WEBVTT - CBDC, Digital Currency, Great Reset, IMF, Debt Cycles | Raoul Pal 0:00:13.640 --> 0:00:16.360 Hey, everyone, Welcome to an episode of the Market Disruptor Show, 0:00:16.360 --> 0:00:18.600 and today I am sitting down with Ralph Paul Um. 0:00:18.600 --> 0:00:20.880 He is the co founder of Real Vision. It probably 0:00:20.880 --> 0:00:23.520 doesn't need much of an introduction here on my show. 0:00:24.200 --> 0:00:25.720 I've been a big fan of work and I'm excited 0:00:25.720 --> 0:00:29.160 to talk to you today, Ralph. I'm alright. Good. So, 0:00:29.600 --> 0:00:32.040 um Man, you put out a ton of content, so 0:00:32.080 --> 0:00:34.120 there's a bunch of different angles that we can go down. 0:00:35.000 --> 0:00:37.599 Um And again, you probably don't need a lot of introduction, 0:00:37.600 --> 0:00:39.479 so we don't need to go deep into that. But um, 0:00:39.520 --> 0:00:43.240 you are a macro investor. That's kind of been your career. UM, 0:00:43.280 --> 0:00:45.840 and that's kind of still what you're doing today. Maybe 0:00:45.880 --> 0:00:47.479 just kind of give us an overview of what that 0:00:47.560 --> 0:00:50.200 is and kind of what you're doing. Yes, So macro 0:00:50.320 --> 0:00:54.640 investing really is looking at major economic trends and dislocations 0:00:55.560 --> 0:01:02.080 and and investing in asset process the UM versus that 0:01:02.160 --> 0:01:05.400 framework of understanding. So you know, if the business cycle 0:01:05.480 --> 0:01:07.120 is going down and go into recession, you're gonna be 0:01:07.200 --> 0:01:09.640 short various things. You're gonna be long one country versus another. 0:01:09.959 --> 0:01:12.040 You're looking to choose the right assets. You're kind of 0:01:12.520 --> 0:01:16.560 asset agnostic, and you're looking across the world to see, Okay, 0:01:16.640 --> 0:01:20.520 how is the global economy moving, is this mispriced, underpriced, 0:01:20.920 --> 0:01:23.840 or what is the trend based on that? So so 0:01:23.880 --> 0:01:26.080 it's a lot of kind of where economics meets markets 0:01:26.480 --> 0:01:28.760 and it's super interesting because it takes you everywhere, whether 0:01:28.800 --> 0:01:32.959 you're investing in Indian equities or cryptocurrencies. Yes, so you're 0:01:33.000 --> 0:01:37.399 kind of taking into account the politics, the economics, I mean, 0:01:37.480 --> 0:01:40.320 all the data, and just kind of what they say 0:01:40.319 --> 0:01:42.240 about Wayne Gretzky trying to skip to where the puck 0:01:42.319 --> 0:01:44.640 is going to be almost that's right. So as a 0:01:44.680 --> 0:01:47.480 macro investor, you're trying to solve the world's most beautiful puzzle. 0:01:47.520 --> 0:01:49.680 It's this endless three D puzzle you can sold for 0:01:49.720 --> 0:01:53.600 seconds then it disappears again. So it's a great intellectual pursuit. 0:01:53.640 --> 0:01:56.000 But the way to do it successfully's to live in 0:01:56.000 --> 0:01:59.680 the future and look back for probable futures. You know, 0:01:59.720 --> 0:02:02.880 what is the potential outcome? How's this price? Is this 0:02:02.960 --> 0:02:06.360 miss price not priced in or correctly priced? So that's 0:02:06.360 --> 0:02:08.800 what you're trying to do all the time. I find 0:02:08.800 --> 0:02:11.239 the further out you go, the more edge you get. 0:02:11.240 --> 0:02:13.360 But the harder it is to get to certainty, so 0:02:13.360 --> 0:02:15.520 then you're really thinking in terms of, well could this that, 0:02:15.560 --> 0:02:17.880 look at that happen, Which is why you know, stuff 0:02:17.919 --> 0:02:20.160 like the crypto wild really interest me because there's a 0:02:20.200 --> 0:02:23.760 ton of possible futures out there and different outcomes that 0:02:23.800 --> 0:02:26.680 we can invest in that all have huge upsides. So that's, 0:02:26.720 --> 0:02:28.560 you know, that's the basis of what we try and do, 0:02:28.639 --> 0:02:31.040 or certainly I try and do. Yeah, So for everybody 0:02:31.040 --> 0:02:33.120 that's tuned in right now, we're gonna dig into some 0:02:33.160 --> 0:02:35.240 really good stuff. We're gonna I'm gonna ask you about 0:02:35.400 --> 0:02:37.400 kind of what you're seeing in the macro picture today. 0:02:37.639 --> 0:02:39.280 I want to dig into some of the work that 0:02:39.320 --> 0:02:41.640 you've done about what you're calling like in the regime 0:02:41.680 --> 0:02:43.760 and this insolvency phase that we're kind of going through. 0:02:44.240 --> 0:02:46.679 What that means for us on a global scale, from 0:02:46.680 --> 0:02:51.440 our money politics, central make digital currencies, cryptocurrencies, and if 0:02:51.480 --> 0:02:53.480 we have time, we might even get into some kind 0:02:53.480 --> 0:02:55.880 of projections and things like that. So if everybody listening, 0:02:55.880 --> 0:02:57.920 just make sure you're sticking around for all that, because 0:02:57.919 --> 0:02:59.600 we're gonna we're gonna really dig into some good stuff. 0:02:59.639 --> 0:03:01.240 We're gonna start at a higher level and then we'll 0:03:01.280 --> 0:03:03.400 kind of push down as I think a good macro 0:03:03.560 --> 0:03:07.880 person would do so. Um. As far as macro, I 0:03:07.960 --> 0:03:10.280 think anybody investing is always trying to guess what the 0:03:10.320 --> 0:03:11.919 future is going to be. I guess it's probably just 0:03:11.960 --> 0:03:14.400 different time frames. If you're a trader, they're very short term. 0:03:14.680 --> 0:03:16.520 Macro is probably long term. Do you think that it's 0:03:16.760 --> 0:03:19.280 easier probably to get the bigger picture right than it 0:03:19.360 --> 0:03:22.600 is the short term picture? Like if somebody says, hey, hey, Rald, 0:03:22.680 --> 0:03:24.519 what's the price of this asset gonna be next month 0:03:24.600 --> 0:03:26.640 or the next week? You're like, I don't know, because 0:03:26.680 --> 0:03:32.000 different people have different skill sets. Um, and I prefer 0:03:32.040 --> 0:03:33.960 the longer term time right, And I'm just better at it. 0:03:35.200 --> 0:03:38.200 I'm a terrible short term trader. Doesn't mean people like 0:03:38.240 --> 0:03:40.200 Stevie Cohen will pulled to the journs to a brilliant 0:03:40.240 --> 0:03:43.880 short term traders. Um. You know, they can be incredibly 0:03:43.880 --> 0:03:46.640 successful at it. So it just depends what suits you, right. 0:03:46.640 --> 0:03:48.680 I'm a very visual person. I say the whole kind 0:03:48.720 --> 0:03:51.080 of macro framework come ahead at all times. I'm always 0:03:51.160 --> 0:03:53.760 kind of adjusting it, and those things I find play 0:03:53.800 --> 0:03:58.480 out better over minimum three months but generally, you know, 0:03:58.640 --> 0:04:02.120 six months to eighteen and sometimes further out as well. 0:04:02.840 --> 0:04:06.280 I just find it. I just get better returns from it. Sure, yeah, 0:04:06.360 --> 0:04:08.280 I kind of feel the same way. Um, it's easier 0:04:08.280 --> 0:04:10.080 for me to see the big picture. Even with my business. 0:04:10.080 --> 0:04:12.280 It's like I can't really dig into the details. I 0:04:12.280 --> 0:04:14.440 still like to look at the big picture. But talking 0:04:14.480 --> 0:04:16.680 about the big picture, maybe why don't you just set 0:04:16.760 --> 0:04:18.719 up for us, I guess what you're seeing in the 0:04:18.880 --> 0:04:24.160 macro economic picture right now. So we'll go back a 0:04:24.160 --> 0:04:27.760 bit very quickly. So we've been in this debt supercycle 0:04:27.760 --> 0:04:30.640 that we all know about. And the answer in two 0:04:30.680 --> 0:04:34.120 thousand after the internet boom was more debt. It's led 0:04:34.160 --> 0:04:36.400 to the housing boom, which led to the banking bus 0:04:36.400 --> 0:04:39.240 and the answer to that was more debt at corporate level, 0:04:39.279 --> 0:04:42.680 now still somewhein the banking system, and then government debt 0:04:42.760 --> 0:04:46.479 because government started trying to monetize this debt. So and 0:04:46.520 --> 0:04:48.560 the central banks have now put it onto their balance sheet. 0:04:48.600 --> 0:04:50.960 So it's not going away. It's just keeps growing, keeps 0:04:50.960 --> 0:04:53.479 getting moved around like a game of Past the parcel. 0:04:54.839 --> 0:04:58.120 So we kind of knew that the next time we 0:04:58.160 --> 0:05:00.320 had a recession, debt was going to be a issue 0:05:00.320 --> 0:05:02.640 again because it hadn't gone away. In fact that I 0:05:02.880 --> 0:05:06.039 got worse. So I've been you know, it's really interesting 0:05:06.040 --> 0:05:09.520 economists never forecast recessions, which is bizarre to me because 0:05:09.520 --> 0:05:12.120 if you show a small child a chart of GDP, 0:05:12.279 --> 0:05:14.000 they said, what, it goes up and down. It's like 0:05:14.040 --> 0:05:16.680 a cycle, right, it's a sign wave. You just don't 0:05:16.680 --> 0:05:19.400 know how deep or how high the peaks and troughs 0:05:19.440 --> 0:05:22.240 are and how far they are apart. But you approximately no, 0:05:22.440 --> 0:05:25.680 which is why it's kind of forecastable. So I've been 0:05:25.720 --> 0:05:30.200 looking for the end of this cycle and a recession 0:05:30.240 --> 0:05:33.040 back from about two thousand and eighteen. By two thousand nineteen, 0:05:33.040 --> 0:05:34.760 I was kind of locked and loaded into bonds where 0:05:34.800 --> 0:05:37.159 the best trade was, and then it was coming. Then 0:05:37.680 --> 0:05:40.599 the pandemic came and I saw it immediately, is okay, 0:05:40.600 --> 0:05:43.880 this is the accelerator, right, this is a huge thing. 0:05:43.920 --> 0:05:45.960 I was very early and got it very very right 0:05:46.040 --> 0:05:51.200 early on and luckily and that phase and looked that said, okay, 0:05:51.480 --> 0:05:53.760 now we've got the situation where we've seen the worst 0:05:53.920 --> 0:05:57.520 ever GDP dropping all history outside of the Great Depression, 0:05:59.560 --> 0:06:04.400 and the market usually goes through certain phases during a recession. 0:06:04.400 --> 0:06:08.480 It's normal. First is the liquidation phase, when everybody goes, 0:06:08.600 --> 0:06:10.839 oh my god, everything's changed. I need to readjust my 0:06:10.920 --> 0:06:14.679 risk right. Then you have the hope phase, which is, well, 0:06:14.720 --> 0:06:16.960 maybe it's not that bad. You know, in the media 0:06:17.080 --> 0:06:19.040 tends play a big role in that because they don't 0:06:19.040 --> 0:06:21.520 want the negative narratives, so it's it's all going to 0:06:21.600 --> 0:06:24.520 be okay. And then usually what happens is you get 0:06:24.560 --> 0:06:28.840 the final reality phase, So the normal reality phases when 0:06:28.880 --> 0:06:31.919 people go, actually, you know, this is pretty bad. Unemployment 0:06:31.960 --> 0:06:36.800 is still sticky, and the economy, consumer confidence, and the 0:06:36.839 --> 0:06:40.679 stock market tend to roll over together. This time around, 0:06:40.680 --> 0:06:43.360 I looked at this and thought, well, we don't know, 0:06:43.520 --> 0:06:45.840 because of central bank actions, how this is going to 0:06:45.880 --> 0:06:48.280 play out in some of these assets, but I know 0:06:48.560 --> 0:06:54.320 that everybody is probably pricing how long this episode goes 0:06:54.360 --> 0:06:58.919 on for wrongly, because every wants to assume it's going 0:06:58.960 --> 0:07:00.440 to be over and done with. And here we are 0:07:00.480 --> 0:07:04.520 now in peak pandemic across Europe, in the US, UM 0:07:04.560 --> 0:07:07.520 and in other countries again, and people starting to understand, okay, 0:07:07.560 --> 0:07:11.280 actually this is gonna last longer. So I termed that 0:07:11.360 --> 0:07:14.720 phase the insolvency phase, because the problem is is GDP 0:07:14.840 --> 0:07:17.960 growth collapsed. It came up a bit, and then it's 0:07:18.000 --> 0:07:20.160 flat blind. If you see all that real time economic data, 0:07:20.240 --> 0:07:24.000 like the Google mobility data, it's flatline. In fact, it's 0:07:24.080 --> 0:07:27.760 rolling over. What's telling us is that GDP growth is 0:07:27.800 --> 0:07:30.400 still about negative five percent year on year, which is 0:07:30.440 --> 0:07:32.160 the worst reception you and I have ever lived through. 0:07:32.920 --> 0:07:36.120 And that's ongoing after the kind of hope phased recovery 0:07:36.280 --> 0:07:38.960 because the first part was so bad. So if you 0:07:39.000 --> 0:07:41.080 think of what does that mean, it means that if 0:07:41.120 --> 0:07:43.360 you're a restaurant or a small business or even a 0:07:43.440 --> 0:07:47.720 large business that's not Internet based, right now, your revenues 0:07:48.040 --> 0:07:52.320 have dropped, but your cost base remains um and that 0:07:52.400 --> 0:07:54.760 makes you insolvent after a while, as you blow through 0:07:54.760 --> 0:07:56.640 your cash and then the government gives you some cash, 0:07:57.080 --> 0:07:59.440 and then they stopped the stimulus, and then you've got 0:07:59.440 --> 0:08:03.520 no cash and you're out of business, and that's insolvency. Now. 0:08:03.920 --> 0:08:06.760 The FED stepped in quickly to stop the insolvency of 0:08:06.800 --> 0:08:10.560 big corporations like General Electric and Forward by buying their bonds, 0:08:11.760 --> 0:08:15.400 but the government stimulus gave that check a while ago. 0:08:15.440 --> 0:08:18.600 Whatever that was like made to people and small businesses. 0:08:18.680 --> 0:08:21.360 It's been nothing since, even Europe struggling to get more 0:08:21.360 --> 0:08:24.320 stimulus through, so kind of it's a bit of a 0:08:24.320 --> 0:08:27.120 wily coyote moment, the insolvency phases where you run off 0:08:27.120 --> 0:08:28.920 the edge of the cliff and it's like it's fine 0:08:28.920 --> 0:08:30.520 out here, and then you're like, oh no, it's not, 0:08:30.920 --> 0:08:34.000 and we're seeing it everywhere. And I worry about what 0:08:34.080 --> 0:08:37.800 that insolvency phase means because in the end, it means 0:08:37.840 --> 0:08:40.600 that central banks have to print more money. You have 0:08:40.640 --> 0:08:42.400 to try and jam it into the banking system and 0:08:42.400 --> 0:08:44.240 try and force the banks to lend it, which they 0:08:44.280 --> 0:08:48.080 don't want to do. And they also have to try 0:08:48.120 --> 0:08:51.120 their ext stimulus for fiscal stimulus by the governments and 0:08:51.200 --> 0:08:54.240 monetize that debt too. So basically we've still got this 0:08:54.320 --> 0:08:58.440 massive transfer of insolvency off that private sector balance sheet 0:08:59.280 --> 0:09:05.760 onto the onto the government and balance shape. Right. The 0:09:05.840 --> 0:09:09.560 whole process is slightly scary, right, And I think, as 0:09:09.559 --> 0:09:12.160 you said, we're in this debt cycle and we're nearing 0:09:12.160 --> 0:09:13.600 the end. But I think a lot of people have 0:09:13.600 --> 0:09:15.080 been calling for the end of the debt cycle for 0:09:15.160 --> 0:09:17.880 a long time, and I think timing is always the 0:09:17.880 --> 0:09:20.400 hard problem, right We we always know what's inevitable, but 0:09:20.520 --> 0:09:23.160 when and so we have this insolvency phase. But it 0:09:23.160 --> 0:09:25.840 looks like we've seen the at least in the United States, 0:09:25.880 --> 0:09:29.000 the FED um be very willing to work. Right In 0:09:29.040 --> 0:09:31.320 two thousand eight it was a trillion dollars pretty quickly too. 0:09:31.400 --> 0:09:33.800 This year was three three trillion pretty quickly, and with 0:09:33.840 --> 0:09:36.760 the government it was six trillion, you know, total. And 0:09:36.920 --> 0:09:39.720 it seems though, like I understand you're saying, like they've 0:09:39.840 --> 0:09:42.200 stalled out on this last round of stimulus and people 0:09:42.200 --> 0:09:44.959 are running out of money, but they've shown how willing 0:09:44.960 --> 0:09:47.600 they are to move fast and hard and heavy. Instead 0:09:47.600 --> 0:09:49.280 of one trillion, it was six trillion. I mean, they 0:09:49.280 --> 0:09:51.680 wouldn't just spend six chillion to let it fall apart now. 0:09:52.160 --> 0:09:54.160 I mean, don't you think they're gonna do whatever it's 0:09:54.200 --> 0:09:55.920 gonna take, or do you think it may be too late? 0:09:56.600 --> 0:09:59.440 Of course, of course they do. And that's the whole 0:09:59.480 --> 0:10:02.160 point is you don't get rid of a debt supercycle 0:10:02.200 --> 0:10:04.600 by letting everybody go bust. You do it by trying 0:10:04.600 --> 0:10:07.880 to support every single part that you can. And what 0:10:07.920 --> 0:10:10.320 you're doing in essence is you're just printing a lot 0:10:10.360 --> 0:10:15.439 of money, so you're devaluing the value of money itself. Yep. 0:10:15.880 --> 0:10:18.959 And that's the real issue here is there is no 0:10:20.200 --> 0:10:23.280 one off reset of debts and everybody goes back to 0:10:23.320 --> 0:10:25.400 the dark ages and you start again. It just doesn't 0:10:25.400 --> 0:10:27.920 work that way because, as you said, governments are highly 0:10:27.960 --> 0:10:32.400 incentivized to protect the people who voted them in, right. Yeah, 0:10:32.440 --> 0:10:34.280 So they're trying to keep all the plates spinning, so 0:10:34.360 --> 0:10:36.400 to speak, and eventually they can't keep mob spinning, and 0:10:36.440 --> 0:10:38.000 they aren't. They are crashed. So it's kind of a 0:10:38.000 --> 0:10:39.439 as I've been seeing. It's kind of a go tell 0:10:39.440 --> 0:10:44.520 your blow tape tape scenario. Yeah. Now, And the problem 0:10:44.600 --> 0:10:47.440 is is people we don't know what that The end 0:10:47.520 --> 0:10:50.160 game of that is. Some people want to price in 0:10:50.800 --> 0:10:54.040 hyper inflation. I don't think that's coming. Some people want 0:10:54.040 --> 0:10:56.240 to apply to a lot of inflation. I don't think 0:10:56.280 --> 0:10:58.760 that's coming either, because of the aging population and the 0:10:58.840 --> 0:11:04.400 debt demographics. Icael, I think it's more deflation, right, Um, 0:11:04.480 --> 0:11:07.320 But whatever it is, this takes a long time to 0:11:07.360 --> 0:11:12.280 play out. And what's what's a long time. I think 0:11:12.520 --> 0:11:14.640 the de leveraging that has to happen in whichever way, 0:11:14.679 --> 0:11:19.160 shape or form, probably twenty years um. And that's that 0:11:19.200 --> 0:11:21.880 means a lot lower economic growth, the less value of 0:11:21.880 --> 0:11:24.760 your own currency, and eventually we might move to a 0:11:24.760 --> 0:11:27.160 different system, which is what we'll come into in a bit. Yeah, 0:11:27.200 --> 0:11:29.040 so I want to move into that conversation, but before 0:11:29.040 --> 0:11:33.080 we do, the the inflation, the the the inflation hyper inflation, 0:11:33.160 --> 0:11:36.319 or the de leveraging the deflation seems to be the debate, right, 0:11:36.320 --> 0:11:39.280 I mean, I've had I've asked that that question many times, 0:11:39.640 --> 0:11:43.720 but it seems like maybe it's actually a very nuanced conversation, 0:11:43.760 --> 0:11:46.959 and there's both because we're seeing I mean, where I'm 0:11:46.960 --> 0:11:49.960 at here in the United States, you can't buy anything. 0:11:50.280 --> 0:11:52.360 You can't buy a bicycle, you can't buy a surfboard, 0:11:52.360 --> 0:11:53.800 you can't buy an r V, you can't buy a car, 0:11:53.920 --> 0:11:55.679 you can't buy a house. I mean, it's inflated so 0:11:55.800 --> 0:11:58.880 fast it makes your head spin. But yet there's deeply 0:11:59.040 --> 0:12:01.600 so it almost seems like we're going to see both. Yes, 0:12:01.760 --> 0:12:03.520 And one of the things I've written a lot about 0:12:03.720 --> 0:12:07.560 is wage deflation. If you look at wages adjusted for 0:12:07.679 --> 0:12:13.319 inflation since nineteen seventy four, that basically remained flat, so 0:12:13.600 --> 0:12:16.480 people because of globalization, the number of people entering the 0:12:16.520 --> 0:12:20.960 workforce from the Baby Boomers and now the millennials, plus 0:12:21.000 --> 0:12:25.040 the globalization and technology have all meant that humans are 0:12:25.040 --> 0:12:28.840 getting replaced either with cheaper workers abroad, or they're competing 0:12:28.840 --> 0:12:30.560 against each other because there's so many of the people 0:12:30.559 --> 0:12:34.320 of the same age, or they're competing against computers. That's 0:12:34.320 --> 0:12:37.280 a terrible situation. And that's not a fault of anybody. 0:12:37.360 --> 0:12:39.080 So if it's a fault of anybody, it's the parents 0:12:39.080 --> 0:12:41.200 of the people who had all these baby boomers, and 0:12:41.200 --> 0:12:44.120 that was World War Two that drove that. Well, that's 0:12:44.160 --> 0:12:46.920 not a terrible thing. I think per per like Jeff 0:12:46.960 --> 0:12:49.560 boosts argument you know about deflation, which I know you 0:12:49.720 --> 0:12:52.560 you know you're familiar with. Um. It seems like human 0:12:52.640 --> 0:12:55.320 nature always wants deflation. Right, instead of making a bunch 0:12:55.320 --> 0:12:57.199 of trips holding stuff with my hands, I'll create a 0:12:57.200 --> 0:13:01.040 whil barrel to make my work easier. And like computers 0:13:01.040 --> 0:13:03.000 and robots, Like I watched the Jetsons when I was 0:13:03.000 --> 0:13:04.440 a kid, and they had a robot that cleaned the house, 0:13:04.480 --> 0:13:05.599 and it's like, oh, how cool would there be of 0:13:05.600 --> 0:13:08.080 a robot cleaned house? So a seems like we naturally 0:13:08.120 --> 0:13:10.360 want that, and it's a good thing to do, but 0:13:10.440 --> 0:13:13.680 we've got this one problem is this to eight these 0:13:13.720 --> 0:13:16.440 two cohorts, the baby boomers and the millennials, too many 0:13:16.480 --> 0:13:20.400 of them. If you're Japan, which didn't have the echo 0:13:20.400 --> 0:13:24.520 millennial boom, this is exactly all you want. You want 0:13:24.559 --> 0:13:28.000 some deflation because you'll say a savings nation. And do 0:13:28.040 --> 0:13:30.720 you want over time because you've got a massive loss 0:13:30.840 --> 0:13:35.520 of workforce to replace them with robots? Of course you do, 0:13:35.880 --> 0:13:38.600 And that's the right answers because of World War Two 0:13:38.600 --> 0:13:40.040 that we end up with these too many groups of 0:13:40.040 --> 0:13:42.400 people because all the baby boomers had kids as well, 0:13:42.760 --> 0:13:46.440 So this kind of demographic mess needs to sort itself through. 0:13:46.720 --> 0:13:49.760 It's not normal. This is a really weird time. That's 0:13:49.760 --> 0:13:51.840 why we store the massive inflation of the seven sis. 0:13:52.160 --> 0:13:54.520 We've seen all of the debt cycle. What I did 0:13:54.640 --> 0:13:59.360 is I took average household earnings in inflation just in terms, 0:13:59.800 --> 0:14:03.640 and adjusted them for the amount of household debt, and 0:14:03.880 --> 0:14:07.840 then exactly mirrors the rise and asset classes. So basically 0:14:07.880 --> 0:14:10.120 what people have done the inflation we've seen in assets 0:14:11.080 --> 0:14:15.280 and wage deflation. The difference is the debt. So people 0:14:15.280 --> 0:14:18.000 could participate in the economy. So it's kind of they 0:14:18.040 --> 0:14:20.680 did a rational thing, but too many people did irrational thing, 0:14:20.720 --> 0:14:24.360 tensively irrational. Well, it seems like we have I I 0:14:24.400 --> 0:14:26.680 do understand the demographics, and you're right. I've been following 0:14:26.680 --> 0:14:28.960 Harry Dent for like over a decade, and he definitely 0:14:28.960 --> 0:14:31.920 has to pioneered a lot on the demographics. But it 0:14:31.960 --> 0:14:35.040 seems like it's maybe because we have incompatible systems where 0:14:35.080 --> 0:14:38.360 we have a def human nature is deflationary, but we 0:14:38.400 --> 0:14:42.320 have an inflationary system. So if we had an inflation 0:14:42.320 --> 0:14:45.280 a deflationary system with a deflationary nature, maybe something would 0:14:45.280 --> 0:14:47.200 be different. I guess we don't know. I think, yeah, 0:14:47.320 --> 0:14:50.080 that maybe it's the argument why we've seen wage deflation 0:14:50.240 --> 0:14:54.680 and asset price inflation. Um, maybe it's exactly that. I 0:14:54.720 --> 0:14:58.960 don't know. It probably makes sense. So, UM, we are 0:14:59.040 --> 0:15:01.800 where we are, as you like to say, right, whether 0:15:01.800 --> 0:15:03.680 we like it or not, Where we are and and 0:15:03.800 --> 0:15:07.160 and things are are moving very very fast. And UM, 0:15:07.240 --> 0:15:11.920 I want to get into um a big topic, which is, UM, 0:15:11.960 --> 0:15:13.600 a few things. There's a few things that seem to 0:15:13.600 --> 0:15:17.000 be kind of converging together. And UM, really, I mean 0:15:17.040 --> 0:15:19.360 you've talked about like the Fourth Turning. And now we 0:15:19.440 --> 0:15:21.920 talk about I mean, we have the Bretton Woods calling 0:15:21.960 --> 0:15:24.000 for or I m F calling for Bretton Woods to 0:15:24.200 --> 0:15:26.600 moment at the same time that the World Economic Forums 0:15:26.600 --> 0:15:29.160 calling for this great reset, and they all seem to 0:15:29.200 --> 0:15:32.000 be kind of converging right here where something big is 0:15:32.040 --> 0:15:35.560 going to happen next year. UM. I know you've talked 0:15:35.600 --> 0:15:38.480 quite a bit about that Bretton Woods Too moment. Maybe 0:15:38.480 --> 0:15:40.720 that means bringing the world back together onto a onto 0:15:40.720 --> 0:15:44.359 a one world currency kind of like Bretton Woods one. Um. 0:15:44.400 --> 0:15:46.440 And then we have the great reset that's coming together. 0:15:46.480 --> 0:15:48.440 I mean, what are you seeing in that whole mess 0:15:48.480 --> 0:15:51.920 kind of converging. It's um, it's a hill bloom. You've 0:15:51.920 --> 0:15:55.800 seen around on Twitter stuff talks about recently about the 0:15:55.800 --> 0:16:01.320 Overtson window, which is a political opportunity, moments of opportunity 0:16:01.680 --> 0:16:04.680 when you can affect great change. Most changes can't happen 0:16:05.040 --> 0:16:08.760 except in extraordinary times, right, And this is what the 0:16:08.760 --> 0:16:11.680 Fourth Turning was about. Is when you get the shift 0:16:11.720 --> 0:16:15.280 in the handover of power from one demographic to the other, 0:16:15.840 --> 0:16:17.720 it changes the end of a system because people in 0:16:17.720 --> 0:16:21.480 different ways of doing things. So this overt and windows 0:16:21.480 --> 0:16:25.080 as wide as it's probably ever been, because everybody knows 0:16:25.080 --> 0:16:27.520 they need something different. Whether you're on the left, whether 0:16:27.520 --> 0:16:29.480 you're on the right, whether a crypto anarchists or a 0:16:29.480 --> 0:16:32.880 gold bug, everybody knows something needs to change. Or you're 0:16:32.880 --> 0:16:35.320 a student, we all know you don't know what the 0:16:35.360 --> 0:16:39.080 answer is. But what it does mean is is that 0:16:39.120 --> 0:16:41.600 there's a hard probability that something big will happen, and 0:16:41.640 --> 0:16:44.560 we're hearing about it. So one of the things that 0:16:44.640 --> 0:16:47.960 these central banks and these government bodies and supernational bodies 0:16:47.960 --> 0:16:50.720 are looking at, they're looking at one of the problems 0:16:50.720 --> 0:16:53.680 that they're seeing is that the fact that the US 0:16:54.840 --> 0:16:59.320 world GDP and of every currency transaction on Earth, and 0:16:59.720 --> 0:17:02.960 this can't work guides we can't, you know, if you're 0:17:02.960 --> 0:17:05.560 South Africa or Brazil or Argentina, you can't live in 0:17:05.560 --> 0:17:07.840 a world where you have to borrow in a currency 0:17:07.840 --> 0:17:10.119 that's not your own, that goes up and down in 0:17:10.200 --> 0:17:13.640 huge cycles, and you're you're having to pander to both 0:17:13.640 --> 0:17:17.520 the swift payment system and and UM and the banking 0:17:17.560 --> 0:17:19.560 system that may or may not have access to dollars. 0:17:20.200 --> 0:17:22.760 So they're all saying, listen, this has to stop. It's 0:17:22.880 --> 0:17:26.320 creating a huge problem part of the big offshore dollar 0:17:26.400 --> 0:17:28.119 lending mark. And when you say they are saying it 0:17:28.160 --> 0:17:30.720 has to stop, who's they? So that is the I 0:17:30.840 --> 0:17:34.760 m F, which is basically the e c B, the 0:17:34.800 --> 0:17:38.560 Bank of England, the Bank of Japan, probably the Royal 0:17:38.560 --> 0:17:41.040 Bank of Canada, I mean the Bank Canada. I mean 0:17:41.119 --> 0:17:44.960 almost all the central banks are saying this cannot go on. 0:17:45.000 --> 0:17:47.320 Obviously the FED wants it to go on because they're 0:17:47.359 --> 0:17:50.280 the reserve currency. Everyone's saying that, right, this has gone 0:17:50.280 --> 0:17:53.359 too far. This is one of the reasons why Bretton 0:17:53.359 --> 0:17:55.960 Woods happened in the first place. It's also the reason 0:17:56.000 --> 0:17:59.320 why the US left Bretton Woods. Is when something goes 0:17:59.400 --> 0:18:02.560 too far and it comes unmanageable for everybody, every he 0:18:02.600 --> 0:18:05.600 seeks a different answer. And what we've seen is the 0:18:05.720 --> 0:18:08.280 rise of populism and anger, whether it's from the left 0:18:08.359 --> 0:18:11.480 or the right, that we want change. And that's classically 0:18:11.560 --> 0:18:15.120 Neil Holl's forth turning as well. So people are now 0:18:15.160 --> 0:18:17.719 realizing that the digital world is going to offer us 0:18:17.760 --> 0:18:20.360 some change. Think of one of the other super narratives 0:18:20.400 --> 0:18:23.840 that we live in, the one verse, right, and we've 0:18:23.880 --> 0:18:26.560 seen that the printing of money and giving it to 0:18:26.600 --> 0:18:29.240 the banks only gives money to people who can get 0:18:29.240 --> 0:18:32.760 access to credit, which is the richer people, right, So 0:18:32.800 --> 0:18:35.840 it doesn't work. So that we're seeing the rise of 0:18:36.280 --> 0:18:40.399 the m m T story, a massive fiscal stimulus, but 0:18:40.480 --> 0:18:43.399 even that normally goes in the hands of the wrong people. 0:18:43.640 --> 0:18:46.520 A few corporates lie in their back pockets. But we're 0:18:46.560 --> 0:18:50.280 seeing the central bank digital currency story rising, which is 0:18:50.320 --> 0:18:53.600 what the IMF for talking about, which is, well, maybe 0:18:55.359 --> 0:19:00.360 maybe we allow programmable money where Mark and rail get 0:19:00.359 --> 0:19:03.879 different rates of interest, or they stimulate your you know, 0:19:03.960 --> 0:19:06.240 your friends surf shack because it's closed down because of 0:19:06.240 --> 0:19:09.800 the pandemic, and they penalize them some savor or somewhere else, 0:19:10.320 --> 0:19:12.680 whatever it may be. You can use behavior economics to 0:19:12.760 --> 0:19:15.160 drive incentive systems to get the economy to function better. 0:19:16.320 --> 0:19:19.800 That's amazing. It's amazing behavior and sensive systems work better 0:19:19.840 --> 0:19:23.080 than anything else. They're also terrifying because they can be 0:19:23.440 --> 0:19:25.240 stronger than everything else. And we've seen that. But Twitter 0:19:25.280 --> 0:19:28.479 and Google, right, and politicization of people who are not 0:19:28.520 --> 0:19:32.280 that political, they got driven down alleyways where they hated 0:19:32.320 --> 0:19:36.080 everybody else because of how behavioral economics works on these 0:19:36.119 --> 0:19:42.080 big data platforms. So that's all that's all coming here now, Um, 0:19:42.359 --> 0:19:44.800 just a sidetrack there a little bit. I mean, we 0:19:44.880 --> 0:19:46.520 talked about this debt based system and we have to 0:19:46.560 --> 0:19:49.520 keep paling more debt and it's almost like, um, it's 0:19:49.520 --> 0:19:51.399 not working, so let's just keep doing more of it. 0:19:51.480 --> 0:19:54.120 Like we've we've you said, we've got this divide between 0:19:54.119 --> 0:19:57.480 then and the one percent. We have this incoming equality. 0:19:57.880 --> 0:20:00.000 Um that's created by this system. But let's just keep 0:20:00.080 --> 0:20:02.600 doing more of it. And now we kind of have 0:20:02.840 --> 0:20:05.520 again we have different political factions and some people are 0:20:05.520 --> 0:20:08.560 calling for everything has to be equal, not just equal opportunity, 0:20:08.560 --> 0:20:10.760 but now it has to be an equal outcome. But 0:20:10.880 --> 0:20:13.479 what you're talking about is the exact opposite. Now we're 0:20:13.480 --> 0:20:18.280 gonna treat everybody not equally. So what again, If we 0:20:18.280 --> 0:20:22.520 think of incentives and game theory, individual governments will always 0:20:22.560 --> 0:20:25.240 choose to maintain the status quo because to do something 0:20:25.320 --> 0:20:30.080 dramatically different is terrifying, and that's all they try and do, really, 0:20:30.320 --> 0:20:32.280