal you know, decline and asset values, 728 00:32:39,600 --> 00:32:43,560 Speaker 1: the bigger risk is probably you know, stagflation where you 729 00:32:43,640 --> 00:32:46,360 Speaker 1: have you know, broad and sharp increase in the broad 730 00:32:46,400 --> 00:32:50,120 Speaker 1: mind supply, but then just various supply shortages and things 731 00:32:50,160 --> 00:32:52,400 Speaker 1: like that. And then especially if you compound that with 732 00:32:52,840 --> 00:32:55,680 Speaker 1: you know, you know, we we've we basically made our 733 00:32:55,720 --> 00:32:58,280 Speaker 1: systems very fragile. So going back to this global view, 734 00:32:58,520 --> 00:33:01,880 Speaker 1: we spent the past forty years globalizing the economy, so 735 00:33:01,920 --> 00:33:05,560 Speaker 1: we we've distributed a supply chains globally. Uh, and we've 736 00:33:05,560 --> 00:33:09,040 Speaker 1: basically made something that's very efficient but then very easy 737 00:33:09,080 --> 00:33:12,400 Speaker 1: to disrupt, very fragile. Uh. You know, obviously a pandemic 738 00:33:12,400 --> 00:33:14,000 Speaker 1: would be part of that. But then in addition, if 739 00:33:14,040 --> 00:33:16,280 Speaker 1: you have say, ties between the US and China continue 740 00:33:16,320 --> 00:33:19,000 Speaker 1: to deteriorate or at the same time, their economy is 741 00:33:19,120 --> 00:33:21,960 Speaker 1: so intertwined. Uh that if you were to get restoring, 742 00:33:22,320 --> 00:33:25,480 Speaker 1: you're basically taking away that that you know, that disinflationary 743 00:33:25,520 --> 00:33:27,880 Speaker 1: outsourcing they've done. Uh, And that that's one of those 744 00:33:27,880 --> 00:33:30,680 Speaker 1: things where that that that outsourcing was very bad for 745 00:33:30,720 --> 00:33:33,680 Speaker 1: some people, whereas people whose jobs were not impacted by 746 00:33:33,680 --> 00:33:36,200 Speaker 1: it benefited from it because prices went down, but they 747 00:33:36,280 --> 00:33:38,000 Speaker 1: you know, they didn't care because they're their incomes are 748 00:33:38,000 --> 00:33:40,440 Speaker 1: still intact. So that led to all sorts of you know, 749 00:33:40,560 --> 00:33:42,840 Speaker 1: social issues, because then you have that leads to wealth 750 00:33:42,840 --> 00:33:44,680 Speaker 1: concentration thing. You know, if you're if you're on the 751 00:33:44,760 --> 00:33:46,760 Speaker 1: right side of that, you're benefiting from the wrong side, 752 00:33:46,800 --> 00:33:49,160 Speaker 1: you're getting harmed. So if you start to reshure that, 753 00:33:49,640 --> 00:33:52,080 Speaker 1: then that kind of changes who's getting hurt and who's 754 00:33:52,080 --> 00:33:55,000 Speaker 1: getting harmed. And so if you were betting on long 755 00:33:55,080 --> 00:33:57,720 Speaker 1: term deflation and you're willing to have you know, negative 756 00:33:57,760 --> 00:34:00,520 Speaker 1: cash yields, negative bond yields, uh, but then you actually 757 00:34:00,520 --> 00:34:02,320 Speaker 1: started to get increased in the broad money supply, you 758 00:34:02,360 --> 00:34:07,320 Speaker 1: start to get disentangling to some extent of globalization. Hey, 759 00:34:07,360 --> 00:34:09,759 Speaker 1: sorry to interrupt this video just one more time. I'm 760 00:34:09,800 --> 00:34:12,600 Speaker 1: not running Google ads, so it's actually way less interruption 761 00:34:12,640 --> 00:34:14,560 Speaker 1: than I normally would have on a video UM and 762 00:34:14,560 --> 00:34:17,359 Speaker 1: that's because it's sponsored by block five UM. They are 763 00:34:17,960 --> 00:34:21,160 Speaker 1: opening up the world of bitcoin and financial products offering 764 00:34:21,200 --> 00:34:24,520 Speaker 1: to pay you interest on your bitcoin um better than 765 00:34:24,520 --> 00:34:26,360 Speaker 1: own in the rental property that you have to manage 766 00:34:26,360 --> 00:34:28,120 Speaker 1: and control and have the risks. You can just earn 767 00:34:28,160 --> 00:34:30,640 Speaker 1: interest on it, or you can leverage against it. Now, 768 00:34:30,960 --> 00:34:34,160 Speaker 1: I plan to hold my bitcoin forever and literally never 769 00:34:34,440 --> 00:34:36,439 Speaker 1: sell my bitcoin. So how do you do that? Well, 770 00:34:36,680 --> 00:34:38,920 Speaker 1: if I need money, I don't want to sell that bitcoin. 771 00:34:38,920 --> 00:34:41,040 Speaker 1: I'm gonna pay tax on it, all right, I'm gonna 772 00:34:41,120 --> 00:34:43,360 Speaker 1: end up with less and I don't have the bitcoin anymore. 773 00:34:43,440 --> 00:34:45,520 Speaker 1: So a better way to do it is to borrow 774 00:34:45,640 --> 00:34:48,520 Speaker 1: against the bitcoin. So I've put all my money into bitcoin. 775 00:34:48,800 --> 00:34:50,439 Speaker 1: If I want to buy a car or I want 776 00:34:50,440 --> 00:34:53,000 Speaker 1: to buy a house, I can borrow against it at 777 00:34:53,200 --> 00:34:56,160 Speaker 1: very very low competitive rates. Get my house, get my car, 778 00:34:56,239 --> 00:34:59,040 Speaker 1: whatever that may be, and get to keep the bitcoin. 779 00:34:59,080 --> 00:35:01,560 Speaker 1: I've done a whole video on this. You can find it. 780 00:35:01,560 --> 00:35:03,560 Speaker 1: I'll link it down in the description below. How to 781 00:35:03,680 --> 00:35:06,080 Speaker 1: retire off a bitcoin without paying taxes and you can 782 00:35:06,080 --> 00:35:08,600 Speaker 1: do that with block fight services. A link to the 783 00:35:08,680 --> 00:35:10,239 Speaker 1: video down below. I'm also going to put a link 784 00:35:10,280 --> 00:35:12,000 Speaker 1: to block fight. If you choose to click on that 785 00:35:12,080 --> 00:35:13,680 Speaker 1: link to check them out, you can earn up to 786 00:35:13,640 --> 00:35:16,560 Speaker 1: two fifty dollars in free bitcoin just for using that link. 787 00:35:16,840 --> 00:35:18,400 Speaker 1: And that's it. Let's go ahead and get back to 788 00:35:18,520 --> 00:35:21,640 Speaker 1: the interview. I need higher inflation risks. Well, if you're 789 00:35:21,680 --> 00:35:23,839 Speaker 1: caught out with a pretty big bond portfolio, pretty big 790 00:35:23,840 --> 00:35:26,360 Speaker 1: cash portfolio, uh, you know, that could that could be 791 00:35:26,360 --> 00:35:29,400 Speaker 1: pretty painful, I think in the twenties, whereas it it 792 00:35:29,480 --> 00:35:30,799 Speaker 1: was a you know, it worked out a little bit 793 00:35:30,840 --> 00:35:33,600 Speaker 1: better for those people in the tenth uh and so 794 00:35:33,760 --> 00:35:35,239 Speaker 1: I think that's kind of the biggest risk to be 795 00:35:35,280 --> 00:35:38,319 Speaker 1: aware of. It is probably that risk of stagflation. And 796 00:35:38,360 --> 00:35:40,719 Speaker 1: then going back to the kind of the changing monentary structure, 797 00:35:41,120 --> 00:35:43,880 Speaker 1: my overall base cases to see overall kind of a 798 00:35:43,920 --> 00:35:47,480 Speaker 1: more and more diversification of global reserves in the sense 799 00:35:47,560 --> 00:35:50,240 Speaker 1: that you know, the percentage of global central bank reserves 800 00:35:50,239 --> 00:35:53,120 Speaker 1: that consists of US assets like US treasuries and and 801 00:35:53,120 --> 00:35:56,040 Speaker 1: and dollar based assets is probably going to continue to 802 00:35:56,040 --> 00:35:59,920 Speaker 1: decline somewhat now still might be the single biggest trunk uh, 803 00:36:00,239 --> 00:36:03,040 Speaker 1: you know, instead of say being you know it, it 804 00:36:03,120 --> 00:36:04,960 Speaker 1: went down over time and it's you know, something like 805 00:36:05,000 --> 00:36:07,919 Speaker 1: six and that could continue to decline down to say 806 00:36:07,920 --> 00:36:11,719 Speaker 1: fifty or which will still make it very large, you know, 807 00:36:12,040 --> 00:36:14,279 Speaker 1: as a as a percentage, but it does mean that 808 00:36:14,320 --> 00:36:17,440 Speaker 1: some of those other areas are potentially growing their their dominance. 809 00:36:17,719 --> 00:36:21,440 Speaker 1: In addition, you know, I think you mentioned the SDR announcement, 810 00:36:21,480 --> 00:36:24,120 Speaker 1: so it looks like we're probably going to get an 811 00:36:24,200 --> 00:36:26,880 Speaker 1: increasing the amount of SDRs in the system. UH. And 812 00:36:27,040 --> 00:36:28,960 Speaker 1: so for people that are familiar with those, there are 813 00:36:29,040 --> 00:36:31,360 Speaker 1: essentially like a currency unit that kind of represents a 814 00:36:31,400 --> 00:36:35,480 Speaker 1: basket of five major currencies based on trade UH and SOU. 815 00:36:35,600 --> 00:36:38,399 Speaker 1: And they've been around since nineteen sixty nine, but they've 816 00:36:38,400 --> 00:36:40,880 Speaker 1: always been a very small percentage of global reserves and 817 00:36:40,960 --> 00:36:43,400 Speaker 1: never really caught on. And so they their full market 818 00:36:43,440 --> 00:36:46,719 Speaker 1: capitalization is something like two hundred billion dollars, which is, 819 00:36:46,760 --> 00:36:48,600 Speaker 1: you know, it's a lot of money. I mean, you know, 820 00:36:48,680 --> 00:36:50,919 Speaker 1: you throw throw around a few hundred billions and sending 821 00:36:51,000 --> 00:36:53,680 Speaker 1: talking about grow money. But in the grand scheme of things, 822 00:36:53,719 --> 00:36:57,200 Speaker 1: you know, they're at the global official reserves or several 823 00:36:57,239 --> 00:37:00,000 Speaker 1: trillion dollars UH. And so that's still a small percent 824 00:37:00,040 --> 00:37:03,400 Speaker 1: enage of global reserves, but they're talking about potentially increasing 825 00:37:03,440 --> 00:37:07,520 Speaker 1: that by another six billion or so, which would you know, 826 00:37:07,920 --> 00:37:10,879 Speaker 1: you know, essentially quadruple the amount of that. And at 827 00:37:10,880 --> 00:37:13,320 Speaker 1: that point, it's still not a giant percentage of reserves, 828 00:37:13,320 --> 00:37:15,879 Speaker 1: but it's a more meaningful percentage of reserves. And that's 829 00:37:15,920 --> 00:37:19,040 Speaker 1: a more kind of diversified you know, asset that's the 830 00:37:19,120 --> 00:37:22,080 Speaker 1: US dollars is less than half of that basket. And 831 00:37:22,120 --> 00:37:24,200 Speaker 1: so that kind of continues the trend we've seen over 832 00:37:24,200 --> 00:37:27,640 Speaker 1: the past a couple of decades of you know, gradual 833 00:37:27,719 --> 00:37:32,040 Speaker 1: de dedollarization and diversification of these of these kind of 834 00:37:32,080 --> 00:37:34,319 Speaker 1: different currency blocks. And then if you were to add 835 00:37:34,360 --> 00:37:36,200 Speaker 1: on to that, you know, China's roll out of their 836 00:37:36,239 --> 00:37:40,440 Speaker 1: cbdc uh. You know, they're trying to internationalize their their 837 00:37:40,480 --> 00:37:43,600 Speaker 1: currency a little bit more. They're they're trying to bypass 838 00:37:43,640 --> 00:37:47,239 Speaker 1: the swift system, make themselves more immune to sanctions, be 839 00:37:47,280 --> 00:37:49,920 Speaker 1: able to buy commodities in their own currency rather than 840 00:37:49,960 --> 00:37:52,600 Speaker 1: go through dollar markets. Uh. And so we've already seen, 841 00:37:52,840 --> 00:37:54,320 Speaker 1: you know, in the past a couple years, Russia do 842 00:37:54,400 --> 00:37:57,400 Speaker 1: that as well, where they've they've sold their official treasury holdings. 843 00:37:57,760 --> 00:38:01,440 Speaker 1: They mostly folcus on gold and your denominated assets, and 844 00:38:01,440 --> 00:38:05,560 Speaker 1: then they kind of spearheaded uh selling their oil and euros, uh, 845 00:38:05,600 --> 00:38:07,400 Speaker 1: you know to to whether you know, selling you know 846 00:38:07,800 --> 00:38:10,399 Speaker 1: energy to Europe, energy to China. Uh, you know, kind 847 00:38:10,400 --> 00:38:13,399 Speaker 1: of using a broader mix of currencies that they're willing 848 00:38:13,480 --> 00:38:16,000 Speaker 1: to settle trade in. And I think that trends probably 849 00:38:16,000 --> 00:38:18,440 Speaker 1: going to continue over the next ten years. And you know, 850 00:38:18,480 --> 00:38:21,040 Speaker 1: there could be sudden events along the way, but over 851 00:38:21,080 --> 00:38:22,719 Speaker 1: time it's you know, at the very minimum of things 852 00:38:22,719 --> 00:38:24,880 Speaker 1: can be kind of a gradual transition that could be 853 00:38:24,880 --> 00:38:27,520 Speaker 1: punctuated by big moves here and they're like, you know 854 00:38:28,040 --> 00:38:30,400 Speaker 1: kind of the they say, the CBDC kind of fully 855 00:38:30,440 --> 00:38:34,600 Speaker 1: going online or something like that. Mm hmm. Yeah. So 856 00:38:34,800 --> 00:38:37,360 Speaker 1: when this when the if they issue that six hundred 857 00:38:37,360 --> 00:38:40,480 Speaker 1: billion of SDRs um then they use those SDRs, they 858 00:38:40,480 --> 00:38:42,440 Speaker 1: give them to different countries to put on their books 859 00:38:42,480 --> 00:38:44,960 Speaker 1: as reserves, which then they have more reserves, means they 860 00:38:44,960 --> 00:38:47,799 Speaker 1: can create more of their currencies. But it's also when 861 00:38:47,840 --> 00:38:50,240 Speaker 1: they when they do that, it forces all the nation's 862 00:38:50,280 --> 00:38:52,720 Speaker 1: oil that are made up of that basket to increase 863 00:38:52,800 --> 00:38:56,680 Speaker 1: their money supply. Right, So, um, I mean, isn't it 864 00:38:56,719 --> 00:38:59,719 Speaker 1: just like a giant circle, Like what are the SDRs 865 00:38:59,760 --> 00:39:03,440 Speaker 1: back by? Their backed by the five five nations fiats? 866 00:39:03,440 --> 00:39:05,680 Speaker 1: But what are these? So then if those nations issue 867 00:39:05,680 --> 00:39:07,399 Speaker 1: more FIAT, what is it backed by? It was backed 868 00:39:07,440 --> 00:39:09,960 Speaker 1: by the SDR reserve. So isn't it just like a 869 00:39:10,000 --> 00:39:12,839 Speaker 1: big circle? Pretty much? I mean yeah, from from any 870 00:39:12,840 --> 00:39:15,560 Speaker 1: one country's perspective, what they want to do is they 871 00:39:15,600 --> 00:39:18,440 Speaker 1: want to have foreign exchange reserves. Uh. And so that 872 00:39:18,440 --> 00:39:20,279 Speaker 1: can I mean it could consist of gold, which is 873 00:39:20,280 --> 00:39:22,040 Speaker 1: a hard asset, but then you know, a large part 874 00:39:22,080 --> 00:39:25,160 Speaker 1: generally consists of four you know reserves. And so let's 875 00:39:25,160 --> 00:39:27,960 Speaker 1: say you're your Thailand, right, so you've uh you know, 876 00:39:28,239 --> 00:39:31,120 Speaker 1: you know, decades ago they had that big crisis where 877 00:39:31,160 --> 00:39:34,799 Speaker 1: that you know, they they their currency had a sharp devaluation, uh, 878 00:39:34,800 --> 00:39:36,879 Speaker 1: you know in the late nineties. Uh. And ever since 879 00:39:36,920 --> 00:39:38,560 Speaker 1: then they said, okay, we want to make sure that 880 00:39:38,560 --> 00:39:41,120 Speaker 1: doesn't happen again. So they hold a lot of foreign 881 00:39:41,120 --> 00:39:43,960 Speaker 1: exchangers or if they hold dollars, uh, they hold you know, 882 00:39:44,000 --> 00:39:46,719 Speaker 1: they hold a diverse array of assets. Uh that and 883 00:39:46,800 --> 00:39:49,719 Speaker 1: so if they're if their currency were to weaken, they 884 00:39:49,719 --> 00:39:51,600 Speaker 1: could sell some of those reserves and buy back some 885 00:39:51,600 --> 00:39:53,480 Speaker 1: of their own currency and kind of tighten it a 886 00:39:53,480 --> 00:39:55,200 Speaker 1: little bit. And so they they've kind of built that 887 00:39:55,560 --> 00:39:58,279 Speaker 1: hedge as as as you point out, the problem is 888 00:39:58,320 --> 00:40:01,399 Speaker 1: everybody else has reserves. And so you know, in these 889 00:40:01,480 --> 00:40:04,000 Speaker 1: kind of uh, you know, these these end of cycle, 890 00:40:04,080 --> 00:40:06,680 Speaker 1: these long term death cycle environments, usually what do you 891 00:40:06,680 --> 00:40:09,720 Speaker 1: get is a broad devaluation. So they might all fluctuate 892 00:40:09,719 --> 00:40:12,680 Speaker 1: against each other, but then they all go down versus 893 00:40:12,719 --> 00:40:15,279 Speaker 1: something like you know, real assets. Uh. And so that 894 00:40:15,280 --> 00:40:18,880 Speaker 1: could be compared to various commodities, for example, and compared 895 00:40:18,920 --> 00:40:22,640 Speaker 1: to other kind of scarce resources. And so for example, 896 00:40:22,640 --> 00:40:24,680 Speaker 1: if you look at uh, you know what happened during 897 00:40:24,719 --> 00:40:28,640 Speaker 1: the Great Depression era, you know, all currencies devalued versus gold, 898 00:40:28,640 --> 00:40:30,040 Speaker 1: and it just became a question of which one is 899 00:40:30,040 --> 00:40:33,080 Speaker 1: devalued more than others, but they all devalued. And so 900 00:40:33,120 --> 00:40:35,880 Speaker 1: I think we're in that environment inwenties where you know, 901 00:40:35,880 --> 00:40:37,800 Speaker 1: pretty much any currency, if you if you bought it 902 00:40:37,800 --> 00:40:40,560 Speaker 1: in twenty and held it, you know, in a bank 903 00:40:40,600 --> 00:40:44,200 Speaker 1: through you're probably gonna about to buy fewer products services 904 00:40:44,200 --> 00:40:46,520 Speaker 1: than you could at the beginning of that decade. Uh. 905 00:40:46,680 --> 00:40:48,040 Speaker 1: And I think that's you know, that's kind of my 906 00:40:48,080 --> 00:40:49,680 Speaker 1: base case, you're seeing how it's going to play out, 907 00:40:49,719 --> 00:40:52,120 Speaker 1: where in a short sense of it is, the industrates 908 00:40:52,120 --> 00:40:55,080 Speaker 1: are not going to fully compensate you for the inflation 909 00:40:55,120 --> 00:40:58,120 Speaker 1: that you're likely to experience over the course of that decade. Yeah. 910 00:40:58,760 --> 00:41:00,840 Speaker 1: Now if we jump back to kind of that bigger 911 00:41:00,880 --> 00:41:03,800 Speaker 1: macro view, do you also look at things like, uh, 912 00:41:03,880 --> 00:41:08,360 Speaker 1: you know, social you know, political societal factors, things like that, Um, 913 00:41:08,400 --> 00:41:12,920 Speaker 1: you know, maybe the rise of more Marxist type things, 914 00:41:13,000 --> 00:41:15,319 Speaker 1: you know, more control over the economy, things like that, 915 00:41:15,600 --> 00:41:18,600 Speaker 1: maybe you know, Biden putting us back into the Paris Accord, 916 00:41:18,640 --> 00:41:20,560 Speaker 1: which now the US has to commit to try to 917 00:41:20,600 --> 00:41:23,560 Speaker 1: lower emissions more while other countries are committing to raise 918 00:41:23,600 --> 00:41:25,160 Speaker 1: their missions. Things like that. I mean, do you take 919 00:41:25,200 --> 00:41:28,000 Speaker 1: those types of things into your calculations. Yeah, and that's 920 00:41:28,040 --> 00:41:30,240 Speaker 1: you know, that's part of the policy makes that I consider. 921 00:41:30,400 --> 00:41:32,640 Speaker 1: And so I kind of I kind of monitor those 922 00:41:32,840 --> 00:41:35,799 Speaker 1: where there are certain environments they can reliably lead to populism, 923 00:41:36,200 --> 00:41:38,120 Speaker 1: and then you kind of monitor what types of populism 924 00:41:38,120 --> 00:41:40,440 Speaker 1: that that is. And there's propulism that come on the right, 925 00:41:40,440 --> 00:41:42,560 Speaker 1: there's probably don't come on the left, and they tend 926 00:41:42,560 --> 00:41:44,640 Speaker 1: to have actually a lot of overlap, even though there's 927 00:41:44,680 --> 00:41:47,160 Speaker 1: there's different flavors of it. Uh. And then there's even 928 00:41:47,239 --> 00:41:50,400 Speaker 1: kind of technopopulism like you know, like like bitcoin for example, 929 00:41:50,440 --> 00:41:52,759 Speaker 1: I would say as a type of technopopulism where its 930 00:41:52,800 --> 00:41:55,320 Speaker 1: people trying to take power back for themselves and trying 931 00:41:55,320 --> 00:41:57,279 Speaker 1: to you know, do this. And of course you can 932 00:41:57,320 --> 00:41:59,360 Speaker 1: have kind of low information populism and you can have 933 00:41:59,400 --> 00:42:02,719 Speaker 1: high information and populism. So so whereas say from a 934 00:42:02,880 --> 00:42:06,560 Speaker 1: from a center to say, established centrist politician perspective, they 935 00:42:06,560 --> 00:42:09,440 Speaker 1: consider populism a bad thing, whereas in reality, I think 936 00:42:09,440 --> 00:42:11,279 Speaker 1: populism is kind of all over the board. Some types 937 00:42:11,320 --> 00:42:13,839 Speaker 1: of populism or bad, some types are good. But either way, 938 00:42:13,880 --> 00:42:17,759 Speaker 1: if you have that environment of say rising wealth concentration, uh, 939 00:42:17,800 --> 00:42:20,000 Speaker 1: you're you're never going to get different types of populism 940 00:42:20,080 --> 00:42:22,759 Speaker 1: start to come up, and especially the you know, some 941 00:42:22,800 --> 00:42:24,960 Speaker 1: of the really kind of problematic ones can be can 942 00:42:24,960 --> 00:42:28,200 Speaker 1: be violent. Uh. And so that's kind of that plays 943 00:42:28,200 --> 00:42:30,839 Speaker 1: in my policy mix. Uh. You might have read the book, 944 00:42:30,840 --> 00:42:33,520 Speaker 1: for example, the Fourth Turning, uh, and so that that 945 00:42:33,600 --> 00:42:35,600 Speaker 1: you know, if you look at the Fourth Turning, I 946 00:42:35,600 --> 00:42:38,200 Speaker 1: mean all the ones that the authors identify, all those 947 00:42:38,239 --> 00:42:41,000 Speaker 1: periods of time that they identified as fourth turnings. Those 948 00:42:41,080 --> 00:42:43,160 Speaker 1: also happened with the end of long term death cycles 949 00:42:43,440 --> 00:42:47,480 Speaker 1: as as defined by uh, you know, say US debt 950 00:42:47,560 --> 00:42:50,600 Speaker 1: the GDP for example, uh you know, government debt, the GDP, 951 00:42:51,040 --> 00:42:53,399 Speaker 1: And so those those periods and time tend to mark 952 00:42:53,520 --> 00:42:57,880 Speaker 1: very big transitions. Often there's currency devaluations, but there's usually 953 00:42:57,880 --> 00:43:01,160 Speaker 1: restructuring of institutions, and so it really kind of takes 954 00:43:01,200 --> 00:43:04,200 Speaker 1: just you know, stepping back and looking out going forward 955 00:43:04,239 --> 00:43:07,960 Speaker 1: and not assuming not having a linear progression, assuming what 956 00:43:07,960 --> 00:43:10,680 Speaker 1: what exists the past decade is likely going to continue. 957 00:43:10,719 --> 00:43:12,799 Speaker 1: You have to kind of start fresh and say, what, 958 00:43:12,880 --> 00:43:15,680 Speaker 1: you know, what are things actually leading towards rather than 959 00:43:15,719 --> 00:43:18,439 Speaker 1: you know, kind of discontinuing on the trend. So then 960 00:43:18,760 --> 00:43:21,279 Speaker 1: you would say that like a traditional financial advisor that 961 00:43:21,360 --> 00:43:24,440 Speaker 1: might say, well historically you would make seven percent, like 962 00:43:24,440 --> 00:43:26,120 Speaker 1: those are kind of off right, Like the world we're 963 00:43:26,120 --> 00:43:27,680 Speaker 1: going into is probably not the same as the one 964 00:43:27,680 --> 00:43:31,640 Speaker 1: that we're coming out of, at least not the current past. 965 00:43:31,680 --> 00:43:33,560 Speaker 1: I guess I think so, And I think no, the 966 00:43:33,560 --> 00:43:36,000 Speaker 1: past can still tell us things, and it has come 967 00:43:36,040 --> 00:43:37,759 Speaker 1: down to whether or not you're kind of finding the 968 00:43:37,840 --> 00:43:39,480 Speaker 1: right policy mixed to even have an idea of what 969 00:43:39,520 --> 00:43:41,839 Speaker 1: you're looking at, and so I certainly wouldn't trust things 970 00:43:41,840 --> 00:43:44,200 Speaker 1: to say, okay, looking back forty years, uh, you know, 971 00:43:44,280 --> 00:43:45,920 Speaker 1: here's what we can expect. And it's kind of like, well, 972 00:43:45,960 --> 00:43:48,520 Speaker 1: forty years isn't nearly enough to capture, you know, kind 973 00:43:48,520 --> 00:43:50,680 Speaker 1: of the full range of a long term death cycle. So, 974 00:43:50,880 --> 00:43:53,239 Speaker 1: like I mentioned before, if anything, the closest policy makes 975 00:43:53,280 --> 00:43:56,160 Speaker 1: that can identifies the nineties. So there's not many financial 976 00:43:56,160 --> 00:43:57,520 Speaker 1: advisors that are like, you know, if you look at 977 00:43:57,560 --> 00:43:59,360 Speaker 1: the nineteen forties, you can see that you know, X, 978 00:43:59,480 --> 00:44:01,839 Speaker 1: Y Z have and but then even there, of course, 979 00:44:01,840 --> 00:44:04,080 Speaker 1: there's still differences to be aware of. So it's kind 980 00:44:04,080 --> 00:44:06,120 Speaker 1: of like looking back to have kind of a framework 981 00:44:06,160 --> 00:44:08,279 Speaker 1: for how this could play out while still you know, 982 00:44:08,360 --> 00:44:11,040 Speaker 1: kind of recognizing that things you know could be quite different, 983 00:44:11,719 --> 00:44:13,360 Speaker 1: and to kind of you know, have a framework to 984 00:44:13,400 --> 00:44:16,520 Speaker 1: kind of navigate that over time. Yeah, and to your point, 985 00:44:16,520 --> 00:44:18,279 Speaker 1: you have to go back, I think, to the full 986 00:44:18,320 --> 00:44:20,799 Speaker 1: cycle and then maybe even look at that cycle played 987 00:44:20,800 --> 00:44:22,760 Speaker 1: out a couple of times to see how that cycle 988 00:44:22,760 --> 00:44:24,480 Speaker 1: played out. It's something that I've actually been spending a 989 00:44:24,480 --> 00:44:27,200 Speaker 1: lot of time working on these different cycles, and I'm 990 00:44:27,360 --> 00:44:29,239 Speaker 1: kind of working on this thesis where like all these 991 00:44:29,239 --> 00:44:32,600 Speaker 1: cycles are kind of converging at the same time. Obviously 992 00:44:32,680 --> 00:44:35,160 Speaker 1: the radalio credit cycle, as you said, the fourth turning cycle. 993 00:44:35,200 --> 00:44:38,200 Speaker 1: They're both like eighty year cycles that are kind of converging. Uh. 994 00:44:38,239 --> 00:44:41,640 Speaker 1: There's one like this, this pendulum cycle where the world 995 00:44:41,680 --> 00:44:46,359 Speaker 1: shifts from a we which is uh like collectivism or globalism, 996 00:44:46,360 --> 00:44:48,960 Speaker 1: and it shifts to me which is like an individualism 997 00:44:49,040 --> 00:44:53,000 Speaker 1: or decentralization. Um. And so um it's almost like if 998 00:44:53,000 --> 00:44:55,480 Speaker 1: you were playing uh almost like if you were playing uh, 999 00:44:55,600 --> 00:44:57,360 Speaker 1: if you're bowling and you put the bumpers up right 1000 00:44:57,360 --> 00:44:59,760 Speaker 1: in the ball, just kind of things back and forth. 1001 00:44:59,800 --> 00:45:01,680 Speaker 1: But um, yeah, it's really interesting. You have to you 1002 00:45:01,719 --> 00:45:05,200 Speaker 1: have to see those. Um. So I've I've identified that 1003 00:45:05,280 --> 00:45:08,040 Speaker 1: somewhat as far as also labor and capital, because you 1004 00:45:08,080 --> 00:45:11,239 Speaker 1: have these environments that are very favorable towards capital, uh, 1005 00:45:11,239 --> 00:45:13,520 Speaker 1: and then you have environments that are very favorable towards labor, 1006 00:45:13,840 --> 00:45:16,400 Speaker 1: and they tend to push until they break something. And 1007 00:45:16,480 --> 00:45:18,560 Speaker 1: so if you if you push labor, you know, labor 1008 00:45:18,600 --> 00:45:20,880 Speaker 1: gets too strong, then it's hard to get anything done. 1009 00:45:21,360 --> 00:45:24,480 Speaker 1: You tend to have more inflation. Uh. But wealth concentation 1010 00:45:24,560 --> 00:45:26,920 Speaker 1: tends to be low, but it gets your point where 1011 00:45:26,960 --> 00:45:29,279 Speaker 1: sunsary a good thing. Then if you swing too far 1012 00:45:29,320 --> 00:45:31,960 Speaker 1: the other side, you have very high wealth concentration. You 1013 00:45:32,000 --> 00:45:34,040 Speaker 1: have people feeling that they have no autonomy, like they 1014 00:45:34,040 --> 00:45:36,480 Speaker 1: can be replaced by robot, they can be replaced by 1015 00:45:36,560 --> 00:45:38,719 Speaker 1: you know, off shoring, uh, And then they start to 1016 00:45:38,719 --> 00:45:40,920 Speaker 1: have that those more populous tendencies and kind of you know, 1017 00:45:41,160 --> 00:45:44,399 Speaker 1: push the pendulum back, and you know, so society kind 1018 00:45:44,400 --> 00:45:46,680 Speaker 1: of if you look back centuries, society, you know, in 1019 00:45:46,760 --> 00:45:49,760 Speaker 1: multiple countries in the world exists in that pendulum swinging 1020 00:45:49,760 --> 00:45:52,960 Speaker 1: back and forth between capital and labor, and I think 1021 00:45:52,960 --> 00:45:54,960 Speaker 1: the balance is kind of keeping it so from so 1022 00:45:55,000 --> 00:45:56,960 Speaker 1: it doesn't hit the extremes and kind of you know, 1023 00:45:57,080 --> 00:45:59,600 Speaker 1: break the social contract you could say, where then you 1024 00:45:59,680 --> 00:46:03,120 Speaker 1: risk of outright revolutions or kind of major changes, and 1025 00:46:03,480 --> 00:46:06,160 Speaker 1: kind of the society kind of negotiates keeping that pendulum 1026 00:46:06,200 --> 00:46:08,160 Speaker 1: in a way that you know that there that there's 1027 00:46:08,239 --> 00:46:10,239 Speaker 1: you know that both sides feel like they have some 1028 00:46:10,320 --> 00:46:14,640 Speaker 1: sort of playing system. Yeah. Unfortunately, it seems like real 1029 00:46:14,719 --> 00:46:17,360 Speaker 1: change only happens when things get bad enough, right, So 1030 00:46:18,320 --> 00:46:21,320 Speaker 1: whatever that is, you know, a junkie on the street 1031 00:46:21,400 --> 00:46:23,440 Speaker 1: or trying to lose weight or a relationship. It's like 1032 00:46:23,480 --> 00:46:26,160 Speaker 1: once it's like you can't take anymore. Is unfortunately when 1033 00:46:26,160 --> 00:46:30,080 Speaker 1: you normally take action. Yeah, yeah, I'm curious to just 1034 00:46:30,360 --> 00:46:32,880 Speaker 1: go back one minute. You had talked about, you know, 1035 00:46:32,920 --> 00:46:35,080 Speaker 1: the rise of populism, and you talked about you know, 1036 00:46:35,160 --> 00:46:37,600 Speaker 1: populism on both sides, but there's some overlap there. So 1037 00:46:37,640 --> 00:46:40,720 Speaker 1: I'm curious what that overlap is. UM. I kind of see, 1038 00:46:40,760 --> 00:46:43,239 Speaker 1: like a lot of times it seems like um, as 1039 00:46:43,239 --> 00:46:46,080 Speaker 1: you said, there's two sides, right, So two sides, um, 1040 00:46:46,120 --> 00:46:48,080 Speaker 1: And it almost seems like they're seeing the exact same 1041 00:46:48,080 --> 00:46:50,040 Speaker 1: problem and maybe they're mad about the exact same thing, 1042 00:46:50,040 --> 00:46:52,920 Speaker 1: but it's just the solutions that they're asking for. Maybe 1043 00:46:52,920 --> 00:46:55,359 Speaker 1: one side thinks that there's less governments the answers once 1044 00:46:55,400 --> 00:46:57,799 Speaker 1: I think that more governments the answer or something. What 1045 00:46:57,880 --> 00:47:01,040 Speaker 1: does that overlap that you were seeing? Yeah, so pretty much. 1046 00:47:01,040 --> 00:47:03,279 Speaker 1: And it also comes down to what they think the 1047 00:47:03,320 --> 00:47:05,919 Speaker 1: government should do. And so actually, oddly, if you get 1048 00:47:05,920 --> 00:47:08,120 Speaker 1: far enough left, far enough right, one of the things 1049 00:47:08,120 --> 00:47:09,640 Speaker 1: they have in common is they want the government to 1050 00:47:09,680 --> 00:47:11,719 Speaker 1: do something. Uh. But then the question is what they 1051 00:47:11,760 --> 00:47:13,879 Speaker 1: want the government to do? Uh. And so on one hand, 1052 00:47:13,920 --> 00:47:15,840 Speaker 1: you have kind of like fascism. The other hand, you 1053 00:47:15,880 --> 00:47:18,520 Speaker 1: have like you know, uh, you know, uh say communism 1054 00:47:18,719 --> 00:47:22,240 Speaker 1: or hardcore socialism. And so we've actually seen periods in Italy, 1055 00:47:22,320 --> 00:47:24,799 Speaker 1: I mean in Europe and Italy for example, where some 1056 00:47:24,840 --> 00:47:26,960 Speaker 1: of those far left and far right movements actually kind 1057 00:47:27,000 --> 00:47:29,040 Speaker 1: of make a coalition, which is funny because you think 1058 00:47:29,040 --> 00:47:31,880 Speaker 1: they'd be totally opposite, but basically they're saying, Okay, you know, 1059 00:47:31,960 --> 00:47:33,520 Speaker 1: we have a lot of differences, but we actually have 1060 00:47:33,560 --> 00:47:36,719 Speaker 1: some similarities compared to the establishment. Uh. And so you 1061 00:47:36,760 --> 00:47:39,000 Speaker 1: actually kind of get that. I define it as like 1062 00:47:39,200 --> 00:47:42,560 Speaker 1: there's four quadrants. So there's like establishment left, establishment right, 1063 00:47:43,200 --> 00:47:45,759 Speaker 1: populous left, populous right. So that's kind of a simplistic 1064 00:47:45,760 --> 00:47:47,600 Speaker 1: way of kind of saying there's actually, in some ways 1065 00:47:47,640 --> 00:47:50,400 Speaker 1: like four parties uh that in any given country are 1066 00:47:50,440 --> 00:47:52,200 Speaker 1: kind of competing with each other. And then of course 1067 00:47:52,200 --> 00:47:55,879 Speaker 1: you have different subsets of those groups. Uh. And so yeah, 1068 00:47:55,920 --> 00:47:59,560 Speaker 1: I look at it like, um, you know, it's interesting 1069 00:47:59,560 --> 00:48:01,880 Speaker 1: that you said fascism and socialism are kind of on 1070 00:48:01,920 --> 00:48:04,359 Speaker 1: opposite ends and sometimes they could join, and I look 1071 00:48:04,400 --> 00:48:06,799 Speaker 1: at them as very similar. And so you do have 1072 00:48:06,840 --> 00:48:09,840 Speaker 1: all these is ms, right, fascism and communism and socialism 1073 00:48:09,920 --> 00:48:12,160 Speaker 1: and capitalism and whatever. And I kind of look at 1074 00:48:12,160 --> 00:48:14,520 Speaker 1: it just like two systems. So you have one that's 1075 00:48:14,520 --> 00:48:17,719 Speaker 1: like captured, controlled, centrally planned, and you have one that's 1076 00:48:17,760 --> 00:48:21,520 Speaker 1: like free, open competitive, and U like fascism and communism, 1077 00:48:21,600 --> 00:48:23,719 Speaker 1: I both or socialism. I look at all those as 1078 00:48:23,760 --> 00:48:26,719 Speaker 1: like a command economy, right, it's like a captured, like 1079 00:48:26,880 --> 00:48:31,279 Speaker 1: essentially planned economy. Um. So maybe fascism and socialism are 1080 00:48:31,280 --> 00:48:32,920 Speaker 1: a little bit different, but they're both the same in 1081 00:48:32,920 --> 00:48:35,560 Speaker 1: the sense where the government you know, controls the means 1082 00:48:35,560 --> 00:48:40,040 Speaker 1: of production versus having an open competitive system Yum. So 1083 00:48:40,600 --> 00:48:43,000 Speaker 1: it seems like I would say, like they want both 1084 00:48:43,000 --> 00:48:45,359 Speaker 1: want the government to do something, but like some side 1085 00:48:45,360 --> 00:48:47,120 Speaker 1: would say, hey, we want the government to do less 1086 00:48:47,160 --> 00:48:49,520 Speaker 1: of do something, which is get out of the way, right, 1087 00:48:49,560 --> 00:48:51,560 Speaker 1: do less of it, um, And the other side is 1088 00:48:51,600 --> 00:48:54,120 Speaker 1: demanding more. And I guess they just decide they can't 1089 00:48:54,120 --> 00:48:56,799 Speaker 1: decide what they want more of. Yeah, pretty much. And 1090 00:48:56,840 --> 00:48:59,279 Speaker 1: it's also, you know, like the funny thing is you 1091 00:48:59,320 --> 00:49:02,640 Speaker 1: look at and globe politics, libertarianism is actually pretty rare. Uh. 1092 00:49:02,640 --> 00:49:04,719 Speaker 1: And so when you look at say, uh, you know, 1093 00:49:05,000 --> 00:49:08,200 Speaker 1: uh say left leaning politics and some areas right leaning politics, 1094 00:49:08,480 --> 00:49:10,359 Speaker 1: they often want the government to do something, but it 1095 00:49:10,400 --> 00:49:12,800 Speaker 1: becomes a matter of what do they want higher taxes, 1096 00:49:12,840 --> 00:49:15,440 Speaker 1: lower taxes. Do they want the government to regulate your 1097 00:49:15,440 --> 00:49:17,960 Speaker 1: social life more or less? Uh? And so for example, 1098 00:49:18,000 --> 00:49:19,279 Speaker 1: one thing I like to point out is that there's 1099 00:49:19,320 --> 00:49:21,960 Speaker 1: very few states that are super low tax and uh 1100 00:49:21,960 --> 00:49:25,239 Speaker 1: they were early to illegalized cannabis for example, Right, it's 1101 00:49:25,280 --> 00:49:26,680 Speaker 1: usually one or the other. Usually like some of the 1102 00:49:26,760 --> 00:49:29,000 Speaker 1: high tax states also legalized it, or some of the 1103 00:49:29,040 --> 00:49:30,880 Speaker 1: low tax states were slow to do it. Some of 1104 00:49:30,920 --> 00:49:33,200 Speaker 1: them still haven't done it. And so it's actually kind 1105 00:49:33,200 --> 00:49:34,719 Speaker 1: of you know, we have we have fifty experiments in 1106 00:49:34,719 --> 00:49:37,160 Speaker 1: the United States, and you know, in terms of the 1107 00:49:37,200 --> 00:49:39,759 Speaker 1: all can manage a lot of the aspects about their economies, 1108 00:49:39,920 --> 00:49:42,960 Speaker 1: but very few of them have chosen, say, libertarianism. And 1109 00:49:43,000 --> 00:49:46,080 Speaker 1: that's an example that we see kind of worldwide. You 1110 00:49:46,120 --> 00:49:48,040 Speaker 1: tend to see these kind of different elements where they 1111 00:49:48,080 --> 00:49:51,400 Speaker 1: all they tend to want government involvement, but then they 1112 00:49:51,520 --> 00:49:53,920 Speaker 1: differ on what exactly they want. Whereas you know, the 1113 00:49:53,960 --> 00:49:56,759 Speaker 1: libertarians rarely tend to get in control and be able 1114 00:49:56,840 --> 00:49:58,680 Speaker 1: to kind of enact the policies that they that they 1115 00:49:58,800 --> 00:50:02,040 Speaker 1: would prefer to have actually kind of lower government. Well, 1116 00:50:02,080 --> 00:50:04,480 Speaker 1: I think a lot of that is. Um. One, it's 1117 00:50:04,520 --> 00:50:07,600 Speaker 1: like talking your book, where like a pharmaceutical company isn't 1118 00:50:07,600 --> 00:50:09,719 Speaker 1: going to promote like a natural curate or something they 1119 00:50:09,719 --> 00:50:11,799 Speaker 1: can't make any money with it, And so what what 1120 00:50:11,840 --> 00:50:14,799 Speaker 1: politician is going to promote? Less less government? But I 1121 00:50:14,800 --> 00:50:18,200 Speaker 1: think it's also a change in the person themselves. So 1122 00:50:18,239 --> 00:50:21,560 Speaker 1: like I would consider myself somewhere on that side. I 1123 00:50:21,600 --> 00:50:24,080 Speaker 1: don't know. I don't like to use labels, but I 1124 00:50:24,120 --> 00:50:25,640 Speaker 1: just want to be left alone, like let me live 1125 00:50:25,680 --> 00:50:27,080 Speaker 1: my life, let me take care of my family, let 1126 00:50:27,080 --> 00:50:29,319 Speaker 1: me go my money. Like that's it. Like I don't 1127 00:50:29,320 --> 00:50:31,080 Speaker 1: want to go into a life of politics. Unfortunately, the 1128 00:50:31,120 --> 00:50:33,359 Speaker 1: people that do want to go into politics are those 1129 00:50:33,360 --> 00:50:35,400 Speaker 1: people that want that right. And we see that at 1130 00:50:35,440 --> 00:50:40,319 Speaker 1: the homeowners Association or Parent Teachers Association, I mean any 1131 00:50:40,400 --> 00:50:43,400 Speaker 1: level you can imagine. Um. And so maybe that's what 1132 00:50:43,440 --> 00:50:46,640 Speaker 1: it is. But anyway, but but as I was just 1133 00:50:46,640 --> 00:50:48,319 Speaker 1: curious to get your take on that, because you you 1134 00:50:48,400 --> 00:50:50,360 Speaker 1: do have to look at all that because as you 1135 00:50:50,480 --> 00:50:52,359 Speaker 1: as you started out with the push poll, like it's 1136 00:50:52,360 --> 00:50:55,400 Speaker 1: that policy response that then has that kind of that 1137 00:50:55,520 --> 00:50:59,759 Speaker 1: jerk reaction. UM. I wanted to talk about two other things, 1138 00:50:59,760 --> 00:51:01,920 Speaker 1: So keep going. But um, one I wanted to talk 1139 00:51:01,960 --> 00:51:05,719 Speaker 1: about gold. Um. And so it seems like a lot 1140 00:51:05,760 --> 00:51:08,279 Speaker 1: of people are losing the faith in gold. Right, It's like, man, 1141 00:51:08,480 --> 00:51:12,000 Speaker 1: whatever six trillion, seven trillion dollars have been printed, um 1142 00:51:12,200 --> 00:51:15,480 Speaker 1: CPI spiking, which not near as high as it should. 1143 00:51:15,480 --> 00:51:17,640 Speaker 1: We're seeing, you know, as you said, commodity prices going 1144 00:51:17,640 --> 00:51:19,760 Speaker 1: through the moon. And if if there was ever a time, 1145 00:51:19,800 --> 00:51:23,080 Speaker 1: I mean, uh, the uncertainty in the world is high, 1146 00:51:23,120 --> 00:51:25,680 Speaker 1: populism is uprising. If there's every time that gold should shine, 1147 00:51:25,680 --> 00:51:28,040 Speaker 1: it should be right now. Um. And it's been in 1148 00:51:28,080 --> 00:51:30,360 Speaker 1: this like down trend. What are your thoughts on that? 1149 00:51:31,080 --> 00:51:33,640 Speaker 1: So in my view, gold kind of follows two main 1150 00:51:33,719 --> 00:51:36,840 Speaker 1: things pretty closely. So one is the broad mind supply increase, 1151 00:51:36,960 --> 00:51:39,719 Speaker 1: especially on a per capital basis uh. And then the 1152 00:51:39,800 --> 00:51:43,080 Speaker 1: second one is real industrates. So say the tenure treasury 1153 00:51:43,440 --> 00:51:47,560 Speaker 1: minus either inflation or say inflation break evens as measured 1154 00:51:47,560 --> 00:51:50,680 Speaker 1: by the tips market uh, and so yields are seven percent, 1155 00:51:51,120 --> 00:51:53,239 Speaker 1: then you're getting a three percent positive real yields. So 1156 00:51:53,239 --> 00:51:55,719 Speaker 1: even though inflation is kind of high, goal is not 1157 00:51:55,760 --> 00:51:58,040 Speaker 1: super attractive in that environment because it's actually in some 1158 00:51:58,080 --> 00:52:02,040 Speaker 1: ways better to have treasuries or or bank cash another hand, 1159 00:52:02,160 --> 00:52:04,640 Speaker 1: Let's say inflation is three percent, but treasure deals are 1160 00:52:04,680 --> 00:52:06,800 Speaker 1: one percent. Well, then you have a negative two percent 1161 00:52:06,880 --> 00:52:09,080 Speaker 1: real yield or to hold something like gold. You know, 1162 00:52:09,200 --> 00:52:11,760 Speaker 1: say that the increase in the broad money supply, especially 1163 00:52:11,760 --> 00:52:14,400 Speaker 1: when you adjusted for you know, the new supply of gold, 1164 00:52:15,040 --> 00:52:17,880 Speaker 1: or or a population increase, which actually tend to be 1165 00:52:17,920 --> 00:52:20,000 Speaker 1: about the same number, something like you know, one to 1166 00:52:20,040 --> 00:52:22,000 Speaker 1: one point five to two percent a year, depending on 1167 00:52:22,080 --> 00:52:24,319 Speaker 1: where you're looking at what time period. Uh. And so 1168 00:52:24,560 --> 00:52:26,919 Speaker 1: by that metric, you know, gold has done its job 1169 00:52:27,040 --> 00:52:30,000 Speaker 1: since where you know, we had a certain increase in 1170 00:52:30,000 --> 00:52:32,480 Speaker 1: the broad mind supply per capita gret, a certain increase 1171 00:52:32,520 --> 00:52:35,520 Speaker 1: in the gold price, but it overshot it a little 1172 00:52:35,520 --> 00:52:38,440 Speaker 1: bit last summer. But then so as we got you know, 1173 00:52:38,600 --> 00:52:41,919 Speaker 1: industrates fell from you know, real industrates fell from say 1174 00:52:41,960 --> 00:52:44,960 Speaker 1: positive one percent all the way down to negative one percent. 1175 00:52:45,520 --> 00:52:48,080 Speaker 1: But then they started bouncing back up, mainly because nominal 1176 00:52:48,080 --> 00:52:50,520 Speaker 1: treasury will start to rise at a quicker pace than 1177 00:52:50,840 --> 00:52:53,640 Speaker 1: than break evens did, and a quicker pace than than 1178 00:52:53,760 --> 00:52:56,000 Speaker 1: official cp I did. So we got that, you know, 1179 00:52:56,040 --> 00:52:59,479 Speaker 1: that eight month kind of correction in gold. But now 1180 00:52:59,520 --> 00:53:01,760 Speaker 1: I think there's there's these indications that it is starting 1181 00:53:01,760 --> 00:53:04,440 Speaker 1: to kind of bottom out, uh, and the real industrates 1182 00:53:04,440 --> 00:53:07,720 Speaker 1: are probably you know, do for another leg lower because 1183 00:53:07,719 --> 00:53:09,719 Speaker 1: now we're starting to get some of those more inflationary 1184 00:53:09,719 --> 00:53:11,960 Speaker 1: spikes coming through. So we have the low base effects 1185 00:53:12,000 --> 00:53:16,080 Speaker 1: for example, pushing up your your CPI changes. Uh. And 1186 00:53:16,160 --> 00:53:19,120 Speaker 1: as economies reopened, uh, you know, we're starting to see 1187 00:53:19,200 --> 00:53:23,680 Speaker 1: kind of more economic activity, higher nominal GP growth, while 1188 00:53:23,760 --> 00:53:26,120 Speaker 1: industrates are kind of still held to very low levels, 1189 00:53:26,360 --> 00:53:28,280 Speaker 1: and that tends to be a good environment for gold. 1190 00:53:28,719 --> 00:53:30,480 Speaker 1: And so it's one of those things where in any 1191 00:53:30,520 --> 00:53:32,960 Speaker 1: one of these kind of big environments, gold doesn't really 1192 00:53:33,000 --> 00:53:34,400 Speaker 1: go up in a straight line. So even if you 1193 00:53:34,400 --> 00:53:36,239 Speaker 1: look at state in the nineteen seventies, which you all 1194 00:53:36,320 --> 00:53:39,759 Speaker 1: know is extraordinarily good decade for gold, it actually had 1195 00:53:39,800 --> 00:53:42,160 Speaker 1: two major peaks. Of course, in the in the mid 1196 00:53:42,200 --> 00:53:44,440 Speaker 1: seventies that had a really big peak, but then I 1197 00:53:44,480 --> 00:53:47,480 Speaker 1: actually had a giant correction and that was correlated very 1198 00:53:47,520 --> 00:53:50,759 Speaker 1: strongly to real rates, because they did try to raise 1199 00:53:50,840 --> 00:53:52,719 Speaker 1: rates to kind of rain in inflation, and it worked 1200 00:53:52,719 --> 00:53:55,320 Speaker 1: for a little bit, but then you didn't really fully 1201 00:53:55,360 --> 00:53:57,400 Speaker 1: get it, and then as you kind of progressed later 1202 00:53:57,440 --> 00:54:00,080 Speaker 1: in the decade you had another bigger spike towards the 1203 00:54:00,120 --> 00:54:02,640 Speaker 1: end of the seventies and into U and so I 1204 00:54:02,760 --> 00:54:05,200 Speaker 1: view in a similar environment now where you know you're 1205 00:54:05,239 --> 00:54:08,320 Speaker 1: gonna have corrections in the gold price, but that overall 1206 00:54:08,360 --> 00:54:10,640 Speaker 1: it's it's likely going to follow say that you know, 1207 00:54:11,239 --> 00:54:14,200 Speaker 1: increases the broad mind supply per capita and kind of 1208 00:54:14,239 --> 00:54:17,640 Speaker 1: follow real industrates. And so I think that real industrates 1209 00:54:17,719 --> 00:54:19,759 Speaker 1: might have you know, had a local top and it 1210 00:54:19,880 --> 00:54:23,080 Speaker 1: probably due for another kind of lower leg down, which 1211 00:54:23,160 --> 00:54:25,160 Speaker 1: we you know, great for kind of you know, commodities 1212 00:54:25,200 --> 00:54:29,880 Speaker 1: and especially for gold. Puerto Rico. I love it. So 1213 00:54:29,960 --> 00:54:31,920 Speaker 1: when you're talking about real real rates, I mean you're 1214 00:54:31,920 --> 00:54:33,920 Speaker 1: basically talking about the treasury yield, the ten or the 1215 00:54:34,000 --> 00:54:37,200 Speaker 1: thirty minus the cp I. Right, So, um, it looks 1216 00:54:37,400 --> 00:54:39,279 Speaker 1: is that right? I mean that's what you're can There 1217 00:54:39,280 --> 00:54:40,600 Speaker 1: are two ways to do it. One is you can 1218 00:54:40,719 --> 00:54:43,200 Speaker 1: tend your yields minus the c p I. Another one 1219 00:54:43,280 --> 00:54:45,080 Speaker 1: is you can do uh, you know, ten year yields 1220 00:54:45,080 --> 00:54:48,440 Speaker 1: minus the inflation break evens rate, which essentially the inflation 1221 00:54:48,520 --> 00:54:51,320 Speaker 1: rate that the tips market is pricing in looking forward. 1222 00:54:51,600 --> 00:54:53,600 Speaker 1: And that one gives you a more real time assessment. 1223 00:54:54,120 --> 00:54:56,280 Speaker 1: But then of course it's it's it could be affected 1224 00:54:56,280 --> 00:54:59,480 Speaker 1: by Federal Reserve purchases of tips, and so you have 1225 00:54:59,640 --> 00:55:02,040 Speaker 1: I look at both so you can see, as you said, 1226 00:55:02,040 --> 00:55:04,640 Speaker 1: like gold kind of overshot. So like August of last year, 1227 00:55:04,880 --> 00:55:08,200 Speaker 1: it's spiked pretty high, and then right at that time, uh, 1228 00:55:08,360 --> 00:55:11,040 Speaker 1: both the Dixie had crashed, but we also saw the 1229 00:55:11,120 --> 00:55:13,799 Speaker 1: negative or the treasury yields had dropped to like zero 1230 00:55:13,880 --> 00:55:16,200 Speaker 1: point five, and then all of a sudden started bouncing 1231 00:55:16,280 --> 00:55:18,040 Speaker 1: up to one point five. And ever since then gold 1232 00:55:18,080 --> 00:55:20,879 Speaker 1: has been been in the bear market. So I mean 1233 00:55:20,880 --> 00:55:22,759 Speaker 1: that that's one way to look at it. But I 1234 00:55:22,760 --> 00:55:25,239 Speaker 1: guess if you were investing into gold, then you're trying 1235 00:55:25,280 --> 00:55:27,600 Speaker 1: to guess into the future where you think those real 1236 00:55:27,719 --> 00:55:29,279 Speaker 1: rates are going to be. So what do you see 1237 00:55:29,600 --> 00:55:33,000 Speaker 1: in regards to that, what you're trying to forecast? There, Yes, 1238 00:55:33,080 --> 00:55:36,120 Speaker 1: my base cases that will have negative real yields, uh, 1239 00:55:36,160 --> 00:55:38,160 Speaker 1: you know, for for most of the next several years, 1240 00:55:38,480 --> 00:55:40,880 Speaker 1: and that will probably see lower reveal yields than we 1241 00:55:40,920 --> 00:55:44,759 Speaker 1: saw back in August, which it means I think we'll 1242 00:55:44,800 --> 00:55:48,040 Speaker 1: see yields really yields that are lower than negative one percent. 1243 00:55:48,400 --> 00:55:50,200 Speaker 1: And of course you can arriot that in a couple 1244 00:55:50,200 --> 00:55:52,800 Speaker 1: of different ways. Like if you had treasure yields two percent, 1245 00:55:53,000 --> 00:55:55,480 Speaker 1: you had inflation of four percent, well then you're at 1246 00:55:55,480 --> 00:55:57,600 Speaker 1: negative two percent, which is much lower than we saw 1247 00:55:57,880 --> 00:55:59,239 Speaker 1: in August. If you look all the way back to 1248 00:55:59,360 --> 00:56:02,359 Speaker 1: nineteen seven, ease, really it's got as low as as 1249 00:56:02,400 --> 00:56:05,200 Speaker 1: negative four or negative five percent at times. Uh. And 1250 00:56:05,200 --> 00:56:07,480 Speaker 1: so I certainly think that that's that we can see cards, 1251 00:56:07,600 --> 00:56:10,160 Speaker 1: we can see uh, you know, results like that in 1252 00:56:10,200 --> 00:56:12,879 Speaker 1: the twenties, where I think, you know, as long as 1253 00:56:12,960 --> 00:56:15,680 Speaker 1: gold kind of continues to be viewed by a pretty 1254 00:56:15,719 --> 00:56:18,560 Speaker 1: large segment as a store of value, that it has 1255 00:56:18,640 --> 00:56:21,400 Speaker 1: that that kind of outcome. So I'm still bullish on it. 1256 00:56:21,640 --> 00:56:23,480 Speaker 1: I know that you know, there's a there's that kind 1257 00:56:23,480 --> 00:56:26,399 Speaker 1: of a heated debate between big winners and gold. Uh. 1258 00:56:26,400 --> 00:56:28,680 Speaker 1: You know, for example, and I've always been kind of 1259 00:56:28,680 --> 00:56:30,640 Speaker 1: on the on the both camp. I mean, I like both, 1260 00:56:30,680 --> 00:56:33,719 Speaker 1: and so I came from more of the precious metals background, 1261 00:56:34,320 --> 00:56:36,719 Speaker 1: but then as bitcoin kind of proved itself over time, 1262 00:56:36,760 --> 00:56:39,440 Speaker 1: I became quite bullish on that. Uh. And so I 1263 00:56:39,800 --> 00:56:42,440 Speaker 1: think that they both can have a role in portfolio 1264 00:56:42,480 --> 00:56:44,719 Speaker 1: because I'm quite bullish on both of them, and I 1265 00:56:44,840 --> 00:56:48,040 Speaker 1: view them as less. So into some extent, they compete 1266 00:56:48,080 --> 00:56:50,799 Speaker 1: with each other, right, especially among younger investors. But if 1267 00:56:50,800 --> 00:56:52,600 Speaker 1: look in the in the broader sense of the you 1268 00:56:52,600 --> 00:56:54,400 Speaker 1: know kind of the world. If you look at the 1269 00:56:54,440 --> 00:56:56,839 Speaker 1: amount of money that's stuck in in cash and and 1270 00:56:56,840 --> 00:57:00,239 Speaker 1: and sovereign bonds, uh that is yielding below there they're 1271 00:57:00,280 --> 00:57:03,800 Speaker 1: prevailing inflation rates. That's a much larger pool of capital 1272 00:57:04,120 --> 00:57:06,800 Speaker 1: than the full gold market capitulization and the full bitcoin 1273 00:57:06,840 --> 00:57:11,040 Speaker 1: market capitalization find order magnitude. Yeah, yeah, I mean, I 1274 00:57:11,120 --> 00:57:12,879 Speaker 1: see what you're saying. I I was a big time 1275 00:57:12,920 --> 00:57:16,240 Speaker 1: gold gold bug. Um. I started to realize I was 1276 00:57:16,240 --> 00:57:18,400 Speaker 1: actually a sound money advocate, and so when I look 1277 00:57:18,440 --> 00:57:20,080 Speaker 1: at it from that lens, I mean, I still like gold, 1278 00:57:20,080 --> 00:57:22,840 Speaker 1: but I like bitcoin. They definitely have their differences. I 1279 00:57:22,880 --> 00:57:25,760 Speaker 1: think I would say to your earlier point you talked 1280 00:57:25,800 --> 00:57:28,280 Speaker 1: about Russia has been dedollarized and moving into gold, and 1281 00:57:28,280 --> 00:57:30,120 Speaker 1: so you see the sovereigns moving into gold, the central 1282 00:57:30,120 --> 00:57:32,960 Speaker 1: banks acquiring gold, they're not buying bitcoin. Um. But as 1283 00:57:32,960 --> 00:57:35,760 Speaker 1: you said, the younger generations, the retail investors, I think 1284 00:57:35,760 --> 00:57:38,560 Speaker 1: Bitcoin is out competing on that level and golds out 1285 00:57:38,560 --> 00:57:41,840 Speaker 1: competing on the sovereign level. Um. And and to your point, 1286 00:57:41,880 --> 00:57:45,240 Speaker 1: I think, you know, sovereigns are a much bigger market. Um. 1287 00:57:45,280 --> 00:57:47,000 Speaker 1: But then we still have the problem with that price 1288 00:57:47,040 --> 00:57:49,320 Speaker 1: being captured and kind of being set in London every day. 1289 00:57:49,600 --> 00:57:52,240 Speaker 1: So um, you know, we'll see what happens with that 1290 00:57:52,320 --> 00:57:55,720 Speaker 1: as well. But but all right, that's good. UM. So 1291 00:57:56,080 --> 00:57:58,800 Speaker 1: moving on to bitcoin. Then you've done some amazing work 1292 00:57:58,800 --> 00:58:00,520 Speaker 1: on bitcoin. By the way, it's been great having you 1293 00:58:00,560 --> 00:58:02,720 Speaker 1: in there doing that that analysis, and I know it 1294 00:58:02,760 --> 00:58:04,760 Speaker 1: did it did seem to take a while to kind 1295 00:58:04,800 --> 00:58:07,080 Speaker 1: of get you warmed up into it. Um. And you've 1296 00:58:07,120 --> 00:58:09,160 Speaker 1: talked about that, right, how maybe over a couple of 1297 00:58:09,200 --> 00:58:10,960 Speaker 1: years you kind of looked at it again. But what 1298 00:58:11,000 --> 00:58:12,800 Speaker 1: was it that kind of kicked you over the edge? 1299 00:58:13,280 --> 00:58:15,480 Speaker 1: I would say two things. I mean, I I analyzed 1300 00:58:15,520 --> 00:58:19,000 Speaker 1: it in late seventeen because you know, when when you 1301 00:58:19,040 --> 00:58:20,320 Speaker 1: have a big run up and something, you started to 1302 00:58:20,320 --> 00:58:22,760 Speaker 1: get a ton of questions from from readers about like, hey, 1303 00:58:22,800 --> 00:58:25,440 Speaker 1: what about this? And so I wrote my first research 1304 00:58:25,480 --> 00:58:27,880 Speaker 1: piece on bitcoin, and I would describe it as kind 1305 00:58:27,880 --> 00:58:30,920 Speaker 1: of neutral to to mildly bearish, where I wasn't explicit fish, 1306 00:58:31,560 --> 00:58:33,520 Speaker 1: but I didn't take a position, and I had a 1307 00:58:33,520 --> 00:58:36,320 Speaker 1: couple of concerns. One was, uh that we we of 1308 00:58:36,320 --> 00:58:38,160 Speaker 1: course had that giant price run up and you had 1309 00:58:38,160 --> 00:58:39,480 Speaker 1: a ton of euphoria, and I was like, you know, 1310 00:58:39,520 --> 00:58:41,280 Speaker 1: whenever you see that that level of before, you have 1311 00:58:41,320 --> 00:58:44,760 Speaker 1: to be careful. And then too, I wasn't for about 1312 00:58:44,760 --> 00:58:48,480 Speaker 1: dilution among multiple different digital assets, and I was like, okay, 1313 00:58:48,520 --> 00:58:50,560 Speaker 1: so you know at that point, I kind of the 1314 00:58:50,560 --> 00:58:52,600 Speaker 1: the alt season, right, and you have you had bitcoin 1315 00:58:52,720 --> 00:58:54,840 Speaker 1: lose its dominance. So it started out, as you know, 1316 00:58:54,840 --> 00:58:56,720 Speaker 1: obviously was the first one, so at a hundred percent 1317 00:58:56,960 --> 00:58:59,040 Speaker 1: of the market share, and then over time it kind 1318 00:58:59,040 --> 00:59:01,440 Speaker 1: of went down to ninety uh. And then during that 1319 00:59:01,440 --> 00:59:05,320 Speaker 1: that full kind of say two year period, bitcoin dominance 1320 00:59:05,320 --> 00:59:09,919 Speaker 1: went down to something of of crypto asset marketing capitalization. 1321 00:59:10,280 --> 00:59:12,400 Speaker 1: And so my concern was, okay, even if even if 1322 00:59:12,400 --> 00:59:14,640 Speaker 1: this whole market goes to a couple of trallion dollars, 1323 00:59:14,720 --> 00:59:18,480 Speaker 1: if it all gets diffused among multiple protocols, especially at 1324 00:59:18,480 --> 00:59:21,520 Speaker 1: that Also at that time, a bitcoin bitcoin cash had 1325 00:59:21,560 --> 00:59:24,440 Speaker 1: recently split, and I was watching that and I was 1326 00:59:24,480 --> 00:59:26,280 Speaker 1: kind of like like, okay, if this, if this splits enough, 1327 00:59:26,320 --> 00:59:29,240 Speaker 1: and if this gets diluted enough, uh, then I'd be 1328 00:59:29,280 --> 00:59:31,640 Speaker 1: concerned about that the idea of scarcity that even if 1329 00:59:31,720 --> 00:59:33,919 Speaker 1: even if a protocol is scarce, it's got a fine 1330 00:59:34,040 --> 00:59:36,480 Speaker 1: number of units. If there if there's kind of multiple 1331 00:59:36,480 --> 00:59:40,160 Speaker 1: protocols popping up and competing with each other, uh, then 1332 00:59:40,320 --> 00:59:43,280 Speaker 1: it can kind of dilute that effect. But then you know, 1333 00:59:43,400 --> 00:59:45,080 Speaker 1: and that you know, in the large part that was 1334 00:59:45,120 --> 00:59:46,840 Speaker 1: correct because then for the next you know, couple of 1335 00:59:46,880 --> 00:59:49,160 Speaker 1: years Bitcoin it had a blow off top, then it crashed, 1336 00:59:49,160 --> 00:59:51,440 Speaker 1: and it had this kind of highly volatile period of 1337 00:59:51,520 --> 00:59:55,080 Speaker 1: underperformance relative to say the SMPF uh, you know, relative 1338 00:59:55,120 --> 00:59:57,720 Speaker 1: to some other assets. But then you know, over those 1339 00:59:57,800 --> 01:00:00,760 Speaker 1: couple of years, my concerns are large address. So one 1340 01:00:00,760 --> 01:00:02,640 Speaker 1: is when you when you have that consolidation, it took 1341 01:00:02,640 --> 01:00:04,840 Speaker 1: off the euphoria from the market, so we kind of 1342 01:00:04,880 --> 01:00:08,560 Speaker 1: took out the price issue. And then second, uh you know, uh, 1343 01:00:08,880 --> 01:00:11,560 Speaker 1: we had kind of the uh that that folk war 1344 01:00:12,000 --> 01:00:14,560 Speaker 1: was largely settled. And so if you look at at 1345 01:00:14,640 --> 01:00:18,120 Speaker 1: you know, marketing, campulization, hash rage, number of nodes, uh, 1346 01:00:18,160 --> 01:00:21,320 Speaker 1: you know, the acceptance among kind of you know, custodians 1347 01:00:21,640 --> 01:00:24,080 Speaker 1: or hardware wallets like whatever, whatever kind of metric you 1348 01:00:24,080 --> 01:00:27,000 Speaker 1: want to do to measure network effect. Bitcoin, you know, 1349 01:00:27,080 --> 01:00:30,440 Speaker 1: retained almost all of that market share compared to bitcoin, cash, 1350 01:00:30,440 --> 01:00:33,520 Speaker 1: bitcoins and social vision things like that, and so overall 1351 01:00:33,600 --> 01:00:36,560 Speaker 1: kind of bitcoins solidified itself as the you know, the 1352 01:00:36,680 --> 01:00:39,800 Speaker 1: premier store of value asset, whereas you know, these other 1353 01:00:39,840 --> 01:00:42,400 Speaker 1: protocols that come and go, uh, you know, so that 1354 01:00:42,440 --> 01:00:44,320 Speaker 1: they don't really matter to it. We also had you know, 1355 01:00:44,400 --> 01:00:49,320 Speaker 1: the growth of uh, institutional grade custodians like Fidelity and nidig. 1356 01:00:49,760 --> 01:00:51,120 Speaker 1: You know, they kind of came out and they had 1357 01:00:51,120 --> 01:00:55,000 Speaker 1: more of a foundation that when institutional money comes into 1358 01:00:55,000 --> 01:00:57,880 Speaker 1: the space, uh, you know, there there's basically places ready 1359 01:00:57,880 --> 01:01:01,440 Speaker 1: to absorb that money. Uh. And we had also ongoing 1360 01:01:01,480 --> 01:01:04,840 Speaker 1: improvements in hardware wallet's software while it's especially for for 1361 01:01:04,920 --> 01:01:07,120 Speaker 1: bitcoin specific ones. So we had kind of the break 1362 01:01:07,120 --> 01:01:09,680 Speaker 1: between Bitcoin and the rest of the crypto space where 1363 01:01:09,680 --> 01:01:13,320 Speaker 1: had we had bitcoin specific companies, bitcoin specific security products 1364 01:01:13,320 --> 01:01:15,600 Speaker 1: and and different things like that. And so when we 1365 01:01:15,640 --> 01:01:19,479 Speaker 1: had that liquidity crisis in March and April last year, uh, 1366 01:01:19,520 --> 01:01:21,520 Speaker 1: you know, I had been watching bitcoin. I was like, okay, 1367 01:01:21,520 --> 01:01:24,040 Speaker 1: now it's perfect, and so you know, I ended up 1368 01:01:24,080 --> 01:01:26,320 Speaker 1: ironically it was like the same prices when I analyzed 1369 01:01:26,320 --> 01:01:29,160 Speaker 1: it back in late seen. But at that point, I 1370 01:01:29,280 --> 01:01:31,720 Speaker 1: view it as significant d risk. Uh, And so I 1371 01:01:32,000 --> 01:01:34,280 Speaker 1: jumped in at like seven thousand coin, and then I 1372 01:01:34,280 --> 01:01:36,800 Speaker 1: wrote a series of articles explaining, you know, uh, you 1373 01:01:36,800 --> 01:01:39,840 Speaker 1: know why I'm bullish, uh, and you know, just kind 1374 01:01:39,840 --> 01:01:42,720 Speaker 1: of emphasizing all the different you know, things that I 1375 01:01:42,720 --> 01:01:45,280 Speaker 1: think changed over this past couple of years. While still 1376 01:01:45,280 --> 01:01:47,160 Speaker 1: being a rare that there there are still some risks 1377 01:01:47,160 --> 01:01:49,160 Speaker 1: to be you know, kind of lurking out there, but 1378 01:01:49,200 --> 01:01:51,680 Speaker 1: that overall that the risk reward profile of it became 1379 01:01:51,800 --> 01:01:54,120 Speaker 1: very favorable, and I kind of hit that critical mass 1380 01:01:54,120 --> 01:01:55,480 Speaker 1: where I was like, Yep, I think it's a I 1381 01:01:55,480 --> 01:01:57,880 Speaker 1: think it's a good kind of emergence store value. I 1382 01:01:57,960 --> 01:02:00,400 Speaker 1: think it's you know, it's it's useful technology. And so 1383 01:02:00,440 --> 01:02:04,320 Speaker 1: I became quite bullish. Um. You know, you've you've studied 1384 01:02:04,320 --> 01:02:07,160 Speaker 1: a lot of cycles. I'm curious if you've gone back 1385 01:02:07,160 --> 01:02:09,400 Speaker 1: and looked at like the technological revolutions. I think there's 1386 01:02:09,440 --> 01:02:11,160 Speaker 1: been four of them in the last two and fifty years. 1387 01:02:11,280 --> 01:02:13,280 Speaker 1: And if you look at these technological revolutions and and 1388 01:02:13,320 --> 01:02:15,800 Speaker 1: look at the tech cycles, they almost always follow that 1389 01:02:15,840 --> 01:02:17,840 Speaker 1: same pattern that you're describing. So you can look at 1390 01:02:17,840 --> 01:02:20,000 Speaker 1: the rise of the automobile and new technology. All of 1391 01:02:20,000 --> 01:02:23,080 Speaker 1: a sudden, there's fifty auto manufacturers, which one's gonna win. 1392 01:02:23,120 --> 01:02:26,080 Speaker 1: Who's gonna win? Right, and then it got overbuilt for 1393 01:02:26,120 --> 01:02:28,880 Speaker 1: the market. The market couldn't sustain fifty auto manufacturers. They 1394 01:02:28,920 --> 01:02:31,400 Speaker 1: all went bankrupt. Three were left. They gobbled up the 1395 01:02:31,480 --> 01:02:33,640 Speaker 1: technology cheap and they went on. Same same thing we 1396 01:02:33,640 --> 01:02:35,600 Speaker 1: saw on the internet days in the nineties and so 1397 01:02:35,680 --> 01:02:37,160 Speaker 1: kind of the same thing we saw play out in 1398 01:02:37,200 --> 01:02:40,080 Speaker 1: the blocks blockchain space where all these protocols, and then 1399 01:02:40,240 --> 01:02:42,920 Speaker 1: it seems like the winners have have kind of emerged 1400 01:02:42,920 --> 01:02:45,680 Speaker 1: from that. So UM again back to that that history, 1401 01:02:45,720 --> 01:02:49,880 Speaker 1: those cycles just just kind of playing playing through. UM. 1402 01:02:49,960 --> 01:02:52,680 Speaker 1: It seems like from seen two now and back to 1403 01:02:52,720 --> 01:02:55,400 Speaker 1: technology cycles, it's different. Different is typically we would see 1404 01:02:55,560 --> 01:02:59,240 Speaker 1: new technology typically would be funded through vcs and institutions 1405 01:02:59,280 --> 01:03:02,120 Speaker 1: and funds like that, and this actually had this grassroots 1406 01:03:02,280 --> 01:03:04,480 Speaker 1: rise right where it went to the people first, and 1407 01:03:04,520 --> 01:03:06,960 Speaker 1: I think because of that it allowed the volatility to 1408 01:03:07,000 --> 01:03:10,800 Speaker 1: get even higher because one like a venture capital company. 1409 01:03:10,840 --> 01:03:12,560 Speaker 1: I mean, if I invest into a VC, we you 1410 01:03:12,600 --> 01:03:14,600 Speaker 1: know there's no daily market for that, right, you don't 1411 01:03:14,600 --> 01:03:17,240 Speaker 1: see it, you don't see the price for whatever six seven, eight, 1412 01:03:17,280 --> 01:03:19,600 Speaker 1: ten years Um, this we saw daily. But but the 1413 01:03:19,640 --> 01:03:22,040 Speaker 1: makeup of the buyer was different, where their retail hoping 1414 01:03:22,080 --> 01:03:24,040 Speaker 1: to make quick money and then when it crashed, they 1415 01:03:24,040 --> 01:03:26,400 Speaker 1: were quick to sell, whereas today, you know, we have 1416 01:03:26,480 --> 01:03:29,280 Speaker 1: these institutional players coming in the warm buffets of the 1417 01:03:29,320 --> 01:03:33,680 Speaker 1: world that have held Coca Cola since um. Not not 1418 01:03:33,800 --> 01:03:36,600 Speaker 1: that he's in, but the makeup of the buyer is different. 1419 01:03:36,960 --> 01:03:39,640 Speaker 1: You know, you mentioned night Egg and you know, mass 1420 01:03:39,720 --> 01:03:41,800 Speaker 1: mutual and and on and on and on. Do you 1421 01:03:41,840 --> 01:03:44,400 Speaker 1: think that the makeup in the buyer and the evolution 1422 01:03:44,480 --> 01:03:46,760 Speaker 1: and the kind of growth that we're in has changed 1423 01:03:46,800 --> 01:03:49,000 Speaker 1: those the cycles? I mean, do you do you see 1424 01:03:49,040 --> 01:03:52,160 Speaker 1: that like maybe those eighty five percent drops of the past, 1425 01:03:52,200 --> 01:03:54,240 Speaker 1: maybe we're kind of past that. Maybe we'll see forty 1426 01:03:54,320 --> 01:03:56,320 Speaker 1: or fifty percent moving forward or what do you see 1427 01:03:56,360 --> 01:03:58,480 Speaker 1: about that? That would be my base case is that 1428 01:03:58,640 --> 01:04:01,040 Speaker 1: as the as the market cap grows bigger, as the 1429 01:04:02,720 --> 01:04:05,760 Speaker 1: size of the customer base, like the user base grows, uh, 1430 01:04:05,800 --> 01:04:08,480 Speaker 1: and that bigger pools of capital get in, I would 1431 01:04:08,520 --> 01:04:11,440 Speaker 1: expect to see lower valatility over time. Uh. And so 1432 01:04:11,480 --> 01:04:13,800 Speaker 1: I don't know the exact amount of drawdowns that will have, 1433 01:04:14,280 --> 01:04:16,360 Speaker 1: but I would expect it to be lower than before, 1434 01:04:16,440 --> 01:04:18,960 Speaker 1: which could be both the upside and the downside. Uh. 1435 01:04:18,960 --> 01:04:20,640 Speaker 1: And so you know, when when it was a tiny 1436 01:04:20,680 --> 01:04:22,920 Speaker 1: asset kind of exploring whether it's going to exist or not, 1437 01:04:23,560 --> 01:04:27,000 Speaker 1: you can have really huge price wings. But then as say, 1438 01:04:27,080 --> 01:04:30,160 Speaker 1: institutions begin holding an allocation and rebouncing it right so 1439 01:04:30,200 --> 01:04:33,240 Speaker 1: that that's a little bit of a volatility dampening right there. Uh. 1440 01:04:33,240 --> 01:04:36,040 Speaker 1: And then as it becomes more clear in regulations how 1441 01:04:36,080 --> 01:04:38,800 Speaker 1: it's gonna be handled, whether institutions can get into it 1442 01:04:38,880 --> 01:04:41,520 Speaker 1: or not, which they now can, that helps smooth that out. 1443 01:04:41,720 --> 01:04:44,640 Speaker 1: In addition, even among the retail investors, we've seen a 1444 01:04:44,800 --> 01:04:47,800 Speaker 1: rise in the idea of dollar cost averaging into you know, 1445 01:04:47,840 --> 01:04:49,960 Speaker 1: companies like Swan Bitcoin and others that have really kind 1446 01:04:49,960 --> 01:04:52,760 Speaker 1: of emphasized that. We even have you know, credit cards 1447 01:04:52,800 --> 01:04:55,680 Speaker 1: and debit cards that they pay back in bitcrin rewards. 1448 01:04:55,960 --> 01:04:57,880 Speaker 1: So we have this kind of mentality of you know, 1449 01:04:58,160 --> 01:05:02,080 Speaker 1: it's like people often describe the crypto space and the 1450 01:05:02,160 --> 01:05:04,640 Speaker 1: same thing as like you know, people buying tesla, uh, 1451 01:05:04,720 --> 01:05:07,280 Speaker 1: you know, and other kind of you know, a speculative stocks. 1452 01:05:07,760 --> 01:05:10,040 Speaker 1: But really, you know, the bitcoin community is somewhat different 1453 01:05:10,040 --> 01:05:11,520 Speaker 1: from all of that in the sense that you know, 1454 01:05:11,760 --> 01:05:13,360 Speaker 1: you have you have a bunch of like say Austrian 1455 01:05:13,400 --> 01:05:16,560 Speaker 1: economists one hand, that's not the same group of as 1456 01:05:16,600 --> 01:05:19,000 Speaker 1: like say people buying tests necessarily, and then you have 1457 01:05:19,040 --> 01:05:20,760 Speaker 1: a lot of people that are kind of like diligently 1458 01:05:20,840 --> 01:05:23,920 Speaker 1: saving you know, every week into into buying some stats. 1459 01:05:24,440 --> 01:05:28,560 Speaker 1: And it's just a very different mindset than say, you know, speculation. Uh. 1460 01:05:28,560 --> 01:05:32,320 Speaker 1: And so the combination of institutional ownership and that idea 1461 01:05:32,320 --> 01:05:35,560 Speaker 1: of like hoddling and dollar cars averaging, I think that 1462 01:05:35,600 --> 01:05:38,360 Speaker 1: can somewhat smooth over uh some of the some of 1463 01:05:38,400 --> 01:05:41,120 Speaker 1: the you know, the volatility that we'll see uh. And 1464 01:05:41,160 --> 01:05:43,120 Speaker 1: I think, you know, the longer term, I view one 1465 01:05:43,120 --> 01:05:45,960 Speaker 1: of the biggest kind of challenges to bitcoin is it 1466 01:05:46,000 --> 01:05:49,960 Speaker 1: has to navigate that that um transition towards uh, you know, 1467 01:05:50,080 --> 01:05:53,480 Speaker 1: it's funding its security mainly through uh a new coin issuance, 1468 01:05:53,560 --> 01:05:57,880 Speaker 1: the block subsidies to transitioning kind of towards fees always 1469 01:05:57,920 --> 01:05:59,880 Speaker 1: being enough to sustain its security. And I think that's 1470 01:06:00,200 --> 01:06:02,880 Speaker 1: the last kind of final test for bitcoin other than 1471 01:06:02,920 --> 01:06:05,720 Speaker 1: maybe kind of a you know, ongoing state attacks like 1472 01:06:05,760 --> 01:06:08,040 Speaker 1: we see some countries trying to ban it. So I think, 1473 01:06:08,040 --> 01:06:11,440 Speaker 1: you know, besides kind of a major regulation. Uh, and 1474 01:06:11,480 --> 01:06:15,240 Speaker 1: that that that shift towards fee based security. I think 1475 01:06:15,240 --> 01:06:18,320 Speaker 1: the actual kind of user base is now a very 1476 01:06:18,320 --> 01:06:20,880 Speaker 1: good tail wind where it's more likely to be held, 1477 01:06:21,120 --> 01:06:23,400 Speaker 1: more likely to be even even when people say they 1478 01:06:23,440 --> 01:06:24,920 Speaker 1: have a lot of it and they want to spend it, 1479 01:06:25,120 --> 01:06:27,640 Speaker 1: they might actually go and say, you know, lend it 1480 01:06:27,680 --> 01:06:30,080 Speaker 1: a little bit, or they might you know, deposit and 1481 01:06:30,080 --> 01:06:32,200 Speaker 1: take out a small loan. And those sort of things 1482 01:06:32,200 --> 01:06:35,320 Speaker 1: can also limit the supply of of coins coming to market, 1483 01:06:35,360 --> 01:06:37,720 Speaker 1: and so I think that that overall can smooth out 1484 01:06:37,760 --> 01:06:40,800 Speaker 1: the market to some extent. Yeah, yeah, great point. I 1485 01:06:40,840 --> 01:06:42,720 Speaker 1: recently just made a video about how to how to 1486 01:06:42,720 --> 01:06:45,280 Speaker 1: retire off bitcoin, and it was just rolling it over, 1487 01:06:45,360 --> 01:06:48,080 Speaker 1: borrowing small pieces against it. Um. And I was a 1488 01:06:48,120 --> 01:06:49,840 Speaker 1: real estate I mean I am a real estate investor, 1489 01:06:50,040 --> 01:06:51,280 Speaker 1: and it's no different than what we do in real 1490 01:06:51,360 --> 01:06:54,560 Speaker 1: estate either. I mean you refinancial house cash out REFI 1491 01:06:54,640 --> 01:06:56,960 Speaker 1: people do all the time, So it's no different. Um. 1492 01:06:57,080 --> 01:06:58,400 Speaker 1: So many people came out and said, oh, but the 1493 01:06:58,400 --> 01:07:00,120 Speaker 1: government's gonna shut that down. You want about to are 1494 01:07:00,160 --> 01:07:02,280 Speaker 1: against it, and I'm like, they're gonna shut down borrowing 1495 01:07:02,320 --> 01:07:05,120 Speaker 1: against assets, Like it doesn't make any sense. But I 1496 01:07:05,120 --> 01:07:06,919 Speaker 1: know We've gone pretty long here and appreciate you taking 1497 01:07:06,920 --> 01:07:08,480 Speaker 1: so much time, but I want to get into one 1498 01:07:08,480 --> 01:07:11,280 Speaker 1: more question and we'll wrap it up. But um, so 1499 01:07:11,440 --> 01:07:15,720 Speaker 1: I back to bitcoin, Um, you know, being viewed as 1500 01:07:15,760 --> 01:07:18,680 Speaker 1: a risk on or risk off asset and so UM 1501 01:07:18,720 --> 01:07:21,000 Speaker 1: obviously we don't know because we don't have that history. 1502 01:07:21,360 --> 01:07:23,480 Speaker 1: But if we look at gold, you know, back in 1503 01:07:23,520 --> 01:07:25,800 Speaker 1: two thousand eight, we saw the stock market drop fifty 1504 01:07:27,080 --> 01:07:30,600 Speaker 1: UM stock dropped. I mean, I'm sorry, gold drop, but 1505 01:07:30,640 --> 01:07:32,720 Speaker 1: it was the response, as you were saying earlier, the 1506 01:07:32,760 --> 01:07:35,560 Speaker 1: policy response to that, all that money printing, UM, it 1507 01:07:35,640 --> 01:07:37,720 Speaker 1: took it pushed gold up. I mean, within six seven 1508 01:07:37,720 --> 01:07:39,800 Speaker 1: months it reclaimed it's tie and then went on to 1509 01:07:40,040 --> 01:07:42,520 Speaker 1: new all time highest where stocks it took six seven 1510 01:07:42,600 --> 01:07:44,720 Speaker 1: years to reclaim its previous all the time hime. So 1511 01:07:44,760 --> 01:07:46,720 Speaker 1: I'm curious what you think, I mean, if gold is 1512 01:07:46,760 --> 01:07:49,560 Speaker 1: any indicator um, And of course we saw that again 1513 01:07:49,600 --> 01:07:51,880 Speaker 1: in in the March of crash as well, same thing 1514 01:07:51,880 --> 01:07:54,360 Speaker 1: with golden bitcoin. So I'm curious what you think moving 1515 01:07:54,400 --> 01:07:57,040 Speaker 1: forward in a speculation because we don't have that historical trend. 1516 01:07:57,080 --> 01:08:00,440 Speaker 1: But um, do you think that bitcoin will be that 1517 01:08:00,520 --> 01:08:02,600 Speaker 1: kind of security? Is it still risk on? Do you 1518 01:08:02,640 --> 01:08:05,280 Speaker 1: think it would crash because of liquidity like everything else, 1519 01:08:05,280 --> 01:08:07,760 Speaker 1: but then rebound really quickly. What are your thoughts there? 1520 01:08:08,200 --> 01:08:10,240 Speaker 1: I view assimilar to how I have you say, these 1521 01:08:10,240 --> 01:08:12,600 Speaker 1: big tech stocks and so early on in their life 1522 01:08:12,600 --> 01:08:15,840 Speaker 1: cycle their risk on assets, right, because they're more speculative. 1523 01:08:16,080 --> 01:08:17,680 Speaker 1: You don't know if they're if they're going, how how 1524 01:08:17,720 --> 01:08:21,439 Speaker 1: well they're gonna do fundamentally, Uh, they're smaller uh, and 1525 01:08:21,439 --> 01:08:24,280 Speaker 1: and so they largely are in some ways, uh, separate 1526 01:08:24,280 --> 01:08:27,200 Speaker 1: from the economics cycle because what you're mostly looking at 1527 01:08:27,360 --> 01:08:29,880 Speaker 1: is their their own growth rate. And that's the same 1528 01:08:29,920 --> 01:08:33,160 Speaker 1: reason why in this pandemic, tech stocks initially did better 1529 01:08:33,200 --> 01:08:35,760 Speaker 1: than value stocks because value stocks and were tied to 1530 01:08:35,800 --> 01:08:39,679 Speaker 1: the actual economy, whereas tex stalks, you know, they still 1531 01:08:39,720 --> 01:08:42,559 Speaker 1: grow the use base regards to what the economy was doing, 1532 01:08:42,760 --> 01:08:45,559 Speaker 1: in some cases even better if if everyone's shutting doors 1533 01:08:45,560 --> 01:08:48,559 Speaker 1: and things like that. And so with bitcoin, it's largely 1534 01:08:48,600 --> 01:08:51,200 Speaker 1: following its own adoption curve. So it's kind of, you know, 1535 01:08:51,360 --> 01:08:54,040 Speaker 1: it has these cycles around itself, largely due to the 1536 01:08:54,080 --> 01:08:58,160 Speaker 1: having a cycle, but it's mainly following it's it's adoption curve. 1537 01:08:58,160 --> 01:09:00,559 Speaker 1: It's kind of an emerging it's being monetized. We're watching 1538 01:09:00,600 --> 01:09:03,160 Speaker 1: something to be monetized in real time over the course 1539 01:09:03,200 --> 01:09:05,280 Speaker 1: of the past twelve years. Uh, and so you know, 1540 01:09:05,439 --> 01:09:07,760 Speaker 1: right now it's it's you know, it's largely been more 1541 01:09:07,760 --> 01:09:10,080 Speaker 1: of a risk on asset. It's been more of a 1542 01:09:10,200 --> 01:09:14,320 Speaker 1: you know, benefiting from higher inflation levels, benefiting from growth, uh, 1543 01:09:14,520 --> 01:09:16,800 Speaker 1: and kind of being punished when there's liquidity problems in 1544 01:09:16,800 --> 01:09:20,120 Speaker 1: the market. Right, so like we had in March. Whereas 1545 01:09:20,200 --> 01:09:22,160 Speaker 1: you know, if it were to get large enough and 1546 01:09:22,280 --> 01:09:25,040 Speaker 1: ubiquitous enough, uh, then it can become more of a 1547 01:09:25,400 --> 01:09:28,160 Speaker 1: you know, a defensive asset in a similar way that 1548 01:09:28,160 --> 01:09:31,559 Speaker 1: that's a gold is where you know, people can can 1549 01:09:31,600 --> 01:09:35,040 Speaker 1: flock to it in times of of of concern rather 1550 01:09:35,120 --> 01:09:38,040 Speaker 1: than uh, you know, uh sell it time to concern. 1551 01:09:38,320 --> 01:09:40,720 Speaker 1: And that's also where if you look at say, even 1552 01:09:40,760 --> 01:09:43,040 Speaker 1: if precious metals, if you look at what paper gold 1553 01:09:43,360 --> 01:09:46,200 Speaker 1: does during h you know, big liquidity problems compared to 1554 01:09:46,560 --> 01:09:49,920 Speaker 1: physical gold, uh, they actually behave somewhat differently. And so 1555 01:09:50,000 --> 01:09:53,120 Speaker 1: I think overall, as bitcoin gets big enough, it does 1556 01:09:53,200 --> 01:09:55,920 Speaker 1: get more of that defensive characteristics in a similar way 1557 01:09:55,960 --> 01:09:57,880 Speaker 1: that a lot of these smaller growth stocks once they 1558 01:09:57,920 --> 01:10:01,200 Speaker 1: became trillion dollar companies. Uh, you know, they've become in 1559 01:10:01,240 --> 01:10:03,559 Speaker 1: many ways viewed more defensively, where people say, Okay, if 1560 01:10:03,560 --> 01:10:05,760 Speaker 1: there's can be slow economic growth, I want to be 1561 01:10:05,760 --> 01:10:07,960 Speaker 1: in Amazon for example. That that's kind of the mindset 1562 01:10:07,960 --> 01:10:09,800 Speaker 1: that the investor got. Was it say, Okay, I want 1563 01:10:09,840 --> 01:10:11,519 Speaker 1: to be in the you know, the big ones that 1564 01:10:11,640 --> 01:10:13,160 Speaker 1: you know, I know that they're gonna be around for 1565 01:10:13,200 --> 01:10:15,679 Speaker 1: a while. And so I think that as as bitcoin 1566 01:10:15,720 --> 01:10:18,880 Speaker 1: gets that kind of critical mass, it cools out and 1567 01:10:18,880 --> 01:10:21,160 Speaker 1: becomes less and less of a risk asset and more 1568 01:10:21,160 --> 01:10:24,200 Speaker 1: and more of a money asset. So to stick to 1569 01:10:24,320 --> 01:10:26,559 Speaker 1: make you uh, you know, put it out right here. 1570 01:10:26,600 --> 01:10:28,599 Speaker 1: I'm not gonna make you pick a date in time 1571 01:10:28,680 --> 01:10:31,000 Speaker 1: or any of that timing markets, but I'm just curious, 1572 01:10:31,320 --> 01:10:33,720 Speaker 1: you know, if or I should say, when we get 1573 01:10:33,720 --> 01:10:36,960 Speaker 1: to like another market crash, timing whenever that is, eighteen 1574 01:10:36,960 --> 01:10:39,920 Speaker 1: months or five years from now. Uh you said if 1575 01:10:39,960 --> 01:10:43,000 Speaker 1: bitcoin gets big enough, so uh timing when you think 1576 01:10:43,000 --> 01:10:45,519 Speaker 1: the next market crash could happen, and where Bitcoin will 1577 01:10:45,560 --> 01:10:47,160 Speaker 1: be at that time. How do you think bitcoin will 1578 01:10:47,160 --> 01:10:48,720 Speaker 1: respond to the next market crash? You think it'll be 1579 01:10:48,720 --> 01:10:51,280 Speaker 1: big enough to to withstand that be that Amazon player? 1580 01:10:52,040 --> 01:10:54,439 Speaker 1: My base case is that, you know, as as something 1581 01:10:54,520 --> 01:10:57,120 Speaker 1: that's still you know, by that point, let's called a 1582 01:10:57,120 --> 01:10:59,639 Speaker 1: futurellon dollars um you know, I still think it could 1583 01:10:59,640 --> 01:11:02,719 Speaker 1: be quite vulnerable to any sort of liquid issue, especially 1584 01:11:02,760 --> 01:11:05,759 Speaker 1: if people need dollars. Right, So institutions need dollars their margins. 1585 01:11:06,000 --> 01:11:07,960 Speaker 1: They sell what they sell what they have not nearly 1586 01:11:08,000 --> 01:11:10,360 Speaker 1: what they want to. Uh and so they can still 1587 01:11:10,439 --> 01:11:13,479 Speaker 1: you know, but but sell bitcoin. But I would expect 1588 01:11:13,479 --> 01:11:15,320 Speaker 1: to see is you know, maybe bitcoin not go down 1589 01:11:15,360 --> 01:11:17,080 Speaker 1: as much as it did in March. Right, So if 1590 01:11:17,080 --> 01:11:19,400 Speaker 1: you compare if you look at say the March activity 1591 01:11:19,400 --> 01:11:21,439 Speaker 1: of last year, you had gold go down by a 1592 01:11:21,439 --> 01:11:23,640 Speaker 1: certain amount, you had silver go down even more, you 1593 01:11:23,720 --> 01:11:26,240 Speaker 1: had Bitcoin go down even more than that. Uh and 1594 01:11:26,280 --> 01:11:28,400 Speaker 1: some of the all coins I believe went down even more. 1595 01:11:28,840 --> 01:11:32,120 Speaker 1: Uh So, But as bitcoin gets bigger, i'd expect to say, 1596 01:11:32,160 --> 01:11:34,679 Speaker 1: act more like silver in that environment, so a little 1597 01:11:34,720 --> 01:11:36,519 Speaker 1: bit less extreme. And then as they gets a little 1598 01:11:36,520 --> 01:11:38,639 Speaker 1: bit more bigger than that, I think it acts more 1599 01:11:38,680 --> 01:11:40,920 Speaker 1: like gold in that environment where you know it might 1600 01:11:40,960 --> 01:11:43,320 Speaker 1: go down in in nominal price to the liquidity shock, 1601 01:11:44,000 --> 01:11:48,559 Speaker 1: but that you know, it goes down less extreme. Yeah, okay, great, Well, 1602 01:11:48,600 --> 01:11:51,160 Speaker 1: thanks for answering that question. If you've given us so much, 1603 01:11:51,160 --> 01:11:52,719 Speaker 1: you've we've we've gone through a lot, and I appreciate 1604 01:11:52,720 --> 01:11:54,439 Speaker 1: you digging that time. But we'll go ahead and wrap 1605 01:11:54,439 --> 01:11:56,640 Speaker 1: it up. I guess with that, UM, I want to 1606 01:11:56,680 --> 01:11:58,000 Speaker 1: go ahead and make sure we're gonna link to your 1607 01:11:58,000 --> 01:11:59,720 Speaker 1: website and the stuff that you do. Like I said, 1608 01:11:59,760 --> 01:12:01,680 Speaker 1: I'm a I'm a paid subscriber, So I recommend it 1609 01:12:01,720 --> 01:12:04,040 Speaker 1: to everybody. Anything else that you want to shout out 1610 01:12:04,520 --> 01:12:08,040 Speaker 1: or have people follow. No, so I appreciate the conversation. Uh. 1611 01:12:08,120 --> 01:12:10,000 Speaker 1: So I'm at linning on dot com people who want 1612 01:12:10,040 --> 01:12:11,720 Speaker 1: to find my work. I'm also on Twitter at lynn 1613 01:12:11,760 --> 01:12:14,600 Speaker 1: on contact and as we showed here, I mean I 1614 01:12:14,640 --> 01:12:19,120 Speaker 1: cover equities that cover macro, precious metals, bitcoin. I try 1615 01:12:19,160 --> 01:12:21,080 Speaker 1: to go wherever kind of you know, whatever makes sense 1616 01:12:21,200 --> 01:12:24,639 Speaker 1: that that time, where the trends going. Uh. And so 1617 01:12:24,720 --> 01:12:26,560 Speaker 1: that's you know, one of the few edges that a 1618 01:12:26,640 --> 01:12:29,479 Speaker 1: reaching investor has is that you can go almost anywhere, 1619 01:12:29,760 --> 01:12:32,519 Speaker 1: Whereas if you're an institutional investor, you're often siloed into 1620 01:12:32,600 --> 01:12:35,400 Speaker 1: into certain asset classes. And so the best investors can 1621 01:12:35,400 --> 01:12:37,240 Speaker 1: do is kind of take advantage of that. You know, 1622 01:12:37,280 --> 01:12:39,160 Speaker 1: the few advantages they have over some of the big 1623 01:12:39,160 --> 01:12:41,800 Speaker 1: money pools, and it's more important than ever, I think 1624 01:12:41,880 --> 01:12:43,960 Speaker 1: now to really stay on top of that and and 1625 01:12:44,240 --> 01:12:47,160 Speaker 1: what I call tactically manage that, because I think those 1626 01:12:47,280 --> 01:12:49,439 Speaker 1: those days of buy and hold are probably gone at 1627 01:12:49,479 --> 01:12:52,000 Speaker 1: least for right now. Right we're in a different times. 1628 01:12:52,040 --> 01:12:53,640 Speaker 1: So with that, we'll go ahead and sign it off. 1629 01:12:53,640 --> 01:12:55,360 Speaker 1: Thanks you, thank you so much with Lynn appreciate it. 1630 01:12:55,479 --> 01:13:04,600 Speaker 1: Thanks for having me. Its fold Surnam School over the 1631 01:13:04,760 --> 01:13:05,360 Speaker 1: bo