Kind: captions
Language: en
Sovereign defaults are at an all-time
high we had 14 in the last 3 years
versus 19 in the previous 20 years
that's 4.7 per year now versus less than
one per year previously that's an
increase of almost 5x we have
millionaire migration uh to the US has
dropped by 86% in the last 3 years and
central banks are buying a ton of gold a
ton of gold the chart is ridiculous Pres
presumably because they see that
something is coming so it's like okay
the you you are the you got a lot I cut
out like 10 yeah so there's an insurance
crisis there's the fiscal crisis blue
states are bankrupt like California
Illinois places like that they're
they're losing a lot of there's the auto
loans there's the student loans there's
credit cards each of these are like
trillion dollar problems that could
crash the economy and they're all
happening essentially at the same time
it is insane so I feel like we're
standing on this real really rickety
thing you said that the you know the
economy is beginning to Creek uh but
I've heard you use an example before
that I worry is more accurate now
remember all I care about I want people
to look at this neither of us have a
crystal ball the one thing we are
guaranteed to get wrong is timing I just
want everyone to be very clear now the
wins and losses all come around timing
so of course like if I had a crystal
ball I would just shut the Showdown and
just going to make a lot of money so uh
I have no idea when this is going to
happen so to to be very clear but you've
used an example before that I think is
absolutely brilliant and that is this is
a Wy coyote moment yes what do you mean
try that so you know Wy Cody if people
haven't seen you can probably put up an
image of it his character from Looney
Tunes and they walk off a cliff and
they're just you know merily going in
midair then one day they look down
they're like oh my goodness and the
markdown is digital in a sense right
they just fall all the way straight down
right and if you look at the graphs of
some of these Banks stocks they're kind
of like that where they're analog and
they're just kind of floating through
the air and then suddenly somebody
actually looks at the financials they
look down and they're just digital they
die
overnight that that analogy is so apt
because and this is why I I never know
how to handle these moments because by
talking about it you are getting people
to look down and so in some ways you run
the risk of speeding it up so you talked
earlier about Janet Yellen she knew
there was a problem but she didn't speak
up now You' for people just listening he
just made a
Jan
yell but I don't know if I'm mad at her
for not broadcasting the problem but at
the same time I can't help myself out of
a moral sense of obligation from telling
people hey you might want to look down
why I make the face well the reason is
that line of argument that talking about
it is causing it is actually uh people
throw that around I think it's false but
it's false in a in an important and
interesting way which is when you know
when one of the things I found that's I
think a stupid kind of meme is you talk
about this type of stuff people be like
oh you're such a Doomer you're such a
downer just look on the bright side man
you know blah blah blah that kind of
thing right and you know the goal is to
be neither a a pessimist nor an optimist
but to be just a realist and if you're a
realist then um you're not a Pana right
like it's not a Doomer to say oh there's
a wall in front of you you might as you
might want to turn the car you know
that's like that's just that's being
smart right that's being realistic and
the thing is that what happens when you
talk about this stuff in the absence of
another human being there the negative
emotions that people have out of
visualizing what a deleveraging actually
is are projected on you oh you're
causing oh my God you're causing a bankr
etc you know who caus it is Jerome
Powell and the Federal Reserve and Janet
Yellen and the US Financial system but
especially Powell he's he's a chair of
the Federal Reserve why does Powell hate
America so much you know like that's
actually the question why did he you
know um devalue the treasuries that uh
the government had sold in in 2021 why
did he tell people that interest rates
were going to be kept at zero before
totally you know jacking them to the
Moon why do you say that inflation was
transitory when when it wasn't right I
have a slightly different hypothesis
which is all the things you just said
are true that the the mistake the the
actions that are being taken are being
taken by those people and those actions
are creating the problem but my whole
thing about it's it's the debt that
causes this collapse I don't think any
human any uh any group of people is a
better way to think about it I don't
think any group of people can stay
emotionally sober for long once they've
lost sight of the people who built the
thing so once you've had enough people
that have inherited the country working
well you you now just it it is
guaranteed to devolve into these choices
that happen around debt because again we
talked about this earlier this is a this
is a it's coming from a beautiful place
they want to they want more people in
housing they want to make things better
for people they want to elevate people
live people out of poverty make sure
that you know nobody goes without like
it really does like I understand the um
what you call the the awokening I think
the awokening of America
like the great awokening whoever came up
with it I like get it I get the impulse
to it but the problem is that you end up
you get in this debt cycle of oh let's
just let's let's inflate the currency
let's print money so we're printing
money we're inflating the currency and
look yeah kind of cheeky it does devalue
everybody's money but nobody feels it
too badly like honestly that in 2008 I
was like word like print money man if
that's going to help people that's
amazing I got devalued obviously and
then again svb I didn't have any money
in svb but I was still like word yeah
print so I'm just like wait is this much
to do about nothing or is this the cycle
that humans cannot get themselves out of
and I'm as much of the problem as
anybody else because I'm like yeah I
don't want to see people suffer man if
you can print like print I guess we all
like take a hint but it's like when does
it become a problem okay well so first
is um there's called the canlin effect
okay which is to say and you know I
think some people have an intuitive
grasp of this but but I'll explain it
anyway um printing money is in a sense
like official counterfeiting and the guy
who is got the counterfeited dollar
first can spend that and get more of the
purchasing power and then eventually it
makes its way through the system and the
entire money supply gets marked down and
it's got less of its purchasing power
with the 15th guy who's who's um got it
okay
and so printing is not Costless what
printing just does is it's like
basically inflation is taxation it's
like um let's say you had I don't know
hundred billion dollar okay in the
economy as a whole and then the
government prints another hundred
billion doll that's as if the government
seized 50% of the wealth in the
country does that make sense or at least
50% of the savings yes because I don't
know how intuitively this comes to
people but yes once you get it once the
penny drops it's brutal
yeah so in so inflation is taxation that
is to say and printing when especially
when you're printing a large percentage
of money supply it is essentially
centralized seizure of wealth the
difference is it is um if you think
about the difference between like a like
a in-your-face predator that's like
communism you know or like a like a lion
you can see it coming versus a stealth
Predator that's camouflaged like a snake
that's like kinanm um um communism they
would just go to your house with a gun
and they would just shoot you and take
your farm and you know throw you know
your your your children in a goog or
whatever right um very direct that was a
lived experience that a lived experience
of many people in Russia China Vietnam
like all kinds of people that's what
collectivization was okay but kinism is
it steals the money in a much more
subtle way where a button is hit and
it's like a mosquito you don't even feel
it right the blood is sucked or it's
like a camouflage snake or something
like that you're you're dead or bankrupt
or devalued at the end of the day but
it's you might even feel it's helping
you so for example let me show you uh in
particular a very important graph did
Republicans pay for 2008 so let's
revisit first take a look at this graph
okay have you seen this graph before Oh
yes my friend I told you every graph
you've ever put out I think I've seen
it's probably not literally true but
it's very close okay all right well
that's cool so there is a Wall Street
Journal article that this comes from
okay and um there it's actually like an
animated version so you could play the
animated version that goes back and
forth so you should do that point is
what is this graph showing um basically
it is showing congressional districts in
the US by their uh real GDP okay
inflation adjusted GDP and um what you
can see is the the kind of solid line
blue line and red line in 2008 uh
Democrat and Republican congressional
districts were were mostly evenly
matched as to say both them had Rich
districts both them had poor districts
and the median wealth median real GDP in
both the STA districts was comparable
okay 10 years later by 2018 the the
distribution of uh Democrat you know
districts had pulled away from the
Republicans like the median GDP of
Republicans was like $30 billion in
their congressional districts for
Democrats was like 50 billion or
thereabouts and moreover all all of the
wealthiest congressional districts were
suddenly Democrat so essentially in 10
years this massive Gap was opened up
between the two parties and this is how
you went from the uh like um sudent tie
wearing Republicans of the early 2000s
to the trucker hat pears of the late
2010s and that transformation happened
over the life of most of the people who
are watching this but I believe it
happened in part because the printing
went disproportionally to the coasts
that is to say if you track the canit
effect if you track the flow print of
money well it's a Fed it buys these
overpriced mortgages from Banks the
banks now have extra assets on their
books and they can spend it on financial
assets and uh then those people have
money in their bank accounts and then
they can go and spend it on houses or
Goods or whatever but that's
disproportionately in um in the coast
the money went to Washington DC it went
to New York and then some of it made its
way to Silicon Valley venture capital is
actually a tiny fraction of the overall
investment landscape it's like a few
billion versus hundreds of billions of
dollars but like a small rivette of that
printed money made its way out to
Silicon Valley venture capital and that
was probably like the most productive
use of the money because you're talking
about investing in businesses that are
being built from scratch and um and
that's a whole separate story as to to
what happened there but essentially the
money made its way to the coast uh and
uh and the guy in Oklahoma who's some
cashier in Oklahoma got the printed
dollar last and didn't even realize that
they had been devalued and um that they
had been essentially had a good chunk of
their assets seized and their whole town
had their assets seized um and the thing
about this is the whole time as you just
said people are like we're helping
people the FED save the world right well
what it actually was I mean you know
2009 2016 as a Democrat Administration
perhaps it was just a coincidence that
the Democrats became far richer than the
Republicans in 10 years okay but it does
seem like the cost of the print was
imposed on the political opposition in a
deniable and invisible way unconscious
even to those doing the imposing who
actually say we we save the world we
help people stimulus blah blah blah
right and that's like a camouflage
Predator where it's like anzing its
Target it doesn't even know the blood is
being
drained okay that's being attacked it's
like it's you know you know strikes like
this right and that's actually better
because you know a lion gets your fight
andlight response up you know it's a
predator mosquito doesn't it's done and
you don't even maybe detect that it's
happened right uh and so like we see
that Evolution has selected for the
camouflage predator and that's a lot of
what the financial system is um and and
if you think about this by the way and
you just start relating I mean think
about how many times Banks try to get
one over on you with fine print right
fine print is not a tactic it's a
strategy the whole point is to get
somebody to sign a contract that they
didn't fully read or they didn't didn't
understand in Parts legal e and lock
them into some adjustable rate mortgage
um or some student loan where they're
too naive to understand you know like
how bad it is for the rest of their life
and they're 18 and they don't you
they're not taught um interest rates
they're not taught taxes and stuff in
high school they're taught just a bunch
of gibberish and then they sign a
student loan for the rest of their lives
the system is sort of set up to get
people into debt and to be clear I'm as
capitalist as they come but I do believe
there's asymmetric information
information Arbitrage there and that
which you've seen at an individual level
that the financial system does is all
something it does in my view at a
collective level by the way there's
somebody else who paid for 2008 you know
who that was no potentially the uh the
Arab world and the reason is uh
basically food spikes helped trigger the
Arab Spring right the US export its
inflation remember the whole Arab Spring
in the early 2010s right I do very much
and this this this is going back to your
earlier thesis uh for everybody
listening along uh as as you biology as
you fractal into these ideas I want
people to understand that there is an
anchor there's something that triggers
this for you but like the the second
third fourth fifth order
consequences in hindsight can be seen
and so a big part of why I find you're
thinking so interesting is you're like
hey Look Backwards understand what
you're going to see going forwards
basically once you understand that
inflation is Taxation and that
Republicans paid for 2008 and uh with
their money and unfortunately a number
of people in the Middle East paid for
2008 in part with their lives because
you know people are like oh 2008 finan
crisis wasn't the end of the world well
you know what for that the AR spring it
was the end of a lot of people's world
right Libya was plunged into chaos that
inflation did destabilize countries and
even if you say it's only 20% the the
cause because it's multiple causes and I
that chaos how how did that happen I I
actually don't understand how the
inflation we didn't really feel it not
in like a way that broke us but it
caused actual instability in other
countries what happened what's the
mechanism so food prices are the often
discussed mechanism that there was like
a a fruit vendor who uh set themselves
on fire um that helped uh you know
Muhammad bazizi right uh fruit vendors
set themselves on fire and that is
thought of as what triggered the Arab
Spring right like essentially you know
um his his prices December 17 December
2010 would have been a normal day if the
local um you know prices uh if the
prices hadn't changed right and um so
the thing about this is uh like it's
multifactorial there's a reason that the
government you know and media covered it
at that time and what not it was useful
in the sense of um have you seen that
clip from Wesley Clark where he talks
about how even in the early
2000s uh like there's folks in the
military industrial complex that decided
to invade like seven Arab countries have
you seen that one
no um Les Clark's former fourstar
General right and uh you know pretty
pretty senior guy before the Iraq
invasion that um that the US plan to
attack seven countries in in a few years
and actually a lot of that came true
right oh my God I did hear this and they
asked him why and he said I have no idea
there there were a bunch of these folks
in like the project for a New American
Century um who uh essentially thought
that Islamic fundamentalism was a huge
problem and they need to democratize the
entire Arab world with like what they
did to Germany and Japan right um that's
like the good motives version of it but
of course uh I mean good motives you
know what I'm saying it's like let's
let's call it that is probably what
their internal mental model was like yes
it's terrible that war exists but you
know it was terrible that World War II
happened and Japan and Germany are
better off for it so we need to conquer
the entire Middle East and democratize
them so that their women are free and
and what not that was The Narrative of
the early 2000s okay what happened of
course was just absolute
and Chaos with Isis and many of these
countries destabilized in Libya and
Civil War and that destabilize people
that that that feels more direct I'm
still trying to understand how re
inflate the currency why does that
impact their food prices we don't have a
blockchain where I can show a purchase B
from C and so I mean markets are you
know are
complicated but um the US exports
inflation um in part because uh it is
the consumer of all these products
around the world and um you know the
dollar is its major export and what is a
small or tolerable rise in prices in the
US is intolerable abroad if somebody's
like kind of living handt mouth to give
the you know what I could diagram out
for you by the way is like the exact
sequence where it goes from the FED
buying an asset from a bank which then
has a cash it can buy a stock
which then puts money in the hands of an
investor who can buy a house that's
actually something where you can
probably track it through the financial
system to track exactly how uh the
printed money is bidding up you know the
you ever heard this saying the price of
tea in China right like what does it
have to do the price of tea in China
what does it have to do the price of
grain in Libya okay to track it exactly
you need access to several different
databases that are not public you know
so you have to kind of look at the aggri
stats and say okay here's how the US
exports
inflation um and then people will argue
about that part of the point is that
it's meant to be deniable right but
um the concept of the US exporting
inflation is certainly not my like
Innovation or anything like that that's
something a lot of folks have talked
about so if you want to get mechanistic
about it You' probably have to go and
pull data sets from I don't know several
different grain venders and so on you
see okay this guy suddenly got a printed
money and so he bid up X which bit up Y
which bit up Z which bit up the prices
of this guy in the Middle East right but
that XY Z A and B are hidden because
they're not on Shain does that make
sense yeah right and that's actually
that's actually part of the point the
part of the point is the again the
mosquito right the camouflage Predator
the point is that you can't see it right
the point is that that's not public I
mean think about how much more coverage
we um we've got of Kim kardashan or
whatever in the 2010s then where did all
that printed money go hundreds of
billions of dollars trillions of dollars
where did all that go how manyan how
many articles have you seen is it is it
a daily thing on that a breakdown of
where the print of money went if you
know that inflation is
taxation then um you know one option is
you can just stay in the system like
those Republicans like those people in
the Middle East and those folks who are
near the money
spigot who can benefit from the candle
in effect do another print and they
benefit again first
right but if you see it coming and you
get out first now you're not part of the
base that is diluted if you get out to
outside money you get out to Gold you
get out to bitcoin you get out to maybe
a foreign Fiat um now you have an asset
where to go back to that example let's
say there's a hundred billion dollars
and the US government printed another
100 billion it seized 50% of of dollars
essentially right but
if there's 21 million Bitcoin the US
government cannot print even one Bitcoin
so can't seize the Bitcoin does that
make sense right by still yeah I'm I'm
not in the camp that Bitcoin is
unseizable I think that you you lock
somebody up they're going to real quick
be like all right here it is yes but but
basically it's not it's not easily
centrally seizable you have to go back
to Communism house to and this is
actually very important
um bit coin and cryptocurrencies more
generally increase the cost of
seesure okay because like a SWAT team
costs money you know it's like sure what
40 $50,000 or whatever right so now you
have to actually look at the p&l of
going in kicking in somebody's door and
beating them up and taking their private
keys right and you have to have you
first you have to find them you have to
find uh you have to have you know like
some legal authority to go in and beat
them up take the and then you have to
replicate that
and that'll arouse resistance because
now it's no longer the camouflage
Predator it's it's the lion right it's
something that you can actually see and
that I don't want to derail us on on
that part yet we're going to get into
that I which I think is a big thing with
the network State and all that but the
the question I want to ask before we
move on I think this is very important
so uh chath Hol haaa P haaa sorry uh so
I don't want to misrepresent his views
but he is I think he's incredibly bright
and uh he has said many times Jam
forgive me if I'm getting your um your
idea wrong here but basically that the
debt to GDP ratio is a big nothing
burger and everybody gets their panties
in a Twist as that number gets uh bigger
and you know we've got multiples of GDP
and debt and he's like me nothing's ever
going to happen it doesn't matter there
is no upper bound um what do you say to
that is is there a Breaking Point or can
we actually just keep printing money
basically
forever well you know shat is a you know
is a colleague and co-investor and I've
been on all in a bit and I think we have
a cordial relationship um J has also
said uh put 1% of your assets in Bitcoin
just in case because if everything else
goes to zero then um you know what like
they can't dilute
that so uh you know if you if you asked
him I don't know where he is at
numerically on that but he probably I
don't know if he'd say it there's 100%
prob
of no devaluation he's fiscated investor
he probably Hedges so that's that's the
first counter argument many people I
mean it's it's a point about not seeing
something in one's life I mean let me
make the point somewhat different way
um most of the 20th century um most
people in the 20th century saw an
economic Apocalypse of some kind it was
communism in Russia in Eastern Europe in
Vietnam in Korea in uh Cuba right it was
um Islamic fundamentalism in for example
Iran that was also asset seizures
happened there that's actually why a lot
of Persian people made their way to La a
lot of the entrepreneurial class their
assets were seized in that Revolution um
there was socialism in India there was
currency devaluations in Latin America
all the kleptocracies and you know like
uh Argentina was once a rich country and
it became poor in part because of this
these kind of currency crisis um
and and certainly there you know even
even the UK had huge problems after
World War II to pay for all of that and
so the you know I think uh there are
three countries uh Dalia talked about
this there's only three countries that
compounded through the 20th century
without an economic apocalypse and those
were the US Canada and
Australia and so you have this
interesting combination of three facts
first economic apocalypse is actually
fairly common second economic apocalypse
is uncommon for
Americans and third um economic
apocalypse is uncommon in American
Media and instead the one thing that we
are aware of is um you know the
potential for genocide on racial terms
right that is definitely a threat that's
something you should be aware of right
um actually most of the conflict in the
20th century was not on the basis of
just race it was on the basis of class
right um do you think Americans have to
worry about that
I do think so yes and the reason I think
so is um if you're not like immunized
against something I mean in many
ways I think this century is seeing sort
of a flipping okay where or flippening
where uh those countries that were on
the capitalist right in 1991 and the
Communist left in
1991 have essentially shifted sides
where now uh they're on the cultural
left and cultural right and um one of
the consequences is all the countries
that had suffered through socialism
communism and so on in the 20th century
even if they still call themselves
Communists like Vietnam or or or
China they're done with that in a sense
like you know they're not I mean there's
there's bad things that you know the the
CCPA is doing but they aren't like fully
abolishing cism and going back to malism
that that that make them too poor what
do you think they learned that made them
flip that
leaf generates power I mean that's like
capitalism I like to be really blunt
about it I mean basically you have an
economic machine and um you can you know
it turns out letting people
self-organized generates more wealth and
power than not right that's if you're
just totally cynical about it right um
and of course it is it also generates a
more contentment among the population
eventually you can get from a position
of totally enlightened self-interest to
okay it's more stable than the
alternative the people are you know have
have a good standard of living they're
not going to protest you can run the
government or whatever right
um the by contrast if the other side is
if you have been born rich have you
heard that you know saying like uh shirt
sleeves to shirt sleeves in three
generations love it yeah used to be an
old American saying right so the current
generation in the US has been born to
wealth right they're born a lot of
people who have come to majority have
essentially inherited this giant
superpower with the scale economic
system and so on and they didn't have to
work for it and fight for it fight in
Wars they didn't have to earn it and so
the memory of what it took to earn it
has fallen off so it's the opposite of
those you know who grew up under
socialism grew up under communism you're
not you know like in India for example
which is actually rising and doing quite
well on balance nowadays um nobody's
like romantic about 15 years ago it was
much worse you know life is getting
better there um you infrastructure is
improving technology is like a good
thing capitalism is a good thing and in
general you know not without its ups and
downs but things are generally up and to
the
right and by contrast in you know the
West I think they've forgotten what's
got them there and it's a combination of
you know oh we can spend without having
to produce you know you heard the
concept of the resource curse you know
what that is yes very much so yeah so
like the resource curse it's like uh you
know many countries that have oil
actually find that people just end up
fighting over the oil or or the money is
spent in a badway and so on and so forth
right it's like you don't have to earn
it or what have you I'm not saying all
like Norway used to seem to manage it
the UAE is managing fairly well now and
so so it's not 100% but but it's like um
it's something that can set you wrong
and so there's a huge difference between
founding and inheriting you know not
just for an individual but at a country
level you know George Washington
you know founded like the US military
right um and uh you know there was some
you know like Hamilton founded like the
ancestor what's the Federal Reserve
those guys understood the constraints in
the world as opposed to the 37th mayor
of this or the 42nd president of that
like those are folks who you know like
um inherited something they're just like
they were named into a system that was
going before them and then continues
after them in the same way that like the
15th of GM or something like that is so
far distant from the founder sometimes
you get somebody who's like San Nadella
who's like uh who manages to make their
way to the CEO position but has the DNA
of a Founder that's a very unusual kind
of person because to make your way to
the co position you sort have to be a
conformist and Rule follower and so on
and then to actually to
reinvent the whole organization you have
to have the founder DNA so it's unusual
that it happens it's not it's not you
know it's not zero probability
but right now you have a machine that's
the opposite of like in India or China
within living memory they were you know
they were Communists or socialists they
very poor so they don't take it for
granted whereas we'll always see people
saying in the US is of course we're
number one we'll always be number one we
inherited being number one I can't
believe you're saying we'd never be
number one it's not hungry and by the
way even you know like a great example
is the response to superpower
competition you remember Sputnik right
the course I mean probably before we
right so when Sputnik uh you know the
the Soviets launched you know
Sputnik the US response at the time
wasn't oh the Soviets have demographic
problems they're going to go to zero uh
you're you're a Doomer are you just
repeating Soviet propaganda by talking
about Sputnik you loser why don't you
believe in America blah blah blah blah
instead they're like oh boy these guys
are ahead we need to get back ahead
massive Math and Science you know uh
effort we're going to put on man and the
moon in you know before the end of the
decade like rising to the challenge and
treating your competition and taking
them seriously is actually how you win
as opposed to the so the response of
Soviets couldn't be more different than
the response of China which is a
combination of denial and actually
stealth imitation so it's denial it's
like oh you're saying you know China's
going to go to zero that you know they
obviously suck you know we have the
Mississippi River and they don't so
they're you know you know what I'm
talking about are the people who will
argue these like again got nothing
against demographics on the way out it's
done yeah exactly their demographics are
done they have terrible geography uh
they don't have a blue water Navy uh
they can't feed themselves and so on so
forth just to kind of go through these
points because people will raise them a
lot first on should I talk about that
for a second right yeah please this to
me gets into why we're in trouble yeah
so so first just looking at the graphs
you know maybe put the graph of steel
production okay and then put the graph
insane it's insane right so you see this
graph and uh what you can see is anybody
who's making analogy to the Past saying
oh you know it's just like the 1970s and
US was in a Mala but you know we pulled
it out and so the US was making 10x
amount of Steel of China in in in that
period
and now it's the other way around
China's making why why do you focus on
that well it's just I mean you can look
at tons of other stuff you can look at
you look at basically every raw material
or um not every raw material I should
say every manufactured thing a variety
of different graphs look like this um
and the reason I think Ste is
interesting exactly it's emblematic
these guys are playing to win and look
I'm in California uh if I had to do the
last three years over again I probably
would not be in California there is
there's just a growing sense of like um
that trying to win is bad and that you
shouldn't want to be competitive you
should want everybody to win and I'm
like no I'm here to win a championship I
want to be the best I want to play with
people that want to be the best and so
when you look at China and you're like
ah they're going to collapse like you
know we don't need to respond like we
responded to Sputnik I'm like you're
going to lose like you've got to be in
this game to win now you do not need to
love to crush your enemy and hear the
Lamentations of their women you know as
they're driven before you that's not my
vibe but my vibe is very much like the
reason that steel is interesting is
these guys are building things now are
they building too many things are they
building things they're going to like
knock down maybe but one thing I've
heard you talk about which I think is is
really insightful is that the that thing
that man if you're of my age when you
hear that idea of oh Pearl Harbor I
think we awoke a sleeping giant and like
you know this is like a fatal mistake
and the US comes and just like
manufactures and we do this unbelievable
stuff we're able to build this Navy and
army like unbelievable we end up doing
what we do in World War II absolutely
incredible amazing
amazing but now like if we had that same
moment now I don't think we'd be able to
manufacture our way out of this we've
outsourced all of that manufacturing and
so now we're in this different period
where culturally people don't want to be
dominant they don't want to be
aggressive like that scene is like bad
mojo and oh it's toxic masculinity or
whatever and I'm just like oh my God
like I need to be around people that
that want to go hard I want to be around
people that want to win like I want I
want to be around people and look this
is going to be a little naive so please
look past this this is I'm just trying
to explain like my spirit of competition
I don't look at China and think oh I
have to beat them and they're bad I look
at China and I go all right China I see
you I see what you're building I see
that you can build a train station or
whatever it was in in like a night not
not joking by the way I it might have
been 48 hours so yes it was so fast I
was like this is insane and in the US
California especially like you can't get
a bathroom stall put in you've you've
shown this like cutting the toib for a
bathroom stall it's like guys what is
happening and so getting back that
energy of like I want to go against the
best I want China to be as strong as
possible as somebody who has read Mal un
story I am so happy for them that they
have moved away from that and that
they're coming out I want a formidable
opponent but I I want to be sharpened by
that opponent I want to get better
because they're trying to outcompete me
and so I want to out compete like I want
to rise and do better and look I don't
want to go to war trust me when I say I
don't want to see them impoverished
that's not how I Envision this but when
when I was a kid and it was like us
versus Russia and it was like
they were doing cool stuff and we were
trying to do cool stuff it was like okay
that felt good like it it gave me a
sense of pride in my team it gave me a
reason to want to get in there and do
well and because of the way that I'm
wired I didn't want to crush my
opponents I didn't want to see bad
things happen to them but I did want to
win and like that spirit is just going
away I already know that the the
comments now to this section of the
video people are going to be like oh
this [ __ ] guy but I'm telling you you
need that spirit so there's a few things
which I think of as cope whenever you
mention China that are worth addressing
right one of them immediately will
people they'll come with a psychological
defense will'll be like oh China can
only do that because they're a Communist
dictatorship and we're a free country so
that's why it's messy and that's why
we're slow at building and so on so
forth okay
except I mean you know if you believe
America was a democracy in the 1940s it
could build a bomber in you know like a
day right actually no here's stats what
is it uh B2 bomber B24 bomber The Source
Ken Burns says 60 Minutes to build a B24
bomber okay which is crazy my God and um
that is of course that's the average
time right in terms of um you know how
many were being built per day right B24
Liberator long range bomber uh one came
off the line every 63 minutes okay like
now today it takes uh you know so dou
World War II America could make a B24
bomber in 60 minutes 2022 America needs
20 years to reopen a bathroom Okay in
San Francisco and the thing about this
is um there's actually two different
demographics because one demographic is
the one you just mentioned which says
that they don't want to win they want
like all these environmental impact
reports or what have you um the their
demographic is one who's like okay yeah
we need to do industrial policy but
there's sort of it's like laring right
because they are trying to do it with
Printing and spending they're like wow
spending on factories is up to the right
but you know what industrial policy is
like venture capital and simply spending
the money doesn't mean you'll get the
returns it has to be done in a capital
efficient fashion and I'm not seeing
that right I'm just seeing money thrown
around without constraint and without
accountability and without a CEO and uh
so I'm not I'm very bearish on
essentially industrial policy right now
okay you it's like it's like saying
you're going to do Venture Capital you
have to there's a difference you're
doing it well coming back up a little
bit point is in in if if the US was a
democracy in the 1940s and China was
Communist in 1970s it was much more
communist and genocidal then and so if
the argument is oh they're a Communist
dictatorship that's why they could do it
well why weren't they they're even more
Communists then if you're if you're
actually arguing
that that gives them strength it doesn't
because they were weaker 50 years ago
right and the US was stronger and you'll
argue it was still a democracy right so
so that actually blows up in my view
that kind of cope style argument that oh
uh you know it's because they're you
know evil that that's why they're strong
they were actually much more evil
arguably 50 years ago when they were
killing millions of people during the
greatly forward and Cultural Revolution
yeah anybody arguing against that I
think that's Madness yeah so so I'm not
saying they're good like in the sense of
I don't like the social credit system
and you know the the um the surveillance
you know State they've built and so on
there's many legitimate critiques but
they're not like
they're not as murderous as under ma
right there's actually an improvement
you know like it's it's seemingly by a
country mile but if everybody has a
Northstar which is human flourishing I
will say that yes I don't think humans
will flourish as well even under the
current um regime I just think that that
social credit scores and things it just
plays out in a way that breaks people's
spirit I think that uh part of what
allows for human flourishing is freedom
but I not deaf to Ray doia take which is
look they are a different Society they
have different values and so yes once
you realize that the people could rise
up at any point and they don't so there
is something going on there it's not bad
enough for them to drive them to revolt
now maybe it would be if the US suddenly
we woke up and we were like that there
might be a lot more push back so anyway
I can simultaneously hold multiple ideas
in my head I would not want to live
there does not seem like the thing
that's going to lead to maximal human
flourishing but I agree with you very
much much having studied a limited
amount but having done at least some
studying of Chinese history it's like
whoa it's a lot better than it was back
in the 70s 60s 50s 40s just way way way
better yeah so one thing also by the way
and this is controversial but I'm just
going to bring up these two articles so
that people can at least see them the
thing is that it is true that China has
uh some of charged that China is uh
being very um either it's genocidal or
it's cracking down or it's concentration
camps or something on on Wagers in
western China that' be the counter
argument the thing is that the US was
bombing you know Chinese weager
militants and um you know once jailed
them and now defends them you can see
these articles from foreign policy so
here's NBC News 2018 us targets Chinese
weager militants as well as Taliban
fighters in Afghanistan us wants jail
wers now defends at un and foreign
policy so the thing is that at one point
the US and China were both thinking of
what's going on there as quote
counterterrorism and there's a woman
named Sheena grens that has written
about this right and then it's kind of
totally switched sides right um and uh
you know this is not to defend anything
that's going on there um because I'm I'm
sure it's quite brutal um but it's like
Sheena grens on understanding China's
policies in Zing Jang this is in uh you
know know the belfer center.org okay and
um essentially like she she's saying
that China is talking about that as
quote war on terror very similar to how
the US Justified its interventions in
the Middle East um the reason I say this
is it's like okay that's useful to know
um because it is it's just not you know
it's just not talked about um and you
know one thing I find is um
you know the the the all the the
negativity towards Russia and China is
there's something merited there no doubt
but um it's also something which some
people think it's like oh being super
nationalistic and being super jingoistic
and having a big war is just what the
country needs to America needs to get
back together you know a big war that'll
bring us back together a common enemy
you know I've actually SE people make
this point have you heard that kind of
thing before of
course right so um the thing about that
is that's not necessarily true because
if there's a big war I mean if you think
about covid or 911 like the war on
terror or covid that didn't bring people
together that just you know immediately
got politicized and you know if there
was an alien invasion one side would
would sign with the aliens almost
certainly right like that's just the
Dynamics of how polarized it is and
um I think you know even though quote
China is a bipartisan issue now it's
questionable as to how long that lasts
we'll see um and it's a bad thing by the
way it's like you can't build America by
hating China you need to like love
America or love other Americans and you
see my graph on like it's not one
country it's two parties yes dude this
is one of the most troubling things you
say and I'm saying that in the context
of I know you're saying that we are
potentially facing Financial Armageddon
but this so going back to my rogue wave
interpretation of your thing and I
should explain that to people so Rogue
Wave happens when you have a bunch of
big but not destructive waves they come
together at once and somehow their
amplitudes magnify and it will create
this rogue wave that can topple an oil
tanker and that feels like uh when you
look at the collapse of an Empire it
usually they do not die from without
they suicide from within and so you need
this High degree of tension inside the
country so that you can't get everybody
on the same page that everybody's just
there's so much infighting so yeah walk
us through because this really freaks me
out that we're we no longer make sense
to think of us as Americans instead we
should think of us how as Democrat and
Republican or even better as one's own
tribe you know some people will say
republican or Texan or Christian or
Bitcoin or something like that and um
just first is just a level set because
you know like it's useful to quantify
something right so if you look at this
series of graphs right it's not one
country it's two parties so basically
this is Congress and an edge between two
nodes is whether they voted together
1951 there's lots of bipartisan stuff
happening in Congress Jes in 2011 it was
just totally a bipartite graph and
that's one oh it's even more than that
2018 2022 this was 12 years ago how
partisan had gotten at the leadership
level and it's even more aggressive than
that right so
this a 70-year trend right where you can
just see it gradually getting more it's
like mitosis it's like a cell coming
apart right for 70 years exactly what it
looks like that's crazy and then it's
visible at the individual level in a
totally different kind of data set so
the previous one was like voting this is
social networks and this is and the
previous one was leadership this is the
masses this from 2017 it's showing
people friending each other following
each other on social networks and red
follows red and blue follows blue and
this was six years ago okay got and even
more disjoint since then now blue has
their own on mastedon and red is on you
know gab or something and and so it's
got an even more disjoint in their own
you know rooms right um this study says
uh that it's not just that Democrats and
Republicans aren't friends with each
other Democrats and Republicans don't
marry each other 96% of Democrats are
not married to Republicans so ideology
becomes biology in one
generation right this to
about yeah the sunnis and Shiites this
is like hearing us referred to in that
way was very eye- openening for me yeah
if you ever read the New York Times
about a foreign country it'll be like in
the Arid steps of so and so tribes have
fought each other for Millennia you know
they'll kind of like have a Gorillas in
the Mist kind of thing right um but the
level of conflict in the west now is uh
is tribal it's Sunni Shiite it's hudu
tosti once you kind of start applying
that filter um it's only partially
ideological and one way of seeing that
is during covid do you remember like
there were like four flips for example
at the beginning Republicans were
worried about covid and Democrats said
it was racist to talk about the China
virus this is from like roughly January
to March okay once Trump started
acknowledging it and even saying
something like oh you know the uh the
virus is we should shut down testing or
something like that like you know
basically trying to downplay it uh at
the time Democrats completely flipped
and now they were saying it was a huge
deal and they flipped to lockdowns and
Republicans flipp flipped to
libertarian and then Trump's vaccine
Trump pushed you know operation warp
speed and so on through and got the
government out of the way for vaccine
development and if you remember Kam La
Harris said something like I'm not going
to take a trump vaccine and so at the
time was the Democrat position was
vaccine hesitancy this has been totally
memory hold and and then after the
election uh the vaccine was actually um
you know held back until after the
election uh there's a there guy Eric
toppo who talked about how I that was
like there was a campaign or lobbying
campaign like to keep the vaccine back
so you know it wouldn't affect the
election either way um then I flipped
again and now Democrats role for the
vaccine okay and uh and then uh
eventually it became something where
Democrats kind of gave up on lockdown
and then the thing has gotten just sort
of like forgotten and I shouldn't say
forgotten about it but memory hold or
not discussed so the point is that's
like at least like two or three or four
flips depending on how you count okay
and when you have flips like that it's
Tribal not ideological each tribe is
saying what they you know um there can
be some rationalization for each tribe
at any given point in time oh I didn't
think it was serious than I thought it
was Oh I thought it was serious and I
realized it wasn't and maybe there's
some truth to that on you know but it's
also something where a is taking a
position because it's the opposite of B
and then vice versa because it's stick a
thumb in the other guy's eye does that
make sense you know oh yes
um and uh you know the the thing about
that is why is that important it means
um talking about the United States is
actually a misnomer it's a disunited
States it's a it's um the individual
states and um it's Democrat and
Republican and you know it's something
where like the flag itself is a
contested symbol where you'll find
people saying you know New York Times
just like a year ago or something what
do they say is like the American flag
had a friend that put an American flag
up on his house and I said oh that's G
to get ripped down and he was like oh it
already and shock crazy ouch yeah Fourth
of July symbol of unity that may no
longer unite um people make assumptions
so the flag is like a contested symbol
okay and um that was like July
the point being that um you know I think
the only thing that you can get super
majorities 99% of Americans to agree on
is that they value the dollar not the
flag that is actually the it's an
economic Union like the EU where the
dollar is the last tattered piece of
paper that's holding the thing
together you know and um you know like
the EU has the Euro right it's like an
economic Union even right so if there's
like a serious currency crisis which I
think is coming because we're already in
a background of high inflation with all
of these crashes they're going to have
to print that's a high level version of
why that printing will cause way more
inflation and then you have something
and you have options also right you have
exits you have Alternatives you have um
cryptocurrency and you have foreign
currencies and you have other countries
that are opting out and getting into
gold or trading with China the thing is