1 00:00:13,640 --> 00:00:17,239 Speaker 1: Hey, everyone, welcome to another episode of the Market Disruptors Show. Today, 2 00:00:17,239 --> 00:00:20,759 Speaker 1: I'm sitting down with Danielle di Martino Booth. She is 3 00:00:20,800 --> 00:00:24,880 Speaker 1: the CEO and founder of quil Intelligence, former Federal Reserve insider, 4 00:00:24,960 --> 00:00:29,000 Speaker 1: and the author of the book Fed Up Now. Of course, 5 00:00:29,040 --> 00:00:30,880 Speaker 1: if you're watching this channel, you know I talked about 6 00:00:30,920 --> 00:00:33,560 Speaker 1: the FED policy a lot and what it's doing. Of course, 7 00:00:33,640 --> 00:00:36,360 Speaker 1: I'm not an insider. I make a lot of assumptions accusations. 8 00:00:36,360 --> 00:00:37,920 Speaker 1: Of course, we try to look at the facts and data. 9 00:00:38,320 --> 00:00:40,160 Speaker 1: But today we get to sit down with an insider. 10 00:00:40,200 --> 00:00:43,120 Speaker 1: And I'm so excited for this interview. So Danielle, welcome 11 00:00:43,120 --> 00:00:47,040 Speaker 1: and thank you for joining us. All Right, so I've 12 00:00:47,080 --> 00:00:50,400 Speaker 1: watched you and countless interviews and have a good idea 13 00:00:50,440 --> 00:00:51,920 Speaker 1: of questions I want to ask, but just for the 14 00:00:51,960 --> 00:00:54,000 Speaker 1: people that are watching, just give us a quick background 15 00:00:54,040 --> 00:00:56,080 Speaker 1: on on maybe kind of who you are and what 16 00:00:56,120 --> 00:00:59,360 Speaker 1: you're doing. So I graduated from business school and being 17 00:00:59,520 --> 00:01:02,600 Speaker 1: finance bright Light Big Cities, started off on Wall Street 18 00:01:02,640 --> 00:01:06,800 Speaker 1: in New York. Uh, never thought i'd leave. Nine eleven 19 00:01:06,880 --> 00:01:09,080 Speaker 1: came and went and the firm that I worked for 20 00:01:09,160 --> 00:01:11,760 Speaker 1: got about out by a Swiss investment bank which was 21 00:01:11,880 --> 00:01:16,440 Speaker 1: very quiet and boring. Uh So, after eleven I met 22 00:01:16,440 --> 00:01:19,200 Speaker 1: the man of my dreams, moved down to Texas. I 23 00:01:19,240 --> 00:01:22,840 Speaker 1: had gotten my second masters in journalism at Columbia when 24 00:01:22,880 --> 00:01:25,800 Speaker 1: I was working on Wall Street. I retired, sold my 25 00:01:25,800 --> 00:01:29,080 Speaker 1: book of business back to the firm, signed a noncompete 26 00:01:29,240 --> 00:01:32,000 Speaker 1: and um, and just decided to write for a living 27 00:01:32,440 --> 00:01:34,559 Speaker 1: and thought that my career was going to be over 28 00:01:34,600 --> 00:01:36,920 Speaker 1: at that point. And at some point Warren Buffett called, 29 00:01:36,920 --> 00:01:38,920 Speaker 1: and off I went to Omaha, and you're writing really 30 00:01:39,040 --> 00:01:41,800 Speaker 1: crazy things and controversial and blah blah blah. And Richard 31 00:01:41,800 --> 00:01:45,880 Speaker 1: Fisher called from the Federal Reserve. I ended up working 32 00:01:45,920 --> 00:01:48,040 Speaker 1: for him for nine years of the Dallas Fed as 33 00:01:48,040 --> 00:01:51,200 Speaker 1: an advisor. And I'm anything but a FED bureaucrats. It 34 00:01:51,240 --> 00:01:54,640 Speaker 1: was an interesting fit and I enjoyed myself so much. 35 00:01:54,680 --> 00:01:56,480 Speaker 1: I came out of the Fed and wrote a book 36 00:01:56,560 --> 00:01:58,120 Speaker 1: for two and a half years called fed Up, An 37 00:01:58,120 --> 00:02:01,000 Speaker 1: Insider Stake on why the Federal Reserve is Act for America. 38 00:02:01,320 --> 00:02:03,520 Speaker 1: So I suppose you could call that my exit interview. 39 00:02:04,080 --> 00:02:07,880 Speaker 1: And since then I have started a research firm, Quill Intelligence. 40 00:02:07,920 --> 00:02:10,120 Speaker 1: We published daily, we published weekly. We've got retail and 41 00:02:10,200 --> 00:02:14,120 Speaker 1: institutional subscribers. And I talk a lot. You do talk 42 00:02:14,160 --> 00:02:16,079 Speaker 1: a lot, and we love hearing it. The public, the 43 00:02:16,440 --> 00:02:18,800 Speaker 1: market has decided they like, they like what you have 44 00:02:18,880 --> 00:02:22,840 Speaker 1: to say. Now I'm curious, um, the dig into the FED. Now, 45 00:02:22,880 --> 00:02:24,600 Speaker 1: I saw in another interview, I think it was with 46 00:02:25,080 --> 00:02:29,560 Speaker 1: Patrick that David and you said that you're fiscally conservative, um, 47 00:02:29,600 --> 00:02:32,960 Speaker 1: and you believe in bringing down the debt in America. UM. 48 00:02:33,000 --> 00:02:36,400 Speaker 1: And maybe I'm just curious, is that maybe what happened 49 00:02:36,400 --> 00:02:38,600 Speaker 1: at the FED. Right you're fiscally conservative. You weren't a 50 00:02:38,639 --> 00:02:41,560 Speaker 1: green with their just inflate away till no infinity or 51 00:02:41,600 --> 00:02:44,320 Speaker 1: into infinity. I I was. I was never a fan 52 00:02:45,480 --> 00:02:49,800 Speaker 1: of the Fed enabling Congress to borrow as much as 53 00:02:49,800 --> 00:02:55,000 Speaker 1: it wants. I've yeah, I listened to the conventional wisdom 54 00:02:55,040 --> 00:02:57,640 Speaker 1: as always, well, you can afford it as long as 55 00:02:57,720 --> 00:03:01,280 Speaker 1: you can service the debt. I don't. I don't buy 56 00:03:01,320 --> 00:03:04,240 Speaker 1: that for a minute. But that is what's happened in 57 00:03:04,280 --> 00:03:07,440 Speaker 1: the extreme with Uncle Sam. And that is, if the 58 00:03:07,480 --> 00:03:10,200 Speaker 1: FED brings interest rates down to the lowest level in 59 00:03:10,280 --> 00:03:13,840 Speaker 1: five thousand years, will low and behold, the government's going 60 00:03:13,880 --> 00:03:16,800 Speaker 1: to start running up deficits and debts that it cannot 61 00:03:16,960 --> 00:03:21,840 Speaker 1: in the end afford and look at where we are today. Yeah, exactly, 62 00:03:21,880 --> 00:03:24,639 Speaker 1: great point. And uh, for everybody that's listening right now, 63 00:03:24,680 --> 00:03:26,440 Speaker 1: make sure you stick around to the end because I 64 00:03:26,480 --> 00:03:29,399 Speaker 1: am going to ask Daniel what that end game looks 65 00:03:29,440 --> 00:03:31,800 Speaker 1: like and we're gonna try and just make some stabs 66 00:03:31,800 --> 00:03:33,360 Speaker 1: in the dark edits. So make sure you stick around 67 00:03:33,360 --> 00:03:35,800 Speaker 1: for that. But back to that point, So, being physically 68 00:03:35,840 --> 00:03:39,119 Speaker 1: conservative and seeing them spend to infinity, I could understand 69 00:03:39,160 --> 00:03:42,360 Speaker 1: that stress. I'm curious just what's your viewpoint is, just 70 00:03:42,520 --> 00:03:45,720 Speaker 1: maybe generally on the FED itself. I mean, from my viewpoint, 71 00:03:45,760 --> 00:03:50,440 Speaker 1: it seems that, um, they're they're kind of responsible for 72 00:03:50,480 --> 00:03:52,839 Speaker 1: a lot of the problems that we have. UM through 73 00:03:52,840 --> 00:03:56,960 Speaker 1: this endless money, inflation, debasement, etcetera. Right, purchasing power has 74 00:03:57,000 --> 00:04:00,880 Speaker 1: gone down, that levels of quality. The list goes on. Yeah, 75 00:04:01,480 --> 00:04:05,960 Speaker 1: so back so so specifically about income inequality. I believe 76 00:04:06,040 --> 00:04:09,320 Speaker 1: that the FED policy has been a major factor in 77 00:04:09,400 --> 00:04:14,400 Speaker 1: the income inequality. UM do you would you see that? Yeah? 78 00:04:14,440 --> 00:04:18,880 Speaker 1: I do. And it's not, Um, it's not only about 79 00:04:19,640 --> 00:04:24,360 Speaker 1: quantitative easing and injecting liquidity into the system. It's also 80 00:04:24,480 --> 00:04:29,920 Speaker 1: about indexing and the whole idea of the FED putting 81 00:04:29,920 --> 00:04:33,479 Speaker 1: a floor under markets, which started with Alan Greenspan in seven. 82 00:04:34,160 --> 00:04:37,520 Speaker 1: In the weeks and months that followed the Black Monday, 83 00:04:37,560 --> 00:04:40,520 Speaker 1: the Crash of seven, he went so far as to 84 00:04:40,760 --> 00:04:44,080 Speaker 1: allow the New York Fed Markets Desk to inform Wall 85 00:04:44,120 --> 00:04:47,919 Speaker 1: Street bond traders ahead of FED moves to inject liquidating 86 00:04:48,040 --> 00:04:50,400 Speaker 1: the system. So that was kind of when moral hazard 87 00:04:50,480 --> 00:04:52,640 Speaker 1: was born, when the FED put was born, and it's 88 00:04:52,680 --> 00:04:54,360 Speaker 1: just gotten to be bigger and bigger and bigger over 89 00:04:54,400 --> 00:04:56,960 Speaker 1: the years. But what's come out of this is this 90 00:04:57,040 --> 00:04:59,920 Speaker 1: idea of don't fight the FED. And what don't fin 91 00:05:00,200 --> 00:05:04,520 Speaker 1: the FED has done is it's fed this huge indexing 92 00:05:04,640 --> 00:05:07,840 Speaker 1: industry because you don't need to pay for active managements. 93 00:05:07,839 --> 00:05:11,200 Speaker 1: When a monkey or port Dave Portnoy, take your choice, 94 00:05:11,400 --> 00:05:14,080 Speaker 1: can simply the row darts at a wall and make 95 00:05:14,160 --> 00:05:17,760 Speaker 1: tons of money because they own anything and everything, and 96 00:05:17,800 --> 00:05:21,640 Speaker 1: it all goes up. But what's actually happened in the background. 97 00:05:21,760 --> 00:05:23,600 Speaker 1: You know, the SMP five hundred recently hit an all 98 00:05:23,640 --> 00:05:26,159 Speaker 1: time high and we exited from the bear market, and 99 00:05:26,200 --> 00:05:29,279 Speaker 1: there were fireworks going off. If you took out the 100 00:05:29,440 --> 00:05:33,320 Speaker 1: SMP five then the stock market was down about three 101 00:05:34,680 --> 00:05:39,000 Speaker 1: So but to the point of the Fed and income 102 00:05:39,000 --> 00:05:43,159 Speaker 1: inequality and don't fight the FED and indexing. If you 103 00:05:43,200 --> 00:05:45,039 Speaker 1: don't fight the FED and you put your money in 104 00:05:45,160 --> 00:05:48,359 Speaker 1: the Vanguard SMP index fund, then you're just going to 105 00:05:48,400 --> 00:05:52,120 Speaker 1: make sure that the biggest companies get bigger. And when 106 00:05:52,160 --> 00:05:55,040 Speaker 1: big companies get bigger, what they do in competition comes 107 00:05:55,040 --> 00:05:59,000 Speaker 1: along is they eat it. And anytime there's an innovator, 108 00:05:59,520 --> 00:06:02,600 Speaker 1: you can to the people who sold um I think 109 00:06:02,640 --> 00:06:06,360 Speaker 1: it's Instagram. Uh, and they they they thought they were 110 00:06:06,360 --> 00:06:08,479 Speaker 1: really wealthy when they sold it to one of the 111 00:06:08,600 --> 00:06:11,280 Speaker 1: big five, but they realized a few years later that 112 00:06:11,400 --> 00:06:14,200 Speaker 1: instead of multi millionaires, they could have been millionaires. But 113 00:06:14,279 --> 00:06:17,279 Speaker 1: they didn't. But but what's happened Because the FED makes 114 00:06:17,279 --> 00:06:21,000 Speaker 1: the biggest companies bigger, and because the FED foster's monopolization 115 00:06:21,120 --> 00:06:25,880 Speaker 1: of the US economy, it ends up stifling innovation. It 116 00:06:25,960 --> 00:06:29,080 Speaker 1: ends up killing the ability to be an entrepreneur. And 117 00:06:29,480 --> 00:06:33,520 Speaker 1: you you take the wind out of the American dream 118 00:06:33,640 --> 00:06:38,120 Speaker 1: of anybody being able to to start a business and 119 00:06:38,160 --> 00:06:41,240 Speaker 1: become successful because it's much harder to do if you 120 00:06:41,279 --> 00:06:44,000 Speaker 1: live in a monopolized economy, which is something that the 121 00:06:44,040 --> 00:06:47,920 Speaker 1: FED has fed. Yeah, that's such a great point. And 122 00:06:48,279 --> 00:06:50,120 Speaker 1: to be honest, it's something that's it's a little bit 123 00:06:50,120 --> 00:06:52,159 Speaker 1: of a different twist than I've actually looked at. Obviously, 124 00:06:52,200 --> 00:06:55,880 Speaker 1: I see government policy going into a lot of the monopolization, 125 00:06:55,960 --> 00:06:58,640 Speaker 1: but I haven't really thought and of course the easy 126 00:06:58,960 --> 00:07:01,479 Speaker 1: flowing money go is into that as well. Letting these 127 00:07:01,480 --> 00:07:06,400 Speaker 1: big companies running running massive losses, right Like, Uh, that's 128 00:07:06,440 --> 00:07:08,360 Speaker 1: one reason why I think like Warren Buffetts maybe kind 129 00:07:08,360 --> 00:07:10,600 Speaker 1: of lost it because he's still looking for that value investor. 130 00:07:10,680 --> 00:07:13,360 Speaker 1: But today companies aren't about making money. They're just about 131 00:07:13,440 --> 00:07:16,920 Speaker 1: growing um. And that's the thing, you know, if the 132 00:07:17,040 --> 00:07:20,880 Speaker 1: FED and its current policies and people people people think 133 00:07:20,920 --> 00:07:23,720 Speaker 1: that zombie corporations are something new. You know, prior to 134 00:07:23,760 --> 00:07:27,680 Speaker 1: the pandemic, four of companies in America were zombie corporations. 135 00:07:27,680 --> 00:07:31,640 Speaker 1: So the FED has been fostering keeping deadwood alive, keeping 136 00:07:31,680 --> 00:07:34,040 Speaker 1: non productive entities in the in the economy. The fetes 137 00:07:34,200 --> 00:07:36,200 Speaker 1: had a great track record of doing that for years. 138 00:07:36,920 --> 00:07:40,400 Speaker 1: Post COVID, it's popped up to of companies because the 139 00:07:40,400 --> 00:07:44,560 Speaker 1: Fed's been so aggressive at keeping companies that should go 140 00:07:44,600 --> 00:07:48,200 Speaker 1: out of business alive by putting more debt on their 141 00:07:48,200 --> 00:07:53,120 Speaker 1: balance sheet. Yet, but there's something beyond the zombie uh, 142 00:07:54,000 --> 00:07:57,080 Speaker 1: the danger of creating all these zombies and the fact 143 00:07:57,080 --> 00:07:59,640 Speaker 1: that it's going to suck productivity out of future growth 144 00:07:59,720 --> 00:08:02,640 Speaker 1: and hold back the ability to create jobs because you're 145 00:08:02,760 --> 00:08:06,360 Speaker 1: keeping companies in the industry when if they came out, 146 00:08:06,480 --> 00:08:09,920 Speaker 1: innovators could enter. But there's there there's something that even 147 00:08:10,000 --> 00:08:14,840 Speaker 1: goes um beyond that when when it comes to zombie corporations, 148 00:08:14,920 --> 00:08:18,320 Speaker 1: and that's that if you pile on so much more 149 00:08:18,400 --> 00:08:22,200 Speaker 1: debt onto these companies, pay attention when you read Chapter 150 00:08:22,240 --> 00:08:26,800 Speaker 1: eleven headlines. Pay attention when you see bankruptcy filings. Today, 151 00:08:26,840 --> 00:08:29,560 Speaker 1: more often than not, you're seeing companies go straight from 152 00:08:29,600 --> 00:08:35,120 Speaker 1: filing to liquidation. And that's the difference that having way 153 00:08:35,120 --> 00:08:37,079 Speaker 1: too much debt sets that you need to file Chapter 154 00:08:37,120 --> 00:08:40,079 Speaker 1: eleven and having so much debt that there's no value 155 00:08:40,280 --> 00:08:42,800 Speaker 1: that you can carve out in the end that saves jobs. 156 00:08:43,240 --> 00:08:47,160 Speaker 1: And that is what this current generation, this last iteration 157 00:08:47,280 --> 00:08:50,880 Speaker 1: of the Feds hurah is doing. Yeah, So just to 158 00:08:50,960 --> 00:08:52,920 Speaker 1: dig into that just for a second. So typically you 159 00:08:52,960 --> 00:08:55,840 Speaker 1: would file see a company file for Chapter eleven, which 160 00:08:55,840 --> 00:08:58,680 Speaker 1: would give them protection to reorganize. But you're saying they're 161 00:08:58,679 --> 00:09:01,200 Speaker 1: not bothering, they're just going straight to liquidation because there's 162 00:09:01,200 --> 00:09:04,440 Speaker 1: just no hope. There's no hope, and because there's so 163 00:09:04,520 --> 00:09:07,360 Speaker 1: much more debt than there would have been otherwise had 164 00:09:07,400 --> 00:09:10,320 Speaker 1: the junk bond market not been kept wide open by 165 00:09:10,360 --> 00:09:13,360 Speaker 1: the FED to keep them alive when they otherwise would 166 00:09:13,400 --> 00:09:17,640 Speaker 1: have had to restructure. The more pot the more debt 167 00:09:17,640 --> 00:09:19,719 Speaker 1: you pile on, the less value you can extract in 168 00:09:19,760 --> 00:09:23,200 Speaker 1: the end. Yeah, and that's been my argument creditors. Yeah, 169 00:09:23,200 --> 00:09:25,160 Speaker 1: that's been my argument, you know, with with this whole 170 00:09:25,240 --> 00:09:27,880 Speaker 1: you know, just picking out Airlines for example, which I 171 00:09:27,920 --> 00:09:29,640 Speaker 1: know you have used on the airlines, but you know, 172 00:09:29,800 --> 00:09:31,720 Speaker 1: everyone's like, oh, we can't let them go bankrupt. And 173 00:09:31,720 --> 00:09:33,960 Speaker 1: it's like, well, we you know, we need to protect 174 00:09:33,960 --> 00:09:35,319 Speaker 1: the jobs and this and that, and it's like, well, 175 00:09:35,360 --> 00:09:37,880 Speaker 1: just because they go bankrupt doesn't mean the jobs go away. 176 00:09:37,960 --> 00:09:39,640 Speaker 1: They just get re orged, right, and they get rid 177 00:09:39,679 --> 00:09:42,160 Speaker 1: of the debt and now they're a lean, mean company 178 00:09:42,160 --> 00:09:44,720 Speaker 1: that can grow again. But instead you're saddling them with 179 00:09:44,840 --> 00:09:48,000 Speaker 1: more debt. That's not like a good thing. But like 180 00:09:48,360 --> 00:09:52,880 Speaker 1: I mean, American Airlines had in one press release that 181 00:09:52,920 --> 00:09:55,959 Speaker 1: they were going to be issuing one to trillion dollars 182 00:09:55,960 --> 00:09:58,360 Speaker 1: of debt and oh, By the way, on September thirty, 183 00:09:58,520 --> 00:10:01,480 Speaker 1: when the bailout expiration ends, they're gonna be upping their 184 00:10:01,559 --> 00:10:04,240 Speaker 1: layoffs from twenty five thousand people. Who puts that in 185 00:10:04,280 --> 00:10:08,319 Speaker 1: the same press release. Yeah, the nerve of these people 186 00:10:09,000 --> 00:10:11,680 Speaker 1: so um. It seems like, you know, I'm not the 187 00:10:11,679 --> 00:10:14,360 Speaker 1: brightest guy. I didn't. I don't have your pedigree, but 188 00:10:14,559 --> 00:10:17,040 Speaker 1: it just seems like so obvious to me. And I 189 00:10:17,240 --> 00:10:20,079 Speaker 1: see comments. I mean I see five ten comments a 190 00:10:20,080 --> 00:10:23,360 Speaker 1: week on my videos, and it seems like people get this. Um. 191 00:10:23,520 --> 00:10:26,760 Speaker 1: Would you say that the FED policy to do this 192 00:10:27,440 --> 00:10:30,800 Speaker 1: is they're completely just missing the picture, or they know 193 00:10:30,840 --> 00:10:33,679 Speaker 1: what they're doing, but they're doing it anyway. I think 194 00:10:33,720 --> 00:10:37,680 Speaker 1: it's the ladder. I think that I think that that J. 195 00:10:38,000 --> 00:10:41,079 Speaker 1: Powell has seen the whites of the eyes of how 196 00:10:41,200 --> 00:10:45,319 Speaker 1: big of a monster this credit is, and he's scared. Um. 197 00:10:46,280 --> 00:10:49,199 Speaker 1: You know, I tell this story all the time. General 198 00:10:49,240 --> 00:10:53,920 Speaker 1: Electric debt was downgraded Halloween two thousand and eighteen, fourteen 199 00:10:53,960 --> 00:10:55,880 Speaker 1: days later junk bond issue and shut down in the 200 00:10:55,920 --> 00:10:59,600 Speaker 1: United States for forty one days. The collateral backing exchange 201 00:10:59,640 --> 00:11:03,199 Speaker 1: traded bond funds was trading by appointment only, and there 202 00:11:03,240 --> 00:11:06,240 Speaker 1: was a huge liquidity issue, and there was the risk 203 00:11:06,320 --> 00:11:09,760 Speaker 1: that that systemic risk was going to be unleashed. And 204 00:11:09,920 --> 00:11:12,679 Speaker 1: that was what brought out the Powell pivot, when he 205 00:11:12,720 --> 00:11:16,359 Speaker 1: realized that so much debt has been created that this 206 00:11:16,360 --> 00:11:19,760 Speaker 1: this is possibly worse than the subprime crisis would be. 207 00:11:19,760 --> 00:11:23,920 Speaker 1: Because in the aftermath of the subprime crisis, everybody decided 208 00:11:23,960 --> 00:11:26,520 Speaker 1: that quantitative easing was the way to go. Everybody was 209 00:11:26,559 --> 00:11:30,640 Speaker 1: lower for longer, whether it became a global phenomena, and 210 00:11:30,679 --> 00:11:35,559 Speaker 1: now you have pushing three trillion dollars of debt worldwide 211 00:11:35,679 --> 00:11:38,520 Speaker 1: and a beast that central bankers simply don't feel like 212 00:11:38,760 --> 00:11:42,240 Speaker 1: they contain. Yeah, I really want to dig into that 213 00:11:42,240 --> 00:11:45,160 Speaker 1: three hundred trillion dollar debt balloon that constantly has this 214 00:11:45,160 --> 00:11:47,160 Speaker 1: big hole in it. But before we do, I just 215 00:11:47,160 --> 00:11:49,000 Speaker 1: want to jump back into the FED policy a little bit. 216 00:11:49,000 --> 00:11:53,559 Speaker 1: So recently UM FED FED chair Jerome Powell came out 217 00:11:53,600 --> 00:11:57,160 Speaker 1: and said that he he did not believe the FED 218 00:11:57,320 --> 00:12:01,480 Speaker 1: policy created inequality, and my right, I mean he said that, 219 00:12:01,559 --> 00:12:05,160 Speaker 1: And then and then we have Senator Elizabeth Warren introduced 220 00:12:05,160 --> 00:12:07,640 Speaker 1: a bill with a few other people UM, a bill 221 00:12:08,000 --> 00:12:13,360 Speaker 1: to specifically have the FED fight inequality. So currently, a 222 00:12:13,400 --> 00:12:17,359 Speaker 1: FED policy should be to maintain stable inflation and maximize employment. 223 00:12:17,720 --> 00:12:19,520 Speaker 1: But apparently it's not good enough. Now. Now the Fed's 224 00:12:19,559 --> 00:12:24,599 Speaker 1: going to fight the inequality that they create. Um, the 225 00:12:24,760 --> 00:12:27,840 Speaker 1: deference to Senator Warren, I couldn't think of a worst 226 00:12:28,040 --> 00:12:31,359 Speaker 1: way of trying to approach the issue of incomm inequality. 227 00:12:31,559 --> 00:12:34,599 Speaker 1: If you want to stop the FED from from widening 228 00:12:34,920 --> 00:12:37,320 Speaker 1: the income inequality divide, then just tell them to quit 229 00:12:37,320 --> 00:12:40,640 Speaker 1: supporting Wall Street in you know, with Main with Main 230 00:12:40,679 --> 00:12:45,680 Speaker 1: Street as the loser curio. Yeah, okay, yeah, I just 231 00:12:45,880 --> 00:12:47,800 Speaker 1: hand again Like I said, it's like, it's just seems 232 00:12:47,840 --> 00:12:50,760 Speaker 1: so obvious to me. And in the comments that I see, 233 00:12:51,200 --> 00:12:55,640 Speaker 1: UM to see Senators Maxine Waters and whatever going behind this. 234 00:12:55,760 --> 00:12:58,200 Speaker 1: I I guess it goes back to that previous question 235 00:12:58,240 --> 00:13:00,920 Speaker 1: do they not know? And maybe Acine Waters and Elizabeth 236 00:13:00,920 --> 00:13:06,320 Speaker 1: Warren don't. I would venture to say that Elizabeth Warren 237 00:13:06,679 --> 00:13:10,000 Speaker 1: completely understands what the FETE is doing, and that in 238 00:13:10,040 --> 00:13:14,720 Speaker 1: a post COVID world, you know, because of the programs 239 00:13:14,760 --> 00:13:16,880 Speaker 1: that that the FETE is laid out, that that and 240 00:13:17,120 --> 00:13:19,800 Speaker 1: and this is her thing. She didn't like the big banks, 241 00:13:20,120 --> 00:13:23,760 Speaker 1: and yet when the FED prize opened the credit markets 242 00:13:24,080 --> 00:13:27,680 Speaker 1: and all these companies are rushing to do record levels 243 00:13:27,679 --> 00:13:31,760 Speaker 1: of bond issuance. Sorry, but that is a great pop 244 00:13:31,800 --> 00:13:34,720 Speaker 1: to the revenue line of these biggest banks. And that 245 00:13:34,880 --> 00:13:38,160 Speaker 1: is what this policy, this post pandemic policy, has done, 246 00:13:38,480 --> 00:13:41,960 Speaker 1: along with quantitative easing. I mean, somebody's got to sell 247 00:13:42,040 --> 00:13:45,160 Speaker 1: the bond, sell the bonds to the fet somebody's gonna 248 00:13:45,200 --> 00:13:48,160 Speaker 1: make money on that. Somebody's gonna help these these companies 249 00:13:48,200 --> 00:13:50,920 Speaker 1: issue record levels of debt. They're gonna make big fat 250 00:13:50,960 --> 00:13:54,199 Speaker 1: investment banking fees on that. We wonder with all these 251 00:13:54,200 --> 00:13:56,840 Speaker 1: credit lost provisions, why the banks aren't doing worse. Well, 252 00:13:56,840 --> 00:13:59,720 Speaker 1: it's because the ft is effectively subsidizing them with policy. 253 00:14:00,080 --> 00:14:03,280 Speaker 1: That's what Elizabeth Warren should be concerned with, right, Yeah, 254 00:14:03,520 --> 00:14:06,040 Speaker 1: So yeah, it just seems so obvious that they're missing it. 255 00:14:06,080 --> 00:14:08,080 Speaker 1: So it seems like they have to know and and 256 00:14:08,240 --> 00:14:10,920 Speaker 1: intentionally be doing that. I know you've talked to quite 257 00:14:10,960 --> 00:14:13,600 Speaker 1: a bit of good, good politics, good optics, all that 258 00:14:13,640 --> 00:14:19,200 Speaker 1: good b s. Yeah. Um, yeah, I mean it's apparent, well, 259 00:14:19,280 --> 00:14:21,680 Speaker 1: it seems apparent that they're really trying to help out 260 00:14:21,680 --> 00:14:25,000 Speaker 1: the buddies, right and not not main street Joe. But um, 261 00:14:25,040 --> 00:14:26,760 Speaker 1: I've seen you know, you've talked quite a bit about 262 00:14:26,760 --> 00:14:28,320 Speaker 1: the pandemic, and you just mentioned it as well. I 263 00:14:28,360 --> 00:14:31,360 Speaker 1: don't want to dig into, uh, the pandemic per se, 264 00:14:31,360 --> 00:14:34,520 Speaker 1: but but the economy post pandemic or or during pandemic 265 00:14:34,600 --> 00:14:38,320 Speaker 1: or post pandemic, and um, what's your view. I know 266 00:14:38,480 --> 00:14:41,480 Speaker 1: we seem to have a V shaped recovery in the markets, 267 00:14:41,720 --> 00:14:44,720 Speaker 1: but the economy ain't have a no vcaped recovery, right, Uh. 268 00:14:44,920 --> 00:14:47,560 Speaker 1: I've seen you recently say maybe a W maybe it's 269 00:14:47,600 --> 00:14:49,200 Speaker 1: an L. I don't know. But what do you see 270 00:14:49,240 --> 00:14:51,600 Speaker 1: about the economy kind of moving forward in this post 271 00:14:51,640 --> 00:14:55,960 Speaker 1: pandemic world? Well, I think that uh, And and I 272 00:14:56,480 --> 00:14:58,560 Speaker 1: don't mind being a little bit controversial about this. I 273 00:14:58,560 --> 00:15:02,120 Speaker 1: think had we had a uniform national mask policy, that 274 00:15:02,200 --> 00:15:04,320 Speaker 1: we the economy will be in a lot better place. 275 00:15:04,880 --> 00:15:07,280 Speaker 1: It was finally forced on the state of Texas where 276 00:15:07,320 --> 00:15:10,440 Speaker 1: I live, and lo and behold, we've got the hospitalization 277 00:15:10,560 --> 00:15:14,280 Speaker 1: right down. Smaller businesses or reopening, people feel safe for 278 00:15:14,360 --> 00:15:17,720 Speaker 1: going out. It makes a huge difference. And the fact 279 00:15:17,760 --> 00:15:20,920 Speaker 1: that we had a patchwork approach meant that the biggest 280 00:15:21,120 --> 00:15:24,000 Speaker 1: spenders in the economy were too frightened to come out 281 00:15:24,040 --> 00:15:26,800 Speaker 1: of their house. And that's just flat out gallop polling, 282 00:15:26,880 --> 00:15:30,360 Speaker 1: non biased polling. So well, they weren't just scared to 283 00:15:30,360 --> 00:15:32,120 Speaker 1: come out of their house. I live in California and 284 00:15:32,160 --> 00:15:34,200 Speaker 1: we were mandated. I mean the businesses were forced to 285 00:15:34,200 --> 00:15:36,640 Speaker 1: shut down. It wasn't a matter of being scared business well, no, 286 00:15:36,720 --> 00:15:40,600 Speaker 1: I'm talking about states that reopened and when businesses were 287 00:15:40,640 --> 00:15:44,280 Speaker 1: wide open and come on in. There was there was 288 00:15:45,040 --> 00:15:49,320 Speaker 1: there was two little follow through economically speaking. Something was missing. 289 00:15:49,600 --> 00:15:52,040 Speaker 1: And the something that was missing was that the people 290 00:15:52,040 --> 00:15:54,400 Speaker 1: who have the most money to spend still weren't coming 291 00:15:54,400 --> 00:15:57,440 Speaker 1: out of their houses because there was no policy mandating 292 00:15:57,520 --> 00:16:01,320 Speaker 1: that that you wear a mask. I just the thing 293 00:16:01,440 --> 00:16:04,000 Speaker 1: that gets me about masks the most is that it 294 00:16:04,200 --> 00:16:06,200 Speaker 1: has nothing to do with science. It has to do 295 00:16:06,240 --> 00:16:11,680 Speaker 1: with economics and the top of earners in America, the 296 00:16:11,720 --> 00:16:15,480 Speaker 1: top two quintiles of earners account for sixty one of consumption. 297 00:16:16,560 --> 00:16:18,200 Speaker 1: If you're not going to convince them to come out, 298 00:16:18,480 --> 00:16:21,080 Speaker 1: you're dead in the water with trying to reopen an economy. 299 00:16:21,160 --> 00:16:23,440 Speaker 1: It's just not gonna happen. And lo and behold, it 300 00:16:23,480 --> 00:16:27,320 Speaker 1: didn't happen. And when you look at spending by zip codes, 301 00:16:27,720 --> 00:16:30,520 Speaker 1: the highest income zip codes have had the highest degree 302 00:16:30,520 --> 00:16:34,240 Speaker 1: of small businesses closing, and that's a shame because again, 303 00:16:34,520 --> 00:16:37,240 Speaker 1: had they felt safe going out, maybe their dry cleaner 304 00:16:37,240 --> 00:16:39,280 Speaker 1: wouldn't be out of business, maybe the restaurant down at 305 00:16:39,280 --> 00:16:41,920 Speaker 1: the corner wouldn't be out of business. But nobody had 306 00:16:42,000 --> 00:16:45,600 Speaker 1: any continuity. I mean, Angela Merkel don't. I don't agree 307 00:16:45,600 --> 00:16:48,480 Speaker 1: with all of her policies, but she was like, fine, fine, 308 00:16:49,200 --> 00:16:53,440 Speaker 1: literally you you were fined and Germany opened back up. 309 00:16:54,160 --> 00:16:59,280 Speaker 1: So I think that the to answer your question, the 310 00:16:59,400 --> 00:17:02,080 Speaker 1: long term damage to the economy because so many small 311 00:17:02,120 --> 00:17:06,320 Speaker 1: businesses have been sacrificed because we haven't had strong leadership. 312 00:17:06,760 --> 00:17:09,119 Speaker 1: It's going to stay with us for a generation. You 313 00:17:09,160 --> 00:17:13,560 Speaker 1: can't bring back small businesses overnight. So this is actually 314 00:17:13,560 --> 00:17:17,439 Speaker 1: going to increase the divide between the oligopolies and the 315 00:17:17,440 --> 00:17:20,639 Speaker 1: monopolies and the biggest companies and the smallest companies. And 316 00:17:20,680 --> 00:17:23,760 Speaker 1: it was a policy error that occurred in Washington, d C. 317 00:17:24,040 --> 00:17:27,600 Speaker 1: And it's a shame. Yeah, you know, I know, as 318 00:17:27,640 --> 00:17:30,120 Speaker 1: you said, it's controversial, and a lot of times talking 319 00:17:30,119 --> 00:17:32,320 Speaker 1: about politics is because there's opinion in there. But you 320 00:17:32,359 --> 00:17:36,440 Speaker 1: can't understand finance without talking about politics because they're so intertwined. Right, 321 00:17:36,480 --> 00:17:40,680 Speaker 1: So I get that I'm curious though, because it seems like, um, 322 00:17:40,720 --> 00:17:43,280 Speaker 1: we've seen the middle class be hollowed out in the 323 00:17:43,359 --> 00:17:47,040 Speaker 1: United States and and and through policy after policy after policy, 324 00:17:47,080 --> 00:17:49,360 Speaker 1: whatever you wanna call it. That a combination of as 325 00:17:49,359 --> 00:17:52,320 Speaker 1: we've as you've already said, right, indexing and giving free 326 00:17:52,359 --> 00:17:56,640 Speaker 1: money away and uh, you know, chrony capitalism, regulations, outsourcing, 327 00:17:56,720 --> 00:18:00,280 Speaker 1: all those things. But it almost seems to me, again 328 00:18:00,320 --> 00:18:02,640 Speaker 1: if you would look at it from politically, like there 329 00:18:02,840 --> 00:18:05,520 Speaker 1: is a reason why they want the middle class hollowed out, 330 00:18:05,880 --> 00:18:08,560 Speaker 1: and this almost seemed like a continuation of that, because 331 00:18:08,560 --> 00:18:11,480 Speaker 1: it's it's the mom and pops. I can't go to 332 00:18:11,640 --> 00:18:15,000 Speaker 1: my local store, but I can go to Walmart. I 333 00:18:15,080 --> 00:18:17,520 Speaker 1: can't go to my local hardware store, but I can 334 00:18:17,520 --> 00:18:20,800 Speaker 1: go to home depot. Like it's like purposely targeting the 335 00:18:20,840 --> 00:18:25,560 Speaker 1: middle class. Almost it is. And and again, had there 336 00:18:25,640 --> 00:18:30,159 Speaker 1: been a cohesive leadership structure that said we're going to 337 00:18:30,280 --> 00:18:32,639 Speaker 1: open up all businesses and we're gonna open up all 338 00:18:32,680 --> 00:18:36,760 Speaker 1: businesses safely, then you wouldn't have seen such destruction in 339 00:18:36,760 --> 00:18:39,879 Speaker 1: the small business sector. Had the paycheck Protection program not 340 00:18:40,000 --> 00:18:43,880 Speaker 1: just been for W two employees, had there been ten 341 00:18:45,240 --> 00:18:47,280 Speaker 1: that were able to be included. Had they accounted for 342 00:18:47,320 --> 00:18:49,920 Speaker 1: the fact that if you're a restaurant and you're being 343 00:18:49,960 --> 00:18:52,119 Speaker 1: told that you can only reopen with twenty five or 344 00:18:52,160 --> 00:18:55,440 Speaker 1: fifty percent capacity, you might want to bend the rules 345 00:18:55,520 --> 00:18:58,920 Speaker 1: someway somehow to allow the small business to stay both 346 00:18:59,000 --> 00:19:02,960 Speaker 1: in compliance with regulations in terms of social distancing and 347 00:19:03,200 --> 00:19:06,840 Speaker 1: not have them lose the loan ability because they're not 348 00:19:06,880 --> 00:19:09,840 Speaker 1: covering seventy of the loan proceeds with employment when you're 349 00:19:09,880 --> 00:19:13,960 Speaker 1: not allowing them to employ their employees. So Washington, in 350 00:19:13,960 --> 00:19:18,040 Speaker 1: my opinion, has completely failed the middle class yet again. 351 00:19:18,600 --> 00:19:22,000 Speaker 1: And at the same time, they've you know, they've effectively 352 00:19:22,040 --> 00:19:25,880 Speaker 1: introduced socialism into the U. S. Economy with the stimulus Bill, 353 00:19:26,040 --> 00:19:29,240 Speaker 1: and now that now that workers in the economy have 354 00:19:29,320 --> 00:19:32,119 Speaker 1: gotten a flavor for what twenty four extra hundred dollars 355 00:19:32,119 --> 00:19:34,600 Speaker 1: a month, feels like they're like, I like this universal 356 00:19:34,640 --> 00:19:38,040 Speaker 1: basic income, Let's get some more of it. So it's 357 00:19:38,040 --> 00:19:40,760 Speaker 1: a dangerous path we've gone down to have signed in 358 00:19:40,880 --> 00:19:44,800 Speaker 1: legislation without really thinking about it, legislation that helped people 359 00:19:44,840 --> 00:19:47,640 Speaker 1: not work, and legislation that put hard working small businesses 360 00:19:47,680 --> 00:19:51,439 Speaker 1: out of business. Yeah, So, um, I agree with what 361 00:19:51,480 --> 00:19:54,159 Speaker 1: you're saying, I mean you're talking about multigenerations or a 362 00:19:54,160 --> 00:19:56,760 Speaker 1: decade to come back. I think maybe multigenerations because we've 363 00:19:56,760 --> 00:19:59,240 Speaker 1: seen like restaurant chains that have been passed down through 364 00:19:59,280 --> 00:20:02,639 Speaker 1: multigenerations are gone now. Um, and so a lot of 365 00:20:02,680 --> 00:20:07,880 Speaker 1: that that's not coming back at all. And also like, uh, 366 00:20:08,160 --> 00:20:10,440 Speaker 1: you know, um, I I grew up racing dirt bikes, 367 00:20:10,520 --> 00:20:15,200 Speaker 1: super dangerous. I've metal in every limb of my body. Uh, 368 00:20:15,280 --> 00:20:17,040 Speaker 1: it's one of the three boys. I'm happy they didn't 369 00:20:17,040 --> 00:20:20,160 Speaker 1: take that up, even though one of them flies planes. Anyways, Yeah, 370 00:20:20,280 --> 00:20:21,680 Speaker 1: I mean it's one That's one thing that's helped me 371 00:20:21,720 --> 00:20:23,440 Speaker 1: with investing because I'm not afraid of the risk. But 372 00:20:23,480 --> 00:20:25,240 Speaker 1: it's also I've made a lot of money, I've lost 373 00:20:25,240 --> 00:20:27,439 Speaker 1: a lot of money. But my point is is my 374 00:20:27,560 --> 00:20:30,439 Speaker 1: doctor would always tell me stay off of it. So 375 00:20:30,480 --> 00:20:32,080 Speaker 1: I go there, I'm like, hey, doc, you know my 376 00:20:32,080 --> 00:20:34,720 Speaker 1: ankle gun herds all stay off of it. But like, hey, 377 00:20:34,760 --> 00:20:36,439 Speaker 1: I gotta go to work. I can't just stay off 378 00:20:36,520 --> 00:20:38,760 Speaker 1: of it. So I thank thank you for your opinion. 379 00:20:39,400 --> 00:20:41,879 Speaker 1: But I understand there's a bigger picture that I have 380 00:20:41,920 --> 00:20:43,240 Speaker 1: to look at. I can't just look at the medical 381 00:20:43,280 --> 00:20:47,119 Speaker 1: and we it kind of look at the medical but 382 00:20:47,240 --> 00:20:51,480 Speaker 1: we didn't take in all the other ramifications of that, right, 383 00:20:51,760 --> 00:20:54,119 Speaker 1: And so like you're talking about business shutdown, Well that 384 00:20:54,200 --> 00:20:59,560 Speaker 1: changes the trajectory of of of multigenerations. And even today, 385 00:20:59,640 --> 00:21:01,399 Speaker 1: right kids can't go back to school, parents are quitting 386 00:21:01,400 --> 00:21:03,480 Speaker 1: their job. You take two or three years off in 387 00:21:03,520 --> 00:21:05,639 Speaker 1: the middle of your career, you're not getting back onto 388 00:21:05,640 --> 00:21:07,640 Speaker 1: that same trajectory you're on, and then your kids aren't 389 00:21:07,640 --> 00:21:09,439 Speaker 1: going to be on the same trajectory. Right right, It 390 00:21:09,480 --> 00:21:13,159 Speaker 1: trickles down and it's a real crying, dying shame. It truly, 391 00:21:13,200 --> 00:21:16,720 Speaker 1: truly is. Again, I there was a way to safely 392 00:21:16,800 --> 00:21:19,480 Speaker 1: reopen the economy. If you look at certain countries in 393 00:21:19,520 --> 00:21:23,280 Speaker 1: Asia that have been scarred by prior pandemics, they never 394 00:21:23,280 --> 00:21:27,159 Speaker 1: shut down the restaurants just said, oh god, look at 395 00:21:27,200 --> 00:21:29,879 Speaker 1: another pandemic. They got rid of half the restaurants. Excuse 396 00:21:30,000 --> 00:21:32,120 Speaker 1: that they go at a half the tables inside the restaurant, 397 00:21:32,240 --> 00:21:34,800 Speaker 1: they just put them in the back. They socially distanced, 398 00:21:34,800 --> 00:21:37,080 Speaker 1: they put their masks on. They did not close their 399 00:21:37,119 --> 00:21:41,320 Speaker 1: economies down, and they haven't had this massive loss to 400 00:21:41,359 --> 00:21:45,160 Speaker 1: their small business economies that we have. But yet nobody 401 00:21:45,320 --> 00:21:47,640 Speaker 1: in in a leadership position. And I'm not talking about 402 00:21:47,680 --> 00:21:50,200 Speaker 1: I'm talking about both sides of the aisle. Nobody was 403 00:21:50,240 --> 00:21:52,720 Speaker 1: strong enough to say, you know what, let's be humble 404 00:21:52,760 --> 00:21:55,680 Speaker 1: about this. We're not a country that's accustomed to pandemics. 405 00:21:55,840 --> 00:21:59,200 Speaker 1: But let's look at countries whose economies are not being 406 00:21:59,200 --> 00:22:02,639 Speaker 1: devastated by a pandemic and maybe emulate what they're doing. 407 00:22:03,560 --> 00:22:07,359 Speaker 1: It wasn't there wasn't any logic to it. Sure, Yeah, 408 00:22:07,400 --> 00:22:09,439 Speaker 1: well no, no doubt, no doubt that it could have 409 00:22:09,640 --> 00:22:11,560 Speaker 1: been done better. And and the sad thing is is 410 00:22:11,600 --> 00:22:14,960 Speaker 1: continuing to be done bad. Um, So we'll see, we'll 411 00:22:15,000 --> 00:22:17,560 Speaker 1: see how that that goes on. But um, jumping back 412 00:22:17,640 --> 00:22:20,760 Speaker 1: into the FED stuff, because I got my FED insiders, 413 00:22:20,800 --> 00:22:23,199 Speaker 1: I want to ask you questions there. Um. So you know, 414 00:22:23,680 --> 00:22:26,160 Speaker 1: they're constantly saying they have this target of two percent 415 00:22:26,240 --> 00:22:28,960 Speaker 1: inflation and I and I and I heard you mentioned 416 00:22:28,960 --> 00:22:31,480 Speaker 1: I think it was on David's podcast. You know the CPI, 417 00:22:31,600 --> 00:22:34,080 Speaker 1: which is the consumer price index what they measure, and 418 00:22:34,119 --> 00:22:36,680 Speaker 1: it seems to me that you know, over time they 419 00:22:36,680 --> 00:22:39,399 Speaker 1: continually change what they're looking at to get the c 420 00:22:39,560 --> 00:22:42,760 Speaker 1: p I. Um, and supposedly they can't get any inflation 421 00:22:43,080 --> 00:22:46,040 Speaker 1: but yet main street knows that. I mean, for sure, 422 00:22:46,280 --> 00:22:50,879 Speaker 1: healthcare education have gone up big time. For sure, we 423 00:22:50,960 --> 00:22:53,639 Speaker 1: know that home prices have gone up, and even my 424 00:22:53,760 --> 00:22:56,720 Speaker 1: milk and my steak have gone up and like big time. 425 00:22:57,280 --> 00:22:59,960 Speaker 1: So what the heck are they looking at for CPU? 426 00:23:00,880 --> 00:23:04,480 Speaker 1: They're they're not looking at. What part of the Fed's 427 00:23:04,520 --> 00:23:09,800 Speaker 1: problem is is very basic. They try and smooth everything out. Well, 428 00:23:09,800 --> 00:23:11,760 Speaker 1: we don't live in a smooth world. But they try 429 00:23:11,800 --> 00:23:14,919 Speaker 1: and smooth inflation out by removing inflated by removing food 430 00:23:14,920 --> 00:23:17,720 Speaker 1: and energy costs. Sorry, but those are pretty important to 431 00:23:17,760 --> 00:23:20,840 Speaker 1: most families. I mean, when I've got all four kids 432 00:23:20,840 --> 00:23:22,920 Speaker 1: in the house, we drink a gallon of milk a day, 433 00:23:23,000 --> 00:23:25,440 Speaker 1: I can tell you exactly fifty nine down at the 434 00:23:25,440 --> 00:23:28,040 Speaker 1: store for the gallon period, and it was three a 435 00:23:28,040 --> 00:23:32,240 Speaker 1: few months ago. So I mean, but the FED excludes 436 00:23:32,359 --> 00:23:35,080 Speaker 1: things so that they can keep things that they can 437 00:23:35,080 --> 00:23:38,160 Speaker 1: smooth out their models. In addition to that, the FED 438 00:23:38,240 --> 00:23:42,000 Speaker 1: does not use the CPI. The FED uses pc which 439 00:23:42,040 --> 00:23:46,880 Speaker 1: is an alternative measure of inflation, which uses my biggest 440 00:23:47,000 --> 00:23:50,280 Speaker 1: pet PEEVE, which uses Medicare and Medicaid reimbursement rates for 441 00:23:50,320 --> 00:23:52,600 Speaker 1: the input for health care inflation. I can tell you 442 00:23:52,640 --> 00:23:55,000 Speaker 1: that that's not what I pay for healthcare at all, 443 00:23:55,320 --> 00:23:57,480 Speaker 1: that my premiums have gone up, that my codepas have 444 00:23:57,640 --> 00:24:00,280 Speaker 1: gone up, and that's the largest The second are just 445 00:24:00,359 --> 00:24:04,280 Speaker 1: input to inflation. The largest input to inflation is housing, 446 00:24:04,720 --> 00:24:08,399 Speaker 1: and they impute inflation some way, somehow that has again 447 00:24:08,920 --> 00:24:11,159 Speaker 1: zipped to do with what you're actually spending in the 448 00:24:11,200 --> 00:24:15,800 Speaker 1: real market. So by understating inflation, which is infuriating, they 449 00:24:15,800 --> 00:24:19,879 Speaker 1: can hide behind that target and say, as long as 450 00:24:19,920 --> 00:24:22,840 Speaker 1: it's below two percent, we can keep the printing press going. 451 00:24:24,119 --> 00:24:26,600 Speaker 1: I've seen them say recently. Uh it was one of 452 00:24:26,640 --> 00:24:29,320 Speaker 1: the smaller FED Bank chairs. I forget which one, but 453 00:24:29,600 --> 00:24:33,400 Speaker 1: he said they're gonna, quote let it run hot, right, 454 00:24:33,440 --> 00:24:36,120 Speaker 1: so like they're gonna go instead of like tapering down 455 00:24:36,119 --> 00:24:37,960 Speaker 1: as they're getting close to target. He says, they're gonna 456 00:24:38,000 --> 00:24:39,760 Speaker 1: run out hot to two percent, which means they're gonna 457 00:24:39,760 --> 00:24:42,760 Speaker 1: wagh overshoot their goal, which if they're looking at over 458 00:24:42,760 --> 00:24:46,000 Speaker 1: shooting two percent, what the heck does that mean for us? Right? Well, look, 459 00:24:46,200 --> 00:24:48,159 Speaker 1: they haven't been able to hit their target in the 460 00:24:48,240 --> 00:24:49,960 Speaker 1: first place. They haven't been able to hit the two 461 00:24:49,960 --> 00:24:51,800 Speaker 1: percent target in the first place, because they know that 462 00:24:51,840 --> 00:24:54,440 Speaker 1: they have a manipulated metrics. So for them to say 463 00:24:54,480 --> 00:24:57,320 Speaker 1: that they're gonna let inflation run hot is simply code 464 00:24:57,359 --> 00:24:59,879 Speaker 1: word for saying we're never going to stop printing money, 465 00:25:00,359 --> 00:25:03,720 Speaker 1: that if it does creep above two percent by some 466 00:25:03,840 --> 00:25:06,639 Speaker 1: miracle with oh, I don't know, all these people losing 467 00:25:06,640 --> 00:25:10,960 Speaker 1: their jobs, companies losing pricing power, disinflationary pressures building up 468 00:25:10,960 --> 00:25:13,840 Speaker 1: in the background, but somehow they're gonna let inflation run hot. 469 00:25:13,960 --> 00:25:15,800 Speaker 1: I mean, it's it's if these people live in a 470 00:25:15,840 --> 00:25:21,400 Speaker 1: different planet, right, But they need the inflation. They want 471 00:25:21,440 --> 00:25:24,440 Speaker 1: the inflation, right, I mean, I mean they, I mean 472 00:25:24,480 --> 00:25:27,760 Speaker 1: they not not we, but they need the inflation, uh, 473 00:25:27,800 --> 00:25:30,400 Speaker 1: in order to keep alive. It almost seems like the 474 00:25:30,400 --> 00:25:33,920 Speaker 1: minute they stop printing, the whole system collapses, right, And 475 00:25:34,400 --> 00:25:36,760 Speaker 1: they have now so much debt they have to continue 476 00:25:36,800 --> 00:25:40,480 Speaker 1: to inflate it away. Is that correct? They want inflation 477 00:25:41,000 --> 00:25:44,200 Speaker 1: to inflate away the debt. But at the same time, 478 00:25:44,240 --> 00:25:47,879 Speaker 1: if they truly had higher interest rates, this whole house 479 00:25:47,920 --> 00:25:51,720 Speaker 1: of debt cards would come just it would implode under 480 00:25:51,760 --> 00:25:56,200 Speaker 1: the weight of whether you're talking about households debt service 481 00:25:56,280 --> 00:25:59,760 Speaker 1: or corporation's debt services. Inability to refinanceer. For God's sake, uncle, 482 00:25:59,800 --> 00:26:02,280 Speaker 1: say what the interest expense of the country would be 483 00:26:02,320 --> 00:26:05,120 Speaker 1: if we truly had normalized interest rates? As you think 484 00:26:05,119 --> 00:26:08,200 Speaker 1: about it, inflations is actually the fed's worst damn nightmare. 485 00:26:08,520 --> 00:26:13,080 Speaker 1: But again, when you purposely understate it, then you can 486 00:26:13,160 --> 00:26:16,879 Speaker 1: hide behind it and ignore asset price inflation and ignore 487 00:26:16,920 --> 00:26:20,800 Speaker 1: food price inflation and just keep the game going. Right. 488 00:26:21,240 --> 00:26:23,879 Speaker 1: But I saw you mentioned before to that you know 489 00:26:24,560 --> 00:26:28,280 Speaker 1: by doing this, the FED has basically destroyed price discovery. 490 00:26:28,880 --> 00:26:32,679 Speaker 1: Now do you see that as only destroying price discovery 491 00:26:32,760 --> 00:26:37,360 Speaker 1: in the financial sector or like money or price price 492 00:26:37,440 --> 00:26:41,280 Speaker 1: discovery across everything. No, I was really referring more to 493 00:26:41,440 --> 00:26:44,919 Speaker 1: stocks and bonds, and but but those are those are 494 00:26:44,960 --> 00:26:48,240 Speaker 1: critical cogs in the system. I mean there was before 495 00:26:48,280 --> 00:26:51,880 Speaker 1: the FED stepped in and intervened in the investment grade 496 00:26:51,880 --> 00:26:55,320 Speaker 1: bond market and even in the junk bond market. As 497 00:26:55,359 --> 00:26:58,800 Speaker 1: as a trader, you know, you knew that you the 498 00:26:58,880 --> 00:27:02,680 Speaker 1: value that you were getting, you could assess what an 499 00:27:02,680 --> 00:27:06,560 Speaker 1: investment should be. Every time a price agnostic buyer enters 500 00:27:06,560 --> 00:27:10,680 Speaker 1: a market, your price discovery shot to hell. Yeah, I mean, 501 00:27:10,720 --> 00:27:14,639 Speaker 1: if you want to extrapolate that to the real world, 502 00:27:15,280 --> 00:27:20,680 Speaker 1: private equity backed investors swarmed into certain inland Empire Phoenix 503 00:27:21,080 --> 00:27:25,320 Speaker 1: that they went into certain markets in America and bought 504 00:27:25,359 --> 00:27:29,760 Speaker 1: up prices without even without even inspecting the homes and 505 00:27:29,840 --> 00:27:32,720 Speaker 1: lo and behold today we have home prices that are 506 00:27:32,720 --> 00:27:37,879 Speaker 1: too high. And they started this cult of investing in homes. 507 00:27:38,040 --> 00:27:40,480 Speaker 1: And that is something that I also leave at the 508 00:27:40,480 --> 00:27:43,000 Speaker 1: foot of the Fed because if money is so cheap 509 00:27:43,040 --> 00:27:45,479 Speaker 1: for so long, investors are going to find new and 510 00:27:45,520 --> 00:27:48,119 Speaker 1: exciting in different ways to come in and destroy price 511 00:27:48,160 --> 00:27:52,760 Speaker 1: discovery in real markets that affect households as well. Yeah, 512 00:27:53,119 --> 00:27:55,800 Speaker 1: you know, I've definitely been influenced big time in the 513 00:27:55,840 --> 00:27:58,240 Speaker 1: Austrian school of thought, right, a lot of the mesas 514 00:27:58,240 --> 00:28:00,520 Speaker 1: stuff and whatnot, and a lot of f high I can. 515 00:28:00,800 --> 00:28:03,879 Speaker 1: You know they talk about like money is communication and 516 00:28:03,960 --> 00:28:06,680 Speaker 1: I kind of believe that, you know, central planning fails, 517 00:28:07,160 --> 00:28:11,600 Speaker 1: and so how do you organize million people? And so 518 00:28:11,920 --> 00:28:16,360 Speaker 1: through money? Money is communication is price discovery. So how 519 00:28:16,359 --> 00:28:18,399 Speaker 1: do I know I need to order new supplies? How 520 00:28:18,400 --> 00:28:19,919 Speaker 1: do I know I need to raise the price of 521 00:28:19,960 --> 00:28:23,400 Speaker 1: my my thing? Right? Well, the market can organize all 522 00:28:23,480 --> 00:28:25,760 Speaker 1: those people when there's prices, when there's price in there. 523 00:28:25,880 --> 00:28:28,280 Speaker 1: But when money is distorted, then nobody knows what the 524 00:28:28,280 --> 00:28:31,040 Speaker 1: heck to do? Do you see that? And and that 525 00:28:31,200 --> 00:28:34,000 Speaker 1: is that that is also the case when it comes 526 00:28:34,080 --> 00:28:37,840 Speaker 1: to uh companies, the ease with which companies can can 527 00:28:37,880 --> 00:28:40,720 Speaker 1: access borrowing as well, and so they end up taking 528 00:28:40,720 --> 00:28:42,880 Speaker 1: on more death than they should because they think that 529 00:28:43,040 --> 00:28:45,080 Speaker 1: there and then all of a sudden, when you have 530 00:28:45,920 --> 00:28:49,320 Speaker 1: a recession, come along, poof, they're gone. So uh No, 531 00:28:50,760 --> 00:28:53,680 Speaker 1: the ability to run businesses at the most at the 532 00:28:53,680 --> 00:28:59,240 Speaker 1: most fundamental level, to your point, uh is, depends critically 533 00:28:59,560 --> 00:29:03,440 Speaker 1: on true price discovery, which is why when when you 534 00:29:03,480 --> 00:29:06,640 Speaker 1: look at socialism UH and you look at the problems 535 00:29:06,680 --> 00:29:09,040 Speaker 1: it has when they have everything controlled by the government, 536 00:29:09,280 --> 00:29:10,960 Speaker 1: you lose all of that and then you end up 537 00:29:10,960 --> 00:29:13,600 Speaker 1: with massive shortages. They don't have enough parts to fix 538 00:29:13,640 --> 00:29:15,760 Speaker 1: their car, they don't have enough food to eat, right, 539 00:29:15,800 --> 00:29:18,240 Speaker 1: And it's all because it's been completely captured and controlled. 540 00:29:18,320 --> 00:29:21,240 Speaker 1: Ye I lived in Venezuela. I live in Venezuela before 541 00:29:21,320 --> 00:29:24,320 Speaker 1: socialism came about. So i'm i'm I'm a big study 542 00:29:24,360 --> 00:29:28,440 Speaker 1: of that. And I nothing scares me anymore than the 543 00:29:28,720 --> 00:29:31,560 Speaker 1: armies of modern monetary theorists to think that that we 544 00:29:31,600 --> 00:29:33,520 Speaker 1: can just print away as much as we want to 545 00:29:33,520 --> 00:29:36,160 Speaker 1: give everybody everything they need in a pony and no, 546 00:29:36,560 --> 00:29:40,320 Speaker 1: it's it's it's a very slippery slope. But again, I 547 00:29:40,320 --> 00:29:42,520 Speaker 1: don't think there's enough of a recognition of the fact 548 00:29:42,520 --> 00:29:46,960 Speaker 1: that we've taken a step in that direction with the 549 00:29:47,040 --> 00:29:49,880 Speaker 1: magnitude of the stimulus bill. If you look at the 550 00:29:49,920 --> 00:29:54,120 Speaker 1: past um six recessions, Yes, if you look at the 551 00:29:54,160 --> 00:29:59,440 Speaker 1: past six recessions going back to disposable personal income adjusted 552 00:29:59,440 --> 00:30:03,240 Speaker 1: for inflation and declined by o point five percent during 553 00:30:03,280 --> 00:30:07,880 Speaker 1: those recessions, real disposable income inflation adjusted disposable income in 554 00:30:07,880 --> 00:30:11,760 Speaker 1: this country has risen by in the current procession on 555 00:30:11,800 --> 00:30:16,080 Speaker 1: an annualized rate because we've given away so much. But again, 556 00:30:16,760 --> 00:30:20,760 Speaker 1: we've taken we've taken socialism for a test drive. And 557 00:30:21,200 --> 00:30:24,120 Speaker 1: my greatest concern is that they're going to be there's 558 00:30:24,120 --> 00:30:26,800 Speaker 1: gonna be enough critical mass to keep it going, because 559 00:30:26,800 --> 00:30:29,480 Speaker 1: we have to remember this was signed into law with 560 00:30:29,560 --> 00:30:33,360 Speaker 1: a Republican in office. See what they wanted? One tint 561 00:30:33,360 --> 00:30:38,239 Speaker 1: inswer three. But yeah, um, but but I'm you know, 562 00:30:38,320 --> 00:30:40,040 Speaker 1: the one thing that I kind of look at and 563 00:30:40,080 --> 00:30:41,640 Speaker 1: of course, I mean I see the same thing and 564 00:30:41,640 --> 00:30:43,880 Speaker 1: like Bernie Sanders, the first guy running on an open 565 00:30:43,920 --> 00:30:47,000 Speaker 1: socialist platform. But I don't look at it as like 566 00:30:47,000 --> 00:30:49,719 Speaker 1: a defining moment. We were capitalism and now we're socialist. Right, 567 00:30:49,720 --> 00:30:52,040 Speaker 1: It's always like a blend and so it's like we're 568 00:30:52,080 --> 00:30:55,480 Speaker 1: part socialist, we're part capitalist. And and people point to 569 00:30:55,880 --> 00:30:58,600 Speaker 1: you know, uh, the you know, some of the Nordic 570 00:30:58,640 --> 00:31:00,640 Speaker 1: countries and say this is the same thing. But everyone's 571 00:31:00,680 --> 00:31:03,040 Speaker 1: kind of like a blend um and it seems like maybe, 572 00:31:03,080 --> 00:31:04,400 Speaker 1: and you can speak to this because you've been there, 573 00:31:04,440 --> 00:31:07,800 Speaker 1: but maybe Venezuela was way more socialist. China had started 574 00:31:07,840 --> 00:31:10,080 Speaker 1: to become a little more capitalist, right that we've seen that. 575 00:31:10,560 --> 00:31:13,640 Speaker 1: But like you talk about like the money going out, 576 00:31:13,640 --> 00:31:17,160 Speaker 1: the stimulus whatnot. But we already have welfare in California. 577 00:31:17,240 --> 00:31:19,640 Speaker 1: If you were to before pre pandemic a year ago, 578 00:31:20,000 --> 00:31:22,640 Speaker 1: if you were to collect all the unemployed, all the 579 00:31:22,880 --> 00:31:24,680 Speaker 1: welfare benefits that are available to you, I think it's 580 00:31:24,720 --> 00:31:27,160 Speaker 1: like almost forty thousand a year. Why it was the 581 00:31:27,200 --> 00:31:28,600 Speaker 1: highest state in the nation. I think it was like 582 00:31:28,640 --> 00:31:31,520 Speaker 1: sixty thousand a year, and that's no taxes. So like 583 00:31:31,840 --> 00:31:34,640 Speaker 1: we're already kind of had a socialist nation. I would say, right, 584 00:31:34,720 --> 00:31:38,560 Speaker 1: we uh, you know, I like to say that the 585 00:31:38,600 --> 00:31:44,680 Speaker 1: past ten fifteen years, because of FED policy, because of 586 00:31:44,760 --> 00:31:47,320 Speaker 1: interest rates at or close to the zero bound, that 587 00:31:47,400 --> 00:31:50,880 Speaker 1: we've had the stealthiest expansion of the social safety nets 588 00:31:50,880 --> 00:31:53,440 Speaker 1: since f DR was in office. People just haven't paid 589 00:31:53,440 --> 00:31:58,640 Speaker 1: attention to it. And again, borrowing costs at artificially low 590 00:31:58,720 --> 00:32:03,680 Speaker 1: levels bring about all manner of sins and we've seen them. 591 00:32:03,840 --> 00:32:06,520 Speaker 1: We're more aware of them today. But this has been 592 00:32:06,520 --> 00:32:10,480 Speaker 1: going on for a very long time. Yeah, now, UM, 593 00:32:10,520 --> 00:32:12,600 Speaker 1: I know we're I want to start wrapping it up here, 594 00:32:12,640 --> 00:32:14,560 Speaker 1: but for everyone who's still listening, I am going to 595 00:32:14,680 --> 00:32:18,280 Speaker 1: We're gonna dig into the inflation versus deflation debate or 596 00:32:18,320 --> 00:32:20,400 Speaker 1: not debate with the conversation, But before we get into 597 00:32:20,440 --> 00:32:22,400 Speaker 1: that and where this endgame is. But before we get 598 00:32:22,400 --> 00:32:26,840 Speaker 1: into that, UM, talking about deflation, you had mentioned how, um, 599 00:32:26,880 --> 00:32:31,240 Speaker 1: you know, how technology has improved things and now with 600 00:32:31,400 --> 00:32:35,200 Speaker 1: post pandemic people working from home streamlining things like that, UM, 601 00:32:35,240 --> 00:32:40,400 Speaker 1: technology has it is and should be deflationary, right, Uh, 602 00:32:40,640 --> 00:32:44,680 Speaker 1: we make things easier and it's deflationary. And for me 603 00:32:45,200 --> 00:32:48,200 Speaker 1: it seems like deflation is a really good thing, Like 604 00:32:48,240 --> 00:32:50,280 Speaker 1: do I want my dollars to buy more things in 605 00:32:50,320 --> 00:32:56,400 Speaker 1: the future? Or less. Right. Uh, the Kenzian system has 606 00:32:56,400 --> 00:32:59,680 Speaker 1: taught people that we need inflation. What do you where 607 00:32:59,720 --> 00:33:01,520 Speaker 1: do you sit on that? Do we need inflation or 608 00:33:01,560 --> 00:33:05,240 Speaker 1: is deflation good? H Well, we don't need deflation in 609 00:33:05,240 --> 00:33:08,800 Speaker 1: our earnings, that's for sure and that. But but if 610 00:33:09,000 --> 00:33:14,280 Speaker 1: if they purchased more, it's always purchasing power, right, purchasing power. Yes. 611 00:33:14,440 --> 00:33:18,840 Speaker 1: But but but you're talking about utopia. You're talking about 612 00:33:19,040 --> 00:33:24,280 Speaker 1: people with no debt. So that's the always the argument, right, Well, 613 00:33:24,320 --> 00:33:26,200 Speaker 1: we need inflation because of debt. Well what if we didn't, 614 00:33:26,280 --> 00:33:28,120 Speaker 1: What if we weren't a debt addicted world, if we 615 00:33:28,120 --> 00:33:30,640 Speaker 1: weren't a debt addicted world, then we wouldn't care about 616 00:33:30,720 --> 00:33:34,400 Speaker 1: deflation at all. I mean, that's that is utopia. I mean, 617 00:33:34,480 --> 00:33:37,320 Speaker 1: you know, I personally, I had a mortgage for a 618 00:33:37,360 --> 00:33:40,000 Speaker 1: while and I you know, I lost sleep every single 619 00:33:40,080 --> 00:33:43,480 Speaker 1: night until the mortgage finally went away. Uh. But not 620 00:33:43,600 --> 00:33:46,320 Speaker 1: a lot of people think like me. And we are 621 00:33:46,440 --> 00:33:50,960 Speaker 1: a debt our nation and we have ingrained into society 622 00:33:51,280 --> 00:33:55,800 Speaker 1: the idea of borrowing and living beyond your meat. This 623 00:33:55,880 --> 00:33:58,720 Speaker 1: is one of the things that has to be expunged. 624 00:33:58,920 --> 00:34:01,720 Speaker 1: Or are you our fate is a nation is is 625 00:34:01,760 --> 00:34:06,760 Speaker 1: at risk. Yeah. So having lived in Venezuela and and 626 00:34:06,800 --> 00:34:11,960 Speaker 1: seeing that kind of firsthand, Um, where do you see 627 00:34:12,080 --> 00:34:15,279 Speaker 1: us on that scale? Do you think there's hope? Well, now, 628 00:34:15,400 --> 00:34:18,359 Speaker 1: I was in Venezuela the summer before Chaves came on 629 00:34:18,640 --> 00:34:21,200 Speaker 1: and really socialism started to get going. And I will 630 00:34:21,239 --> 00:34:27,239 Speaker 1: tell you that, Um, and again capitalist total conservative right 631 00:34:27,239 --> 00:34:31,440 Speaker 1: here completely, But I will tell you that the level 632 00:34:31,480 --> 00:34:35,280 Speaker 1: of poverty that I witnessed and the level of homelessness, 633 00:34:36,200 --> 00:34:38,920 Speaker 1: and you know, but the time I I spent a 634 00:34:38,960 --> 00:34:42,200 Speaker 1: few months living there, I left. You know, this is 635 00:34:42,320 --> 00:34:45,400 Speaker 1: prior to all of the knowledge that I have today 636 00:34:45,400 --> 00:34:49,319 Speaker 1: about economics. But just as somebody observing what was going on, 637 00:34:49,760 --> 00:34:53,719 Speaker 1: I knew that the environment was right for somebody to 638 00:34:53,760 --> 00:34:57,000 Speaker 1: come up and try and help the people. And if 639 00:34:57,040 --> 00:35:01,879 Speaker 1: you if there's enough suppression that goes on, then you 640 00:35:02,000 --> 00:35:04,200 Speaker 1: end up with a big enough ground swell to bring 641 00:35:04,200 --> 00:35:07,000 Speaker 1: about a change in an economy where it's not the 642 00:35:07,040 --> 00:35:10,200 Speaker 1: balance that you describe, but something that swings too far 643 00:35:10,239 --> 00:35:15,000 Speaker 1: to left. You certainly don't want that. But and again 644 00:35:15,040 --> 00:35:17,880 Speaker 1: that is why I think it's so critical that education 645 00:35:17,960 --> 00:35:22,920 Speaker 1: reform and reforming the FED be pursued, because ultimately the 646 00:35:22,960 --> 00:35:25,839 Speaker 1: country pays the price if you allow the income inequality 647 00:35:25,840 --> 00:35:28,600 Speaker 1: divide to get completely out of hand, and there is 648 00:35:28,680 --> 00:35:32,560 Speaker 1: concern for that right now. There is talk of mass 649 00:35:32,600 --> 00:35:37,239 Speaker 1: homelessness in our future. There already is mass homeless in California. Man, 650 00:35:37,400 --> 00:35:40,480 Speaker 1: you live in California. Last time I was in Los Angeles, 651 00:35:40,520 --> 00:35:43,480 Speaker 1: I was, I was. I mean, it's my children were, 652 00:35:43,880 --> 00:35:47,399 Speaker 1: They've never seen anything like that. But when when you're 653 00:35:47,440 --> 00:35:52,640 Speaker 1: talking about a world a decade in which FED policy 654 00:35:52,680 --> 00:35:55,480 Speaker 1: made it for every real estate developer. The only way 655 00:35:55,480 --> 00:35:57,200 Speaker 1: that they could make the math work in a zero 656 00:35:57,200 --> 00:36:00,160 Speaker 1: interest rate environment was to build luxury units. So now 657 00:36:00,200 --> 00:36:02,920 Speaker 1: we've got a bunch of high rises and beautiful condos 658 00:36:02,960 --> 00:36:05,560 Speaker 1: that nobody can afford. And the only the only thing 659 00:36:05,640 --> 00:36:09,160 Speaker 1: that home builders built for a decade where luxury homes. 660 00:36:09,560 --> 00:36:13,239 Speaker 1: So there's there's a there's an argument to be made 661 00:36:13,440 --> 00:36:17,200 Speaker 1: for the FED having made housing out of reach. You 662 00:36:17,239 --> 00:36:19,240 Speaker 1: don't want to be working in a in a hospital 663 00:36:19,280 --> 00:36:21,319 Speaker 1: downtown or in a hotel downtown and have a two 664 00:36:21,360 --> 00:36:25,200 Speaker 1: hour commute and you know you can't find an apartment 665 00:36:25,239 --> 00:36:29,200 Speaker 1: that's a reasonable rent. So again, this is not how 666 00:36:30,120 --> 00:36:35,000 Speaker 1: economies should work. But when you artificially repress interest rates. 667 00:36:35,120 --> 00:36:38,920 Speaker 1: It's exactly what's happening. Yeah, And I've I've made the argument. 668 00:36:38,920 --> 00:36:40,400 Speaker 1: I think it's maybe a pen tweet on my on 669 00:36:40,440 --> 00:36:43,719 Speaker 1: my Twitter threat is uh, you know, real economies make 670 00:36:43,840 --> 00:36:48,640 Speaker 1: real things, and we've financialized the economy. So that's hard. 671 00:36:48,719 --> 00:36:51,319 Speaker 1: That's hard. Big thing is like finance, and everything's gotten 672 00:36:51,880 --> 00:36:55,120 Speaker 1: during the real estate boom, what were we doing? I mean, 673 00:36:55,600 --> 00:36:58,440 Speaker 1: what was productive about building all those homes and all 674 00:36:58,440 --> 00:37:01,120 Speaker 1: those mansions. I mean, we we we came out on 675 00:37:01,160 --> 00:37:04,400 Speaker 1: the other end of it. There was those homes because 676 00:37:04,640 --> 00:37:07,520 Speaker 1: because the price signal was wrong the first the price 677 00:37:07,560 --> 00:37:12,000 Speaker 1: signal was wrong because because Alan Greenspan interest rates too 678 00:37:12,000 --> 00:37:14,840 Speaker 1: low for too long, and subprime mortgage went through the 679 00:37:14,920 --> 00:37:17,680 Speaker 1: roof right in your backyard, New Century country wide, and 680 00:37:17,880 --> 00:37:20,799 Speaker 1: all those names probably ring about oh yeah, oh yeah. 681 00:37:20,920 --> 00:37:23,000 Speaker 1: I I got caught up in that, and unfortunately it 682 00:37:23,000 --> 00:37:24,839 Speaker 1: didn't end good for me as well. And that's that's 683 00:37:24,880 --> 00:37:27,560 Speaker 1: part of the reason why I really dug into gold 684 00:37:27,600 --> 00:37:30,640 Speaker 1: and learned about hard sound money and found Mike Maloney 685 00:37:30,640 --> 00:37:33,000 Speaker 1: and Ron Paul and I started chanting in the Fed 686 00:37:33,080 --> 00:37:37,920 Speaker 1: with him, and uh, here I am a dozen years later. Um. 687 00:37:38,080 --> 00:37:41,719 Speaker 1: But getting back into that, UM, I would just say 688 00:37:41,719 --> 00:37:43,640 Speaker 1: one comment. I didn't have this on my list of things, 689 00:37:43,680 --> 00:37:46,680 Speaker 1: but you know, I'm I'm forty five, so I'm like 690 00:37:46,719 --> 00:37:48,960 Speaker 1: old enough to have kind of grown up to like 691 00:37:50,440 --> 00:37:53,520 Speaker 1: be fearful of the USSR. And I remember thinking like 692 00:37:53,640 --> 00:37:56,359 Speaker 1: communist Russia, like they tell you what you can do 693 00:37:56,440 --> 00:37:59,200 Speaker 1: for work and what you can't do. And I remember 694 00:37:59,239 --> 00:38:02,080 Speaker 1: as a kid, like people like coming from Cuba and 695 00:38:02,080 --> 00:38:03,920 Speaker 1: like risking their life, and I was thinking, like, oh, 696 00:38:03,960 --> 00:38:07,440 Speaker 1: they're swimming in shark infested water to like escape, you know. 697 00:38:07,480 --> 00:38:10,319 Speaker 1: And I remember the Berlin Wall, and I remember these 698 00:38:10,320 --> 00:38:12,400 Speaker 1: thoughts as a kid, like what if I was like 699 00:38:12,440 --> 00:38:14,160 Speaker 1: at my friend's house and then I woke up in 700 00:38:14,160 --> 00:38:15,680 Speaker 1: the morning and the fence was up and I couldn't 701 00:38:15,719 --> 00:38:19,279 Speaker 1: get back, And like, um, we have all these examples, 702 00:38:19,320 --> 00:38:25,080 Speaker 1: and we have real life examples in Venezuela. Right, Um, 703 00:38:25,120 --> 00:38:29,880 Speaker 1: why do people still think it's a good idea? Uh? Well, 704 00:38:30,600 --> 00:38:35,680 Speaker 1: it's it's an easy way of thinking. It is. It's 705 00:38:35,719 --> 00:38:40,200 Speaker 1: it's the easy way out. And on top of that, 706 00:38:40,880 --> 00:38:44,160 Speaker 1: you've had a lot of corruption in public education in 707 00:38:44,200 --> 00:38:48,480 Speaker 1: America such that you have generations of people who feel 708 00:38:48,480 --> 00:38:51,759 Speaker 1: like they're stuck in this loop and they can't escape poverty, 709 00:38:51,920 --> 00:38:54,759 Speaker 1: and in many cases you can't. I mean, I've I've 710 00:38:54,760 --> 00:38:59,120 Speaker 1: actually written uh some ideas down I've published some papers 711 00:38:59,160 --> 00:39:02,880 Speaker 1: about education reform. And you know, if you want to 712 00:39:02,880 --> 00:39:07,240 Speaker 1: spend taxpayer dollars on something, then make sure a working 713 00:39:07,280 --> 00:39:12,280 Speaker 1: mom has has childcare coverage in the first few months 714 00:39:12,280 --> 00:39:14,759 Speaker 1: of a child's life so that she can rejoin the workforce. 715 00:39:15,480 --> 00:39:17,920 Speaker 1: Don't make it so prohiberitly expensive that she has to 716 00:39:18,000 --> 00:39:20,640 Speaker 1: drop out and go on welfare, because then she's going 717 00:39:20,680 --> 00:39:22,239 Speaker 1: to be stuck in a loop and her kid's going 718 00:39:22,320 --> 00:39:24,680 Speaker 1: to be stuck in the same loop. And there there's 719 00:39:25,320 --> 00:39:28,759 Speaker 1: make it to where people can work, and that is 720 00:39:28,800 --> 00:39:31,960 Speaker 1: what you need to do, I think, to ensure that 721 00:39:32,440 --> 00:39:36,960 Speaker 1: because working parents teach their kids to get educated. Parents 722 00:39:37,000 --> 00:39:40,160 Speaker 1: who don't work don't and that is part of the problem. 723 00:39:40,400 --> 00:39:42,880 Speaker 1: Is it comes down to the parents, and that is 724 00:39:42,960 --> 00:39:46,000 Speaker 1: part of where financial illiteracy is so rife in this 725 00:39:46,320 --> 00:39:49,279 Speaker 1: in this country. Yeah, that so that we can have 726 00:39:49,280 --> 00:39:50,799 Speaker 1: a whole show on that, and I don't I don't 727 00:39:50,840 --> 00:39:53,359 Speaker 1: really want to jump into that, but but you're absolutely right. 728 00:39:53,400 --> 00:39:56,000 Speaker 1: It's always about education. Our food that we eat, our 729 00:39:56,000 --> 00:39:58,320 Speaker 1: medicine that we take, everything always boils down to education. 730 00:39:58,360 --> 00:40:02,000 Speaker 1: And I think the system has uh intentionally we know this, right, 731 00:40:02,040 --> 00:40:04,400 Speaker 1: we know it's been taken over, and it's intentionally created 732 00:40:04,440 --> 00:40:06,560 Speaker 1: a bunch of victims, like, Hey, you can't get ahead 733 00:40:06,560 --> 00:40:08,080 Speaker 1: because you're poor, you can't get head because you're black, 734 00:40:08,080 --> 00:40:10,040 Speaker 1: you can't get ahold head because you're a woman. And 735 00:40:10,120 --> 00:40:12,239 Speaker 1: now when when you when you become a victim, then 736 00:40:12,280 --> 00:40:15,840 Speaker 1: you're looking for a savior instead of empowering people. Right, 737 00:40:15,960 --> 00:40:18,080 Speaker 1: And so I mean just that little minor shift, and 738 00:40:18,120 --> 00:40:20,880 Speaker 1: I and I just had this thought that's like analogy, 739 00:40:20,880 --> 00:40:23,000 Speaker 1: and it's like, uh, right, if the state is going 740 00:40:23,080 --> 00:40:25,640 Speaker 1: to keep us safe from every virus and every sickness 741 00:40:25,640 --> 00:40:28,840 Speaker 1: and every poorness and every all these things, were like, shoot, 742 00:40:29,400 --> 00:40:30,719 Speaker 1: just put me in a cage and give me a 743 00:40:30,760 --> 00:40:32,640 Speaker 1: steak once a day, and like I'm good, right, like 744 00:40:32,640 --> 00:40:34,560 Speaker 1: a lion. I guess, like I won't roam the planes 745 00:40:34,600 --> 00:40:36,560 Speaker 1: because that's a hard life on the planes. Sometimes I 746 00:40:36,560 --> 00:40:38,640 Speaker 1: don't eat. I have other animals and hunters that try 747 00:40:38,680 --> 00:40:40,960 Speaker 1: to kill me. So put me in a cage and 748 00:40:41,040 --> 00:40:42,439 Speaker 1: give me a steak every day and keep me safe. 749 00:40:42,480 --> 00:40:46,440 Speaker 1: Like and that's kind of like where people are at right, Uh, Anyway, 750 00:40:46,960 --> 00:40:49,239 Speaker 1: that's a whole another conversation. But let's jump back into this. 751 00:40:49,320 --> 00:40:53,520 Speaker 1: So I know we're gonna wrap it up here. So UM, 752 00:40:53,560 --> 00:40:55,680 Speaker 1: I know that you're really bullish on gold. You've talked 753 00:40:55,719 --> 00:40:59,359 Speaker 1: about that, UM and right now, right now, we've got 754 00:40:59,400 --> 00:41:01,360 Speaker 1: one too many speculators in the house in my opinion. 755 00:41:01,400 --> 00:41:04,200 Speaker 1: But anyways, Yes, it is a long term hold, one term. 756 00:41:04,239 --> 00:41:07,040 Speaker 1: What do you mean by that, Warren Buffett jumping in. No, 757 00:41:07,239 --> 00:41:09,000 Speaker 1: I don't think he's I don't think he's a speculator. 758 00:41:09,120 --> 00:41:10,960 Speaker 1: I think Warren Bufett jumping in is a reflection on 759 00:41:11,000 --> 00:41:13,080 Speaker 1: the fact that there's nothing of value to buy out 760 00:41:13,120 --> 00:41:15,960 Speaker 1: there right now because prices are so distorted. No, I 761 00:41:16,280 --> 00:41:19,279 Speaker 1: just mean that it feels like there's been a lot 762 00:41:19,280 --> 00:41:21,560 Speaker 1: of hedge funds, a lot of fast money has moved 763 00:41:21,560 --> 00:41:24,680 Speaker 1: into precious metals of late UM. But you're always going 764 00:41:24,760 --> 00:41:29,320 Speaker 1: to have that at certain times in UH in economic cycles. Sure, 765 00:41:29,600 --> 00:41:32,120 Speaker 1: but I would say, you know, you said long it's 766 00:41:32,160 --> 00:41:34,600 Speaker 1: it's a long term hold. Right, So we see, UH 767 00:41:34,800 --> 00:41:37,440 Speaker 1: FED can continue print money. Interest rates are probably going 768 00:41:37,520 --> 00:41:39,080 Speaker 1: to be continue to be held low for a really 769 00:41:39,080 --> 00:41:42,920 Speaker 1: long time. Why hold UH bonds that are going negative 770 00:41:42,920 --> 00:41:45,239 Speaker 1: when I could just go to gold. Right. Um, so 771 00:41:45,360 --> 00:41:48,160 Speaker 1: there's like this, my my long maturity bonds have treated 772 00:41:48,200 --> 00:41:51,919 Speaker 1: me very well. I still have those two, so you're lucky. 773 00:41:51,960 --> 00:41:53,520 Speaker 1: I'm talking about like treasuries, you know what I mean, 774 00:41:53,560 --> 00:41:56,200 Speaker 1: Like treasuries only one percent or half a percent, but 775 00:41:56,600 --> 00:41:58,560 Speaker 1: you know, justin for real inflation or whatever, it's like 776 00:41:58,600 --> 00:42:01,960 Speaker 1: it's it's a negative. Um. What are your thoughts on bitcoin? 777 00:42:03,400 --> 00:42:07,239 Speaker 1: I think bitcoin is is kind of the young hip 778 00:42:07,280 --> 00:42:11,080 Speaker 1: crowd hit hip crowd's gold. I think that it is 779 00:42:11,160 --> 00:42:15,160 Speaker 1: a reflection of the disgust with fiat money and and 780 00:42:15,480 --> 00:42:19,080 Speaker 1: the Fed monetizing the dead. I think bitcoin is I 781 00:42:19,120 --> 00:42:21,960 Speaker 1: literally think it's a modern day equivalent to gold or 782 00:42:22,000 --> 00:42:25,080 Speaker 1: I think that that's how it's perceived. Um. You know, 783 00:42:25,160 --> 00:42:27,920 Speaker 1: from from what little I understand about it, the economics 784 00:42:27,960 --> 00:42:31,440 Speaker 1: of mining for bitcoin or not ideal. And once quantum 785 00:42:31,480 --> 00:42:35,319 Speaker 1: comes about, I think that that could revolutionize how the 786 00:42:35,360 --> 00:42:37,560 Speaker 1: world views cryptos. But at the same time, we already 787 00:42:37,640 --> 00:42:40,359 Speaker 1: know that all major central banks in the world are 788 00:42:40,440 --> 00:42:45,120 Speaker 1: looking at sovereign cryptocurrencies, such that you have to wonder 789 00:42:45,760 --> 00:42:49,280 Speaker 1: if there are crypto sovereign currencies, what the fate would 790 00:42:49,280 --> 00:42:54,000 Speaker 1: be then of something that was not sovereign well, um, 791 00:42:54,040 --> 00:42:57,319 Speaker 1: you know, bitcoin is not cryptos. So bitcoin is a 792 00:42:57,440 --> 00:43:01,400 Speaker 1: decentralized system that's built on proof of work on a 793 00:43:01,440 --> 00:43:05,400 Speaker 1: minor system. Um, so all the other cryptos are centrally controlled, 794 00:43:05,400 --> 00:43:08,000 Speaker 1: and sovereign cryptos will be the same thing, centrally controlled. 795 00:43:08,000 --> 00:43:10,359 Speaker 1: And we know where essentially controlled things go. They become 796 00:43:10,400 --> 00:43:14,640 Speaker 1: manipulated and distorted. A decentralized technology that is not able 797 00:43:14,680 --> 00:43:18,400 Speaker 1: to be manipulated, inflated, distorted, whatever is different. And I 798 00:43:18,400 --> 00:43:20,799 Speaker 1: always think about fa hiak. He said that there will 799 00:43:20,800 --> 00:43:22,480 Speaker 1: never be a sound money again until we take the 800 00:43:22,520 --> 00:43:24,000 Speaker 1: thing out of the hands of the government, and it 801 00:43:24,080 --> 00:43:25,440 Speaker 1: can be done in a forceful way, has to be 802 00:43:25,440 --> 00:43:28,279 Speaker 1: done in a slide round about way. He said that 803 00:43:28,320 --> 00:43:30,239 Speaker 1: like in the eighties and so forth, telling because that's 804 00:43:30,280 --> 00:43:34,560 Speaker 1: kind of where we're at. Um. So, as a bitcoin person, 805 00:43:34,640 --> 00:43:39,799 Speaker 1: we believe that, Um, we want to opt out. We're 806 00:43:39,800 --> 00:43:42,160 Speaker 1: opting out of the system, right, getting our money out 807 00:43:42,160 --> 00:43:45,160 Speaker 1: of the financial system. All right, forget the Fed, forget this, uh, 808 00:43:45,239 --> 00:43:46,799 Speaker 1: this whole thing. We're just gonna take our money. We're 809 00:43:46,800 --> 00:43:49,960 Speaker 1: gonna vote with our money, right, Uh, and we're opting out. 810 00:43:50,040 --> 00:43:53,640 Speaker 1: Gold is a way is opting out as well. Um, 811 00:43:53,760 --> 00:43:56,879 Speaker 1: do you think if enough people opt out with their money, 812 00:43:56,960 --> 00:43:59,239 Speaker 1: it makes a big difference to the fed. Are we 813 00:43:59,239 --> 00:44:02,360 Speaker 1: gonna win that war opting out? Oh? I think if you, 814 00:44:02,400 --> 00:44:06,040 Speaker 1: I mean, if you have enough adoption of anything, then 815 00:44:06,040 --> 00:44:08,920 Speaker 1: it will win. I mean, that's that's a rhetorical question. 816 00:44:10,400 --> 00:44:14,960 Speaker 1: It works as long as everybody agrees to it working. Um. Yeah, 817 00:44:15,000 --> 00:44:18,080 Speaker 1: that's a bigger battle to fight. Yeah. I don't see 818 00:44:18,120 --> 00:44:20,279 Speaker 1: you know, I don't see a government ever saying hey, 819 00:44:20,400 --> 00:44:22,440 Speaker 1: let's just forget the dollar and move to bitcoin. Like. 820 00:44:22,520 --> 00:44:24,680 Speaker 1: Of course not, they're gonna want to control it, manipulate it. 821 00:44:24,680 --> 00:44:27,080 Speaker 1: But it's like the people's money, you know, and and 822 00:44:27,120 --> 00:44:29,560 Speaker 1: again in Venezuela, like and they say, well, you know, 823 00:44:29,800 --> 00:44:31,520 Speaker 1: they have the army, they can force you to use 824 00:44:31,520 --> 00:44:33,479 Speaker 1: their currency. Will know they can't. Like, if people don't 825 00:44:33,520 --> 00:44:35,920 Speaker 1: trust the money, they're not going to use it. I'd 826 00:44:36,000 --> 00:44:38,760 Speaker 1: rather just trade you water for bread. Right. Uh. So 827 00:44:39,040 --> 00:44:41,279 Speaker 1: it's like, hey, you can have the government money over here, 828 00:44:41,680 --> 00:44:44,240 Speaker 1: and we'll have our our own money over here. Maybe, 829 00:44:44,560 --> 00:44:46,759 Speaker 1: but you're talking about kind of the ultimate endgame, right, 830 00:44:46,760 --> 00:44:49,120 Speaker 1: because people in Venezuela who had money, they got it 831 00:44:49,120 --> 00:44:52,239 Speaker 1: out of Venezuela and put it in dollars. Uh. And 832 00:44:52,239 --> 00:44:55,080 Speaker 1: and that's kind of what capital flight has always looked like. 833 00:44:56,200 --> 00:44:58,000 Speaker 1: If you're talking about the end of the dollar, I 834 00:44:58,000 --> 00:45:03,479 Speaker 1: mean these are it's a much bigger discussion. Yeah. Um, 835 00:45:03,520 --> 00:45:05,799 Speaker 1: so we'll we'll tease into that just a little bit. 836 00:45:05,840 --> 00:45:07,040 Speaker 1: And I know we won't. We don't have time. We're 837 00:45:07,040 --> 00:45:08,640 Speaker 1: gonna wrap it up here in a couple minutes. But 838 00:45:09,040 --> 00:45:12,120 Speaker 1: so talk about the endgame. So we're in a situation 839 00:45:12,160 --> 00:45:15,239 Speaker 1: now where we have this massive debt bubble. I don't know, 840 00:45:15,280 --> 00:45:18,240 Speaker 1: three trillion whatever it is, one point to quadrillion derivatives. 841 00:45:18,239 --> 00:45:20,600 Speaker 1: Who knows how big that is? Um, And it's constantly 842 00:45:20,600 --> 00:45:23,120 Speaker 1: trying to deflate, and the FED keeps trying to inflate it. Right, 843 00:45:23,120 --> 00:45:26,640 Speaker 1: and it seems like, uh, each each correction that we've 844 00:45:26,640 --> 00:45:29,960 Speaker 1: had is uh is the market trying to correct and 845 00:45:30,000 --> 00:45:31,960 Speaker 1: the FED just keeps trying to pump it up. Um. 846 00:45:32,000 --> 00:45:34,439 Speaker 1: We're at a point now where I think you said 847 00:45:34,440 --> 00:45:36,000 Speaker 1: earlier like the Fed's kind of between a rock and 848 00:45:36,000 --> 00:45:38,160 Speaker 1: a hard place. They have to continue to print. If 849 00:45:38,160 --> 00:45:42,759 Speaker 1: they quit, it's over. So what does the endgame looks like? 850 00:45:42,880 --> 00:45:46,600 Speaker 1: I'm thinking that they go until they blow, meaning uh, 851 00:45:46,719 --> 00:45:49,680 Speaker 1: it's having diminishing returns. Right, it's already having less and 852 00:45:49,760 --> 00:45:51,839 Speaker 1: less effect. But they have no choice, and they're gonna 853 00:45:51,840 --> 00:45:54,239 Speaker 1: just go and tell it doesn't work anymore. Is that 854 00:45:54,280 --> 00:45:56,279 Speaker 1: what you see? Or what do you think they're gonna 855 00:45:56,280 --> 00:45:57,919 Speaker 1: wake up and be They're gonna wake up and pass 856 00:45:57,960 --> 00:46:02,160 Speaker 1: austerity tomorrow, Like, how does that work? Look? J Powell's 857 00:46:02,239 --> 00:46:08,040 Speaker 1: first eleven months in office, he tried desperately and he 858 00:46:08,080 --> 00:46:10,919 Speaker 1: was serious about it, about shrinking the balance sheet, about 859 00:46:10,960 --> 00:46:14,719 Speaker 1: quantitative tightening, about normalizing interest rates, getting interest rates up 860 00:46:14,760 --> 00:46:17,280 Speaker 1: to higher levels. I mean, he he was our last 861 00:46:17,320 --> 00:46:20,680 Speaker 1: great hope because he had the stones to actually try 862 00:46:20,680 --> 00:46:24,920 Speaker 1: and do it. And he failed and so well he tried, right, 863 00:46:24,960 --> 00:46:28,880 Speaker 1: he tried, but I don't know. He tried his again 864 00:46:28,920 --> 00:46:33,040 Speaker 1: before the credit market instructed him that if he kept 865 00:46:33,080 --> 00:46:35,160 Speaker 1: about the business of tightening it was going to blow 866 00:46:35,200 --> 00:46:37,640 Speaker 1: up to Kingdom come and that he better back off. 867 00:46:38,280 --> 00:46:41,319 Speaker 1: He was really making an effort to take us to 868 00:46:41,360 --> 00:46:46,839 Speaker 1: a better place. And what he learned was that had 869 00:46:46,880 --> 00:46:51,440 Speaker 1: we stopped after the housing crisis, had we not ventured 870 00:46:51,440 --> 00:46:55,239 Speaker 1: off into quantitative easy, had we not gone down that 871 00:46:55,400 --> 00:46:59,440 Speaker 1: rabbit hole, there might have been a way to normalize 872 00:46:59,480 --> 00:47:04,600 Speaker 1: monetary policy but there's not there's not anymore. And in 873 00:47:04,760 --> 00:47:08,799 Speaker 1: theory because again the three trillion dollar figure that we're 874 00:47:08,800 --> 00:47:13,040 Speaker 1: throwing about, that's a global number you have to have 875 00:47:13,920 --> 00:47:16,400 Speaker 1: for the endgame to work, which is a debt jubilee 876 00:47:17,000 --> 00:47:19,879 Speaker 1: theoretically of all sovereign debts. You have to have all 877 00:47:19,880 --> 00:47:24,200 Speaker 1: the countries agreed, and at last check, not all countries 878 00:47:24,239 --> 00:47:28,520 Speaker 1: in the world are our allies. And that is really 879 00:47:28,560 --> 00:47:31,560 Speaker 1: the discussion. I think that brings us to what the 880 00:47:31,640 --> 00:47:34,720 Speaker 1: endgame might or might not look like. And you recall 881 00:47:34,800 --> 00:47:37,239 Speaker 1: from history that every time a reserve currency status has 882 00:47:37,280 --> 00:47:41,640 Speaker 1: been lost, there's been a war involved. And that is 883 00:47:41,960 --> 00:47:44,439 Speaker 1: that is really my greatest fear. It's that we keep 884 00:47:44,480 --> 00:47:47,839 Speaker 1: the money printing going. The genesis of every world war 885 00:47:48,000 --> 00:47:52,280 Speaker 1: and history has always been economical in nature and triggered 886 00:47:52,280 --> 00:47:58,040 Speaker 1: by something debt related. So again, if if the Kumbai 887 00:47:58,120 --> 00:48:01,239 Speaker 1: Yah happy ending is a debt jubilee and all the 888 00:48:01,239 --> 00:48:04,360 Speaker 1: countries in the world are going to agree to expunge 889 00:48:04,400 --> 00:48:08,719 Speaker 1: all of their sovereign debts, wipe the slates clean, forgive everything, 890 00:48:08,800 --> 00:48:11,360 Speaker 1: forget everything, in order for that to work, you have 891 00:48:11,440 --> 00:48:15,760 Speaker 1: to have every single country agree with the United States, 892 00:48:16,560 --> 00:48:19,520 Speaker 1: which I would agree would be almost an impossible task. However, 893 00:48:19,600 --> 00:48:21,960 Speaker 1: after seeing what's happened with COVID, with every country in 894 00:48:21,960 --> 00:48:23,560 Speaker 1: the world locking down all of a sudden, I think 895 00:48:23,640 --> 00:48:26,680 Speaker 1: maybe it could happen. But um, I guess if we 896 00:48:26,880 --> 00:48:29,920 Speaker 1: are the debt you beilie, that's that's a big thing. 897 00:48:29,960 --> 00:48:32,560 Speaker 1: But also like mom and Pop's own treasuries, do they 898 00:48:32,600 --> 00:48:35,680 Speaker 1: want that wiped out as well? No? No, look, there's 899 00:48:35,760 --> 00:48:38,439 Speaker 1: there is nothing. Um it's a there's a good reason 900 00:48:38,480 --> 00:48:41,600 Speaker 1: that debt jubilees are in the Bible. Uh, it's not 901 00:48:41,719 --> 00:48:45,799 Speaker 1: really a feasible modern I mean, you would have to 902 00:48:45,800 --> 00:48:48,520 Speaker 1: have a debt jubilee just for the sovereign, and that 903 00:48:48,560 --> 00:48:51,200 Speaker 1: would be tricky enough given the fact that mom and 904 00:48:51,239 --> 00:48:54,759 Speaker 1: Pops do own treasuries. And again the reason I bring 905 00:48:54,800 --> 00:48:56,920 Speaker 1: up other countries, it's because other countries own a ton 906 00:48:56,960 --> 00:49:00,319 Speaker 1: of treasuries. Again, everybody would have to agree, and you 907 00:49:00,360 --> 00:49:02,040 Speaker 1: still wouldn't be able to have a debt jubilee in 908 00:49:02,040 --> 00:49:08,000 Speaker 1: the private debt markets that could. It's impossible. So I'm 909 00:49:08,040 --> 00:49:11,799 Speaker 1: only talking about one sliver of the pie and not 910 00:49:11,840 --> 00:49:14,640 Speaker 1: talking about household debt and not talking about corporate debt, 911 00:49:14,880 --> 00:49:18,320 Speaker 1: not talking about financial debt. Yeah, yeah, so the sovereigns 912 00:49:18,360 --> 00:49:19,719 Speaker 1: all get off the hook, but we still have all 913 00:49:19,760 --> 00:49:24,320 Speaker 1: the debt. Great, so we're saying there's no elegant out. No, no, 914 00:49:24,719 --> 00:49:27,160 Speaker 1: there's not. All right, So last question, um, and we'll 915 00:49:27,200 --> 00:49:30,960 Speaker 1: wrap it up. So, Um, the question is inflation or deflation. 916 00:49:31,160 --> 00:49:34,200 Speaker 1: So we have this massive debt bubble and it's continually 917 00:49:34,239 --> 00:49:38,040 Speaker 1: trying to deflate. Um, the Feds trying to reinflate. It 918 00:49:38,120 --> 00:49:41,439 Speaker 1: seems like defaulting on a billion dollars is very easy 919 00:49:41,480 --> 00:49:43,360 Speaker 1: and the and the money's gone to put a billion 920 00:49:43,360 --> 00:49:46,640 Speaker 1: dollars back into a lot harder. However, we see you know, 921 00:49:46,719 --> 00:49:48,360 Speaker 1: the Green New Deal, and they want to spend thirty 922 00:49:48,360 --> 00:49:50,240 Speaker 1: to ninety trillion. Where is that going to come from? Whatever? 923 00:49:50,320 --> 00:49:53,080 Speaker 1: So do you think the Fed is able to inflate 924 00:49:53,120 --> 00:49:56,279 Speaker 1: the balloon faster than it's deflating or do we are 925 00:49:56,280 --> 00:49:58,239 Speaker 1: they gonna are they gonna be able to inflate it 926 00:49:58,239 --> 00:50:00,400 Speaker 1: for a while and then lose, or we're gonna go 927 00:50:00,440 --> 00:50:02,200 Speaker 1: into a deflationary period, Like how do you see that 928 00:50:02,200 --> 00:50:05,880 Speaker 1: playing out? Maybe over the next couple of years or whatever. 929 00:50:06,360 --> 00:50:08,200 Speaker 1: So I think right now that the FED is trying 930 00:50:08,520 --> 00:50:11,600 Speaker 1: really really hard to engineer inflation. In fact, the FET 931 00:50:11,640 --> 00:50:14,239 Speaker 1: is trying so hard to engineer inflation that it's it's 932 00:50:14,239 --> 00:50:17,320 Speaker 1: gotten into the business of buying treasury inflation protected securities 933 00:50:17,640 --> 00:50:22,279 Speaker 1: to push up inflation expectations like by force. So they're 934 00:50:22,320 --> 00:50:26,359 Speaker 1: they're trying as hard as they possibly can. However, a 935 00:50:26,440 --> 00:50:30,759 Speaker 1: million new filers of initial claims every week dictates that 936 00:50:30,800 --> 00:50:35,279 Speaker 1: you're going to have deflation eventually take cold if there's 937 00:50:35,320 --> 00:50:38,640 Speaker 1: not some kind of a magnificent economic recovery in the offing, 938 00:50:38,719 --> 00:50:41,040 Speaker 1: which is going to be very difficult to do given 939 00:50:41,080 --> 00:50:43,000 Speaker 1: the fact that debt got us in this situation in 940 00:50:43,040 --> 00:50:46,280 Speaker 1: the first place, and debt by definition is a drag 941 00:50:46,320 --> 00:50:50,040 Speaker 1: on economic activity and a drag on the ability of 942 00:50:50,080 --> 00:50:56,880 Speaker 1: the economy to achieve exit velocity. So I think that 943 00:50:56,880 --> 00:51:02,200 Speaker 1: that deflation can, in the media term, rear its ugly head. 944 00:51:02,680 --> 00:51:07,080 Speaker 1: I see the possibility of their being negative nominal rates 945 00:51:07,320 --> 00:51:12,680 Speaker 1: dictated by the market, as we've seen in France, Germany, Holland, Switzerland, 946 00:51:12,719 --> 00:51:17,799 Speaker 1: the UK. So and that would be very daunting for 947 00:51:17,840 --> 00:51:20,640 Speaker 1: the FED because it would it would obviously reveal that 948 00:51:20,680 --> 00:51:25,440 Speaker 1: they had lost the battle, the inflation deflation battle. So 949 00:51:25,800 --> 00:51:28,200 Speaker 1: but again, you can only take so many people out 950 00:51:28,239 --> 00:51:32,919 Speaker 1: of the workforce which kills pricing power and hold off 951 00:51:32,920 --> 00:51:37,839 Speaker 1: deflation for so long. So which one is it going 952 00:51:37,880 --> 00:51:40,680 Speaker 1: to be? I think we have deflation first, and I 953 00:51:40,680 --> 00:51:44,360 Speaker 1: think if we try and keep printing printing, printing. It 954 00:51:44,400 --> 00:51:47,480 Speaker 1: depends on who's going to be in Washington. If they 955 00:51:47,520 --> 00:51:51,840 Speaker 1: ever change the FED mandate and allow the FED, instead 956 00:51:51,840 --> 00:51:55,520 Speaker 1: of buying treasuries in the secondary market, to actually buy 957 00:51:55,560 --> 00:52:00,480 Speaker 1: treasuries at auctions such that the FED is basically um 958 00:52:00,520 --> 00:52:04,720 Speaker 1: the feds liabilities are legal tender. Then you can flip 959 00:52:04,760 --> 00:52:09,240 Speaker 1: the mother of all inflation switches. Okay, you're as goodbye. 960 00:52:10,040 --> 00:52:14,279 Speaker 1: So you think deflation and then inflation. It depends on 961 00:52:14,320 --> 00:52:17,239 Speaker 1: what Washington does or doesn't do. If somebody draws the 962 00:52:17,280 --> 00:52:20,000 Speaker 1: line and prevents the FED. I mean, opening the Federal 963 00:52:20,080 --> 00:52:23,359 Speaker 1: Reserve Act is a big deal, um so, and it's 964 00:52:23,360 --> 00:52:25,880 Speaker 1: a can of worms. But if if the FED it, 965 00:52:25,960 --> 00:52:28,120 Speaker 1: but look at what they've done with treasury and special 966 00:52:28,120 --> 00:52:30,560 Speaker 1: purpose vehicles and off balance sheet and corporate bonds and 967 00:52:30,640 --> 00:52:35,239 Speaker 1: municipal bonds and junk bonds. So clearly they can expand 968 00:52:35,400 --> 00:52:38,560 Speaker 1: the Fed's footprint if they want. The politicians in Washington, 969 00:52:38,880 --> 00:52:41,759 Speaker 1: let's see what they do next. Yeah, and that's a 970 00:52:41,760 --> 00:52:43,640 Speaker 1: great answer, and we'll wrap it up with that answer. 971 00:52:43,640 --> 00:52:46,040 Speaker 1: And just for everybody listening, you know, nobody has a 972 00:52:46,080 --> 00:52:47,600 Speaker 1: crystal ball. I always say it would be so much 973 00:52:47,600 --> 00:52:50,640 Speaker 1: easier if we did um, and so nobody myself. I 974 00:52:50,719 --> 00:52:53,399 Speaker 1: never give predictions, and obviously Danielle is trying to stay 975 00:52:53,400 --> 00:52:55,000 Speaker 1: away from it as well. And what we do is 976 00:52:55,040 --> 00:52:57,920 Speaker 1: we look at probabilities, right like, hey, this is probably 977 00:52:57,960 --> 00:53:01,160 Speaker 1: it's not a very high probability, but if these things happen, 978 00:53:01,239 --> 00:53:04,000 Speaker 1: then it could, right. And so for everybody listening, just 979 00:53:04,040 --> 00:53:06,280 Speaker 1: try to always think about things in that in that framework, 980 00:53:06,320 --> 00:53:09,439 Speaker 1: and and and pay attention watch for the signs. Uh, 981 00:53:09,520 --> 00:53:12,360 Speaker 1: inflation and deflation are both probable, and then we'll watch 982 00:53:12,400 --> 00:53:14,120 Speaker 1: the signs to know which ones are coming and we'll 983 00:53:14,120 --> 00:53:17,399 Speaker 1: have to react accordingly. Right, you've got you've you've got 984 00:53:17,440 --> 00:53:20,960 Speaker 1: ten of the workforce, depending on what agent, what statistical 985 00:53:21,000 --> 00:53:23,400 Speaker 1: agencies is telling you what the date is out of 986 00:53:23,440 --> 00:53:25,480 Speaker 1: the workforce. I'm sorry, but a monkey could tell you 987 00:53:25,520 --> 00:53:30,279 Speaker 1: that that's disinflationary. Yeah, exactly. Money printing eventually is inflationary. 988 00:53:30,360 --> 00:53:34,200 Speaker 1: And and you're right, you just have to assign odds. Yeah, great, Okay, 989 00:53:34,200 --> 00:53:36,160 Speaker 1: we're gonna wrap it up with that, Daniel, I appreciate 990 00:53:36,160 --> 00:53:38,680 Speaker 1: you so much. Now we went maybe a little bit over, 991 00:53:38,719 --> 00:53:41,640 Speaker 1: so I appreciate that. Um. Now, of course you're all 992 00:53:41,719 --> 00:53:44,480 Speaker 1: over all over the internet with all your interviews, but 993 00:53:44,560 --> 00:53:46,160 Speaker 1: maybe do you want to direct people to where they 994 00:53:46,160 --> 00:53:48,400 Speaker 1: can go follow you for more? Sure of you can 995 00:53:48,400 --> 00:53:50,760 Speaker 1: always follow me at de Martino Booth. I'm the most 996 00:53:50,800 --> 00:53:54,080 Speaker 1: active by far on Twitter. Um, come on over to 997 00:53:54,080 --> 00:53:57,200 Speaker 1: my YouTube channel as well, and if you really want 998 00:53:57,200 --> 00:54:00,799 Speaker 1: a great education in good entertainment every day, then become 999 00:54:00,800 --> 00:54:03,440 Speaker 1: a subscriber at Quill Intelligence. We're happy to have you 1000 00:54:03,960 --> 00:54:06,160 Speaker 1: great and I'll link to all that in the show 1001 00:54:06,200 --> 00:54:08,480 Speaker 1: description so everybody can go find that. And with that 1002 00:54:08,520 --> 00:54:10,279 Speaker 1: we're going to wrap it up. Daniel, thanks so much 1003 00:54:10,280 --> 00:54:11,719 Speaker 1: for joining. Thank you. Take care,