1 00:00:00,040 --> 00:00:04,320 Speaker 1: Welcome to another episode of Financial Heresy, where we discuss 2 00:00:04,320 --> 00:00:06,720 Speaker 1: how money works so you can make more, keep more, 3 00:00:07,080 --> 00:00:10,920 Speaker 1: and give more. Today, I have a fantastic guest that 4 00:00:10,960 --> 00:00:13,920 Speaker 1: I am really excited about for you guys. Her name 5 00:00:13,960 --> 00:00:16,800 Speaker 1: is Lynn Alden. She is one of the world's leading 6 00:00:16,880 --> 00:00:22,720 Speaker 1: experts on economics, monetary policy, fiscal policy, energy, crypto. She 7 00:00:22,840 --> 00:00:26,200 Speaker 1: knows it all. She's got a fantastic background in engineering 8 00:00:26,239 --> 00:00:29,800 Speaker 1: that has allowed her to take a fresh look at 9 00:00:29,840 --> 00:00:34,280 Speaker 1: these economic things in a way that most people cannot. 10 00:00:34,520 --> 00:00:37,239 Speaker 1: And because of that, she's able to make connections and 11 00:00:37,280 --> 00:00:40,159 Speaker 1: explain things in a way that are are make it 12 00:00:40,240 --> 00:00:44,440 Speaker 1: make it easier for ordinary people like myself to understand. 13 00:00:44,560 --> 00:00:47,280 Speaker 1: And so in this episode, we're gonna be talking about 14 00:00:47,479 --> 00:00:51,280 Speaker 1: the relationship between monetary and fiscal policy. We're gonna be 15 00:00:51,320 --> 00:00:55,120 Speaker 1: talking about energy, nuclear oil, We're gonna be talking about 16 00:00:55,160 --> 00:01:00,320 Speaker 1: investment opportunities and globalization and more like to welcome um 17 00:01:00,440 --> 00:01:04,160 Speaker 1: Lynn Alden here. Thank you so much, Lynn for joining 18 00:01:04,240 --> 00:01:08,840 Speaker 1: us today. I'm really excited about this conversation. Um. You 19 00:01:09,000 --> 00:01:14,119 Speaker 1: have some of the clearest explanations and uh most nuanced 20 00:01:14,319 --> 00:01:16,679 Speaker 1: thoughts on what is going on in the economy today, 21 00:01:17,000 --> 00:01:20,400 Speaker 1: and very detailed understanding of how the you know, the 22 00:01:20,840 --> 00:01:24,160 Speaker 1: mechanisms of the economy work. UM, So I'd like to 23 00:01:24,200 --> 00:01:26,520 Speaker 1: start off kind of looking at what is going on today. 24 00:01:26,840 --> 00:01:29,160 Speaker 1: Right now, it looks like inflation may have peaked. The 25 00:01:29,240 --> 00:01:34,120 Speaker 1: Federal Reserve is potentially nearing the end of their rate hikes. UM, 26 00:01:34,160 --> 00:01:37,560 Speaker 1: what is your overall outlook on the economy, uh, specifically 27 00:01:37,600 --> 00:01:40,800 Speaker 1: in America with what the Federal Reserve is doing right now? Sure, 28 00:01:40,840 --> 00:01:42,720 Speaker 1: I think it depends on what time frame you look at. 29 00:01:42,760 --> 00:01:44,400 Speaker 1: So I think, you know, if I zoom out really far, 30 00:01:44,920 --> 00:01:47,680 Speaker 1: my overall assessment is, I think we're in a disinflationary 31 00:01:47,680 --> 00:01:50,720 Speaker 1: cycle within what is probably going to be a recurring 32 00:01:50,720 --> 00:01:54,760 Speaker 1: inflationary problem for a while, some more structural inflation, uh, 33 00:01:54,840 --> 00:01:57,040 Speaker 1: you know, partially just due to energy capex and things 34 00:01:57,040 --> 00:01:58,960 Speaker 1: like that. But we can get to that later. Uh. 35 00:01:59,000 --> 00:02:00,880 Speaker 1: In the near term, I sent you the Federal Reserve 36 00:02:01,080 --> 00:02:05,240 Speaker 1: and other central banks are trying to tighten monetary policy, uh, 37 00:02:05,280 --> 00:02:09,240 Speaker 1: domestically and globally in order to reduce demand for goods 38 00:02:09,280 --> 00:02:13,080 Speaker 1: and services, to basically slow down, uh, their their demand 39 00:02:13,320 --> 00:02:15,400 Speaker 1: so that they can let the edge off of inflation 40 00:02:15,720 --> 00:02:18,920 Speaker 1: and to you know, curtail lending. Activities to curtail consumption 41 00:02:19,480 --> 00:02:21,920 Speaker 1: UH and things like that, and so far that that 42 00:02:21,960 --> 00:02:24,400 Speaker 1: seems to be working through a significant degree. But it's 43 00:02:24,440 --> 00:02:27,200 Speaker 1: also that you know, there's no more fiscal pouring out right. 44 00:02:27,240 --> 00:02:30,240 Speaker 1: So for example, UH, you know that the Fed's balance 45 00:02:30,280 --> 00:02:33,280 Speaker 1: she doesn't necessarily on its own dictate what happens with inflation, 46 00:02:33,680 --> 00:02:37,240 Speaker 1: whereas the government sending checks to people does um. And 47 00:02:37,280 --> 00:02:40,200 Speaker 1: of course how they do it matters as well. UM. 48 00:02:40,480 --> 00:02:43,120 Speaker 1: And so because you know that the governments are still 49 00:02:43,200 --> 00:02:45,799 Speaker 1: running deficits, but they're not it's not the same explosive 50 00:02:45,840 --> 00:02:49,680 Speaker 1: sort of like fast acting stimulus that was before, you're 51 00:02:49,680 --> 00:02:52,560 Speaker 1: seeing a draw down in in in basically like savings 52 00:02:52,680 --> 00:02:55,440 Speaker 1: rates UM by people. It's kind of undoing some of 53 00:02:55,440 --> 00:02:58,079 Speaker 1: the stimulus we saw before. UH. And so essentially what 54 00:02:58,160 --> 00:03:01,120 Speaker 1: we can describe this as that the economy domestically and 55 00:03:01,120 --> 00:03:04,600 Speaker 1: and to something that globally is decelerating uh. And so 56 00:03:04,639 --> 00:03:08,160 Speaker 1: it's not necessarily in a recession yet, but it's decelerating 57 00:03:08,160 --> 00:03:12,520 Speaker 1: according to most broad indicators, so purchasing managers, index of 58 00:03:12,600 --> 00:03:16,520 Speaker 1: manufacturing sectors, even service sectors. There's now so much slowing down. 59 00:03:16,760 --> 00:03:19,359 Speaker 1: If you look at the conference board leading leading indicators 60 00:03:19,760 --> 00:03:23,760 Speaker 1: they're pointing towards ressession yield curve is suggesting UH feature 61 00:03:23,760 --> 00:03:26,080 Speaker 1: as sessions. So a lot of negative indicators out there. 62 00:03:26,600 --> 00:03:29,320 Speaker 1: And the thing that hasn't really rolled over yet is 63 00:03:29,400 --> 00:03:33,320 Speaker 1: the domestic labor market. That's still pretty strong. You still 64 00:03:33,360 --> 00:03:36,360 Speaker 1: have substantial weight growth that's also coming off of its 65 00:03:36,440 --> 00:03:40,080 Speaker 1: highs UM. We are starting to see kind of early 66 00:03:40,160 --> 00:03:44,600 Speaker 1: signs of weaknesses and labor markets. So over time hours 67 00:03:44,600 --> 00:03:47,960 Speaker 1: are down, temporary help is down, but some of the 68 00:03:48,000 --> 00:03:49,800 Speaker 1: sticky things are still there, and that tends to be 69 00:03:49,840 --> 00:03:52,400 Speaker 1: a lagging or coincident indicator. And so I would say 70 00:03:52,400 --> 00:03:55,960 Speaker 1: that overall the economy is decelerating, UH, and it's not 71 00:03:56,000 --> 00:03:57,800 Speaker 1: really looking good for the second half of the year 72 00:03:57,880 --> 00:04:02,280 Speaker 1: in terms of you know, likelihoods over session got you okay? 73 00:04:02,320 --> 00:04:05,119 Speaker 1: Well on that note, UH, One thing that you've talked 74 00:04:05,120 --> 00:04:09,120 Speaker 1: about in the past, UM, and I believe this was 75 00:04:09,200 --> 00:04:13,760 Speaker 1: before UH inflation really started getting going, was you've talked 76 00:04:13,760 --> 00:04:17,200 Speaker 1: about why there was no inflation after, how they dealt 77 00:04:17,240 --> 00:04:19,719 Speaker 1: with the financial crisis when they built out the banks, 78 00:04:20,240 --> 00:04:25,000 Speaker 1: and how that would be different coming into one. Basically, 79 00:04:25,040 --> 00:04:28,200 Speaker 1: the difference is you know, base money versus broad money, 80 00:04:28,279 --> 00:04:30,880 Speaker 1: and your measure that you like to point to for 81 00:04:30,920 --> 00:04:33,960 Speaker 1: broad money is the as M two that is now 82 00:04:34,120 --> 00:04:38,719 Speaker 1: down year over year. Um, given that that is one 83 00:04:38,760 --> 00:04:42,080 Speaker 1: of the key drivers behind inflation and or deflation, do 84 00:04:42,120 --> 00:04:44,920 Speaker 1: you think there's a possibility that at least temporarily we 85 00:04:45,040 --> 00:04:49,359 Speaker 1: might see inflation crash pretty soon here and maybe even 86 00:04:49,360 --> 00:04:55,800 Speaker 1: temporary deflation. So it's certainly possible. Uman. Yeah. Back in UM, 87 00:04:55,839 --> 00:04:57,440 Speaker 1: I was pointing out that I thought that a lot 88 00:04:57,480 --> 00:05:00,200 Speaker 1: of people were underestimating the impact of fiscal stimula us 89 00:05:00,240 --> 00:05:02,880 Speaker 1: and many people didn't even have a conception of how 90 00:05:02,880 --> 00:05:05,880 Speaker 1: they were separate fiscal stimulus versus monetary stimulus. And a a 91 00:05:06,120 --> 00:05:09,560 Speaker 1: lot of people when they saw a lot of QB happening, um, 92 00:05:09,600 --> 00:05:12,840 Speaker 1: you know two nine in the aftermath, you know QUE one, 93 00:05:12,880 --> 00:05:15,240 Speaker 1: two and three, Uh, and that definitely trigger a lot 94 00:05:15,279 --> 00:05:17,440 Speaker 1: of inflation. And so when people saw that a lot 95 00:05:17,440 --> 00:05:19,600 Speaker 1: of QUI was happening again, they were like, well, I mean, 96 00:05:19,640 --> 00:05:21,920 Speaker 1: this is not gonna inflationary either. We learned that QUI 97 00:05:22,040 --> 00:05:24,520 Speaker 1: is not inflationary as they put it, and my view 98 00:05:24,560 --> 00:05:26,600 Speaker 1: is that it's a very different type of QUI. Last 99 00:05:26,600 --> 00:05:30,840 Speaker 1: time it was QUI primarily to recapitalize the banking system. Uh. 100 00:05:30,880 --> 00:05:33,839 Speaker 1: And the fiscal stiamus was approximately large enough back then 101 00:05:34,160 --> 00:05:38,000 Speaker 1: to all set loan losses and so load like loan 102 00:05:38,080 --> 00:05:42,440 Speaker 1: losses default actually destroy broad money M two, whereas fiscal 103 00:05:42,440 --> 00:05:45,240 Speaker 1: stimulus adds to M two and you had they pretty 104 00:05:45,320 --> 00:05:46,880 Speaker 1: much balanced it out. So if you look at M 105 00:05:46,920 --> 00:05:49,560 Speaker 1: two over that time period, it doesn't look unusual at all. 106 00:05:49,960 --> 00:05:53,680 Speaker 1: It just kind of continued growing um not an unusual rate, 107 00:05:54,200 --> 00:05:58,080 Speaker 1: whereas twenty was very different because before any loan losses occurred, 108 00:05:58,120 --> 00:06:01,200 Speaker 1: you had absolutely massive it looked like World War two. 109 00:06:01,279 --> 00:06:05,479 Speaker 1: They look like massive wartime injections of money into the system. Uh. 110 00:06:05,520 --> 00:06:08,720 Speaker 1: And that's inflationary. And so you know, before the que 111 00:06:08,920 --> 00:06:12,599 Speaker 1: was just recapitalizing banks. Now QUI was financing the fact 112 00:06:12,680 --> 00:06:15,600 Speaker 1: that the government was issuing all this debt, not drawing 113 00:06:15,600 --> 00:06:18,360 Speaker 1: money from anywhere, was drawing money from new money made 114 00:06:18,360 --> 00:06:21,280 Speaker 1: from the Fed and then sending it to people. And 115 00:06:21,360 --> 00:06:23,599 Speaker 1: even then a lot of people focused on stimulus checks, 116 00:06:23,600 --> 00:06:26,279 Speaker 1: but it was also p PP loans that turned into grants, 117 00:06:26,560 --> 00:06:28,920 Speaker 1: it was corporate bailouts. There was all sorts of programs 118 00:06:28,920 --> 00:06:32,359 Speaker 1: after programs there were subjecting money into the system, and 119 00:06:32,400 --> 00:06:35,280 Speaker 1: that means more people have more money there's not magically 120 00:06:35,320 --> 00:06:37,560 Speaker 1: more goods and services, and so you start to get 121 00:06:37,600 --> 00:06:40,039 Speaker 1: actual price inflation those that that and it takes a 122 00:06:40,080 --> 00:06:44,159 Speaker 1: while to then diffuse through it. And so that's happened. 123 00:06:44,320 --> 00:06:46,480 Speaker 1: But then, as you pointed out, now that they you know, 124 00:06:46,920 --> 00:06:49,880 Speaker 1: I think even the Fed underestimated the impact of fiscal stimulus. 125 00:06:50,240 --> 00:06:52,599 Speaker 1: And so now that they got pretty substantial inflation, they 126 00:06:52,640 --> 00:06:54,560 Speaker 1: got wage inflation, they got you know, for a while, 127 00:06:54,560 --> 00:06:57,880 Speaker 1: they got energy inflation, they got goods inflation, all sorts 128 00:06:57,880 --> 00:07:01,159 Speaker 1: of things are structurally higher. They're now trying to pull back. 129 00:07:01,200 --> 00:07:04,760 Speaker 1: They're doing quantitative tightening that helps pushed on asset prices, 130 00:07:04,800 --> 00:07:07,520 Speaker 1: makes people feel poor, so they spend less, which takes 131 00:07:07,520 --> 00:07:11,120 Speaker 1: the edge off demand. Uh, you know, there's there's still 132 00:07:11,240 --> 00:07:13,640 Speaker 1: fiscal deficits happening, but they're not, like I said, they're 133 00:07:13,640 --> 00:07:16,920 Speaker 1: not sending out fast acting money anymore. And so you know, 134 00:07:16,960 --> 00:07:20,720 Speaker 1: whether or not we experience outright deflation in year of 135 00:07:20,800 --> 00:07:23,320 Speaker 1: year terms, I mean that's certainly. I mean, basically, all 136 00:07:23,360 --> 00:07:25,960 Speaker 1: all deflation takes is if you hit at high level 137 00:07:25,960 --> 00:07:28,640 Speaker 1: of prices and then goes sideways and slightly down for 138 00:07:28,680 --> 00:07:31,400 Speaker 1: a year, you technically have have experienced year of year 139 00:07:32,120 --> 00:07:35,760 Speaker 1: you know, deflation, and so is that possible. Sure, Um, 140 00:07:36,160 --> 00:07:39,080 Speaker 1: I don't think it'd be a persistent deflationary trend, but 141 00:07:39,200 --> 00:07:41,680 Speaker 1: you can certainly have kind of a ricochet from very 142 00:07:41,760 --> 00:07:44,600 Speaker 1: high inflation towards periods of deflation. In fact, of the 143 00:07:44,640 --> 00:07:48,600 Speaker 1: nineteen forties, which was a very inflationary decade for most 144 00:07:48,640 --> 00:07:50,960 Speaker 1: of the world. UH. At actually United States, that was 145 00:07:51,000 --> 00:07:52,880 Speaker 1: our highest year of year inflation. We get up to 146 00:07:53,000 --> 00:07:55,960 Speaker 1: ninet in the nineteen forties, which is higher than any 147 00:07:55,960 --> 00:07:57,960 Speaker 1: point in the seventies, but we also actually had a 148 00:07:57,960 --> 00:08:01,880 Speaker 1: couple of years of deflation UH in nineties. Uh even 149 00:08:01,880 --> 00:08:05,000 Speaker 1: though the inflation overall averaged about six percent from the 150 00:08:05,040 --> 00:08:07,320 Speaker 1: early forties to the early fifties. And so I don't 151 00:08:07,320 --> 00:08:09,200 Speaker 1: really have a strong case on what number we're going 152 00:08:09,240 --> 00:08:12,080 Speaker 1: to reach. Um, But my overall view is that we 153 00:08:12,120 --> 00:08:17,120 Speaker 1: are experiencing this inflation unlesser until there's a change in 154 00:08:17,200 --> 00:08:21,280 Speaker 1: liquidity conditions and or energy constraints, and when we when 155 00:08:21,320 --> 00:08:23,720 Speaker 1: we enter the next cycle of growth, you know, let's 156 00:08:23,720 --> 00:08:27,720 Speaker 1: call it. I do think it's probably gonna come with 157 00:08:27,760 --> 00:08:32,520 Speaker 1: another round of inflation. Got you, Okay, Yeah, that makes sense. Um. 158 00:08:32,559 --> 00:08:35,280 Speaker 1: You mentioned a few times the fiscal side of things. 159 00:08:35,360 --> 00:08:38,800 Speaker 1: And that's something that UM, I've seen many people point to, 160 00:08:39,440 --> 00:08:41,720 Speaker 1: UH when when I've talked about, hey, there looks like 161 00:08:41,760 --> 00:08:45,200 Speaker 1: we're gonna continue to get this slow down in inflation. UM. 162 00:08:45,240 --> 00:08:47,000 Speaker 1: Many people look to, you know, the recent you know, 163 00:08:47,040 --> 00:08:50,560 Speaker 1: omnibus UH spending package that they that they just passed 164 00:08:50,600 --> 00:08:54,320 Speaker 1: and saying, hey, with fiscal deficits this large, how could 165 00:08:54,360 --> 00:08:57,360 Speaker 1: you have uh, you know, how could you have inflation 166 00:08:57,520 --> 00:09:01,440 Speaker 1: coming down at even even if it's temporary. UM. And 167 00:09:01,480 --> 00:09:06,080 Speaker 1: you've talked about the three different sources by which fiscal 168 00:09:06,440 --> 00:09:11,000 Speaker 1: is funded basically borrowing, taxes and inflation. Could you break 169 00:09:11,000 --> 00:09:14,040 Speaker 1: that down and point to whether you think the fiscal 170 00:09:14,080 --> 00:09:17,280 Speaker 1: side of things are inflationary right now or UM or 171 00:09:17,360 --> 00:09:21,680 Speaker 1: not or somewhere between. So I'll answer your second part first, 172 00:09:21,720 --> 00:09:23,520 Speaker 1: which is I think that the fiscal is going to 173 00:09:23,600 --> 00:09:26,000 Speaker 1: be inflationary this decade. I think that's a big contributed 174 00:09:26,000 --> 00:09:29,680 Speaker 1: to inflation. UH. That is structurally adding money supply into 175 00:09:29,720 --> 00:09:33,320 Speaker 1: the economy UM and making hard for central banks to 176 00:09:33,440 --> 00:09:35,640 Speaker 1: tighten as much as they otherwise would have if there 177 00:09:35,720 --> 00:09:39,520 Speaker 1: is a better UH debt profile of their government. UM. 178 00:09:39,600 --> 00:09:41,440 Speaker 1: So I would say that it reduces their ability to 179 00:09:41,520 --> 00:09:45,280 Speaker 1: normalize policy even though it doesn't really affect their ability 180 00:09:45,320 --> 00:09:50,160 Speaker 1: to temporarily tighten policy. Um. And to answer your other questions, 181 00:09:50,280 --> 00:09:52,920 Speaker 1: see how how does government finance itself? So you know, 182 00:09:53,000 --> 00:09:55,560 Speaker 1: we can picture government fundancing itself in three ways. The 183 00:09:55,600 --> 00:09:58,240 Speaker 1: first is that if it spends money into the economy, 184 00:09:58,320 --> 00:10:00,840 Speaker 1: you can tax money out of the economy, right. And and 185 00:10:00,480 --> 00:10:03,600 Speaker 1: and so you know, back when they were saying gold standards, right, 186 00:10:03,640 --> 00:10:06,600 Speaker 1: so the government was not able to print money. It 187 00:10:06,720 --> 00:10:09,080 Speaker 1: just had to basically operate with the money that existed. 188 00:10:09,080 --> 00:10:10,760 Speaker 1: It could, you know, it could, it could coin it, 189 00:10:10,800 --> 00:10:13,000 Speaker 1: but it didn't just create out a thin air. You know, 190 00:10:13,040 --> 00:10:17,520 Speaker 1: you had to basically over time tax uh what you spend. Uh. 191 00:10:17,520 --> 00:10:19,439 Speaker 1: And so they can say, okay, we're gonna tax everybody 192 00:10:19,520 --> 00:10:22,320 Speaker 1: ten percent, every every third percent, whatever the number is, 193 00:10:22,520 --> 00:10:24,280 Speaker 1: and then we're gonna we're gonna spend it on X 194 00:10:24,400 --> 00:10:26,520 Speaker 1: y Z. So that that's kind of the most basic form. 195 00:10:26,920 --> 00:10:29,680 Speaker 1: The second is that forever reason if you temporarily have 196 00:10:29,800 --> 00:10:33,360 Speaker 1: to spend more than your taxing, maybe it's a war, uh, 197 00:10:33,400 --> 00:10:37,080 Speaker 1: maybe it's you know, for whatever reason, Um, you can 198 00:10:37,640 --> 00:10:41,760 Speaker 1: spend more than your taxing by issuing bonds to willing investors. 199 00:10:41,800 --> 00:10:44,400 Speaker 1: It's more like a voluntary form of tax, but then 200 00:10:44,400 --> 00:10:47,679 Speaker 1: you get paid back with interest um. And they can 201 00:10:47,720 --> 00:10:49,480 Speaker 1: do that just like a corporation would or just like 202 00:10:49,520 --> 00:10:52,480 Speaker 1: any other entity would um. And and so they can 203 00:10:52,480 --> 00:10:55,360 Speaker 1: do that approach uh. And again they're still actually drawing 204 00:10:55,440 --> 00:10:58,480 Speaker 1: money from the economy. So with both taxes and normal 205 00:10:58,600 --> 00:11:01,560 Speaker 1: debt financing, they're pulling me out of someplace and then 206 00:11:01,600 --> 00:11:04,360 Speaker 1: they're putting it back to the economy other places. The 207 00:11:04,400 --> 00:11:06,520 Speaker 1: third thing that they can do uh, and they can 208 00:11:06,559 --> 00:11:08,040 Speaker 1: only do this on a on a you know, a 209 00:11:08,120 --> 00:11:10,520 Speaker 1: via system or a very loose gold peg that doesn't 210 00:11:10,520 --> 00:11:13,400 Speaker 1: really constrain money supply, is that they can have their 211 00:11:13,400 --> 00:11:19,200 Speaker 1: central bank create new bank reserves by government bonds with 212 00:11:19,280 --> 00:11:22,880 Speaker 1: that um and then spending the economy. And so then 213 00:11:22,880 --> 00:11:25,240 Speaker 1: the question becomes where did you withdraw You know, you're 214 00:11:25,240 --> 00:11:27,920 Speaker 1: putting money into the economy, where did you withdraw it from? 215 00:11:27,960 --> 00:11:30,960 Speaker 1: And it's nowhere. You just monetized it. You just you know, 216 00:11:31,040 --> 00:11:34,040 Speaker 1: the combination of the fiscal authority and the federal reserve 217 00:11:34,440 --> 00:11:37,679 Speaker 1: allows you to print money. And one we can put 218 00:11:37,720 --> 00:11:39,760 Speaker 1: it is that I like to use the description of 219 00:11:39,760 --> 00:11:41,280 Speaker 1: like you know, you've seen a movie, maybe you're like 220 00:11:41,320 --> 00:11:43,440 Speaker 1: two generals have to like both put their key into 221 00:11:43,440 --> 00:11:45,640 Speaker 1: like launch a nuke or something like. You know, one 222 00:11:45,679 --> 00:11:47,880 Speaker 1: guy can't do it, but they both can. It's kind 223 00:11:47,880 --> 00:11:49,800 Speaker 1: of like that with the FED and the Treasury. So 224 00:11:50,480 --> 00:11:53,840 Speaker 1: the Fed can create new base money, but it's it 225 00:11:53,920 --> 00:11:56,079 Speaker 1: can't just hand out money to people. Can only it 226 00:11:56,120 --> 00:11:59,079 Speaker 1: can do various lending activities. It can create new base money, 227 00:11:59,720 --> 00:12:01,880 Speaker 1: but it can't just send you a thousand dollars. It 228 00:12:01,920 --> 00:12:04,600 Speaker 1: can't just send me a thousand dollars. The fiscal Authority 229 00:12:04,640 --> 00:12:07,040 Speaker 1: on their of their hand can it can send you 230 00:12:07,080 --> 00:12:09,160 Speaker 1: a thousand dollars. It can send me a thousand dollars. 231 00:12:09,160 --> 00:12:12,240 Speaker 1: It can It can send a small business owner a 232 00:12:12,320 --> 00:12:14,400 Speaker 1: quarter million dollars in a p P P loan and 233 00:12:14,440 --> 00:12:16,960 Speaker 1: then just forgive it. Um it can do whatever it 234 00:12:16,960 --> 00:12:20,079 Speaker 1: wants essentially, but it needs someone to buy the bonds. 235 00:12:20,360 --> 00:12:23,160 Speaker 1: And because they you know, they essentially you know, they're 236 00:12:23,160 --> 00:12:25,320 Speaker 1: supposed to have central bank independence, but at the end 237 00:12:25,360 --> 00:12:27,640 Speaker 1: of the day, I mean they write the laws, uh, 238 00:12:27,679 --> 00:12:32,240 Speaker 1: and so they have considerable influence over their central bank. Um, 239 00:12:32,360 --> 00:12:34,760 Speaker 1: they can have a central bank by the bonds. And 240 00:12:34,800 --> 00:12:38,079 Speaker 1: then when you join those two forces together, you're injecting 241 00:12:38,080 --> 00:12:40,920 Speaker 1: money into the economy that you didn't draw from the economy, 242 00:12:41,200 --> 00:12:43,800 Speaker 1: and that's how you get a fiscal driven type of inflation, 243 00:12:43,880 --> 00:12:46,760 Speaker 1: which happened a lot in the nineteen forties. Uh, it 244 00:12:46,840 --> 00:12:48,840 Speaker 1: was a small factor. In the seventies, it wasn't the 245 00:12:48,840 --> 00:12:51,920 Speaker 1: primary factor. That was very different type of inflation, but 246 00:12:52,080 --> 00:12:54,400 Speaker 1: it was adding to it. Uh. And then it's it 247 00:12:54,480 --> 00:12:56,400 Speaker 1: was a big factor in what we just saw throughout 248 00:12:56,440 --> 00:13:00,600 Speaker 1: this you know, early twenties period. You mentioned, uh, you 249 00:13:00,640 --> 00:13:03,880 Speaker 1: mentioned something in there about um, you know, the two 250 00:13:03,920 --> 00:13:08,040 Speaker 1: generals that comment and basically you need that coordination. Over 251 00:13:08,080 --> 00:13:12,520 Speaker 1: the last let's say fifteen years, maybe a little bit longer, 252 00:13:12,840 --> 00:13:18,000 Speaker 1: we've seen increasing coordination between fiscal policy and monetary policy, 253 00:13:18,679 --> 00:13:20,920 Speaker 1: between the Fed and the Treasury in order to accomplish goals. 254 00:13:20,920 --> 00:13:23,320 Speaker 1: And it seems like in uh, you know, in the 255 00:13:23,320 --> 00:13:28,160 Speaker 1: wake of each crisis, UM, it's becoming even more necessary 256 00:13:28,280 --> 00:13:30,840 Speaker 1: if they want to orchestrate some sort of a bailout 257 00:13:30,920 --> 00:13:35,720 Speaker 1: or rescue the system. UM. Let's uh, let's you know, 258 00:13:35,800 --> 00:13:39,600 Speaker 1: look looking forward, do you think there's a possibility of 259 00:13:40,240 --> 00:13:44,360 Speaker 1: in practice a complete merger between monetary and fiscal policy 260 00:13:44,640 --> 00:13:47,120 Speaker 1: being carried out through something like a central bank digital 261 00:13:47,120 --> 00:13:50,160 Speaker 1: currency either by the Fed or the Treasury or an 262 00:13:50,200 --> 00:13:54,760 Speaker 1: actual legal merging. So that can happen, but it's pretty disastrous. 263 00:13:55,000 --> 00:13:57,000 Speaker 1: And that's also why you generally see a lot of 264 00:13:57,000 --> 00:14:00,800 Speaker 1: inflation emerging markets because you don't have that robust sort 265 00:14:00,840 --> 00:14:05,120 Speaker 1: of separation. Um. And so separation is kind of a spectrum. Um. 266 00:14:05,160 --> 00:14:07,720 Speaker 1: There's no country where it's completely separate, but there's ones 267 00:14:07,720 --> 00:14:10,680 Speaker 1: where there's more safeguards between them. It's basically harder to 268 00:14:10,760 --> 00:14:14,080 Speaker 1: merge them. Whereas, for example, in Turkey, if the central 269 00:14:14,080 --> 00:14:17,680 Speaker 1: bank doesn't do what the leader wants, they get kicked 270 00:14:17,679 --> 00:14:19,160 Speaker 1: out and get another one, and it's like, I'll just 271 00:14:19,240 --> 00:14:21,720 Speaker 1: keep firing people until someone does what I want. Um. 272 00:14:21,760 --> 00:14:23,640 Speaker 1: And so you don't really you know basically that the 273 00:14:23,720 --> 00:14:26,360 Speaker 1: that the the what you know, assent to the executive 274 00:14:26,360 --> 00:14:29,640 Speaker 1: branch has more influence than otherwise should have over monetary policy. 275 00:14:29,920 --> 00:14:32,000 Speaker 1: And the reason you're supposed to have somebody give independence 276 00:14:32,080 --> 00:14:34,480 Speaker 1: is because let's say you're a president and you're running. 277 00:14:34,520 --> 00:14:38,000 Speaker 1: You know, you're you're running for your second term. Um, 278 00:14:38,040 --> 00:14:40,680 Speaker 1: you know, you'd have an incentive to say, okay, cut 279 00:14:40,680 --> 00:14:43,720 Speaker 1: igustrate six months before the election, let's let's let's uce 280 00:14:43,800 --> 00:14:45,800 Speaker 1: things up a little bit and then once if I 281 00:14:45,880 --> 00:14:47,720 Speaker 1: win election, Okay, now it's tighten a little bit. We 282 00:14:47,720 --> 00:14:49,520 Speaker 1: don't really need this right now, let's undo some what 283 00:14:49,600 --> 00:14:51,920 Speaker 1: I just did. Um. So you don't really want to 284 00:14:52,000 --> 00:14:56,440 Speaker 1: use monetory policy for the short term political incentives. You 285 00:14:56,480 --> 00:14:59,160 Speaker 1: want to put someone in power uh that you know, 286 00:15:00,000 --> 00:15:01,560 Speaker 1: in the United States, the president a point to them. 287 00:15:01,560 --> 00:15:03,720 Speaker 1: They have to go through the Senate. UM. And then 288 00:15:03,760 --> 00:15:06,120 Speaker 1: they're running the FED with with you know, also input 289 00:15:06,160 --> 00:15:08,680 Speaker 1: from the banking system, and that is now in a 290 00:15:08,760 --> 00:15:11,240 Speaker 1: long term that's it's hard to reverse, right. So so 291 00:15:11,280 --> 00:15:13,280 Speaker 1: it's not like, you know, the president can just call 292 00:15:13,360 --> 00:15:14,760 Speaker 1: up the FED and say this is what you're gonna 293 00:15:14,800 --> 00:15:17,880 Speaker 1: do this week. Um. Now, in the nineteen forties, when 294 00:15:17,880 --> 00:15:20,960 Speaker 1: you had war um, both in the United States and 295 00:15:21,000 --> 00:15:24,200 Speaker 1: ninty Kingdom, I mean basically ninety Kingdom was was uh 296 00:15:24,320 --> 00:15:27,480 Speaker 1: saying World War One. Even so United the United Kingdom 297 00:15:27,560 --> 00:15:31,400 Speaker 1: was the world reserve currency. Their central bank was deliberately 298 00:15:31,520 --> 00:15:34,320 Speaker 1: financing the government when the bond auctions failed, the war 299 00:15:34,360 --> 00:15:36,920 Speaker 1: bond auctions, so you had the beginning of a merger 300 00:15:37,560 --> 00:15:40,600 Speaker 1: between Bank of England and the Government of England. UH. 301 00:15:40,640 --> 00:15:42,560 Speaker 1: And that of course continued into World War two, all 302 00:15:42,600 --> 00:15:45,600 Speaker 1: major countries were doing it, and so during times of crisis, 303 00:15:46,000 --> 00:15:48,680 Speaker 1: even in these countries that do generally have more safeguards 304 00:15:48,760 --> 00:15:52,120 Speaker 1: of independence, you get that merger. Uh. And that's because 305 00:15:52,200 --> 00:15:53,680 Speaker 1: at the end of the day, the government is not 306 00:15:53,720 --> 00:15:56,320 Speaker 1: going to default in the currency to the prince. Now, 307 00:15:56,360 --> 00:15:58,560 Speaker 1: you could have technical default through to due to you know, 308 00:15:58,640 --> 00:16:01,640 Speaker 1: self imposed political polarization things like that. You can have 309 00:16:01,680 --> 00:16:04,480 Speaker 1: these technical defaults, but you know, you're basically not gonna 310 00:16:04,480 --> 00:16:08,720 Speaker 1: have this big deflationary crash that stays down forever. If 311 00:16:08,720 --> 00:16:11,360 Speaker 1: the liabilities are something that you can print, right, So 312 00:16:11,600 --> 00:16:12,960 Speaker 1: at the end of the day, they can even change 313 00:16:13,000 --> 00:16:18,240 Speaker 1: the laws and and rewrite how the central bank operates. Um, 314 00:16:18,360 --> 00:16:20,480 Speaker 1: you generally will get opposition to that sort of thing, 315 00:16:20,800 --> 00:16:25,080 Speaker 1: right because again, if you if you start approaching you know, 316 00:16:25,160 --> 00:16:29,840 Speaker 1: developing country type of of strongman like merger of of 317 00:16:29,920 --> 00:16:33,000 Speaker 1: central banking and physcal authorities, Uh, you're more likely to 318 00:16:33,040 --> 00:16:35,920 Speaker 1: get kind of long term inflationary spirals because there's there's 319 00:16:36,040 --> 00:16:40,400 Speaker 1: there's fewer safeguards for creating more money. Right. I mean, 320 00:16:40,720 --> 00:16:43,120 Speaker 1: as as centralized as it is, it does have some 321 00:16:43,160 --> 00:16:46,920 Speaker 1: degree of decentralization. And that's why, uh, some of these 322 00:16:47,040 --> 00:16:49,600 Speaker 1: systems have actually lasted quite a while because it is 323 00:16:49,680 --> 00:16:51,640 Speaker 1: you know, there's there's a lot of momentum that's hard 324 00:16:51,680 --> 00:16:53,600 Speaker 1: to reverse. It takes a it takes you have to 325 00:16:53,680 --> 00:16:55,720 Speaker 1: chip away at it over the long term. And so 326 00:16:55,760 --> 00:16:58,440 Speaker 1: I do think that central bank digital currencies could chip 327 00:16:58,440 --> 00:17:00,400 Speaker 1: away at that, but it's actually pretty hard to get 328 00:17:00,440 --> 00:17:04,280 Speaker 1: those through. You have to rewrite the Federal Reserve Act. Um. 329 00:17:04,320 --> 00:17:07,080 Speaker 1: And so it's you know, it's always on the horizon. Uh, 330 00:17:07,160 --> 00:17:09,200 Speaker 1: some countries that will happen. Some countries I think will 331 00:17:09,240 --> 00:17:11,840 Speaker 1: be more slow or or less likely to have it happen. 332 00:17:12,880 --> 00:17:15,240 Speaker 1: So in an example like this, it would look like 333 00:17:15,600 --> 00:17:22,400 Speaker 1: um uh political opposition where you have two parties, um, 334 00:17:22,440 --> 00:17:25,239 Speaker 1: you know, kind of vying for power and you know, 335 00:17:25,600 --> 00:17:28,480 Speaker 1: not wanting increases in power when the other party is 336 00:17:28,520 --> 00:17:31,320 Speaker 1: in power. That could be something that gridlock could be 337 00:17:31,359 --> 00:17:35,399 Speaker 1: something that would actually prevent those safeguards from being taken 338 00:17:35,440 --> 00:17:39,600 Speaker 1: down and having something um like a you know merger 339 00:17:39,840 --> 00:17:44,960 Speaker 1: and a CBDC become become as destructive as possible, um, 340 00:17:45,440 --> 00:17:48,280 Speaker 1: which you know, typically people look at political gridlock as 341 00:17:48,320 --> 00:17:49,959 Speaker 1: a bad thing, thinking, you know, oh, we should get 342 00:17:49,960 --> 00:17:51,520 Speaker 1: our government to be more efficient and be able to 343 00:17:51,520 --> 00:17:53,639 Speaker 1: do things. But a lot of times those safeguards are 344 00:17:53,680 --> 00:17:56,360 Speaker 1: there for a reason, so it's it's good if they're 345 00:17:56,359 --> 00:18:00,880 Speaker 1: not as efficient as removing them. Yeah, exactly. Basically, that separate, 346 00:18:01,200 --> 00:18:03,840 Speaker 1: slow moving situation is what kind of locks things in 347 00:18:03,880 --> 00:18:06,360 Speaker 1: the place. And for example, in the in the late seventies, 348 00:18:06,400 --> 00:18:09,439 Speaker 1: you had Jimmy Carter put in Paul Volker and just 349 00:18:09,640 --> 00:18:12,160 Speaker 1: get inflation under control. And then when the presidency switched 350 00:18:12,200 --> 00:18:14,040 Speaker 1: to Reagan, he's like, yeah, just keep doing what you're doing, 351 00:18:14,040 --> 00:18:17,439 Speaker 1: get inflation under control, and you have pretty significant separation 352 00:18:18,080 --> 00:18:22,080 Speaker 1: um of powers. Whereas for example the nties, when the 353 00:18:22,080 --> 00:18:25,040 Speaker 1: FED was you know, basically locked into doing yield curve control, 354 00:18:25,320 --> 00:18:28,399 Speaker 1: you have this ongoing problem because the FED wanted some 355 00:18:28,480 --> 00:18:30,560 Speaker 1: independence and the Treasures like not yet, not yet. And 356 00:18:30,560 --> 00:18:32,400 Speaker 1: even as the war ended, the Feds like, well, now 357 00:18:32,560 --> 00:18:34,320 Speaker 1: we have independence, and the Treasures like, well, not yet. 358 00:18:34,359 --> 00:18:36,200 Speaker 1: We now we have to do a rebuilding after what ward. 359 00:18:36,280 --> 00:18:38,320 Speaker 1: It's just like, you know, it's like when when when 360 00:18:38,359 --> 00:18:40,680 Speaker 1: does the executive branch want to give up power? And 361 00:18:40,720 --> 00:18:44,399 Speaker 1: the answers you know, rarely, only when there's considerable pressure 362 00:18:44,440 --> 00:18:47,040 Speaker 1: on them to do so. Um, And really, you know, 363 00:18:47,119 --> 00:18:50,520 Speaker 1: THETI and fifties were in some ways the success story 364 00:18:50,560 --> 00:18:54,680 Speaker 1: of the They did manage to partially separate that, which 365 00:18:54,720 --> 00:18:56,280 Speaker 1: is not the case for a lot of other countries. 366 00:18:56,320 --> 00:18:58,040 Speaker 1: And so it comes down to kind of the strength 367 00:18:58,080 --> 00:19:02,760 Speaker 1: of those institutions, which you know, after long enough timeline, 368 00:19:02,800 --> 00:19:05,520 Speaker 1: people forget why they're separate in the first place. And 369 00:19:05,560 --> 00:19:07,560 Speaker 1: so I would say that, I mean, I'm I'm not 370 00:19:07,600 --> 00:19:09,879 Speaker 1: in favor of really the concept of central banking. I 371 00:19:09,880 --> 00:19:12,080 Speaker 1: don't really think that there's price controls on things, let 372 00:19:12,119 --> 00:19:14,680 Speaker 1: alone the price of money. But to the exent that 373 00:19:14,720 --> 00:19:16,720 Speaker 1: there is a central bank, you generally want one that's 374 00:19:16,720 --> 00:19:19,840 Speaker 1: independent to some degree. So that, like I said before, 375 00:19:19,880 --> 00:19:22,480 Speaker 1: you can't have a president like juice industrates right before 376 00:19:22,480 --> 00:19:25,199 Speaker 1: the election and then new things after. And we we've 377 00:19:25,280 --> 00:19:26,760 Speaker 1: kind of been chipping away at that in a lot 378 00:19:26,800 --> 00:19:31,960 Speaker 1: of countries lately. That makes sense speaking of other countries. UM. 379 00:19:32,280 --> 00:19:36,200 Speaker 1: One factor that seems like it is kind of one 380 00:19:36,240 --> 00:19:38,680 Speaker 1: trend that's reversing itself that was going on for a while. 381 00:19:38,800 --> 00:19:41,760 Speaker 1: It was globalization. Now many people are talking about how 382 00:19:41,800 --> 00:19:43,879 Speaker 1: it looks like we are entering into a new period 383 00:19:43,880 --> 00:19:47,720 Speaker 1: of the globalization. UM. What are your thoughts on that 384 00:19:47,920 --> 00:19:53,000 Speaker 1: and some of the factors that are contributing to uh, 385 00:19:53,080 --> 00:19:57,439 Speaker 1: that seeming that seeming new reality of the globalization. So 386 00:19:57,480 --> 00:20:00,480 Speaker 1: I think we're deglobalizing and rate of change terms. Um, 387 00:20:00,560 --> 00:20:02,480 Speaker 1: if you if you zoom out really far right. So 388 00:20:02,560 --> 00:20:05,960 Speaker 1: globalization was happening in the second half of the eighteen hundreds, uh, 389 00:20:05,960 --> 00:20:10,320 Speaker 1: and the early nineteen hundreds. Um, you had you know, 390 00:20:10,359 --> 00:20:12,520 Speaker 1: the existing power was the UK. You had a rising 391 00:20:12,560 --> 00:20:15,040 Speaker 1: power of the United States, but we were isolationists at 392 00:20:15,040 --> 00:20:18,119 Speaker 1: the time. UM. And you know, between two oceans, the 393 00:20:18,200 --> 00:20:21,400 Speaker 1: more relevant rising power was Germany was kind of challenging 394 00:20:21,440 --> 00:20:25,320 Speaker 1: the UK's you know, economic dominance. UM. That obviously contributed 395 00:20:25,359 --> 00:20:27,480 Speaker 1: to what became World War One. I mean there are 396 00:20:27,480 --> 00:20:30,320 Speaker 1: other factors obviously, but you know, basically, if you follow 397 00:20:30,320 --> 00:20:32,520 Speaker 1: the dominoes of why, you know, why is the UK 398 00:20:32,720 --> 00:20:35,680 Speaker 1: involved and why is France involved in what was originally 399 00:20:35,800 --> 00:20:38,840 Speaker 1: an Eastern European conflict, it's because of those you know, 400 00:20:38,840 --> 00:20:41,480 Speaker 1: there's there's various powers and so actually people at the 401 00:20:41,480 --> 00:20:43,600 Speaker 1: time thought there's no way that that you could have 402 00:20:43,680 --> 00:20:47,280 Speaker 1: war because the economies are so interconnected. It's kind of 403 00:20:47,280 --> 00:20:49,480 Speaker 1: like what we hear today. UM. But then of course, 404 00:20:49,520 --> 00:20:51,320 Speaker 1: with the World War One and then through the Middle 405 00:20:51,359 --> 00:20:52,960 Speaker 1: Period and then through World War Two, you had that 406 00:20:53,040 --> 00:20:58,560 Speaker 1: multi decade period of deglobalization for obvious reasons, this global conflict. UM. 407 00:20:58,600 --> 00:21:01,439 Speaker 1: After World War Two, you then entered a new period 408 00:21:01,640 --> 00:21:05,199 Speaker 1: of globalization. Uh, with the exception of of you know, 409 00:21:05,280 --> 00:21:07,960 Speaker 1: Soviet controlled areas, right, so you had that's where that's 410 00:21:07,960 --> 00:21:10,520 Speaker 1: where the term third world comes from. You had you know, 411 00:21:10,600 --> 00:21:13,600 Speaker 1: you had, uh, the United States is area of influence, 412 00:21:13,640 --> 00:21:16,639 Speaker 1: you had the Soviet area of influence. And then you know, 413 00:21:16,680 --> 00:21:19,000 Speaker 1: the rest of the world was that third world. That 414 00:21:19,080 --> 00:21:23,679 Speaker 1: was like the third component. And and so you know 415 00:21:23,840 --> 00:21:26,320 Speaker 1: that ended obviously with the with the fall of the 416 00:21:26,359 --> 00:21:29,440 Speaker 1: Berlin Wall, and then you know, we we had globalization 417 00:21:29,520 --> 00:21:31,240 Speaker 1: during that time, but it was somewhat constrained by the 418 00:21:31,280 --> 00:21:34,200 Speaker 1: fact that you had these two different different worlds. Um. 419 00:21:34,440 --> 00:21:37,440 Speaker 1: So with the fall of of you know, the Berlin Wall, 420 00:21:37,520 --> 00:21:40,119 Speaker 1: the collapse of the Soviet Union, the opening of China 421 00:21:40,160 --> 00:21:42,800 Speaker 1: a little bit before that in the eighties, UM, this 422 00:21:42,960 --> 00:21:45,560 Speaker 1: marked a period of kind of acceleration of globalization. So 423 00:21:45,600 --> 00:21:51,600 Speaker 1: the nineties the two thousand's, to some extent, you increase globalization. 424 00:21:51,640 --> 00:21:55,040 Speaker 1: You basically had these pools of labor, these pools of capital, 425 00:21:55,560 --> 00:21:57,760 Speaker 1: and they found each other. Basically you had a lot 426 00:21:57,840 --> 00:22:00,080 Speaker 1: of empowerished people say we're willing to work, we we 427 00:22:00,080 --> 00:22:02,520 Speaker 1: we have skills, we we can learn. We you know, 428 00:22:02,600 --> 00:22:04,479 Speaker 1: we were cut off from things. Now we're not as 429 00:22:04,560 --> 00:22:07,200 Speaker 1: much UM. And they had pools of capital saying I 430 00:22:07,280 --> 00:22:10,080 Speaker 1: don't want to pay my expensive domestic workers, I want 431 00:22:10,160 --> 00:22:12,960 Speaker 1: us you know, produced my margins by going overseas, and 432 00:22:13,040 --> 00:22:17,240 Speaker 1: so you you had this joining of forces UM. And 433 00:22:17,280 --> 00:22:19,120 Speaker 1: another way of looking at is that after we War two, 434 00:22:19,160 --> 00:22:22,720 Speaker 1: the United States was over global GDP. Right, they were 435 00:22:22,720 --> 00:22:24,719 Speaker 1: they were the only ones that were practically untouched by 436 00:22:24,720 --> 00:22:27,480 Speaker 1: the war. UM, and they had most of the gold 437 00:22:27,520 --> 00:22:30,159 Speaker 1: and they had, you know, the biggest, biggest military, and 438 00:22:30,240 --> 00:22:32,480 Speaker 1: so you had a you know, other than the Soviet Union, 439 00:22:32,520 --> 00:22:34,119 Speaker 1: you had a UNI paller. So you had in some 440 00:22:34,160 --> 00:22:35,880 Speaker 1: ways it was kind of bipolar, but it was very 441 00:22:35,960 --> 00:22:38,359 Speaker 1: much US centric. And then especially after the follows of 442 00:22:38,560 --> 00:22:41,199 Speaker 1: Union that the past, like you know, thirty years after that, 443 00:22:41,240 --> 00:22:44,880 Speaker 1: you had a very unique unipolar power. But over decades 444 00:22:44,960 --> 00:22:47,919 Speaker 1: as you had recovery of Europe, recovery of Japan, the 445 00:22:48,040 --> 00:22:51,840 Speaker 1: rise of China, fries of India, uh, you've you've you know, 446 00:22:51,880 --> 00:22:55,600 Speaker 1: you spread out economic prowess, and so in some ways 447 00:22:55,600 --> 00:22:58,520 Speaker 1: it's returning to more of an equilibrium where the United 448 00:22:58,520 --> 00:23:01,639 Speaker 1: States has less than five percent one population. Uh. You know, 449 00:23:01,680 --> 00:23:05,400 Speaker 1: now we're down to something global GDP depending on how 450 00:23:05,400 --> 00:23:08,080 Speaker 1: you measure it, which is, you know, if anything, that's 451 00:23:08,080 --> 00:23:10,240 Speaker 1: still kind of high, but at the point is returning 452 00:23:10,240 --> 00:23:14,200 Speaker 1: to more of a spread out, less concentrated baseline. And 453 00:23:14,280 --> 00:23:17,240 Speaker 1: so that's naturally resulting in a more multipolar world with 454 00:23:17,280 --> 00:23:20,000 Speaker 1: more trade tensions. Uh. In many ways it kind of 455 00:23:20,040 --> 00:23:25,080 Speaker 1: resembles early stages of that war period unfortunately. Um, and 456 00:23:25,200 --> 00:23:28,119 Speaker 1: now we see with you know, the conflict of you know, 457 00:23:28,160 --> 00:23:31,040 Speaker 1: the invasion of Ukraine. Uh, that's that's kind of like 458 00:23:31,080 --> 00:23:33,399 Speaker 1: similar events that you would see in the run up 459 00:23:33,440 --> 00:23:35,520 Speaker 1: to World War One. And not not that I'm calling 460 00:23:35,520 --> 00:23:36,760 Speaker 1: for that sort of thing, but the point is, I 461 00:23:36,800 --> 00:23:40,440 Speaker 1: do think that we're entering a appeared with more frictions. Uh. 462 00:23:40,480 --> 00:23:43,320 Speaker 1: We're not in this this like you know, perfect window 463 00:23:43,320 --> 00:23:46,240 Speaker 1: of the nineties, the two thousands, you know, at the 464 00:23:46,320 --> 00:23:48,480 Speaker 1: very least, I think we're entering back into that like 465 00:23:48,560 --> 00:23:51,000 Speaker 1: kind of Cold war type environment. We still have some 466 00:23:51,200 --> 00:23:53,760 Speaker 1: globalization obviously, but it just was it was still so 467 00:23:53,880 --> 00:23:56,000 Speaker 1: much constrained, and I do think that we're we are 468 00:23:56,240 --> 00:23:59,560 Speaker 1: entering this appeared of more frictions, and so it doesn't 469 00:23:59,560 --> 00:24:02,919 Speaker 1: mean that globalization goes away, but it means that that 470 00:24:03,119 --> 00:24:05,760 Speaker 1: the low hanging fruit of globalization I think has already 471 00:24:05,760 --> 00:24:09,000 Speaker 1: been picked. And now you have the globalization in some places, 472 00:24:09,040 --> 00:24:11,360 Speaker 1: you still have globalization in other places. So, for example, 473 00:24:11,359 --> 00:24:14,600 Speaker 1: I think that services are still somewhat globalizing. I think 474 00:24:14,640 --> 00:24:17,840 Speaker 1: that you know, with with the acceleration of remote work 475 00:24:18,480 --> 00:24:21,240 Speaker 1: UM and things like that, you know, there there's potentially 476 00:24:21,280 --> 00:24:25,040 Speaker 1: more services globalization that can happen, uh, you know, hiring 477 00:24:25,240 --> 00:24:28,800 Speaker 1: a programmer from Nigeria for example, or graphic designer UM. 478 00:24:29,480 --> 00:24:33,359 Speaker 1: Whereas I think that manufacturing globalizations probably reversing to some extent, 479 00:24:33,400 --> 00:24:35,560 Speaker 1: that that's coming a little bit closer to home, a 480 00:24:35,560 --> 00:24:40,160 Speaker 1: little bit more localized, uh supply chains, got you. Yeah, 481 00:24:40,200 --> 00:24:43,160 Speaker 1: that makes sense. With that. Part of that is, uh, 482 00:24:43,200 --> 00:24:49,520 Speaker 1: you know, new new political allegiances, new relationships between countries. 483 00:24:50,160 --> 00:24:53,720 Speaker 1: And you mentioned kind of the long term cycle of 484 00:24:53,760 --> 00:24:57,920 Speaker 1: these things with rising and falling powers. UM. There also 485 00:24:58,000 --> 00:25:04,040 Speaker 1: comes with that, the uh, the fall of global reserve currencies. UM. 486 00:25:04,080 --> 00:25:08,720 Speaker 1: What is your outlook long term on this trend's impact 487 00:25:08,800 --> 00:25:11,800 Speaker 1: on the dollar, the dollars use around the world, and 488 00:25:11,840 --> 00:25:16,760 Speaker 1: potentially other uh a new global reserve currency replacing it, 489 00:25:16,960 --> 00:25:21,800 Speaker 1: a competition between multiple currencies. What's what are your thoughts 490 00:25:21,840 --> 00:25:25,119 Speaker 1: on all of that. So I think we're gonna have 491 00:25:25,400 --> 00:25:28,520 Speaker 1: in a feature less dollar dominance, but that there's no 492 00:25:28,560 --> 00:25:31,600 Speaker 1: particular contort that's gonna have more dominance than the United 493 00:25:31,600 --> 00:25:34,639 Speaker 1: to dates right. So, for example, I don't think like 494 00:25:34,680 --> 00:25:36,879 Speaker 1: a lot of people say China's next world will power, 495 00:25:36,960 --> 00:25:39,360 Speaker 1: for example, I don't view it like that. They don't 496 00:25:39,359 --> 00:25:41,679 Speaker 1: really you know, they don't have ford percent of global GDP, 497 00:25:42,200 --> 00:25:45,040 Speaker 1: they don't have very strong demographics. Their geography is not 498 00:25:45,080 --> 00:25:47,000 Speaker 1: as good as the United States in terms of deep 499 00:25:47,040 --> 00:25:49,919 Speaker 1: water access, the amount of river systems and things like that. 500 00:25:50,000 --> 00:25:52,880 Speaker 1: So they have some constraints that allows them to reach 501 00:25:52,960 --> 00:25:55,359 Speaker 1: the height that for example, the United States reached at 502 00:25:55,400 --> 00:25:57,320 Speaker 1: its height, which were which we're even us. We're no 503 00:25:57,400 --> 00:25:59,879 Speaker 1: longer at um. So i'd phrase it is there's no 504 00:26:00,040 --> 00:26:03,920 Speaker 1: country big enough to be the globe, the only globals 505 00:26:03,920 --> 00:26:06,320 Speaker 1: of currency, and that we're entering, just like we're entering 506 00:26:06,320 --> 00:26:10,280 Speaker 1: a more multipolar world in terms of economic power, I 507 00:26:10,280 --> 00:26:12,960 Speaker 1: think we're also entering a more multipolar payment world and 508 00:26:13,240 --> 00:26:16,000 Speaker 1: savings world. I think that it's it's easier to build 509 00:26:16,600 --> 00:26:18,600 Speaker 1: you know, for lack of a better word, payment pipes 510 00:26:18,960 --> 00:26:22,479 Speaker 1: around the world. UM. And you know that that China. 511 00:26:22,840 --> 00:26:25,040 Speaker 1: I mean, in the past twenty years, China became the 512 00:26:25,040 --> 00:26:29,000 Speaker 1: world's largest trading partner with most countries UH, surpassing the 513 00:26:29,040 --> 00:26:31,960 Speaker 1: United States, and so they can do pretty good deals. 514 00:26:31,960 --> 00:26:34,280 Speaker 1: They can say, hey, you know we're gonna uh. You know, 515 00:26:34,320 --> 00:26:38,159 Speaker 1: we're gonna buy your oil, We're gonna sell you electronics. Uh. 516 00:26:38,200 --> 00:26:40,080 Speaker 1: And to the extent that you run a surplus with 517 00:26:40,160 --> 00:26:43,159 Speaker 1: US whole some of it in yuan, UM and you 518 00:26:43,160 --> 00:26:44,640 Speaker 1: can you know, you can use that to to buy 519 00:26:44,720 --> 00:26:46,680 Speaker 1: future things from US. You can exchange it for gold 520 00:26:47,119 --> 00:26:49,200 Speaker 1: uh in Jianghai. You know, there's there's lots of things 521 00:26:49,200 --> 00:26:51,119 Speaker 1: you can do with it. And so around the margins, 522 00:26:51,160 --> 00:26:53,679 Speaker 1: you are starting to see an uptick in in trading 523 00:26:53,720 --> 00:26:58,120 Speaker 1: partners with China interface with the yuan more directly. Obviously 524 00:26:58,160 --> 00:27:00,760 Speaker 1: that the cut off of Russia for the financial system 525 00:27:00,800 --> 00:27:04,359 Speaker 1: someone accelerated that. UM. We're seeing China make overtures in 526 00:27:04,400 --> 00:27:08,359 Speaker 1: the in the in the Middle East more directly about 527 00:27:08,359 --> 00:27:12,399 Speaker 1: making its attentions clear uh, and so much like the 528 00:27:12,440 --> 00:27:16,720 Speaker 1: world's globals global uh, you know, becoming a multipolar. I 529 00:27:16,760 --> 00:27:19,120 Speaker 1: do think that money is becoming a multipolar as well. 530 00:27:19,480 --> 00:27:22,040 Speaker 1: And then there's somewhat of a return to neutral money. 531 00:27:22,160 --> 00:27:24,520 Speaker 1: So for example, before the United Kingdom, people often point 532 00:27:24,520 --> 00:27:27,679 Speaker 1: out that like globalserve currencies going like these ninety year 533 00:27:27,760 --> 00:27:31,840 Speaker 1: increments or whatever. I pushed back on that, because there 534 00:27:31,840 --> 00:27:35,120 Speaker 1: most of history, gold was was money, right, the globals 535 00:27:35,160 --> 00:27:37,160 Speaker 1: of currency was really just kind of like a proxy 536 00:27:37,240 --> 00:27:42,840 Speaker 1: four gold, convenient rapper for gold. Um uh. And starting 537 00:27:42,840 --> 00:27:45,680 Speaker 1: with the UK, that's when he kind of they actually 538 00:27:45,720 --> 00:27:47,919 Speaker 1: pretty much had a pretty good lock with their you know, 539 00:27:47,960 --> 00:27:50,440 Speaker 1: their bonds treated like gold. And of course the United 540 00:27:50,440 --> 00:27:53,040 Speaker 1: States brought up to a new level um. Whereas I 541 00:27:53,040 --> 00:27:56,240 Speaker 1: think we're somewhat returning you know, that was that was 542 00:27:56,280 --> 00:27:58,920 Speaker 1: kind of a peak anomaly period, and I think that 543 00:27:58,960 --> 00:28:02,280 Speaker 1: you know, it were returning to more neutral assets, things 544 00:28:02,280 --> 00:28:06,320 Speaker 1: like qualities, um, things like that at the heart of system. 545 00:28:06,359 --> 00:28:09,320 Speaker 1: You know, obviously bitcoins another prospect there. It's still in 546 00:28:09,359 --> 00:28:12,040 Speaker 1: its infancy, so we'll see what happens there. But essentially 547 00:28:12,600 --> 00:28:15,520 Speaker 1: the idea of of assets that are liquid and that 548 00:28:15,560 --> 00:28:18,639 Speaker 1: no country issues them or control it and can confiscated. 549 00:28:18,640 --> 00:28:20,280 Speaker 1: I think that's going to interest a lot of nations. 550 00:28:21,520 --> 00:28:25,000 Speaker 1: So with with the idea that looking ahead there may 551 00:28:25,080 --> 00:28:29,120 Speaker 1: be more competition, or maybe it doesn't even look like competition, 552 00:28:29,160 --> 00:28:32,720 Speaker 1: but just more of a decentralization distribution between the roles 553 00:28:32,760 --> 00:28:36,240 Speaker 1: that currencies play and the interest in currencies and assets 554 00:28:36,240 --> 00:28:42,120 Speaker 1: that other parties can't control or have less influence over. UM. Obviously, 555 00:28:42,120 --> 00:28:45,959 Speaker 1: we are seeing nations UH take big interest in this. 556 00:28:46,120 --> 00:28:48,240 Speaker 1: Last year, central banks bought more gold than they have 557 00:28:48,280 --> 00:28:51,200 Speaker 1: since nineteen sixty seven. Do you think that's something that 558 00:28:51,520 --> 00:28:56,840 Speaker 1: as individuals looking to protect themselves from UH inflation financial crises? 559 00:28:56,920 --> 00:29:00,520 Speaker 1: Do you think that's something that UH is UH of 560 00:29:00,600 --> 00:29:04,560 Speaker 1: interest in terms of UM an asset to hold UM? 561 00:29:04,720 --> 00:29:07,680 Speaker 1: Or is it? UH? Is that something that is, you know, 562 00:29:07,760 --> 00:29:12,320 Speaker 1: a very small part of an investor's focus or should be. 563 00:29:13,640 --> 00:29:15,360 Speaker 1: I think it depends on your goals, But I do 564 00:29:15,400 --> 00:29:18,880 Speaker 1: think the precious metals are an interesting part of a portfolio. UM. 565 00:29:18,960 --> 00:29:21,239 Speaker 1: You know, what makes them different is that you can 566 00:29:21,280 --> 00:29:23,479 Speaker 1: self custody them. So for example, I mean I like 567 00:29:23,520 --> 00:29:25,360 Speaker 1: equities quite a bit, and you can get a lot 568 00:29:25,400 --> 00:29:27,480 Speaker 1: of real assets you can get thinks you know, you 569 00:29:27,480 --> 00:29:32,320 Speaker 1: you own infrastructure, you own energy deposits, you own commodity production. 570 00:29:32,440 --> 00:29:35,440 Speaker 1: You know, you own real estate, You own tangible things, 571 00:29:36,240 --> 00:29:38,760 Speaker 1: often with with fixed rate debt attached to it. So 572 00:29:38,800 --> 00:29:42,160 Speaker 1: you're basically also shorting via currency while owning fixed assets, 573 00:29:42,200 --> 00:29:44,880 Speaker 1: and you're getting a profitable cash flow, you're getting dividends, 574 00:29:44,880 --> 00:29:47,360 Speaker 1: you're getting positive carry, right, So that's obviously a pretty 575 00:29:47,400 --> 00:29:50,600 Speaker 1: attractive situation to do. But of course you can't really 576 00:29:50,600 --> 00:29:52,960 Speaker 1: self custody those those are you know, all of those 577 00:29:53,000 --> 00:29:57,080 Speaker 1: represent the liabilities of corporations, even equity equities, a liability 578 00:29:57,760 --> 00:30:00,920 Speaker 1: um from the perspective of the corporation to their shareholders 579 00:30:01,440 --> 00:30:04,400 Speaker 1: to your asset. It's their liability um. And so that's 580 00:30:04,440 --> 00:30:08,400 Speaker 1: reliant on rule of law, that's reliant on functioning financial 581 00:30:08,400 --> 00:30:13,280 Speaker 1: markets things like that. Whereas self custody gold, silver, platinum, 582 00:30:13,280 --> 00:30:16,960 Speaker 1: self custody bitcoin, you know, whatever the case, wine, art, 583 00:30:17,120 --> 00:30:20,560 Speaker 1: like uh, you know, magic gathering cards, whatever, you're into that, 584 00:30:20,600 --> 00:30:23,280 Speaker 1: you know a thing or two about um, those represent 585 00:30:23,360 --> 00:30:26,560 Speaker 1: bare assets that you hold and then to to the 586 00:30:26,560 --> 00:30:29,320 Speaker 1: extent of you know, if they're truly decentralized, like you know, 587 00:30:29,760 --> 00:30:33,080 Speaker 1: like gold or like bitcoin, or like art from an 588 00:30:33,200 --> 00:30:37,240 Speaker 1: artist that's dead right. Basically, no entity can create more 589 00:30:37,280 --> 00:30:39,800 Speaker 1: of those tend to hold their value. And what makes 590 00:30:39,800 --> 00:30:42,440 Speaker 1: them different than cash flow producing things that they their 591 00:30:42,440 --> 00:30:44,760 Speaker 1: self custody. Now that can be a disadvantage. I mean, 592 00:30:44,760 --> 00:30:48,000 Speaker 1: if things are going fine, generally, you want cash flows. 593 00:30:48,040 --> 00:30:51,440 Speaker 1: You want businesses that are that are building equity, that 594 00:30:51,480 --> 00:30:53,640 Speaker 1: are getting more productive each year. You have tons of 595 00:30:53,640 --> 00:30:56,960 Speaker 1: people working every year for you to increase the value 596 00:30:56,960 --> 00:31:00,000 Speaker 1: of your investment. Um. But there are other times where 597 00:31:00,120 --> 00:31:03,320 Speaker 1: er uh it's those you know, gold outperformed stocks for 598 00:31:03,400 --> 00:31:06,000 Speaker 1: like five ten years UM. And I do think that 599 00:31:06,760 --> 00:31:09,920 Speaker 1: there gonna be time where commodity exposure is probably a 600 00:31:09,920 --> 00:31:12,160 Speaker 1: good thing. Doesn't mean every year, but I think the 601 00:31:12,160 --> 00:31:14,480 Speaker 1: commodities are probably gonna do pretty well. And I think 602 00:31:14,480 --> 00:31:19,440 Speaker 1: that includes the precious metals as well. UM. Along those 603 00:31:19,480 --> 00:31:24,360 Speaker 1: same lines, it seems like energy, uh, and owning the 604 00:31:24,360 --> 00:31:28,120 Speaker 1: production of energy is something positioned to do fairly well 605 00:31:28,160 --> 00:31:31,120 Speaker 1: into the future. You've discussed at length kind of the 606 00:31:31,800 --> 00:31:36,160 Speaker 1: long term mismatch between the supply and demand of all 607 00:31:36,200 --> 00:31:39,600 Speaker 1: different forms of energy. Can you give a broad overview 608 00:31:39,720 --> 00:31:44,760 Speaker 1: right now on um, First, why energy is so important 609 00:31:44,800 --> 00:31:49,560 Speaker 1: for economic growth, and then what energy problems most countries 610 00:31:49,560 --> 00:31:53,120 Speaker 1: around the world are facing today. So in many cases 611 00:31:53,120 --> 00:31:56,120 Speaker 1: that you can describe the growth of modern civilization, the 612 00:31:56,160 --> 00:32:00,720 Speaker 1: whole Industrial revolution and then the tech revolution as a 613 00:32:00,840 --> 00:32:04,479 Speaker 1: growth of energy density. Right. So you know, you can 614 00:32:04,520 --> 00:32:07,480 Speaker 1: think of old forms of energy were like you know, 615 00:32:07,520 --> 00:32:10,440 Speaker 1: manual like windmills, or like a guy going out chopping 616 00:32:10,480 --> 00:32:12,880 Speaker 1: down a tree, you know, chopping the wood up, bringing 617 00:32:12,920 --> 00:32:16,880 Speaker 1: it back, burning it. Right, you're expending energy and you're 618 00:32:16,880 --> 00:32:19,560 Speaker 1: getting energy back, and it's pretty low multiple that you're 619 00:32:19,560 --> 00:32:22,320 Speaker 1: getting back. Uh. And so it's pretty hard to have 620 00:32:22,360 --> 00:32:25,560 Speaker 1: explosive population growth. It's pretty hard to have rapid productivity 621 00:32:25,600 --> 00:32:28,520 Speaker 1: gains because everything is kind of marginal. You're you're just 622 00:32:28,520 --> 00:32:32,320 Speaker 1: getting a very small, slow growth. And that's why during 623 00:32:32,360 --> 00:32:36,200 Speaker 1: most of human history population growth is pretty low. Um, 624 00:32:36,240 --> 00:32:38,000 Speaker 1: you know, it's it's just what you didn't get these 625 00:32:38,000 --> 00:32:41,480 Speaker 1: like exponential growth curves. But once you discovered coal, once 626 00:32:41,520 --> 00:32:44,080 Speaker 1: you discovered oil, and then and then natural gas and 627 00:32:44,120 --> 00:32:47,200 Speaker 1: then nuclear, we started realizing that there's actually far more 628 00:32:47,320 --> 00:32:49,600 Speaker 1: energy density that we can tap into. We can put 629 00:32:49,600 --> 00:32:51,440 Speaker 1: a little bit of energy into get these things out 630 00:32:51,440 --> 00:32:53,880 Speaker 1: of the ground, and then instead of getting you know, 631 00:32:54,440 --> 00:32:57,200 Speaker 1: five times energy back, we can get fifty times energy 632 00:32:57,200 --> 00:33:00,720 Speaker 1: back um. And you know, a bar of oil has 633 00:33:00,760 --> 00:33:05,120 Speaker 1: like thousands and thousands of hours of human caloric labor 634 00:33:05,400 --> 00:33:09,080 Speaker 1: in it um. And you know, basically, if you if 635 00:33:09,080 --> 00:33:11,880 Speaker 1: you tally up all the energy it takes to make 636 00:33:11,920 --> 00:33:14,640 Speaker 1: all the things around you, how much it takes to 637 00:33:14,680 --> 00:33:18,280 Speaker 1: make all the pumping of water, running water, clean, clean 638 00:33:18,360 --> 00:33:23,640 Speaker 1: cleaning of water, electricity, transportation. It's basically having dozens and 639 00:33:23,680 --> 00:33:27,120 Speaker 1: dozens of people working for you for free, because it's 640 00:33:27,120 --> 00:33:31,320 Speaker 1: all from that marginal productivity. And what makes this kind 641 00:33:31,320 --> 00:33:34,160 Speaker 1: of period unique is now that the world one is 642 00:33:34,200 --> 00:33:38,440 Speaker 1: we've gotten a lot of the easy deposits of some 643 00:33:38,520 --> 00:33:40,800 Speaker 1: of these energy sources. So the United States, for example, 644 00:33:40,840 --> 00:33:44,240 Speaker 1: conventional oil production peaked in nineteen seventy, so it went 645 00:33:44,320 --> 00:33:47,160 Speaker 1: up from the late eighteen hundreds to nineteen seventy about 646 00:33:47,160 --> 00:33:49,960 Speaker 1: a century later, and then it began a structural multi 647 00:33:50,000 --> 00:33:54,400 Speaker 1: decade decline. Now starting in you know, the two thousands, 648 00:33:54,480 --> 00:33:57,400 Speaker 1: we were able to all sit that with a you know, shale. Basically, 649 00:33:57,400 --> 00:33:59,800 Speaker 1: we use our productivity to find new types of energy, 650 00:34:00,160 --> 00:34:02,600 Speaker 1: but that that depletes very quickly, so it's not like 651 00:34:02,640 --> 00:34:05,640 Speaker 1: we can just grow that forever um. It doesn't mean 652 00:34:05,640 --> 00:34:07,120 Speaker 1: that we've run out. It just means that, you know, 653 00:34:07,200 --> 00:34:10,759 Speaker 1: we can't always get more out of the ground this 654 00:34:10,840 --> 00:34:13,279 Speaker 1: year than we got out of the ground last year. Uh. 655 00:34:13,360 --> 00:34:15,319 Speaker 1: You see, a lot of OPEC nations are kind of 656 00:34:15,320 --> 00:34:20,120 Speaker 1: flatlining in terms of energy production, um nuclear. There's still 657 00:34:20,120 --> 00:34:22,400 Speaker 1: a lot of untapped potential there, but we've kind of 658 00:34:22,400 --> 00:34:25,040 Speaker 1: turned away from it as a like, as a civilization. 659 00:34:25,840 --> 00:34:29,080 Speaker 1: I think that's gonna be I think it's already being revisited. Basically, 660 00:34:29,080 --> 00:34:31,840 Speaker 1: some of those decisions are coming back to haunt some 661 00:34:31,880 --> 00:34:35,279 Speaker 1: of the policemakers that made them. But essentially, now we're 662 00:34:35,280 --> 00:34:38,160 Speaker 1: going into this period where, you know, for various reasons, 663 00:34:38,160 --> 00:34:41,120 Speaker 1: the world is kind of looking towards less dense energy sources. Again, 664 00:34:41,120 --> 00:34:43,640 Speaker 1: they're saying, okay, let's do solar, let's do wind, let's 665 00:34:43,640 --> 00:34:47,080 Speaker 1: get away from all these you know, fifty x uh, 666 00:34:47,120 --> 00:34:50,120 Speaker 1: you know, energy dense things. But I think that they 667 00:34:50,200 --> 00:34:53,600 Speaker 1: underplay the downside of what it means for a civilization 668 00:34:53,640 --> 00:34:56,400 Speaker 1: to run on less energy density. And it's gonna cause 669 00:34:56,680 --> 00:35:00,480 Speaker 1: growth challenges, inflationary challenges. You know, there's really nothing more 670 00:35:00,520 --> 00:35:04,279 Speaker 1: deflationary than than the discovery of oil. Basically that like 671 00:35:04,320 --> 00:35:06,160 Speaker 1: I said, you know, it's if you had to have 672 00:35:06,200 --> 00:35:09,839 Speaker 1: all this around you built from people chopping wood, right, 673 00:35:10,200 --> 00:35:12,279 Speaker 1: it would be far more inflationary, you wouldn't. But we 674 00:35:12,320 --> 00:35:16,000 Speaker 1: live like kings and queens today because of the marginal 675 00:35:16,040 --> 00:35:19,640 Speaker 1: productivity that these very dense energy sources provide us. And 676 00:35:19,680 --> 00:35:22,160 Speaker 1: so if we start flat landing or turning down in 677 00:35:22,280 --> 00:35:25,160 Speaker 1: terms of our average energy density, uh, unless we have 678 00:35:25,160 --> 00:35:28,520 Speaker 1: certain technology breakthroughs that that fixed that, it's going to 679 00:35:28,560 --> 00:35:32,640 Speaker 1: be a rougher time. So basically throughout history, we've found 680 00:35:32,680 --> 00:35:38,759 Speaker 1: ways to outsource human labor uh to uh other forms 681 00:35:38,800 --> 00:35:43,319 Speaker 1: of energy that are much higher outputs. So we use 682 00:35:43,440 --> 00:35:47,320 Speaker 1: energy as leverage, so we have less of our own input, 683 00:35:47,600 --> 00:35:49,799 Speaker 1: we get more out of it, and so that gives 684 00:35:49,840 --> 00:35:51,840 Speaker 1: us more stuff that we want and need over time 685 00:35:52,360 --> 00:35:54,920 Speaker 1: without having to do as much to get it. And 686 00:35:54,960 --> 00:35:57,520 Speaker 1: now we're kind of in this period of time where that, 687 00:35:58,239 --> 00:36:01,799 Speaker 1: at least for some years has kind of slowed down 688 00:36:01,880 --> 00:36:04,360 Speaker 1: or maybe reversed itself. In some cases, we might be 689 00:36:04,400 --> 00:36:09,759 Speaker 1: looking for lower leverage areas of energy instead of higher exactly, 690 00:36:09,840 --> 00:36:11,880 Speaker 1: and that opens all sorts of productivity risk because you 691 00:36:11,920 --> 00:36:15,880 Speaker 1: still have you know, emerging markets still want to grow rapidly, 692 00:36:16,160 --> 00:36:19,799 Speaker 1: which means more energy consumption UM, and the developed world 693 00:36:19,920 --> 00:36:21,359 Speaker 1: is you know, we don't really need like I don't 694 00:36:21,400 --> 00:36:23,319 Speaker 1: really need to use more energy that I'm using now. 695 00:36:23,400 --> 00:36:27,359 Speaker 1: I'm quite comfortable, but I'd like to maintain what I'm using, right, 696 00:36:27,400 --> 00:36:28,959 Speaker 1: So a lot of us are in that position where 697 00:36:28,960 --> 00:36:30,319 Speaker 1: we want to keep what we have and other people 698 00:36:30,360 --> 00:36:33,400 Speaker 1: want to get up to the level we have UM. 699 00:36:33,560 --> 00:36:35,120 Speaker 1: And that's I mean, that's if you do that, if 700 00:36:35,120 --> 00:36:36,880 Speaker 1: you do the math. I mean, if everybody in India 701 00:36:36,920 --> 00:36:39,640 Speaker 1: wants to consume as much energy as people in Germany do, 702 00:36:39,920 --> 00:36:44,839 Speaker 1: for example, that's a lot more energy. UM. And there 703 00:36:44,880 --> 00:36:46,960 Speaker 1: are I mean, I think they're interesting things. Like you know, 704 00:36:47,000 --> 00:36:48,960 Speaker 1: I don't think we've Like I said, I think uranium 705 00:36:49,040 --> 00:36:52,520 Speaker 1: still under explore in terms of how much it can 706 00:36:52,520 --> 00:36:55,560 Speaker 1: help us. I think that UM ocean thermal energy is 707 00:36:55,640 --> 00:36:57,600 Speaker 1: under explored in terms of how much it can help us. 708 00:36:58,520 --> 00:37:01,560 Speaker 1: But the obviously the big sticking points are are hydrocarbons 709 00:37:01,680 --> 00:37:07,759 Speaker 1: and uranium. On that note, UM, hypothetically, let's say I could, uh, 710 00:37:07,960 --> 00:37:11,000 Speaker 1: I could crown you world dictator for one day, and 711 00:37:11,000 --> 00:37:15,839 Speaker 1: you could make one decision relating to energy policy. What 712 00:37:15,920 --> 00:37:18,719 Speaker 1: would it be and why would it be? To deregulate 713 00:37:18,800 --> 00:37:23,040 Speaker 1: nuclear Uh yeah, basically, would I would do my best 714 00:37:23,080 --> 00:37:28,319 Speaker 1: accelerate uranium uh nuclear production. Uh try to you know 715 00:37:28,440 --> 00:37:29,880 Speaker 1: if they if I was going to do stimulus, it 716 00:37:29,920 --> 00:37:34,560 Speaker 1: would be helping those get built. Um. Uh And and 717 00:37:34,640 --> 00:37:39,200 Speaker 1: you know wayte safely stored all the you know the details. Um. 718 00:37:39,280 --> 00:37:41,239 Speaker 1: Basically it's just because that so if you look back 719 00:37:41,280 --> 00:37:43,080 Speaker 1: in the seventies, a lot of those plants were built 720 00:37:43,160 --> 00:37:45,759 Speaker 1: very quickly, and they were great, and they provided sons 721 00:37:45,760 --> 00:37:49,279 Speaker 1: of energy. UM. But then you know, uh, you know 722 00:37:49,360 --> 00:37:55,359 Speaker 1: there were three incidents obviously through my island, um, Chernobyl, Fukushima, 723 00:37:55,880 --> 00:37:59,000 Speaker 1: and collectively, I mean they even the high end estimates 724 00:37:59,000 --> 00:38:00,839 Speaker 1: when you include all the radio and deaths over long 725 00:38:00,880 --> 00:38:03,920 Speaker 1: periods of time. I mean they killed fewer people than 726 00:38:04,000 --> 00:38:08,480 Speaker 1: Cole kills in a year. Um. And you know, obviously 727 00:38:08,560 --> 00:38:10,600 Speaker 1: you want to have, like for example, Chernobyl. What made 728 00:38:10,640 --> 00:38:12,000 Speaker 1: it so bad is they didn't even have like a 729 00:38:12,000 --> 00:38:15,400 Speaker 1: protective dome, like you can't have obviously, like you know, 730 00:38:15,440 --> 00:38:19,160 Speaker 1: obvious safety problems are obvious. Um and so like you know, 731 00:38:19,480 --> 00:38:21,880 Speaker 1: like you shouldn't be allowed to build a nuclear facility 732 00:38:21,920 --> 00:38:24,240 Speaker 1: without like a protective dome. So you need to obviously 733 00:38:24,280 --> 00:38:28,359 Speaker 1: some basic regulations, UM. But you can't hamper so much 734 00:38:28,440 --> 00:38:30,800 Speaker 1: that you can't build them at all. Like in the States, 735 00:38:30,960 --> 00:38:34,280 Speaker 1: we just don't build nuclear reactors at all anymore because 736 00:38:34,280 --> 00:38:38,200 Speaker 1: it's practically impossible to do so uh throughout the whole process. 737 00:38:38,719 --> 00:38:43,080 Speaker 1: And so and you see kind of the consequences in Germany, right, So, 738 00:38:43,120 --> 00:38:46,080 Speaker 1: they they wanted to decommission a lot of their nuclear 739 00:38:46,440 --> 00:38:49,399 Speaker 1: after Fukushima, and what they could have done, they actually 740 00:38:49,480 --> 00:38:52,880 Speaker 1: could have used less coal, um, but they didn't. Instead 741 00:38:52,920 --> 00:38:55,640 Speaker 1: they use less nuclear and so, you know, they for 742 00:38:55,719 --> 00:38:59,000 Speaker 1: example of a you know, they've you know, they're they're 743 00:38:59,520 --> 00:39:01,400 Speaker 1: they're going on about c O two, but if you 744 00:39:01,440 --> 00:39:04,239 Speaker 1: look at their neighbor France, they have much less CEO 745 00:39:04,320 --> 00:39:07,080 Speaker 1: two emissions per on their electrical grid per unit of 746 00:39:07,200 --> 00:39:09,920 Speaker 1: energy produced than Germany does. And it's it's because they 747 00:39:09,960 --> 00:39:13,560 Speaker 1: decided to to lower uh, you know, densit energy coal 748 00:39:14,080 --> 00:39:17,279 Speaker 1: uh compared to uranium. And it's it's as also you know, 749 00:39:17,320 --> 00:39:20,480 Speaker 1: it's particulates CEO two whatever you want to measure by, 750 00:39:20,560 --> 00:39:23,320 Speaker 1: it's not as clean as uranium. UM. And so I 751 00:39:23,360 --> 00:39:26,440 Speaker 1: think the obvious answers you need more nuclear power globally. 752 00:39:26,520 --> 00:39:30,160 Speaker 1: That's that's kind of an important marginal highly dense energy 753 00:39:30,200 --> 00:39:33,200 Speaker 1: sources the densest one we know of, UM to help 754 00:39:33,280 --> 00:39:35,480 Speaker 1: us out. I think if there's a secondary one, I 755 00:39:35,520 --> 00:39:38,400 Speaker 1: would try to accelerate ocean thermal and just see what 756 00:39:38,920 --> 00:39:41,240 Speaker 1: you know, if I think it's an under explored area 757 00:39:41,719 --> 00:39:45,000 Speaker 1: that provides us some like you know medium uh energy 758 00:39:45,080 --> 00:39:49,520 Speaker 1: density that that's pretty untapped into. Given this outlook, with 759 00:39:49,680 --> 00:39:54,160 Speaker 1: the kind of long term mismatch between supply demand of energy, Uh, 760 00:39:54,280 --> 00:40:00,720 Speaker 1: this presents investment opportunities. Uh correct, because uh the demand 761 00:40:00,960 --> 00:40:03,920 Speaker 1: for them with you know, not enough supply means um 762 00:40:04,160 --> 00:40:08,520 Speaker 1: that the price has to go up. Basically, Yeah, I 763 00:40:08,560 --> 00:40:10,680 Speaker 1: think if I think so in this space, you have 764 00:40:10,760 --> 00:40:13,600 Speaker 1: to be willing to take on volatility. Commodities are volatile. 765 00:40:14,040 --> 00:40:15,879 Speaker 1: Another thing is that if you look over very long 766 00:40:15,960 --> 00:40:18,480 Speaker 1: periods of time and you rank asset classes by how 767 00:40:18,560 --> 00:40:21,640 Speaker 1: well they do, so equities tended you know, diverse equity 768 00:40:21,680 --> 00:40:24,880 Speaker 1: tend to do well, Diverse real estate tends to do well. Uh, 769 00:40:25,000 --> 00:40:26,920 Speaker 1: gold is pretty good. When you go down to the 770 00:40:26,960 --> 00:40:29,440 Speaker 1: bottom the list, you get two commodities. And that's because 771 00:40:29,480 --> 00:40:31,920 Speaker 1: in some ways, the fact that we get more productive 772 00:40:31,960 --> 00:40:34,960 Speaker 1: over time means that we're better at getting commodities, right, 773 00:40:35,120 --> 00:40:37,680 Speaker 1: it's it's easier to get like wheat than it was 774 00:40:37,680 --> 00:40:40,560 Speaker 1: a hundred years ago for example. Uh, the same thing 775 00:40:40,640 --> 00:40:44,520 Speaker 1: for most most resources. So commodities are these very boom bust, 776 00:40:45,080 --> 00:40:49,480 Speaker 1: low performing assets. But those those decades where they do perform, well, 777 00:40:49,920 --> 00:40:53,759 Speaker 1: it's like it's explosive, it's usually quite good. Um. And 778 00:40:53,920 --> 00:40:56,920 Speaker 1: so I think that we're in a period of scarcity 779 00:40:57,400 --> 00:41:00,640 Speaker 1: under investment over the past decade UM, and I think 780 00:41:00,680 --> 00:41:03,160 Speaker 1: the next decade or two is likely to be favorable 781 00:41:03,280 --> 00:41:07,360 Speaker 1: for commodity investments. And but like there's a lot of landmines. 782 00:41:07,400 --> 00:41:09,040 Speaker 1: You have to get through the volatility. You don't want 783 00:41:09,080 --> 00:41:11,120 Speaker 1: to get over your skis. In terms of leverage, you're 784 00:41:11,200 --> 00:41:14,279 Speaker 1: picking like, you know, the most risky small cap ones 785 00:41:14,320 --> 00:41:17,160 Speaker 1: for your entire portfolio. You also have to be careful 786 00:41:17,200 --> 00:41:20,239 Speaker 1: about you know, you might own a great investment and 787 00:41:20,280 --> 00:41:22,279 Speaker 1: then the government takes it from you, and you know, 788 00:41:22,400 --> 00:41:26,880 Speaker 1: given jurisdiction where they tax all the excess profits for example, um, 789 00:41:27,040 --> 00:41:30,680 Speaker 1: so then there's jurisdictional risks. So I am I am 790 00:41:30,760 --> 00:41:35,120 Speaker 1: bullish on you know, both commodities as well as transporting commodities, 791 00:41:35,200 --> 00:41:39,880 Speaker 1: So producing transporting um. Then even things like upgrading what 792 00:41:39,960 --> 00:41:43,239 Speaker 1: we already have. Upgrading our electrical grids, for example, I 793 00:41:43,320 --> 00:41:46,840 Speaker 1: think that's a it's a boring but underappreciated area. You know, 794 00:41:46,920 --> 00:41:49,040 Speaker 1: if people, if people want more of our energy to 795 00:41:49,239 --> 00:41:51,719 Speaker 1: to be electrified, Uh, they certainly can't do it on 796 00:41:51,760 --> 00:41:54,279 Speaker 1: the on the grids, you know as they are now, right, 797 00:41:54,520 --> 00:41:56,920 Speaker 1: and so UM, I think there are a lot of 798 00:41:57,080 --> 00:42:01,200 Speaker 1: areas that are just we've underinvested in general on physical 799 00:42:01,280 --> 00:42:05,400 Speaker 1: world stuff. We've we've the last decade was you know, 800 00:42:05,520 --> 00:42:08,400 Speaker 1: it was apps, it was software, it was social That's 801 00:42:08,400 --> 00:42:10,600 Speaker 1: where a lot of our investment went, and we saturate 802 00:42:10,719 --> 00:42:12,400 Speaker 1: ourselves with them. We have pretty much all that we 803 00:42:12,840 --> 00:42:15,719 Speaker 1: we want. Obviously, development well there will continue, but that's 804 00:42:15,719 --> 00:42:18,239 Speaker 1: not where if you think of what are you scarce on? 805 00:42:18,680 --> 00:42:22,319 Speaker 1: No one says I'm I'm scared with streaming options, right, 806 00:42:22,800 --> 00:42:25,360 Speaker 1: you know, maybe a decade fifteen years ago, you're like, 807 00:42:25,400 --> 00:42:27,040 Speaker 1: I wish I could just look at my computer. Now 808 00:42:27,120 --> 00:42:29,120 Speaker 1: you can now now it's like, I'm you know, you 809 00:42:29,160 --> 00:42:32,799 Speaker 1: have too many streaming options. Uh. What we are under 810 00:42:32,880 --> 00:42:36,200 Speaker 1: invested in is a real world stuff, commodities, infrastructure, things 811 00:42:36,280 --> 00:42:40,080 Speaker 1: like that, right, the stuff that actually uh help makes 812 00:42:40,120 --> 00:42:45,040 Speaker 1: the world go around. Yeah. Absolutely, Um, everybody, I highly 813 00:42:45,160 --> 00:42:48,120 Speaker 1: encourage you to go to Lynn Alden dot com sign 814 00:42:48,239 --> 00:42:51,319 Speaker 1: up for her free newsletter there. But Lynn, you also 815 00:42:51,440 --> 00:42:55,640 Speaker 1: have a premium newsletter that I highly encourage any one 816 00:42:55,719 --> 00:42:57,799 Speaker 1: of you. It's it is the value that you get 817 00:42:57,920 --> 00:43:01,200 Speaker 1: there is so much more than the very small fee 818 00:43:01,239 --> 00:43:03,960 Speaker 1: that you'll pay for it. Um. And you provide uh 819 00:43:04,520 --> 00:43:09,160 Speaker 1: your portfolio insights and updates for investment opportunities as your 820 00:43:09,160 --> 00:43:12,120 Speaker 1: outlook changes as well. Right, yeah, I appreciate that. So 821 00:43:12,280 --> 00:43:14,000 Speaker 1: my my free neews that are comes out every six 822 00:43:14,040 --> 00:43:17,120 Speaker 1: weeks on average, whereas my my premium one is is 823 00:43:17,160 --> 00:43:20,080 Speaker 1: pretty low cost. I haven't raised the prices uh in years. 824 00:43:20,400 --> 00:43:22,840 Speaker 1: Uh and it comes out every two weeks on average. Uh. 825 00:43:22,920 --> 00:43:25,920 Speaker 1: And so it's basically just ongoing updates in macro and 826 00:43:26,120 --> 00:43:31,000 Speaker 1: some specific investment uh you know, opportunities and then anywhere else. 827 00:43:31,440 --> 00:43:34,000 Speaker 1: You are pretty active on Twitter as well, right Yeah, 828 00:43:34,040 --> 00:43:37,359 Speaker 1: people can check me out at line Alton Contact But yeah, 829 00:43:37,360 --> 00:43:39,359 Speaker 1: the best basis probably the website lind Alton dot com. 830 00:43:40,160 --> 00:43:42,920 Speaker 1: Very good. Well, thank you so much for spending the 831 00:43:43,040 --> 00:43:45,840 Speaker 1: time and giving us so much insight and wisdom on 832 00:43:45,920 --> 00:43:49,120 Speaker 1: what's going on in the world today. I really appreciate you. Yeah, 833 00:43:49,160 --> 00:43:50,880 Speaker 1: thanks for having me. Absolutely