A Great Depression Worse Than 2008 - Survive & Thrive During The New Economic Reset | Arthur Hayes

Ray Delio recently said that the next 5 years will be a period of radical disorder in money printing. Rising inflation, possible bank prices and a huge amount of debt threaten to shake global markets and many people, including today's guests, believe that something resembling World War III has already occurred. started, but even if all that is true, we can't control it, whatever hand we are dealt, we have to find a way to play it right, so I bring you Arthur Hayes, the controversial macro investor who will give a masterclass on how Navigating these difficult times, what are the signs on the horizon that a financial crisis could be heading our way?

I absolutely agree that there will be a major financial crisis probably as bad or

worse

than the Great Depression sometime near the end of the decade before us. get there, we're going to have, I think, the biggest bull market in stocks, real estate, crypto art, whatever, that we've seen since World War II and the reason why I think is if we go back to 1945 essentially. Europe blew up, China was destroyed by a Civil War and Japan, Russia, essentially fought the war for everyone else and you know mass destruction, so if you look around the world, the only country left was the United States and you know they had a manufacturing base that came out of the war unscathed and they essentially rebuilt the war and made enormous profits and there are still people that Americans still live off of those profits today, but at the end of the day everyone started to believe this. something called, you know, Keynesian

economic

s, which is basically if something gets into trouble, the government should rush to spend money, if they don't have the money, the Central Bank should print it and you know, everyone collectively in the world depends, regardless of whether Do you know what kind of ism you believe in?

Subscribe to this theory and what that means is that we have all collectively agreed that the government is essentially there to try to eliminate the business cycle as if bad things never happened. to the economy and if there are, we want the government to come in and essentially destroy the free market, so every time we've had a financial crisis in the last 80 years, you know, what happens, the government rushes in and essentially destroys a part of the F of the free market because they want you to know how to save the system and what that means.

It's like whacking a mole, so every time there's a disruption you know the central banks like you know the Federal Reserve in the US, they come in. they print money, they enact a bunch of regulations and they basically say, okay, we don't want this sector to fail, we don't want you to know the creative destruction that's called, you know capitalism if you really believe in that, um, we don't. I don't want that and every five seven years there's another sector of the economy that essentially has fixed prices and that's why we've gotten to this point where you know globally the central banks have basically destroyed the free pricing mechanism in almost every country. sectors of the economy. the financial economy except one which is the government bond markets because they are so large and so unruly that it is practically impossible to eliminate market forces from this part of the market, but the problem is that now we are going to try.

You know, we've gone from 100% debt to GDP globally to about 360% according to the royal bank and we're accelerating the amount of debt we're adding to the pile, why? Because in the rich world, including China, Russia and Brazil. We've stopped having enough children, so the population is actually declining, so if you have all this debt and you don't have any more humans being born to essentially do things to pay it off, the only way to ensure that this system is solvent is governments. and the central banks start printing money uh and now we've gotten ourselves into a situation where we have all this debt that needs to be refinanced we have a population that has been told, "hey, you're good, anything happens." the government is going to come in and we're going to make sure that you know that you have enough food to eat, that you have health care, we're going to protect you, blah, blah, blah, right, and all of that is expensive, especially because you have less and less humans that are doing productive things and then we are going to continue to increase the debt because that is the only way the government can stay in business and now we have reached a situation where there is so much debt that it is accelerating exponentially that to save the market this time, I think that in the next three to six months there will be some type of major disruption in the market and probably in the US Treasury or other large global bond markets, and the solution is going to be, let's print the largest amount of money we have ever printed to try to essentially save this Fiat financial system that we have created since World War II, which in the first instance will create a massive bull market in anything you know. crypto real estate stocks that have a fixed supply, maybe they'll be productive, they'll have some profits and then we'll find out that actually the government can't save everything, they can't just print as much money as they think about trying to save themselves and, um, fix the price their bond yields and we're going to have a generational collapse and hopefully that doesn't coincide with a major global conflict.

Normally it does. I hope it doesn't match. because I really don't want to experience World War III while I'm alive, um, but that's my general macro cycle thesis, so you know the massive 2026 high time frame and then, um, you know, some kind of Great Depression. Situation similar to what happened towards the end of the decade, if we want to take a look at the progress of human civilization of the last 150 or 200 years, everything is based on hydrocarbons, at the moment when we began to commercially extract oil from the soil and turn it into thousands of different products that we all use every day and that basically drive our modern life, supercharged development, you know?

We went from I don't know how many billion people in the 1970s to today, a population that more than doubled, and that's all because we were able to harness this particular kind of potential energy from the Earth that's beneath us, and we've We've built up all this debt, we've fueled all this future growth and we haven't really innovated another form of energy that makes us much more productive, you know, maybe if the world started adopting nuclear energy today immediately, like small nuclear reactors in our cars, our apartments powered by nuclear energy, maybe we would have a chance to grow our way out of this debt or, you know, there's a magical alien that comes down and gives us, you know, some basic resource that allows us to take advantage of a new source of energy and we can market it instantly.

Yeah, so we could give all this money back or if the population doubled overnight to 16 billion people then okay,

great

, we've built all this, there are more people who need to use it, okay, we can pay this debt, but borrowing any of these, you know, you know, I like to say it takes 18 years to make an 18 year old child it's practically impossible to create humans out of thin air, no matter what any politician tells you and you know we're not actually you know what we seem to be doing is um in certain countries it's saying you know hydrocarbons have no value that we want to use these other forms of energy that are less dense, less productive and somehow To think that we are going to get out of this debt through cultivation, which is mathematically impossible, there is simply no other way if the government wants to save itself with it. printing money and printing money is not growth, it's just an exhausted piece of paper and once the population thinks, there are more and more of these pieces of paper floating around, there are a limited number of real goods, just you know, there are a limited amount of oil.

There is a limited amount of electricity, well I guess I should consume as much as I can right now that doesn't actually generate real growth. If we simply printed our money in real growth, then Rome would have

survive

d. Zimbabwe would be the richest country in the world. The same as Argentina. I have known the Yar Republic in Germany as if this was the answer, there are many other societies that have tried this and the result was always the same massive inflation and then social unrest and collapse with the government, so I think we have shown to what Over thousands of years of human history that printing money is not growth, it's a Shima and the party only lasts for a while and then you know they're Bad News Bears, this is what really scares me.

What Ray Alio is talking about is the predictability of this cycle and what I want to do, you are very good at explaining this. I want to go over the different things that build up to this moment, this inevitable moment and then one of the things that I want to make sure we talk about later about the right moment, this is next to Impossible and that will be in the background, but first I want to Go over the things that you now said that you hope this doesn't happen. Not everything happens in a time of political instability, but I would like to quote Arthur Hayes here very quickly.

This is from this is the first line of one of his recent articles. You said that World War III has already begun. The mainstream media and the political elite want to acknowledge it or not, so let's talk about the political instability we're going to have, the debt, the banking crisis, the inflation, all that, but let's set the right context for us. Now, what's happening right now that makes you nervous from a political standpoint? For some reason, I don't know why Western Europe starting and then the United States has something against Russia, and I know that if you read the I think it's to fix it.

The global home island theory that he wrote wants to look at the early 19th century, early 20th, or late 19th century, whatever a very famous war strategist was and he basically said the home island is essentially EUR Asia. , so think China, Russia. um, Western Europe, right, whoever controls that part of the world controls the world, so if you think about naval powers like Britain and the US, let's talk about Britain first, what was British foreign policy about? in the XIX century? At the beginning of the 20th century they prevented a strong continent, whether it was France or Germany, they didn't care, they just didn't want a unified Europe now that Russia industrialized in the late 19th century, they started to worry, okay what about Russia?

We can not? have a strong German alliance after bismar uh United Germany and Russia because Russia has all these commodities that would be the worst thing that could happen to us, Britain and naval power, so what did they do? You know, a series of alliances. that precipitated World War I, which was to make sure that Germany and Russia were not friends and essentially that was a strategy before World War I. Obviously that blew up what the strategy was in World War II. You know, if you take a look at the rise of Hitler and you know all the different Western powers that were okay with Hitler as long as he was going to convert his army and just fight Russia, right?

Hitler wrote about this and said we want to create the space for the German people to eradicate the Slavs in Russia and between there and the Westerners were perfectly happy with that because, again, what do they want? They don't want a United Island. They do not want a United Eurasia. because that threatens the hegemony of, you know, Britain at the time, obviously, that didn't work out so well. Hitler led his army against the other half of Europe and then everyone started fighting again and then we ended that war and then what. we stayed with the United States versus Russia over and over again, it was all about making sure that you know that Russia and China are not aligned or, um, Russia and the rest of Russian Europe are in one line, so you know.

We invested many billions of dollars through the Marshall Plan to rebuild Western Europe to make sure it was a fight against Russia and the virus of communism and you know I forgot I was reading a recent book called The Asian Wars. 1911 to 1949 and the author made a very good point about why communism is so hated as a form of government than anything other than communism and the reason is because you know obviously communism has its flaws but it is the core of the True for many. People, we're going to completely uproot the social system, we're going to replace the classes that are oppressing us, it's not like it's okay, it's one class that was running things, we're going to move on to this other class of elites. which is like socialism, fascism, you know, capitalism, it's just a group of elites versus the other communism.

Let's destroy the entire class of elites and bring the people to power. Obviously, that never happens, but in the beginning it does happen, and if you're a bua intellectual and you know, and one of these other systems you're like I can't let communism take over. Can'tallow real workers to rise up and replace me as an entire class and then try to govern, that's why you hate communism so much and you know the Russian system and what they are trying to export in terms of ideology is so hated in the liberal democrat West or pseudo-fascist and, in any case, the United States now is. closed the agreements with Russia to make sure that Eurasia divided because a strong Eurasia will control the world because it controls most of the world's natural resources and most of the population and that has been the foreign policy of the United States since the end of the Second World War.

World War, fast forward to the 1990s, when the Soviet Union collapsed, the United States' response was not to make another Marshall Plan and rebuild Russia, but to encourage a group of former gangsters now called oligarchs to come and take over all natural resources, impoverish their people and move their wealth to London and New York. right, that was the policy that came out of there, you know, essentially Putin, who was concerned with building a strong revisionist, the Russian ideal, believe it or not, whether you think that's good or bad, but that's his appeal to the Russian people.

Hello, you suffered during the end of the Soviet Union, the West was not your friend, you know you were robbed. I am here to rebuild Russia for the Russian people. I believe you that is your message to your constituents. They know they might like it. Whether we like it or not, we are now in a situation where Russia invades Ukraine and the West injects resources to essentially fight them using the blood and gore and tears of the Ukrainian people. It's not the Americans who fight, it's not the Europeans, you know? The Europeans in NATO are still fighting, so it's a proxy war between Russia and the West, obviously Russia has the tacit support of China and the rest of the world is saying, well, we don't want to be part of this, we're trying to be.

Non-aligned we don't want to get involved in this, so we have this kind of setup of everything that was happening in the late 19th century in the West aligning to create a divided Eurasia and therefore we can call it a conflict or a skirmish or whatever. whatever, but I don't know how many billions of dollars have been authorized by the US Congress to essentially send weapons to Ukraine, NATO sends weapons to different countries that provide intelligence so that Ukraine forces can try to hinder the Russian advance now, although yes, there are no boots on the ground from the West in Russia, as far as we know, maybe there are, I don't know, it's basically a war, um, and so you can argue that World War II has already started, um, it's just not that super kinetic, you know, I'm going to throw my nukes at you, kind of like what we had in the last World War, why do you think this matters? in energy prices, is it going to become a debt problem?

Why does this become part of the backdrop of the context that will lead to this next financial crisis? So at the end of the day, proper human civilization is a transformation of Russia being the world's largest exporter of raw materials. They have oil. They have natural gas. They have metals. They have food. Ukraine, the Ukrainian breadbasket was one of the world's largest exporters of wheat, sunflower seed oils, all of this is in this region and now the West has decided that we are no longer going to trade with Russia. Now, if you really look at the details, you will know that India, China, some of these other countries basically just buy Russian material, refine it and sell it to the Europeans and the Americans at a higher price, so the result of this policy of Let's exclude Russia and simply raise the prices of our energy inputs globally, so the war is causing inflation which central banks now have to fight by raising interest rates, which then bankrupts the banking system because now they have all these bonuses. that are underwater, so this ideology that we need to fight Russia, you know, keeping the Eurasian island fractured is the immediate cause of the inflation that is causing the financial crisis in the West itself, so it is a foolish policy , but it is the natural result of What happens when you say I'm not going to trade with the world's largest commodity exporter?

I think it's important to break down exactly the cocktail of things that contribute to weakening an economy. This was something that took me a long time. to learn and for anyone who's been watching the show for a while, you've had to go on this journey with me to figure out how this all works, the debt cycle, exactly what happened with the banking crisis, inflation, all of that, um , how does it work? This begins? Does it all start with money printing leading to inflation causing banking crisis? What comes first? How does this ball start rolling? Just so you know that the situation wouldn't be so bad if he wasn't collecting all the money. before, so at the end of the day, let's take the US as an example because it is the largest and richest country in the world, you know, my opinion is the thesis: you know, in the 1970s, the government of the US made a TCID promise to the Baby Boomers and they said hey, go out to work, spend your money, don't save, we've got you, we'll make sure that when you get older you have government covered healthcare and don't worry . can be as energy inefficient as one would like, two cars in a garage driving, everything you know, everywhere, without supporting public transport, we will make sure that where there is oil we will get it, so our defense budget will be reduced.

Be astronomical, this is why baby boers are

great

, we know that we are going to go out and live our lives and consume the most that any generation has ever had in the history of humanity, us baby boomers, and what has happened. Health costs continue to rise now. They didn't increase as much until maybe five or 10 years ago because they're in the productive years of their life, but now, and I'm sure you've probably had some guests talking about what they call us healthcare, right? the amount of money you spent at the end of the last 10 years of your life dwarfs all the money you spent before and the way incentives work in the US healthcare system there is no incentive to get preventive care You know, when you get sick. get yourself into the H hospital and just go to town with the insurance company, which is essentially an American taxpayer because of Medicare and Social Security, now there are no American politicians and I don't care if you are a Republican, Democrat or third party.

Any party that can stand up and say, I'm going to reform the US healthcare system, and guess what baby boomers, who are the wealthiest and most politically active cohort, their healthcare benefits are going to decline, they're not going to get re-elected? , etc. these two programs are in sync, you're also not going to get re-elected saying, hey, we're really going to address this, you know, this runaway American defense budget, we're not going to go around the world bombing everyone to make sure that you have enough oil so that you can have the newest truck you know in your garage, consuming oil, you will not be re-elected either, so Health Care and Defense, these items in the government budget cannot be changed under the current political system and what has been promised to the people over the last 50 years, which basically means that as the population ages and the world becomes more multipolar, which means that there are other challengers, namely China, that are saying, "Hey, this quote-unquote rules-based order is determined by 4 % of the population does not work for the rest of the 96 of the population who never got to say what this order was we want a new order we want to have our own basic products we want to have our own material wealth We also want to eat a lot of meat and drive a car well.

If you think about the world's per capita energy uses, in order for it to match the United States globally, we need an excessive amount of energy that we simply don't need. I'm not right, that just means inflation, so what our country is doing is saying that we are actually going to keep our stuff, we will only export finished products, which makes things more expensive, so all this is happening even before Let's get to what's happening. Nowadays and as we have had fewer and fewer children because the rich have fewer children and when women have the option to choose contraceptives they choose not to have as many children, the Federal Reserve says: Well, we don't have any human growth, we don't have any.

You know, we have a rising cost of keeping the political promises we made to our people, the only option is to print money to make sure the government can be funded at an affordable level and every time there is a financial crisis instead of reforming the banking system and allow some people to go bankrupt, money is printed to make sure the banking system is sound and the goal of the banking system is to take people's savings and give them to the government which is why the banking system should always be saved from government perspective because that is what it is there for and different countries use their banking systems in different ways to essentially reach the same goal of financing the government at a cheap level and that is why whenever the banking system is threatened, the government or the Central Bank They have to come in and save it by printing money, so we've been through this situation that comes up today where you know the United States went from I don't know 30% dead to GDP. in the 1980s to 130% today, which is a huge amount and if you read, you forgot the other professor's other name, Rogoff wrote a paper on debt.

In May 2011 the book came out. I forget what, when sometime in the last 15 20 years. and they empirically showed that once a country crosses around 130% debt to GDP, there is always a default and a default could be a massive currency depreciation, it could be a massive financial repression or it could be some kind of default in the government bond market every day. One time there are no exceptions, so they are already at this level and now it comes and inflation is partly a result of there being fewer humans doing productive things, the war on climate change and the rebuke of hydrocarbons and then more actors in the world. wanting to be assertive about their natural resources saying that not everything should go to the United States and Western Europe but should reach our people we should enjoy the same standard of living that we see in Hollywood movies you can restart your life your health even your career , whatever you want, all you need is discipline.

I can teach you the tactics I learned while growing a billion-dollar business that will allow you to see your goals, whether you want better health, stronger relationships, a more successful career, all of that. It is possible with the mindset and business programs of Impact Theory University. Join the thousands of students who have already achieved incredible things. Tap now for a free trial and get started today on the idea that 130% debt to GDP has historically always equaled default. I heard that before, um, that's worrying, uh, we'll come back to that, so the idea of ​​printing money, this is what I want to anchor to people, so okay, so you make all these promises to a gigantic generation , that generation is not replaced.

Well there are no more people to be productive and take care of them, so your only tool you have is to start using debt. The only way to manage debt is to print money so you don't default and now guide us. uh this took me a while to really wrap my head around the idea that printing money is inflation. Inflation is simply saying that the amount of money is inflating like a balloon compared to the things you can buy with it, so there are no additional expenses. things to buy, then people simply start charging more for the things that are offered because there is more money floating around in the system.

How accurate is that? Basically, that's it. There is the denominator. The amount of money is growing infinitely and then. The things about finance and I think about finance is the energy that we produce and that, in my opinion, is hydrocarbons because that is what powers our entire global civilization. I don't care what you believe about the good or evil of oil, but your entire modern life is based on oil, whether you believe it or want to believe it or not, so it's not like we've become much more productive when it comes to oil. extract oil from the ground or that we have found or decided to do. commercialize nuclear energy energy that has been around since, I don't know, the 1960s, for some reason we, as a global civilization, decided to ignore this incredible source of energy and poop it now if we had decided in the past to commercialize nuclear energy and spend it. the amount of energy and money we have spent on wind and solar to make nuclear energy the safest possible use of energy in the smallest possible delivery mechanism, we may notWe are in this situation, but those are the political decisions that we make as an organization, so the energy, the amount of energy and the amount of energy that we produce each year is not growing, it is a real fact as if we reached peak oil , you know, a while ago, which means that the entire growth of the oil industry has been based on us, the shale and the The number of new discoveries and new wells that are being drilled is declining precipitously because the shale is very depleted quickly, but it's not like we're finding a new Saudi Arabia every 10 years.

No, do you know these massive oil discoveries? We're just not doing them like we were in the '60s, '70s, '80s and therefore there's more debt, the amount of energy we're producing is flat and that's why we're going to have energy inflation and when you have energy inflation you have inflation of goods because every good we use is a derivative of energy so This is a unique view, at least for me, you are the only person I have heard anchor everything related to energy. I heard you say and this is really important for people if they want to understand the point of inflation and why. becomes so problematic is that what you're really trying to do over time is preserve your purchasing power as it relates to the amount of energy, so energy will determine the cost of a flight, energy will determine the The cost of energy in a car will certainly determine the cost of gasoline.

Plastics again and again, even when they are not. Plastics can be confused because they are made of roughly the same substance, but even just to do the creation of all those things. energy that right now obviously the main source of that energy is still coming from fossil fuels, so I understand that you're in this race against that, so now you have two problems, problem number one is what you just raised. Note that we are flat, we are not finding new Saudi Arabias every 10 years, which would be wonderful and would certainly help make it easier, leaving aside any obviously potential global warming issues, but only from a cost point of view. energy, so Problem number two is that we are inflating the money supply and now the cost of that is already increasing.

So what I want to get into, if we know that we have this magic mark of 130% debt to GDP, we're going to equate to a default, we already have 130% debt to GDP, but we have two promises to help to healthcare and that, to keep prices where they are from an energy perspective, we're going to have to run around the world, uh, defense, um, to make I'm sure we have access to oil flows. Let's print more money. Now explain to me what some of the things are other than that, because the crazy thing is that you listed those two.

I didn't even really think about those two as something that's going to cause us to bloat. I was thinking about, for example, Btfp bank's term financing program, which is basically stealth money printing quantitative easing under a different name. It's actually bigger than the coid stimulus which was 4.1 trillion so tell us what are some other things that you see on the horizon that will lead to more inflation so that will be taken care of in the past, in the future we have essentially to the rest of the world and to you. I know, call it the non-aligned countries, they are not subscribed to the West, I mean, NATO or, um, the China sphere, here we go, hey, we are a group of countries that have been impoverished for almost forever, we have the natural resources . that are needed to fuel the Green Revolution um we have hydrocarbons uh we have people that will come to the US and be your nurses um we will clean your bathrooms we will take care of your children right, this is what we have U want to keep these resources for ourselves now we don't want to choose a side China or the United States we just want to get richer ourselves how we do it we trade what we trade we trade know higher value goods, so an example would be um Indonesia, a large producer of nickel, one of the largest in the world, um Joko W Doo, the president of the country recently banned the export of raw nickel, said: You know guys, you want some nickel, come to Indonesia and build some kind of manufacturing plant and export the refined product, so I think if I read the statistics recently, they went from about a billion dollars of

economic

s around nickel when they were just exporting the raw material to about 20 billion dollars of value added when they were said, guess what guys you need to build things for? employ our people and raise the prestige of our country, so this is just one country, the rest of the world wonders why we let these guys come here and own our natural resources, no. give us jobs and then return the raw materials and then we import finished products, that's been the whole structure of um since World War II and why things are very cheap in the US and Western Europe compared to how expensive are the things in the rest. of the world and so they are fed up with this, and now they have sort of broken the ideological position, you know, the conditioning, you know, maybe some of the leaders that they were taking from all these countries or from the longest power and We are as if we want to be like Americans and Western Europeans.

We have seen the movies. We want to be like them. Why can't we be like them? Well, we're going to stop giving you all of our stuff essentially. almost free and that's why this is just a movement um resource nationalism this is what he called um koreal soala from 13d calls it the uh loyalty of the afflicted the afflicted is anyone who suffered, you know, post-colonial problems by essentially being an economic vessel You know some European nation or the United States and that's why they say that they are gaining their voice again and at a time when you know that the appetite of the Western public to go and beat heads against the wall is diminishing and so You have the situation where The raw materials that drive the incredible standard of living in Western Europe and the United States are going to become more expensive because they don't come from those countries themselves, and in the case of the United States, the United States has all the stuff. is ever necessary, it's just that the companies in charge prefer to send all the material to third world countries and have a cheaper labor base than to employ Americans who are expensive, true, Europe is not so lucky, but I think that's a source of inflation that's only going to grow as the rest of the world says, "I want to live the Hollywood movie too, so when I think about some of the stealth liabilities we have, the number starts to get pretty scary when you think about As we celebrate this big holiday, all the stimulus is coming in.

What do you think it's going to trigger? You said that in three to six months you expect some kind of big disruption. What kind of big disruption are you looking for? that the government is going to do, um Pony, is it just the things that you've listed so far? Health, defense, um and then the banking sector, or are there other things that people are not thinking about in terms of liabilities De. no way they would drop it, yeah, so at some point I need to write a comment on this, but essentially over the last 40 to 50 years, the financial ecosystem has been based on a scenario where there has never been a situation where long term, that's what it's called, the 10 or 30 year bond yields in the US go up, so they go up, but they go up faster than the short term yields, that's what it's called that's never happened for a sustained period of time, not in the last 40 50 years.

It's called a bearish steepening, so if I'm a bank, I'm an insurance company, I'm a pension company and I'm going to shape what I think the future is going to be like. I'm going to model the way The Future has been sought for the last 30 or 40 years, and every time there is a problem and yields rise, the government comes in and prints money and crushes it, they crush the volatility in the markets because they want save the banking system that they don't have. I don't want anything, anything, to explode, but now that we are in a situation, at least in the US Treasury market, where the US government is issuing the largest amount of debt ever justified, federal deficits like seven or eight percent of GDP, it's like we're in a war, this is the largest and longest sustained type of deficit since World War II, but we're not in a war, you know, at least not, um, more than one, uh, you have 7 points, I think 7.75 billion.

US dollars worth of debt must be rolled over by 2026. A huge amount of debt that is only on the US side, so who is going to buy it? The traditional buyers were a China, Japan, right? China and Japan will not buy more US Treasury bonds. China because they don't want to be tied to the dollar anymore because of a geopolitical security issue in Japan because they are also facing a problem in their bond market where their currency is becoming junk because they are also trying to save their bond market. Japan, fortunately for themselves, has saved it. a lot of money in the last 30 or 40 years, so now they are starting to use that money, they are not buying new Treasuries, they are starting to sell bonds, China is starting to not buy new more Treasuries, They are starting to sell them. sells treasuries and you can look at the official US Treasury data, you can see that the balance of treasuries owned by China and Japan is declining on the oil exporters side.

Speaking of OPEC, you know that Russia is an important member of OPEC. Russia is Obviously, they will not buy any more Treasuries, they will simply ban them from the Western financial system. Saudi Arabia is not increasing its treasury position, it is also decreasing, so oil exporting nations that previously earned dollars internationally and deposited those dollars into the US banking system and bought. treasuries are no longer buying treasuries the US banking system the US banking system is functionally insolvent because the regulators set the rules in such a way that it was profitable from an accounting perspective, not an economic one, essentially accept deposits and buy cheap yielding treasuries and they could do it with almost infinite leverage and a few basis points difference in the price change and everyone makes a lot of money and everyone gets a big bonus, so the banks collectively bought all these Treasuries in 2021 and Obviously, the prices have gone down a lot since then and that's why we have the regional banking crisis, so at a structural level the US banking system can't buy more debt because it can't afford to do so. because it is functionally insolvent and therefore you already know it. leaves the Fed, but the Fed has committed to quantitative tightening, which means it is letting Treasuries off its balance sheet, it is not accumulating more Treasuries, so the Treasury has to issue all this new debt, you have to refinance all this new debt. but the major buyers of these things alone, you know, for scattered reasons, can't buy them, so what we're seeing in the markets is that relationships that were kept close are breaking down if you take a look at the bonds 10-year US Treasury versus gold, you would think that as yields rise in the US Treasury market, gold would be getting hit, here's how it has worked in financial history modern because if the interest rate is high, money says I want to own that I want to own 4 and a half% of treasury versus owning gold, which pays me nothing, but today the fact that gold remains firm does not it's like going crazy in a crazy way, but it's also not getting hit since 10-year US Treasury yields are at, you know, 4,434 basis points last time.

Checked, so wait, that makes a prediction, at least as I understand it in my mind, that people think the bank is going to default because, sorry, the government is going to default, because if you get any risk-free money, it's right now it's like something like 5%, if you can have 5% risk free money and people don't run away from gold to get into that 5% risk free money, that says, to my limited mind, that The market no longer believes that. is risk-free is that an accurate assumption that the US debt market is risk-free on a US dollar perspective on a nominal basis, why would people stay in gold because they say they don't pay me enough in this moment? real return term and if you ask an economist you will get a different answer depending on who you ask.

My definition of real yield is that I take the yield on government bonds and subtract nominal GDP, so if I'm lending money to the government from a point ofPay me, so yes, there is a banking crisis that was softened a little by the bank's term financing program, but that is not the case. People have stopped noticing that in less than five minutes they can go from 0% to 6% interest income that will not stop, so the BGY crisis is still there. The acute political choice that regulators and the government are going to have to make is still there.

It is still unclear who is going to pay for these losses in the bond portfolios of all these banks. I don't know what they're going to decide, but I think they're going to decide to print the money and make sure the utility gets its deposit back in nominal dollar terms, so that's just my opinion, so the bank's term financing program does. it does. it doesn't cover regional banks, I thought no, no, it covers, it covers banks that hold eligible securities, which essentially means US Treasuries and home equity mortgages. Now, the most important thing that a lot of people are focusing on is the real business.

Real estate law is not included, so it's not like you've lent money to some real estate developer and some market that's going to build office buildings. I can't take that loan right now and give it to the Fed and get 100% of my money back and in dollars. I can take a treasury. I can take a mortgage guarantee. I can exchange that for dollars. I can't flip commercial real estate, which is a problem because small regional banks were the driving force behind the commercial real estate lending boom. The last few decades, whatever you want to call it, now that we're changing the way we work and a lot of people are working two or three days from home, these office buildings are becoming somewhat irrelevant and the market has frozen.

So now it's a question of well, how big will the price drop be when the deals close and then our banks will have to write down this section of their balance sheet and oh, they're solvent again or at least we are? do you know they are solvent again or what is the fed going to do, are they going to expand the btfp to include commercial real estate loans because this is what is going down in price or can they expand it to auto loans or are they going to expand it so that you know personal loans like all these things that banks have been lending where the ability to pay or the value of assets is declining and that are not US Treasury bonds or mortgage guarantees?

The securities are the btfp that will be expanded to cover them because if they go down in price, the banking system will still default on them correctly and therefore, yes, they have solved a part of the market, the one that really matters to them, which is the return of mortgages. The securities that want Americans to own a home and the American treasuries want Americans to invest in the government, now there are all these other things that I would rather not have to bail out, but again the banking system is choking on all these things and at some point they will have to make the political decision to let the desecrated non-tubular banks fail and a Many of you know that Americans with small deposits don't get their money back or are they going to come and save the day and bail everyone out and print more dollars .

Well, I think this is the part of our program where we point out exactly what inflation is when it was first described to me as an invisible tax. I thought it didn't make sense to me and now that I understand it better I realize that what you're doing is saying, "Okay, let's do it." Everyone's money is worth a little less, so by earning more, the value of any dollar is reduced a little and it becomes a way to spread taxes among everyone. So the real question the government asks itself is: Is this Bank okay? They did something that's not right, so we already know that mortgage securities and Treasuries are going to be one for one, but if they have anything more than that, they wonder: do we want everyone to have to cover? this thing that didn't end up working this investment that didn't work or we're just going to let them roll over and die um as you look at that and when you think about this big three to six month disruption is that What you think happens is something triggers a run on these small banks, it could be commercial real estate starts, something starts and starts going down, or there are other things on your bingo card besides the regional bank bankruptcies, I mean.

Typically the problems are known, it's a question of whether or not we're focusing and whether we're the right market so the market knows that commercial real estate is a problem, but we haven't really seen a big price drop because nobody wants. When trading, sellers don't want to take a loss and then have to write down the rest of their portfolio and therefore become insolvent and buyers don't want to buy at this price because they know it is too high, so no one is trading. correctly. It's that calm situation where, well, the price is still where it was, you know, 12 months ago, but there are no correct transactions, so once there are some transactions when people have to sell for whatever reason, we don't know what will it be so let's go then it's fiduciary responsibility okay well there are these transactions in the market and now I need to flag my portfolio report to my regulators oh my capital reserve has been rejected therefore I'm insolvent and what usually happens Do you know that because of politics they will let someone fail, someone there will be at least one failure and then the market will get nervous.

They say okay, we can't let the next one fail, right, they let Silvergate fail in March this year, but they didn't let svb and by failure, I mean, Silvergate went bankrupt and the depositors have no guarantee. to get their money back from the um Federal Deposit Insurance Company (FDIC), while with SCB and firm and First Republic were bailed out, being the deposit were bailed out now, obviously, the management of the bank was replaced and the shareholders lost money, but the depositors were bailed out, so usually one person fails, there was a Leman, there was a bear before Goldman Morgan Stanley existed, everyone else in City G, so they'll probably let someone fail first because politics demands it once fear of imminent collapse is instilled.

The Regulators will then say that we have to print the money because the system is going to fail, what will that be? I don't know, I just see that for some reason the financial crisis happens in the fall and you know. winter in the northern hemisphere perspective and that's why we haven't solved any of these problems, they're just getting

worse

, they're getting exponentially worse and the countries that would normally bail out the US financial system by buying assets for their own reasons can't do this and so, to As we go through this season where crises traditionally occur, there will be something that I don't know what it will be, that's just my base case and I want to prepare and make sure that I can make money and in a situation where everything gets complicated, yes, it is Well, I didn't know that there is a preponderance of problems in the fall and winter, the obvious assumption for someone who has never heard that before would be it has something to do with energy prices, since people have to raise their prices, usually in the past it was agricultural problems, so, farmers, the credit is reduced in certain parts of the year, depending on when the farmers need credit for you.

You know, buy more equipment to do the winter planting well, they get a lot of money now that they need to resort to credit and that's why you get spikes in credit as we go through the agricultural cycle and that's part of the reason. The reason you have different federal reserve banks in different districts is to try to smooth out the demand and supply of credit between the banks in the east and the agricultural regions in sort of the center of the country. you know all other countries are pretty much the same right, farmers are always in debt and they always borrow money and then they get a lot of money depending on how the harvest goes and I think that's part of the reason we usually experience crises in harvest season and then winter planting.

Now you said the problem is generally known, but it's a question of whether the market is paying attention to it or not. What are some of the issues that you are already aware of whether the markets are focused on them or not? Those could be those first dominoes to fall, so we already know that the US banking system is insolvent from our perspective. We already know that the major buyers of US Treasury debt are not buying and the Treasury needs to issue a large amount. known, we already know that commercial real estate in the US is a problem, this is that no one is trading right now because of what I just described, you know, globally we already know that, um, China has this huge problem real estate and deleveraging, which means China can't contribute to global growth the way it used to mean: doing massive government stimulus and essentially buying things from the rest of the world to build their country.

China has been the economic powerhouse of global growth driving the US and European economies. You know, since the early '90s they've lost their ability to stimulate in the way they're used to. Japan has a problem: either they are going to save their government bond market or they are going to save their currency that Japan owns. It is one of the richest countries from the perspective of assets on its balance sheet. Are they going to sell their Treasury bonds? You know, they like American real estate. Your capital positions essentially help finance your Central's ability to manage depreciation. a coin, so these are all known things, there is nothing hiding which one causes the spark for everyone to start concentrating on going crazy.

I don't know, so when we start putting all these pieces together, what's next? step there um the crisis begins money printing continues and I guess when you think about money printing an analogy to use would be a rubber band that is pulled back further and further and each failure releases tension because we, those people, they lose and we don't have to make them complete and there is no more printing, it is not inflationary and every time we print more there is more tension, more tension, more tension, um, that's how you look at it, you're waiting for the dominoes, the housing, brand or I'm sorry. the regional bank says, uh, the FED decides that they are going to bail them out, we invested a ton of money in the system, uh, and you're waiting for that moment when there's too much tension, like you see a um when let's say a big big thing happens. riot, do we just load more tension on the rubber band but are we still, who knows, 10 or 20 years away from a real crisis or do you think it has to break and that's why we go into a Great Depression style?

Well, I think we have shifted the crisis to the sovereign debt markets and therefore this crisis will be one in which buyers refuse to buy long-term bonds of a particular government because we are all the same type. position different things can trigger it, but again Global debts GDP is 360% why would I, as an investor, own a long-term bond when I know that no one is going to be born and that there is not going to be a miracle of energy productivity? There is no way for them to pay me in a real dollar, a real yen, a real RB, uh, at a rate that is affordable for the government, for me to make money over time, so why own these bonds?

I'm perfectly happy staying there overnight. you know, fed deposits or short-term bonds from a particular country because I know I can sell them pretty quickly and not suffer any kind of capital loss, but if I'm forced to sell a 10-year treasury or a 10e Chinese bond . or a Japanese government bond 10 30 20 years because rates have gone up I'm going to suffer a massive capital loss so why own those things and if no one wants to own the long end of the government bond market rates will go up. a lot and then the answer is some way to shut down the banking system to make sure depositors can't flee to other asset classes and then force depositors to buy government bonds, this is called fiscal dominance, this is a theory or is the next.

It's called yield curve control, where the Central Bank says, "Okay, we know that everyone wants to get out of this market, so we're going to set the price at a particular level, whatever is politically expedient, whatever is affordable for government". this and we are going to expand our balance sheet infinitely to make sure that rates stay at that level, so in Japan the Bank of Japan is doing this for almost a decade where they say they determine a band of the yield and They say that if the yield reaches a certain level, we will enter the market and buy bonds by printing money to ensure that yields do not rise.

The US did this in the late 40's and early 50's to pay. Back up World War II debt by capping rateslong-term Treasury rates, 10e rates at two and a half percent, the Fed expanded its balance sheet to make sure the rate is at that level, so that if we have a revolt of large asset holders who say no I don't want to own these long limits because I know mathematically that there is no way to make money on a real basis. I would prefer to have shares. I would rather have cryptocurrencies. I'd rather have an oil field.

I'd rather have gold, whatever it is. So the only answer is to move to the end game, which is fine, we fix the yield and just print money until it's needed to keep the yield at that level and once you've moved on to yield curve control at or something similar in the US um it's already in Japan um something similar could happen in China and other places so the question is okay, can the authorities keep the money within their banking systems or are there ways for us the people Let's get our money? out of the system so that, in a real way, we can maintain our energy purchasing power and that becomes the true support point of the crisis, because if all the money is in the banking system and cannot leave, the one that has been able do before bitcoin and some of these other blockchain based cryptocurrencies, then they just tax us all and over time the government basically profits from the situation, yes there is high inflation, depending on how your company is structured, your country, maybe it's hyperinflation maybe it's just you know High inflation and some governments fall, some governments stay the same but at the end of the day the majority The government can

survive

, but if we the people can turn our money into a type of money or a type of asset that is outside of government control outside the banking system, then the system collapses, well, that is a very disconcerting thing, he said very calmly, Mr.

Hazes, okay, how, give me, give me the odds here, so if Japan has been doing the yield curve? control for a while uh for a decade you said um I've been to Japan, it's amazing so is there really a problem because it sounds bad, but having experienced if my time in Tokyo is what performance curve control looks like, no is it so bad? So what am I missing? Why is this something you have to be very careful about? So I think people have confused the fact that we've been able to print so much money and not have an adverse effect.

They are not analyzing why it has changed. the global economy in the last um let's call it 20 years and what has changed is China. China joins the WTO in 2000 and essentially became the world's workshop, so the cost of goods in all sectors has been reduced thanks to China. and they are willing to degrade their environment to capture market share and much of the dirty rare earth processing um different types of commodity refining um that the West and Japan are not willing to do um they have had a growth of young people willing to work in a factory and do these things for a very cheap salary, um, and that's it, we don't have China anymore.

China number one is dying like everyone else. Its population is predicted to be half of what it is. You know from the China at the end of the century, the people of China have also decided that they do not want to live in a small factory and have told their government to prioritize environmental protection, which basically means that China no longer wants contaminate itself. that the United States, Western Europe and you know, and Japan and Korea don't have to do the right thing, so we're going to make these things more expensive, um, and therefore there won't be any more big countries coming together and essentially degrade so that the rest of the world, very developed and rich, can enjoy a higher standard of living even while they print a lot of money, so there's no more, that's not going to happen again and I think that It's what people miss. about why we were able to print all this money in the last 20 years and really not have any kind of adverse effects.

That's just not going to happen anymore, so maybe I'll ask the UNC question, but the obvious question is that India continues to grow. It's there because what I'm talking about is being right about the concepts, but being wrong in the moment is the same as being wrong, so what I don't want to do is get nervous, you know? the sky is falling this is all going to be bad uh I need to get my money out of the banking system I don't want the government to close the outlets I don't want to be forced to buy things uh I want to maintain my financial autonomy I want to maintain my freedom I want to come and go to wherever uh and there are certainly many, many horror stories over time of governments doing that um and if there's a way to keep this party going again, I'll use Japan as an example.

You know, all my life I've heard that Japan is in full swing, but again, being in Japan is beautiful and charming, and there are wonderful restaurants and exceptional people, and for me, as a Storyteller, some of my favorite storytelling. it leaves Japan like there just doesn't seem to be any and look, I've never lived there but there don't seem to be any downsides, it's not like I'm like, oh my gosh, I'd never want to be in Japan. I like that this place is amazing, so I hear your point about China and China, the booming growth and the amount of things that we were all able to reap the benefits of is that, you know, the developed world is a little bit ahead of They, uh, we.

They were able to reap the benefits of their transition period, which is just amazing to have been aware while it was happening was a truly magnificent thing and look, I was far removed but still had a sense of how extraordinary their growth was. Are we not ready to see? same in India, so in Japan because this is called the Widowmaker trade, oh my god, Japan is dying, oh my god, debt to GDP is only going in one direction, oh my god, the Bank of Japan is through the roof, so Japan is essentially like China Japan is a more successful version of China, both have executed the exact same industrial playbook.

Japan received two nuclear bombs from the United States, um and the US essentially harassed a colony for a while, uh, so what? Did Japan reorient itself, reorient itself to do something for the United States and essentially the Japanese government and big business essentially made a PCT that said, "Okay, we're going to give all the people jobs for life, you work very hard?" for the nation of Japan to do." The things you know increase the country's prosperity, but they are not going to maintain all the productivity gains correctly. That difference will essentially go to these large companies and they will reinvest those profits in the United States and Western Europe essentially, if you look at Japan as a country, they are one of the richest countries in the world in a net investment portfolio perspective, they have assets for worth one or two trillion dollars, what are those?

Those assets are essentially the productivity gains of their people or more, you know, since World War II, so Japan has this cushion of money that they can protect themselves, they owe the money to themselves, it's not like, um , they owed the money, you know. Foreigners can't really buy Japanese debt in large quantities, so yeah. Japan is a unique situation in that, first, they have a lot of assets and second, their banking system is relatively closed. It's not like it's Saudi Arabia. They can go in there and buy a billion, you know, a trillion dollars of Japanese bonds, they just won't let them do it right because they don't want the situation that the United States is in, where essentially the equity holders determine the policy of nation and number three, Japan, has been very fortunate to use labor from China and Southeast Asia to reduce the cost of labor.

If you look at the major Japanese trading houses and manufacturers and if you go around Southeast Asia, Look, there are many Japanese companies that have factories in all these countries that employ all this labor that is very cheap compared to very cheap labor. face in Japan. Japan is a very special case, but again all of that is ending because the countries that didn't benefit from the The last 80 years are like, well, why am I the donkey for Japan to make a lot of money or the United States or Europe Western? I want high salaries I want to live in a Hollywood movie I want more energy consumption I'm not going to sell my resources to these other countries, um cheap, so inflation in Japan is rising for the first time, I don't know, a maximum of four or five% in 40 years, isahi for the first time in 30 years increases beer prices.

Well, then the problem is when inflation sets in and when you run out of cheap labor, when you run out of cheap energy, when you sell off all your trillions of dollars of assets and inflation remains in a world where the United States is not able to dictate. energy flows unilaterally, then your special circumstance, which you know about since the collapse of your stock market and the real estate market since the late 80s, is no longer valid, so I think people are making a mistake by not understanding why Japan is successful by saying "oh yeah Japan".

They did it? They can be successful. Let's take a look at the United States. The United States owes the world between 1 and 2 trillion dollars. The United States has a current account deficit and a budget deficit. So, it's a completely different financial situation than Japan. Foreigners own a large part of the debt. The United States depends on foreigners to buy the debt and finance itself at affordable levels. It's a completely opposite situation from Japan, so to say that Japan did it and that it's fine that it can work in the United States is to miss the fundamental differences between the two, um, the two situations now, you know, don't worry. freak out and go, you know, move all your money to gold or what or something, and you know, suffer some capital losses, you know how I structure my portfolio.

To benefit from both situations, I have high nominal rates at the moment. I know I'm actually losing money, but fortunately, as a percentage of my net worth, the amount of money I consume on food and energy is very low. Even if I have a 5% rate and it's still a negative real gate on how much equity I have, I'm still earning more than I need to support myself, so save some cash and put it in a money market fund . you're making five six% and take whatever you can afford a small amount and put it into something that will benefit if money printing resumes, which could be Nvidia stock, could be Bitcoin, could be productive farmland, whichever you want, have a pick.

I want to make sure that in case money starts printing, I can easily get out of my short-term money market fund, government bonds, into things that are risky for the fixed supply and go up that way or if nothing happens , I'm still making money. I'm starting to get yield here with my uh, my treasuries or any short-term government bonds. I can finance some of my expenses and I have a positive carry trade, which means I have structured my portfolio in such a way that If I am really up, I am going to make a lot of money in that situation, but as long as it is not very calm, I am still covering the day-to-day expenses, so you'll want to have an optional wallet that costs.

If not, you will earn little or nothing over time if you are able to build it, but time doesn't matter because you are not paying for time if you sell a lot of stuff and have everything. the risky cube yes, I would agree with you so you say, well, when is it going to happen? It didn't happen last month and I'm down, I'm down that percentage or I needed to buy, you know, go to the hospital. because I had an emergency injury and I had to sell part of my portfolio, I'm like betting on this collapse and that was financially ruinous, so it's about trying to build this portfolio where the cost of waiting is zero to make money versus you know what?

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We want to make sure that we can move in one direction or another depending on what is happening. When something starts to explode, but you said risky things with afixed supply, so hide. Those are what I will call two philosophical principles, risky things. I assume you mean high volatility and therefore explaining to people why volatility is a feature and not a bug. I think it may surprise someone then why a fixed supply is so new. we want to do basically we want to participate in the rally as much as we can, um, right, so we want the high volatility stuff, we want the cryptocurrencies, we want the tech stocks, um, but when things don't happen, then we want Our brakes are like the of a car, you want to go as fast as you can on the straight when you're racing and you want the best brakes possible so you can take those corners and not crash, so breaks are effective in the short term. cash instruments that generate returns, i.e. you pay your grocery bill, you're filling up your car, whatever you need to do, you want to make sure you can cover those expenses with some cash in the bank or a money market fund or something like that and hire a yield instrument so you can pay some of those expenses so that when shit is done, oh, I'm here, I'm ready to make as much money as possible when they're printing money I'm not in this boring safe thing because this situation doesn't happen, there aren't many immediate moments, right?

I need to make as much money as I can when the money making is good and then put the brakes back on like you were a racing driver, that's how I want to think about it, okay, knowing that these trades are terribly difficult to make, for people who don't know you manage your own money, you have often said that you find it intellectually. stimulate is fun uh, I'll ask the question that everyone better have in mind, so throughout life you're either up or down up, okay, so we know that at least your strategy has worked once, that's very valuable, so, How do we make volatility work for us?

It's obviously the best advice and people laugh at this, but I think they laugh at this at their own risk because they don't understand why it has become the phrase Buy low, sell high, which was repeated so many times that it became funny. because people think it is very obvious, but in reality it is what people never do, they almost always buy high and sell low, they buy high because it is hype, it is moving, finally they pay attention, they imitate and then it starts to go down, They panic and sell because it is lower. that when they bought it, so let's assume they're going to be emotionally aware, they're going to stay calm, they're not going to make that mistake, but how do they know which of the risky assets to do?

I know how to handle volatility, well it's a personal preference, I'm obviously in the cryptosphere. I love cryptocurrencies. I understand. Volatility doesn't scare me. For some people, you might know that's too much for me, maybe. I'm going to stick with NASDAQ tech stocks. I understand that I understand it. I understand why this particular company could do well. You know, I'm going to jump into AI technology. It doesn't really matter what is right, but looking at whatever is. It's that you think it's going to be your winner on the upside. Look, wait, it's not just what it is that matters, it's the only thing that matters because if they bet wrong or they don't win any money or God forbid, they lose a lot. money, so the most important thing is not the upside, it's the break, the break is that I own it right now, the break is that I have cash and a five and a half with a 6% yield, money in March or wherever you are in the world, whatever that may be in the short term. the government, that is the rest, the one that pays your bills, the one that pays the rent, the one that generates a little income, because at the end of the day you want this wallet to generate money for you while you wait, then, if it's okay To make that a principle, you're basically saying that you're going to move into high volatility, something you have some reason to believe.

You will do well, but you should not invest more in high volatility than you can see going to absolute zero; You should have enough in the breakout category that even if all of that goes to zero, you'll still be able to eat and fill the tank exactly because you're going to know when to go High Vol St. Fed. The market panics. Everything is being thrown away. The Fed arrives overnight. He says we stopped the financial system again and created some letters of the alphabet. essentially it means printing money correctly and it could be that you choose your different central bank and wherever you're from, then you know okay, cash is garbage.

I was earning 6% overnight, now it's zero. I'm out of this and guess what you're in. I'm not going to suffer any capital loss compared to if I were in some other type of instrument. It might be liquid or whatever, so I can get out of this very easily and boom, maybe I already had something in my high volatility bucket, but now I'm completely out of that high volatility bucket because I no longer earn anything from it. cash, so there's no reason it would have something in the other segment. I wouldn't because I'm getting zero. I'm not getting anything, so I have to dig into that because I have to find something that will maintain its purchasing power once the denominator of fiat money expands infinitely, so you know it's going to be, it's not like the S&P you know goes up three times. the instant um Ben beri unveiled quantitative easing in 20 in March 2009, it took many, many, many years, it's not like you have time, this is not like, oh, I have to go, you know, sell this , buy this and I miss it for a day and therefore my return for next year no, you're going to have time, it will be communicated very clearly, you're just listening to what they say, okay, that makes investing seem easier to what I have experienced.

So again, I say very clearly that no one should follow my investment advice and I mean no one. I'm still struggling to understand these things, but when people ask me, Hi Tom, with your limited understanding of investing, what do you advise me to do my thing? You're always, uh, going to lose if you try to trade, so don't try to trade, that is, actively, like it's there. Oh, I did it right and I'm operating in the morning and afternoon just like you would. guaranteed to lose, what I would tell them to do is choose the most diversified package of whatever, whether it's the S&P or you said AI growth stocks I don't know if you consider that high volatility, but something that spreads your risk is proportional to the amount of knowledge you have, if you don't have much knowledge then I would be very broad and I would be very careful and try to get as close to Lightning as possible.

Climate finance as much as humanly possible something that will have a four or five% return no matter what, um, that's when you're ignorant like me, that's what I would push people to do, um, do you agree? with that when people don't know? And do you agree that if you're going to get into something that's high volatility, you should only do it in an area that you understand? I think you need to define your time period. I think a lot of people think it's like, wow, I see. this person on TV or Tik Tok or Instagram or whatever and went from zero to hero in five days of trading they made all this money, so they should do the same if you're not willing to put in 247 of your life energy. looking at a screen then you shouldn't trade on short time frames, so what does that mean?

Don't use leverage. Please do not open options trading account or futures trading account if you are not willing to do so. Work to sit there and trade now, obviously, I have a big ownership in a futures exchange. I'm not saying don't use my product. What I'm saying is if you're going to be a day trader then be a day trader and dedicate yourself to it, don't work a day job, think you're going to come home at night for two hours and just step on it, you know. , quit your job, right? It's a profession, it's a dedication, you can do it, but have the will. you have to put in the effort to do it, if you're not willing to put in the effort to do it, then you know broad based indices, you know different things, whatever you collectively understand, okay, I want to own stocks, I don't really know what.

Well, my country has a particular index, right, everyone will be there, many people will be in this buying the same thing, it is a matter of taking that index and combining it with the breaks, that is the point to be able to both participate. the general increase in prices of an asset, but you don't care when it happens and if you can build that portfolio, then you can sit at home and know that you won't worry about it, you won't worry about it, which means you have to be patient for when the time comes. true, and if you've invested capital in long-term things, you won't be able to take advantage of the moment when it comes, or if you have, you've basically thought you're going to redeem yourself for the day. this and you're staring at the screen all day and you're not willing to put in the effort to actually be a good trader, then you've wasted your opportunity instead of saying "okay, I don't know when it's time." is going to be, but I know that fortunately, thanks to these relatively higher interest rates, I have the ability to earn some income on my excess cash and use a small amount of cash on what I think are highly volatile things, whether whatever. for you and that may allow you to sit there and wait patiently for the inevitable math to catch up with bad policy, okay so let's go over what you said: It's your likely scenario that in 3 to six months something bad is going to happen. uh, it's going to cause a ton of money printing, but I guess money printing is when you say we're going to have this kind of moment of joy, uh, where everyone feels blushing and um, I forgot what you said.

G, it will be a great moment. I forget how big you were saying, but it really will be wonderful and then it will all lead to something like the Great Depression, how can we ride that wave and that crash so that we do well? At both times when money printing starts, we want to go to High Volatility, that's the play, yeah, so my kind of mental limit now is, I think, the biggest trend, so you always want to own the new technology in the Bunty Bing bull market, so if you look at history, the new technology, it's been railroads, it's been radios, it's been computers, it's been the Internet.

Every cycle of money printing has a new technology that will fundamentally alter this modern civilization that we have. had since the Industrial Revolution in the mid 19th century and therefore we all need to be on it because the way we exist as humans is going to fundamentally change and yes that is true in a long term perspective, however there are a mania that happens, so the mania this Time will be AI, right, Chad GPT has been the fastest growing technology adoption in human history, from I don't know Z to 100 million years in the amount of days it was, it's faster than ever, so we're all involved.

AI and you can look at Nvidia and some of these other AI related stocks that you know and they don't give a damn about this banking crisis, the debt outweighing the population issues, they're going straight through the roof because everyone says it's okay, I know . Long-term AI is going to completely change what it means to be human, what the human e-economy is or isn't, and I want to own the next dance of Google, Facebook, Amazon, Alibaba, right? be in that company, so I'm going to start trying to find anything that's related to Ai and pump money into it so that on the one hand, we have the largest amount of money that has ever been printed in the history of humanity to deal with to save the global Keynesian bond market from all these governments and we have the newest technology that has the fastest adoption in the history of a technology, we're going to combine those two and we're going to get the biggest tech Mania boom we've ever seen. seen and will be based on everything related to AI and artificial intelligence, so I personally have a part of my portfolio that is based on AI.

In fact, I'm one of the largest shareholders in one of the largest sextile manufacturers in the US that has robotic sex two um and so I didn't see that coming um I think we actually plan to go public at some point so that the shares of that company I think will do very well in this boom on the crypto side of things I've been arguing that economic agents with artificial intelligence inherently need decentralization and therefore should use Bitcoin to make money, they should use Ethereum for smart contracts and governance and Dows, and they should use filthy currency for decentralized storage.

I own all three. They are the mining companies and the filecoin, the filecoin itself, a lot of ethereum. I have my family office, we are investing in decentralized architecture technology that will drive growth and decentralization in the future, and obviously, do you know I have a ton of Bitcoin? I'm all for AI number one in the traditional sense of AI Robotics and I'm all for the intersection of AI and crypto on thetechnology because this is the craze that will captivate investors to take that money and funnel it somewhere. because they're not going to buy companies like General Motors, I mean, maybe it will increase, but that's not where the Ze of the world will be, it's what AI is, governments are printing all this money, it has to go.

In my opinion, somewhere it will predominantly go to companies that are listed in AI, venture capital funds that invest in AI, so it will be crazy because we are combining the largest amount of printed money in the history of humanity with the most destructive technology to what it really means to be human and interact in this universe and therefore it will create fantasies of growth that will never happen in the time period that they say, but we are going to believe it as a collective public investment that is going to drive that , so that's my super volatile segment that I want to participate in and then on the boring side, I will continue to move money from the high interest generating, you know, money, market funds and stuff as rates start.

I'm going to go down but I'm not going to do it beforehand I'm going to wait for them to tell me uh and usually, unfortunately, right after the Federal Reserve or any other Central Bank is printing money, there's usually some kind of financial crisis because the The reason they are printing money is because something bad happened, so it's not like they started printing money and things just kept going higher. Things generally went down a lot. Something happened, they say oh, we need to print money. They print the money and then things go. they pick up at that level and then go higher, so it's a mistake to think that just because you're investing now yes, if you have a long enough period of time, you should make money if they print enough, however, it's the p.

It depends a lot on the path, so instead of trying to time the market, just wait for them to tell you, they're going to tell you, but why not just earn 6% of your money market fund? I just relax, so I'm not trying to time when. is going to happen I have a mental model I'm preparing I'm making sure we're ready to make investments and identifying the things that I think are going to work very well from a macro perspective and a thematic perspective in terms of where I think the focus is going to be. the investing public, but I can't predict the moment and I don't want to lose money either because I try to be too cute and predict when you know something is going to happen or where exactly it is going to happen in the financial system and when you say that they are going to tell you what it means that we are going to print money, we are raising rates, we are lowering rates, whatever the case may be, yes, they are coming. let's say oh because something happened in the financial system now we've lowered rates to this level we've introduced that program uh whatever it is, it's very transparent regardless of whether it's the Federal Reserve, it's the People's Bank of China, it's the Central Bank European, it is the bank of The Bank of England of Japan will tell you exactly what it is, because what do they want you to do?

The market is already down. They want the investing public to gain confidence to go buy things, so they must be very clear about what it is. They're doing it, uh, and the question is if you don't believe them or are you just going to say no, no, no, I'm just going to stay in this thing very, very safe, okay, but in a real way. You're probably not going to make the money you'd like to make before Doomsday comes when things go down a lot, so if we know the market values ​​the things it already knows, you have to bet against the consensus and be right. , so what would a well-intentioned person who disagrees with you say about what you're saying now?

Because if it really was that easy, everyone watching this video would just do that and kiss like bandits, but of course. will not developSo the consensus says that we are going to have a soft landing in which these few men, mostly men, very few women, have somehow guessed the economic cycle and therefore can print enough money and increase rates enough and the country's inflation rate. The world is going to go down to its 2% level and employment is going to stay the same and we are going to move on and be nice and happy, that is the consensus that these guys know exactly what they are doing. and they got it, which means you don't need to, you don't need to sell your stocks, you don't need to sell your bonds, you know, you need to, just sit tight and keep adding more because there won't be any financial situation. disturbance because they are right and inflation is going to trend down to its exactly 2% level and it will be surprising, that is the consensus, so if you don't believe that, then you believe that something on either extreme is the GNA. is going to go up very, very high or there will be some financial disruption because rates continue to rise and force them to go back down to zero, so my thesis is that when you have 360% global debt in relation to GDP you no longer you have situations where things happen calmly, you go to extremes very quickly and to think that all of a sudden you know that less than 100 people are able to determine how this global economy is going to weaken in some way after printing the largest amount of money we've printed in human history and I've gone from a 5,000 year low of interest rates rising at the fastest pace ever seen in the financial markets, so you know that's a bet I'm not willing to make, You know, chth poopaa, yes, I know.

Okay, I could be misquoting, but I'm almost sure this is correct, he was saying that you know people make such a big deal out of this 130% of GDP debt, but he's no big deal. Burger, it doesn't really matter. There's no law of physics that says we can't go over it, although historically that has been a sign that has led to collapse given modern economic theory and that's how I remember it, oh God, forgive me. Chth, yes I am very wrong, but that was what I took away, apart from that it is very convincing to me that we have all the historical examples that say that every time we do this it leads us to collapse, but what if If I took your posture for a second, can you see how maybe it's possible for us to have this soft landing?

They do it well that's not something magical you know things like the speed of light it can be crossed and people can still recover from this um and I think you would say that well I'm just going to listen to what they say anyway I'm not going to make a move until I actually see it happen um yeah I could he's right then I would say we're investing in a game of probabilities and expected values ​​so if Chatha says okay there have been other examples in the that this has not been the case, but this will be the only example in which the markets will continue to function. a little bit higher, then you're taking a different mindset, and every time there's been one, this time it's different, whatever the financial markets look like, right, the problem is you're not just getting, you're not getting paid . enough for this time is different this time is different means um S&P goes up I don't know four five% right I'm making 6% of my cash so why bet on this time is different if I can earn most of the excess return of stocks by literally just putting my money in a money market fund and I have no risk of the Fed paying me that money, why take the risk?

This time is different because generally it is not different, it is the same as any other. time, but there, so I don't get paid enough to be, this time it's different, the only way to get paid enough is to add more leverage, which increases your risk. I prefer to accept it, well, everyone thinks this time is different, therefore. They don't pay me enough for it, but the other alternative is that it's the same old thing, but they pay me a lot more money to be in that field. I want to go there and based on the expected value I'm going to make more money over time, why not?

If you believe that, just put your money in a money market fund. Don't buy stocks. Why would you like the S&P? Aside from you, you know Nvidia, Facebook, and Google, and those seven big stocks haven't outperformed. in cash, so put your cash in and invest in AI stocks and believe this time is different or just put your money in a money market fund. There's no point in taking risks in the general market because this time it's different because it's never different, it's always been, you know, this time it's different, it takes a beating apart from the AI.

High volatility stuff, do you have anything deployed in the stock market right now? uh uranium so I think we're finally going to come together and somehow believe in nuclear energy and there's been a huge underinvestment in uranium refining capacity and as the world moves towards nuclear energy and maybe the West decides that They want to be stupid and not do it right, but China is going nuclear, India is going nuclear, Saudi Arabia is going nuclear, the rest of the world. The world is going nuclear and there just isn't enough refined yellow cake to go around, so you know, Uranus mining companies in certain jurisdictions will do very well and, I'm big, well, not big, it's my capital position larger. um kamiko mining ccj uh it's up I don't know 80% this year uh so that's something I believe in as a long term energy play okay so understand now the way it's implemented .

I want to talk about Euphoria so I never experienced what Euphoria looks like on the Humanity level until cryptocurrency 2021 2020 2021 hurry up it was really fascinating to watch it was cool and felt a certain way so now I know what to look for in The Ether um how do you think as a disciplined investor, how do you think about Euphoria? I know you're planning it in the AI ​​like, hey, I know people are going to get their stimulus checks or you know the bailout however we want to categorize that, uh, they're going to put it in whatever's hot at the moment, you hope be AI, um, how do you know?

Because I'm assuming you're going to go in, you're probably not going to try to time the top perfectly, but you're going to go in, make a certain level of profit, and then come back out. I guess if we are talking about Euphoria because Euphoria is, I would say, quite irrational and Now would be afraid when others are greedy and greedy when others are afraid. My now honed instinct for that would kick in, so I think Euphoria, in my perspective, is the willingness to invest in liquid things that have a beautiful long-term future, so the problem with AI is that to get liquidity in my cycle, which is the time period of 2026, it is necessary to have been investing for three four five years, because if you talk about stocks you need five to seven.

A company's IPO is years away, so if you're investing money in a bunch of startups today, you won't see any liquidity until 2003, you know the time period long after the ball market, although on paper your thing could be up. I can't actually sell it because it's not liquid right now, obviously, I invest a lot in crypto tokens, uh, and stuff again if I sign a term sheet today because of lockdowns and all that, I won't receive my tokens until maybe 2026 2027, which might be a little late for me in perspective cycle time, so to the extent possible I want to engage in my topic, which is AI and cryptocurrencies, in a way where I have liquidity to 20125 and 2026. so that when you get the feeling that you're going to see something, I don't know what it is, if it's something that seems underrated, like I don't know, FTX has Tom Brady and a basketball stadium, right, that one is this exchange. that never existed two years ago now it has our, you know, our logo on top in Miami and you know, Tom Brady, once some would say the biggest footed football player of all time is now defending them on TV, that seems strange, right? there's going to be something that looks a little weird that tickles your mind and you're like, hey, that doesn't make any sense, maybe we've gone too far, when you get that feeling like you want to be able to go to your portfolio. and wind things down now, the euphoria is I think you know AI is going to be something so transformative that I'm willing to give someone some money and not see it for a long, long time and not be able to wind it down at all and therefore you'll get caught. offside when the market suddenly does well, show me the growth, show me how you're going to make enough profits to give me back 100x Nvidia's profits, show me all the people. willing to pay real money for these AI solutions, show me how your startup has any defense against open AI or bar or any of these other big initiatives that could basically just, you know, intermediate your little plugin on top of your big language .

The models show me the money when the market starts saying that and you can't liquidate, you're screwed, because then the market will start asking where the revenue is, where the U users are or where the users are who are actually willing to pay. real money for the product and that is usually the end of that bull marketin particular and things just start to fall apart because there's just no liquidity and people just sell what they can and the game is over now obviously out of the rubble comes your Amazon which is down 90 something from its peak in 2000 in 2002 or whatever and then it shoots up at multiples of what it was worth, but most of us won't be able to find the Amazon that we're going to find. pet.com um and that's the game so it's about trying to invest in the theme and the liquid vehicles available and not getting caught up in the hype and putting your money into eLiquid stuff that you can't sell when the mood changes. that's really interesting, so with your AI stuff you're planning to be in a position where you're liquid by the time Euphoria Peaks you see the FTX moment and come out, so this is not something where, uh, let's wait for that first moment where they say, okay, we're printing money and then you're in, you're already deployed in some of the places that you're hoping to be ready to go in that moment of euphoria, yeah. fortunately I have the capital position to do that well.

I can pay my bills with my income from the right things, so I can come in a little early and get things wrong because I don't need the money, except for someone who needs the money that they won't have the opportunity to invest in a startup. of AI or something related to cryptocurrencies years before and now, receiving liquidity at the top of the market, you will have to be very disciplined to participate. on the things that you know you can buy and sell on a day's notice and not be fooled by your guy down the street who has this new AI he's been cooking up and why don't you lend him some money or invest in his startup and in seven years it's going to go public, that's what gets you in trouble, yes you can buy liquid shares and it goes up 90%, but at least you can try to sell them, you can't sell the term sheet, that's where people he gets into trouble, he buys you liquid things that are based on the theme that goes on forever, okay, so that's the first part of the wave, everything goes up, it seems like it's going to last forever, but then we have the big explosion that we lead to something like the Great Depression, um, how does that party end?

All the money was invested in um the new hype, let's say it's AI, uh, and what makes the music stop well if we've already bailed out if we've already printed money to make the yield curve. control and the system is still collapsing, whether the price of oil is $1,000 available now or something, whether it's some energy component of it, or you know the cost of end-of-life care is in the millions of dollars, right? printing healthcare you can't print oil properly so these are the things that are going to go up hugely in price and then the system just breaks because people are like holy wait a second like yeah the government bond yield It is 2 and a half%. in the baking system it works out on a nominal Fiat basis but it cost me $10,000 to fill my gas tank just being obtuse here and then there's social unrest because I can't eat enough or you've broken the promise of the lifestyle it's supposed to I have to live being in this country but they promised me to vote for you and I won't be there anymore and then okay, well, if I don't have it internally, let me go out and get it. get it somewhere else, oh don't worry everyone, we're going to go there and take them and deliver them to you, so support me as a political right and trade will no longer become the way we acquire the things we need. we resort to force and then unfortunately that's how we lead to the conflict, well it is also when you look at it's a conflict between the United States and China.

I can't pronounce her last name uh pipe M something or other uh she let she coined the phrase a um a hot war World war in cold places cyberspace the Arctic Circle space right there there are wars going on right now in these different FS that don't They are the same as boots on the ground in kinetic conflict. Nowadays it is more important to own territory or own the data of your citizens, so there are different things that we consider important and the substrate of our modern life, so If we are in this new world of AI, your data is more important than going out and acquiring your territory, so it could be that the war is not about shooting them at some border, but rather it is about aggressive hacking between different countries trying to ensure that they have access to certain data or that their AIS can operate in certain ways, so it couldn't be a different type of war, not exactly the same war that we are used to, maybe even more dystopian.

Don't know. I hope you don't know, let's get into it. I'm alone. I'm going to take your and you know, maybe we'll get to the nuclear situation, but again, whatever countries believe is the good that they need to provide for their people to stay in power, they're going to try to come out and take it. for anyone else, okay, I'm going to leave out most of the diet stuff, uh, largely just because I hope it doesn't happen and two, I don't know, it's for the best, it rarely happens. I think the worst, very rarely. It never happens, not that it doesn't happen, I'm certainly a student of history and I'm well aware that things really do go off the rails, um, but let's take a scenario where we don't end up in a hot war, but we get that pressure effect from elastic band.

We just printed too much money. The gas tank is too expensive to fill. We have social unrest. The government blocks things. We are terrified of buying our debt and end up in a position where other countries are incentivized to start moving away from the dollar. Do you see a real threat to dollarization? And if so, how does that affect the average person? Dollarization? negatively impacts the financial elite of the United States, it could have zero or no impact for the average American, because I have argued in some essays that the current system, you know, the Fiat financial system that operates in the United States, does not really benefit the American average. benefits New York and you know San Francisco and Los Angeles, essentially the coast, people who are in finance, people who are in technology, right, the average United States is a big land mass, you know, it has enough food to feed yourself, you have enough oil.

I think we're the number one or number two oil producer in the world, right. I think number one, what surprised me, is that it's protected by two oceans and Canada and Mexico could also be called part of the United States, right? and if you count the Mexican population and the growth in terms of its demographics, the United States can actually achieve the replacement rate of 2.05 children per woman, so as an economic unit, the United States is unique in the sense that it can become notary and basically was until World War I can go back to that place, but the current generation of people who are in power would lose position in that type of situation, so they continue to carry the value of the dollar due to their wealth.

They are international companies where half of the business is abroad where the workforce is in China, Vietnam, wherever it is, it is not in the United States, so dollarization points to this big thing and the United States needs to protect the dollar , but for who not. it actually benefits the manufacturing worker, uh, the UAW, you know, the union worker or the UPS truck driver, right? I mean, it's a question of what the political system benefits, who it benefits, and therefore the United States and dollarization, you know, Bing. It's a very bad thing, yes, it's bad for some people who are tied to the Fiat financial system and that's where their wealth is, but if you think about it from the point of view of the average American, made in America, there are excellent salaries for last 50. % increase, they have better purchasing power, yes, things are more expensive, but at least they can get them.

There are many parts of the world in Europe that are probably the ones that don't have population growth, don't have energy and don't have enough food, that's where you could probably see a lot of internal conflict again as the euro economy falls apart, and These countries do not want to be tied to a group of faceless bureaucrats in Brussels who tell them what to do? Do you see that as a real concern? I didn't realize that Europe was at higher risk. Yes, I see that Europe is at greater risk because it is again dying like the rest of the Western world.

It does not have energy security. I am not food secure. I mean, most of Germany's productive region was powered by Russian gas. Ukraine's bread basket, EUR, helps feed much of Europe. Oil and natural gas from North Africa help keep things running in most of Europe. uh in most of Europe and therefore eliminating those things uh Europe is the euro, it's poor, it's a construct, you know, I'm quoting, paraphrasing the macro guide Felix Zolof, the euro was created to maintain to France strong and Germany weak, um, and he's trying. hide these differences in the economy with this structure that simply does not work and will come to a head when suddenly there is not enough stuff to go around and Europe's traditional trading partners say: "well, you." If you are going to align yourself with the United States, then we will no longer sell you things preferentially.

There is no more Russian gas. There is no longer a group of West African countries willing to sell to you. cheap stuff, we're just going to let you figure it out yourself, and what the answer is, print more money, but again, with the euro perspective, you have a group of countries that think that, you know, they're kind of political democratic. and the population could be the reason we already have this euro, but obviously there is an elite that likes the euro and that could come to blows, so uh, I've talked to Ray Delio several times and one of the things I usually ask him.

It's because he sees so much disruption coming, what do we do about it? Where we go? And he keeps repeating this idea that what matters is how people treat each other and he said you want to be in a place where people treat each other well. rule of law that can be negotiated, what is the movement and is that how cryptocurrencies come into your thesis, what is the movement if the Western world is dramatically disrupted, whether it's uh, hot wars and cold places, um or controls of capital, so the government is um. trying to lock things into yield curve control, you know, they're just doing all those things to continue to prop up the system, what's the problem?

You're obviously American, but you don't live in America, yeah, how do you think about that? step and cryptocurrencies are part of that so the easiest thing right now is to protect your financial wealth properly for the first time in human history we have a financial system that is not based on government violence which is crypto , it is voluntary violence. -Finance free coercion system where I can opt for this Bitcoin blockchain based financial system and now I have a way to transact with anyone around the world in an open source honest and transparent way and I can escape the Fiat system with as much or as little wealth as I deem appropriate at this time, so I now have the ability to take my wealth outside of the government system and unlike gold, no one knows how much cryptocurrency I have.

I can store my cryptocurrencies in my head. I can memorize my private keys, um and my my seed phrases and restore any of my wallets and it's not like I do this, but you can do it if you're good at it so you can have as much wealth as you can in Fort Knox in your head, that it's absolutely revolutionary, um, so that's it, we have financial freedom if you choose to use it, um, and once you've gained financial freedom, then it's about, as Bellagi says, choosing your tribe, where there's a place that has the same spirit as you, you know it has a good food supply the climate you like the climate but the most important thing is that you like the community of people that are there and there is no prescription of where it is that is very personal maybe it is where you are now and all you need to do is get your Financial Freedom such that if the board is closed and whatever you find interesting, you can maintain the purchasing power in terms of energy and yet you are surrounded by a community of people that you like and love, uh, so, um, I think so.

The community aspect is very personal, there is no right place, the financial aspect is whether you have the ability to do it. Get your financial freedom for the amount of capital you want from the Fiat financial system if you think you know in my thesis. and others and that mathematics is going to collide with bad politics, so now you have financial freedom, which gives you the ability to move whether you want to or not, so what I think about a lot with this is time. I'm a big believer in cryptocurrencies, but I really don't want to leave where I am, and I'm not just in the United States, which doesn't seem like the most crypto-friendly place to me.

I'm in California, that is. I definitely did some things.legislative that I found questionable, but man, I don't want to leave, that's how they make you wait until it's too late, or that influenced your decision to move. outside the US no, I moved outside the US because it's just not a place that you know resonates with me personally, right, I love being in Asah, uh, I love the people, I love the culture, um, yeah, you just know my place, the economic opportunity, all that. kind of right for some people America is great, okay, it's a very personal thing, but yeah, there's a lot of inertia with people with money, they understand how this monetary system works.

Bitcoin didn't exist 20 years ago. to take your hard-earned money and put it into Magic Internet Money with a group of people with P py penguins and crypto punks as avatars who are debating macroeconomic policies on Twitter and other social media platforms. You might think you know we're a bunch of clowns here and then you're wondering: Why should I trust this financial system instead of the woman's man in a navy suit with a Herz tie and a pair of lubatons? Okay, so it's all of these things that influence whether or not you trust the financial system. um again, very personal, but the unfortunate part is that most people aren't taught the math, they don't understand how a bond works.

They don't understand how a bank creates and removes credit from the system, they understand why mathematically this cannot continue as it is and that there will be a reckoning and history has told us the exact manual they are going to use, it's not like they are telling us. hiding, there is paper after paper written on exactly how to financially repress the population to ensure that money does not leave the banking system and use the banking system to purchase government debt at a level the government can afford. below the level of growth of the economy, so the government benefits, all this has been written, you can read it on the Internet, but most people are too lazy or too distracted or they have a job and are simply too tired to open a book and read um, but it's all there for you to read and if you read it all you will understand very quickly that this situation cannot continue and that you have to do something and that something depends on your financial situation, obviously, I'm in the position. putting a big chunk of my wealth into cryptocurrency and not worrying too much about where the price goes, maybe not the most insidious thing about inflation is that the poorer you are, the harder it is, the more percentage of your income is spent on energy. therefore, the more inclined you are to become a degenerate speculator, because the little money you can save needs to be highly leveraged just to have an impact on the depreciation of your wages against the cost of food and fuel. that you make bad decisions, especially if you are not informed about what these financial markets are, because that has essentially been a government policy worldwide: to keep people in the dark about how money works so that they blindly trust the supposed person in power, yes, that's something I heard you say that really struck me, that inflation turns us all into speculators.

Speculation is the only thing I really find super disconcerting. To me, speculation and gambling are basically the same thing, like people are just drinking. A guess, how is it possible that people cannot understand the system and yet feel the force that forces them to be speculators? Are they looking at their wife and kids and thinking I'm just going to do it? get a 2% raise but I can feel that that's not enough as I don't even know if they like it, it doesn't seem like they would think of all that, so what is the instinct that kicks in that makes people speculate because I want? a I know I can't earn my way out of this.

I can work as hard as I want. I can do so many overtime hours, but I'm only going to make a certain amount of money per hour, but I watch TV and I see the successful guy, mostly men, who drives a fancy car, has nice clothes, and six months before he was in the street, whatever the story is, you know, Horacio Alar, you know, Rags of Wealth, very little effort, there was one thing I did. trading stocks or whatever is right usually like financial markets because things move very fast and you can apply leverage and yes there are people who have done that but most people who try that fail because it is very very difficult to do, then you are desperate and say: I know I need to increase my earning potential, but working in my lane I can't do it.

It's simply impossible. I see myself losing day after day. I see my family having a lower standard of living day after day. If only I could choose the right actions. If you could predict where the crosses between the yen and the euro are going. 200x leverage if I could only get black five times on roulette Ro, if I could just, you know, go to the casino and play CRP if I can only and then you'll spiral out of control, yeah, it's interesting the idea of ​​creating a financial system. that people can and I will use my words that people can bet on to create Capital to move Capital into the system, so if I'm a company and I'm trying to grow, I could say: who would like a piece of this?

I don't even have to offer a dividend like dividend stocks, I get it because you're actually making profits from the company, which makes all the sense in the world to me when I was first, when I was in my trying to understand the stock market, I thought that was cool, so wait a second, some of them are baseball cards and some of them are dividend paying stocks, that was it, it just made sense to me. It doesn't pay me a dividend, but if I can get someone to pay more to own it for whatever reason, which I can, which is that they think someone else is going to buy it now, suddenly, that company has access.

I see Capital well, that's good, I have a chance if I can really sell it to someone, then okay, that makes sense to me, I can make more money, it's really a cool system, but hidden inside it is the silliest theory Well wait a second, if the stock doesn't pay dividends, then if no one else is willing to buy it for more and the number isn't always going to go up, I mean it's never always going to go up, but it can go up for some companies for a while. very long period of time, um, but it's really clever, but yeah, the element of speculation, the element of I have to the element of um, I don't know what I'm doing, but I'm going to YOLO in Anyway, it all gets me very nervous so one thing I hear people say a lot is that cryptocurrencies are your way out of that system because you can't inflate them and this is the thesis with Bitcoin and again, stop me if I'm going to Ary uh Bitcoin.

It has a finite supply which goes back to one of the things you said at the beginning is that it's kind of risky but it's a fixed supply that idea that it's a fixed supply there's only 21 million of them and they won't be made anymore You can't make them. make cry more cryptographically, so, um, and therefore, if everyone agrees that it has value and I put money into it, then that money should maintain its value because it's not going to inflate, um, but is it Is that really a way out of the system of having to speculate or is it just another part of speculation so that you can speculate in cryptocurrencies absolutely there are all the different things that you can speculate in Bitcoin you know, you put a lot of your wealth into it, it's very volatile, goes up and down a lot, um, so when you get out of the Speculator category, if you're putting a certain amount of money into cryptocurrencies, for example, and you say, I'm going to assume this is going to zero and I'm not going to matter, then you are not speculating, right, you are speculating about a future, but again, your lifestyle will not be affected like it is now.

The worst part about speculating is that I need this to go up because I need to buy my dinner tonight, right, and that's when you start to deal with the problems, but yeah, speculating about more humans, you know, humanity enters a new system and that system is worth more because there is a larger community fine, but just choose the size. about the size, nobody knows the characteristic, we are speculating every second of every day, every step we take, we are speculating about things that we have reported, you know, historical experience says that this thing is less risky than the other, but none of we know what. the future stops, we are always speculating, the question is size and risk, don't put all your net worth in cryptocurrencies, where if the price goes down a little you won't be able to eat, that's how smart it seems to not put your money in the p 500 or know some other stock inoc SE um and go long, you know too much that if you go down 1% you won't be able to eat well again, it's about you knowing how to create a system that works for you and where your financial position is in life, uh and if you want to delve into the super leverage aspect, make sure it's an amount of money that you can afford to lose, what's your thesis on cryptocurrencies, why do you think you're going to be here for a long time? long term it's been around for 12 years 13 years something like that uh obviously it's been done well, but it's a pretty short period of time.

What gives you confidence that it will continue to be important? So, it is a financial system that no longer exists. zero, you know, the first BL joke in 2009 to a system that has withstood multiple crises in the most recent one, we had one of the largest exchanges in the world, a group of the largest lenders, some of the largest hedge funds , massive amounts of fraud, uh, all of this. It happened in the span of six months, um, people lost hundreds of billions of dollars of value, but blocks continued to be produced every 10 minutes for Bitcoin, 10 seconds for Ethereum, and whatever the blockchains are for many other currencies. , people from the decentralized finance movement or def5.

We were still trading on decentralized exchanges, people were still borrowing and selling, borrowing and lending different currencies on some of these lending platforms, the financial architecture worked even though we had one of the largest wealth losses and the largest amounts of financial money history. crypto ecosystem and I mean, if you want to compare the amount of money that, you know, Sam Bankman released and his team allegedly stole from his clients, I would classify it as one of the largest thefts. Financial frauds in the history of humanity. there was no bailout, there was no Central Bank saying we need to preserve the system and so if we assume that they could print a bunch of Bitcoin or ethereum or whatever and make sure that these entities are complete so you know that certain people don't lose. no money, none of that happened, people lost a lot of money, but the system architecture worked, the community was still there, people are still submitting the code.

It was right at token 249 in Singapore, the energy, 11,000 tickets sold, sold out, you know, basically, almost sold out. all over the Marina Bay Sand Convention Center uh, for this conference, people all over the world believe in this system, there are some of the smartest people in the world that have ever been known who are building this system, you know, take a look at who's who. They're the smart Muppet people of The Scholar Financial Fiat system, right, they're there because they've always been there, not because they're special, not because they're inspiring, so they're not building anything new. "We're trying to keep the old relevant and that's why I think this will have staying power because the math works, the Crypt, the cryptography works, but the most important thing is that the people are so awesome, so dedicated and so excited about what we're doing. do".

We are building and I also worked in a bank, there was none of that energy working in uh, working in the traditional Finnish financial sect, we are there punching a clock, earning a paycheck and trying to take on as much risk as possible to make a little money so we can get out of there, okay, but there is a question that needs to be asked: there is regulation for a reason and that the average person, I mean, looks at FTX, what we are talking about, is very impressive to me and again I want to say that I am a big believer in cryptocurrencies for a different reason than you, which is interesting, but at the same time I want to confront the things that I find worrying and this may be a feature and not a bug and it is possible that We all have to understand it, but the amount of regulation in the world of traffic is quite extreme now.

I'll admit the first time I realized that just because I had over a million dollars that I suddenly became a um oh gosh what is a qualified investor? It's not the term, but um, now it was accredited. I was an accredited investor and I thought, but wait, I don't know anything else about investing money, now I know how. to make money, I don't know how to invest money, uh, so I was very surprised, it seems stupid that you can't pass some kind of test and be able to do your thing, um, but at the same time.

Are people emptiedthe wallets constantly in uh crypto PE? The amount of malfant uh just on FTX alone is absolutely crazy and cryptocurrencies tend to attract those people or the current lack of regulation just creates the incentive structure where that's what's going to happen. One thing to jump to is that it says FTX was regulated in I don't know how many jurisdictions around the world had licenses around the world, so the notion that regulation would have stopped FTX is patently false. highly regulated not as regulated as a bank I wouldn't say but they had regulators all over the world that had given them licenses and they were supposed to do things a certain way correctly if you want to take the other example like now a look at the credits and they didn't steal anyone's money, but credits were a systemically important global banking Gip right and yet the most highly regulated regulated industry in the world is banking, the most highly regulated regulated banks give credit to SS in Switzerland and and exploded and demanded Swiss taxpayers bail them out for billions of dollars, so financial regulation when the incentive structure doesn't work is useless, doesn't solve anything, makes you feel good at night, okay if you can get You They return the money nominally, but what happened was that they printed more money and made us all poor in the result, so I would say that Financial Regulation yes, it is good that a bank should be managed in a certain way, but that It doesn't stop bad people from doing bad things, it just makes it so that if someone is going to pull off a scam, it usually makes it bigger, so what do you think, how does this all start to come together and I'll give you my thesis why I think ? that Bitcoin specifically and cryptocurrencies in general will be here.

I think tomorrow will be more digital than today. I think every generation grows like a fish in water and when you're born and cryptocurrencies are just a thing and Don't even think about it, yeah, it wouldn't make sense to you that that's somehow less valuable than fiat money, especially when everything What you do is buy skins and video games, and for you those are as valuable as the real ones. clothes and you love them so much and um, so you know, when I think about kids, uh and v-bucks, they're just digital natives through and through, so I think to them it'll make all the sense in the world and So, once If something is digital, why wouldn't you want your money to be digital too?

Then it becomes a question of control because, hey, the government will be more than happy to launch a cbdc, huh, and that then collides with freedom. I don't know how humanity is going to answer that question. I'll be completely honest when I think about it. I think people like to be taken care of. I think there's a Hu like when you read the rhetoric of 1776 like those guys were ready. for Die For Freedom we're not there, we're not there like we are right now, it's just a different time, man, so I think people will want the convenience of something digital.

I think money will be digital. I think people will live in digital worlds. I think they will buy digital products, but I don't know where we are going to settle. A desire for protection like the same as me. It wasn't until it looked like um svb was going to crash that I finally went like you. I know I should just understand that I didn't have any direct exposure to svb um, but it made me remove everything from every exchange, uh, but then when you look at the realities of cold storage and you realize that you have to store them in different places and not in your house and it was like, oh god, how I felt, so I still feel so paranoid.

I'm going to forget where I put something or half of my key that's in, you know this place, like I'll forget which one it has. Oh God, that kind of stuff terrifies me and so what do you think about that? Do you think people will really accept digital money? I think most people will agree with that. Do you think they will care enough? about money privacy, which is something I've heard you talk about a lot with Bitcoin, will they care enough to create Bitcoin, which is maybe trying to be strangled by the government and all that, will they do it or will they just take its cbdc, so i think? most people don't care about privacy and that's what I know because they have a mobile phone in their pocket a smartphone the smartphone is tracking you um we have voluntarily given the most information about ourselves to Facebook Google Alibaba WeChat all these things, right? because we want community, we want to communicate with each other, we want to see thirst traps, whatever the reason, it's true, um, we've done this, no, the government didn't force us to do this, they were private companies creating these products correctly.

So for most people, like you said, it's too much to be financially independent to really be your own financial institution for a lot of people it's too much and they're going to stay in the system and I like to say there's a flood coming, you know, inflationary, maybe a pseudo collapse with the Fiat financial system, there is a Noah's arc where you know, Satoshi, down there with Bitcoin, unfortunately most people are going to drown because this is not for them, so which, when you move it to the government aspect, cryptography itself is not. It is not a problem, the problem is that people own it and it is not the standard individuals and companies that are used to owning the new technology lovers and that is their problem with it, and now we are seeing that the experiment It has worked.

So far we have many millions of wallets created, we have many trillions of dollars of transactions that have been completed in these systems, they work, it's more robust than traditional finance, it's faster, it's cheaper, well, let's not have a bunch of Muppets running around. the world that they're not a bunch of bald old men singing in New York, London and Paris and whatever they own this, we want to move it back to who should own this, so now we're going to let the actors Traditional financiers properly launch things like ETFs, which is a very easy way for everyone to own the financial performance of Bitcoin, very important.

I say financial performance is not real Bitcoin, like you said, I don't want M private keys, I don't want to worry. about where I put my wallet, I just want to gain that inflation protection aspect of Bitcoin, but I don't necessarily care about actually experiencing the real financial freedom of owning my own financial system in my pocket, in my head, so I just put some Faith in Black Rock ETF, Fidelity ETF or pick your big asset manager, wherever ETF, right, you don't own Bitcoin, no, you don't care about custody you like, oh the price goes up .

Up and down the screen, I have beaten inflation, but guess what my money, when I want to sell, goes back into Fiat, back into the banking system, ready to be financially repressed to ensure the banking system buys the bonds. To keep governments afloat now, okay, Bitcoin is an open architecture, everyone should be able to build any financial product they want, the question then becomes and I don't know the answer is: Will so much value and currency be owned by these centralized assets? ? administrators who are essentially arms of the ecosystem trafi that the underlying fundamentals of what Bitcoin is privacy will be altered. money or censorship resistance or proper decentralization, while we as traders are applauding that yes ETF ETF ETF that will bring all this money into the system because now people who want to escape inflation understand the value of fixed supply and all of that, but I just don't want to deal with the technological aspect of being a bearer asset cryptographically because what's wrong with passwords and all that, people don't want to deal with that, they want to put their money in the ETF and we.

Yes, it's great, more money in the system increases, we are all rich, but are we inviting something that is going to fundamentally change what Bitcoin is because now they will have a say through large owners and mining pools or are they going to run a bunch of nodes or will they have control over the price, is an open question and this will be the real Crucible that we will have to face as an industry to determine what is bitcoin when we now have trefi who is a stakeholder in this system, how do we deal with them, how do we maintain this spirit that makes Bitcoin priceless, this immutability, this money, this is the most difficult monor that has ever existed with a system that is basically trying to capture the largest amount of capital and sequester it. so I can pay the inflation tax and make sure the government stays afloat.

I don't have the answer to that, but that is the real crucible that we will have to face in the future because, as you say, Point out that it is a headache to be your own financial institution. It's interesting that one feels easy to me. Don't know. If money really represents freedom, then you have to let people do what they are going to do. I saw this a lot on web 3 and I had the feeling that we, the vanguards of web 3, are going to decide who is web 3 enough and if you don't pass the purity test, then you know we don't want it.

You're here and it's like you're never going to be able to achieve anything at scale trying to impose a top-down culture. Culture is always and I mean always going to emerge from below and you can manipulate it through the media and things like. that, but at the end of the day, man, what people internalize will become the culture that young people will always get, whatever culture they decide they want, it's just an unstoppable force and yeah, to me, it's like Satoshi created the thing and then the thing will become what it becomes and if there is a way to control it then it will be no better than the thing that it is trying to replace, which is already something that is being controlled and the point is that you think You want to be able to control it because You think you have all the answers and you're going to do everything right and the reality is that as soon as someone can control it, they will control it and use it against you, which is all.

I mean, just to get in trouble when I saw what was happening with the convoy of Canadian truckers. I thought: They're freezing the assets of people who donated to a cause like that. It's crazy. I could not believe it. That really. I became much more interested in having something I could control now. I'm not convinced that the government can't use the Force to get what they want in a crypto because at the end of the day, see if the government puts up a big enough gun. in my face here's my crypto so you know I get it, it's easier and if I leave before the guns start firing then fair enough, but God I don't want to, I don't even want to look at such a twisted world, yeah .

I hope it never happens to you and me, so I have to ask you where you think Bitcoin is going. Is it something that you know is over 100,000? Is it something that exceeds a million? Is Michael Sailor going to be the greatest in the world? What do you think? My working model is you know we're going to continue to cut about 25 20 30 000 this year as we get to some kind of financial disruption and people recognize that real rates are negative if you know if the government are growing if the economy is growing at a nominal rate of 10% but I'm only getting 5% 6% even though it's high people are on the sidelines and will start buying other things cryptocurrencies are one of those things so in 2024, or If a financial crisis occurs, rates go to zero or we keep raising rates, but not as fast as governments are spending money because they are just trying to keep people doing things and rates are negative, so what we arrived at cryptocurrencies around 70,000 uh. by the end of 2024 and that's the combination of the crypto event, maybe there will be, you know, some ETFs launched by big asset managers in the US, Europe and China, maybe Hong Kong to be specific, so that we recover all. peak moment by the end of 2024 and that's when the real bottom starts well, that's when the real bull market starts and so my mental model of where we could go, I think we're going to get somewhere between, already you know, 750,000 and a million dollars in Bitcoin is rising right and we go to any level, there will be a round number, focus on it, I guess Bitcoin reached $69,999, it didn't reach 70,000 and then it will crash, you know, 75 8 90% whatever is correct, it doesn't matter, but yes, some of my positive target is the wrist level of 75 750,000 million in the 2026 time frame, just because, again, I think this will be the market biggest financial bull market Financial assets we've ever seen in human history, so not only will Bitcoin be ridiculously priced, you know, NASDAQ will be ridiculously priced, S&P will be ridiculously priced, you know, pick your Indy stock wherever you are, if you're not in one of Europe or the United States they're going to be ridiculously priced, certain types of properties, ridiculously priced, um, so we're going to have a lot of ridiculously priced out there and not just in crypto, yeah, it's going to be a strange time and with people they think the party is never going to end, of coursealways ends, let me ask you so I can help you better understand the way this all plays out globally, what's going on with Hong Kong and crypto China. took very strong drastic measures, it seemed like it was a very bad sign for me.

I thought, this is what worried me, that a government could effectively eliminate it from its country. It's not that they are a China that was never eliminated. crypto, they never removed cryptocurrencies from China, tell me more, you know, if you want to think from the perspective of the Chinese government, what they care about most is social stability, right? And as everyone becomes speculators because they're desperate, the last thing they want is a bunch of moms and dads getting together in groups with a communal grievance, it could be crypto, it could be anything, right, we know all these stories, you know , have developed in Chinese history, they have not.

So, you know that could cause unrest in China and you also have the energy aspect of Bitcoin mining which consumes a lot of electricity that could be used to do other things. Basically, they made it very difficult to market, so the exchanges. You know, the Chinese still own Bitcoin, that hasn't changed, you can't mine it, there are no exchanges, okay, they can't really acquire it, but at the end of the day I think the Chinese government sees this as technologically. Something sounds good and they want more in the Chinese diaspora that they can control, it doesn't necessarily have to be in a government coffer, but the Chinese government thinks that if you are Chinese, we own you as a person, you are Chinese, we are the Chinese government.

So you are our subject no matter where you live in the world, ethically speaking, and if you think about Hong Kong, which is part of China now and always was, but now it is very explicitly part of China, but it has this western capital. meeting point of the eastern capital if they want to experiment with allowing more general ownership of cryptocurrencies or if they want to allow certain types of Chinese individuals to own cryptocurrencies through regulated Hong Kong financial institutions, which essentially means they are controlled by the Chinese government. the same way Black Rock is controlled by the US government, it's no different, so they're going to allow these companies to buy and hold cryptocurrencies because at the end of the day, as long as cryptocurrencies are inside China, they believe that They can control it, so why not let a part of the country experiment with this, let people own it, let people buy it, controlling it in terms of the way that companies can acquire users and allow those users own cryptocurrencies, why?

Licenses have been issued. The Hong Kong government is very positive about Bitcoin. The Hong Kong government is part of China, so they would never do this if it wasn't blessed by Beijing as part of a national prerogative for this particular part of China. be positive on cryptocurrencies, so it's a similar situation to how I describe the Black Rock ETF, right? Larry thinkink and brra having a trillion dollars worth of Bitcoin in their custody is the same as, as you know, the Bank of China launching an ETF in Hong Kong. Stock market and having a trillion dollars in cryptocurrencies, both are essentially in the orbit of the United States or China and that is the goal if this technology is so transformative if it is the strongest money that has ever existed, wouldn't you prefer to its citizens?

Have it instead of someone else's and as the American political establishment decides what it wants to do with cryptocurrencies and that uncertainty drives companies out of the United States and into the rest of the world, China has already been through it, they have already purged the exchanges , knows? starting in 2017, culminating in, as you know, I think in 2020 right now they've gone in the other direction, okay, let's try to control this, let's try to allow certain types of ownership through companies that we can control in Hong Kong, which It is our testbed region. because in a way, you know financial innovation and you give the Hong Kong economy something to attract experience.

Foreign capital because they know that the Chinese government believes in technology. Cryptocurrencies are a vanguard of financial technology. Why not bring these smart people here, let them experiment and we believe they can control what they do well, so in my opinion that is what is behind the story of Hong Kong. Let's see how it progresses. Obviously I live in Hong Kong. I love Hong Kong. I hope there is a vibrant cryptocurrency ecosystem there and that people. They are able to experiment with different things because there is a task of government support for technology, we will see what happens on the end if suddenly you know that there are all these companies with billions of dollars in cryptocurrencies.

I don't know but at least there are some people who are given the space to at least experiment and try it compared to other places in the world where they are being pushed out and rejected, yes I will be very interested to see how it plays out. develops. I was very intrigued when China opened that backup in Hong Kong, it made me realize that okay, maybe they're not as negative as I thought. They were and as you said, this is really an element of control, which makes me feel very uncomfortable in terms of governments having more control than I'm comfortable with, but I fully recognize that the way it looks and as someone who lives there can certainly speak to this better than me, which is not necessarily that one is better than the other, they are just different, but man, from my perspective, it seems better to be free, but I won't try to export my values, so one thing What I want to understand better is that I had Peter Shiff on the show and in the comments because he was right up my alley in terms of all my fears, like he was there, uh, everything that if I'm honest, he's very close to articulating exactly what I think is going to happen when I objectively look at the math of all of this and then one of the comments in the feed was: Peter Schiff has predicted nine of the last two. recessions and I had to laugh about that, so you know, the backdrop of our whole conversation has been a kind of mutual acceptance that yes, all hell will probably break loose, that we think we have a good handle on just physics. of mathematics and that it can't keep increasing forever that using my analogy you will pull this rubber band back until it breaks uh there's just no way around it what if we're wrong and what if we're wrong?

We are wrong, if there is an energy miracle, like when we discover some form of energy, we commercialize it instantly. Think about how long it took us to get to a car. Every household in the US thinks about how long it took us to electrify the UK, even though these technologies were created in the mid-19th century, that already means we can't have a soft landing. What if they just do it right? If they do well then you will win, could you earn what you earn now? it's up I don't know, let's take out the tech stocks, it's up, I don't know, six seven percent this year, whatever it is, could it make the same?

Are you saying I could earn the same amount? Can I earn the same amount? in bonds and in Liv literally overnight loans to the Federal Reserve Zero financial risk They pay me five and a half six% why take the risk if they understand everything well? Great, I'm taking, I'm getting two-thirds, if not 75%. of US stock performance without taking on any Mark to Market risk, so there's really no point in owning stocks if you think they're going to do well because stocks aren't coming back enough, it's not like the SV was. up to 25% and a cash yield of six, so from a risk-adjusted and risk-adjusted perspective, if they do everything right then okay, maybe the only stock you should know about is an Nvidia fine, the rest of the market is a dog, why even why even why even play the game? put your money in a money market fund take your money out of your 0% annual bank account put it in a money market fund it just doesn't make sense to trade stocks if they are doing well what would have to be true for you to say yes?

I no longer believe there is anything on the horizon, there is no financial crisis looming that they would have to achieve. I assume debt to GDP will be below 130. I assume they would have to start taking some money out of the economy without it. causing any kind of side effects, um um, what else, so the US government right now is running the Playbook, they should be running correctly, which is that nominal GDP is at 9%, but public debt yields four and a half, call it right. the government is making money, if they can continue to keep money in the banking system bond market at these rates and at this level of growth, then the US government, at least for them, will deleverage over time, the problem is that capital can move in a way that makes the assumption that capital doesn't move, so if to me, you know, go to scenario number one, no, capital leaves a long-term bond market when they have a negative real return, right, number two, there is an energy miracle or we decide. that nuclear power is next and we're left out investing in all sorts of different types of startups to basically miniaturize nuclear reactors so that instead of pumping oil into our car we have a small U-shaped nuclear reactor that powers our vehicles or us. "I'm going to build all these different power plants, so that has to happen immediately, those are the things that would say okay, maybe I'm wrong and we're going to have some kind of acceleration in energy productivity, so, I should own a company that makes real things besides semiconductors otherwise they put overnight bonds on me because the moment they dropped rates I don't care I didn't lose any money I just take my money from the bonds and leave .buy things right, but I'm definitely not going to own long-term bonds that trade is negative EV, negative expected value in my perspective, I don't see how they do all these things right before the money leaves the system, saying this I want to. 9%, not four and a half U, so why own the long end?

Just put all your money in short-term bonds if you think they're going to get S all. Just put your money in short-term bonds and. Don't risk it, Arthur. Hayes, this has been a wonderful conversation that people can follow you um so on Twitter crypto haaz I have a substack and the same handling of crypto Hayes um and I write essays, probably you know, twice a month on macro geopolitics Obviously there's always a crypto angle, but um. yeah that's where you can find me and I speak globally at conferences around the world it's all true bro thank you so much for joining me today everyone if you haven't already make sure to subscribe and until next time my friends are going to be legendary take care , peace if you really want to understand the complex financial landscape we all face watch this conversation with bology shr vason the problems go to the base of the financial system in terms of treasury bonds being the new toxic waste, it will be at least as bad as

2008

but probably worse than that.