The #1 Lie They're Still Telling You About Inflation

Our latest video on the things that happen right before a collapse is going crazy. You guys asked, we are now here to answer. Without further ado, Drew, what do people have to say about this video? >> Let's jump into the comment section. Jim Dwyer 1, "Like your videos, Tom, and you make very valid points, but I can't agree with you 100% of the time. I don't agree with you 100% of the time, so The US is far from a debt crisis. We may get there in the future, but it's going to take a while. The dollar is the world's reserve currency, and the US has the strongest military in the world. Those two factors give us a lot of leeway on debt. Additionally, some context is needed >> on, hold on, okay. Okay, this whole thing that it gives us leeway on debt, they're not wrong. But that is the most moronic thing to say. So, imagine, Drew, that I'm racing towards a cliff. And as we're going to the cliff, it's like, "Bro, this car is number one in like uh crash safety. We're all going to be fine." No, no, no, we're still going to die at the bottom of the cliff. The car may crumple in the most useful way possible, but that steering wheel is still going to punch through my sternum. So, I do not understand what people are trying to convince me of. Can they not see young people been completely priced out of home buying? Can they not see homes are the only asset people understand intuitively? Can they not see that inflation robs them of their buying power? Can they not see that real wages have stagnated? Can they not see that we have offshored uh so many jobs that now the rate of deaths of despair that men particularly die from is skyrocketing? Like, I'm what metric are they looking at to be like, "This isn't a problem"? Okay, can I play devil's advocate? >> Please. Push back violently. Um the mafia boss who cuts off your finger when you don't pay him. Like, I'm incentivized to pay him cuz I like my fingers. I don't know if there's a country in the US that's going to come around and be like, "Hey, US, I need that money." And we're going to be like, "Ooh." Like, >> Are you high? We can fight China. We got a lot of bases. >> China China, first of all, China's already selling our debt. The people that the US The US is never going to outright default. And if this is what people are trying to get to, fine. But hear me when I say, they will do and already are doing what's called soft defaulting. And they will simply reduce the purchasing power of your dollar to nothing. If you think I'm making that up, over the last 100 years, they did it by 95% In the last 5 years, they did it by 25%. This is not a maybe. This is not a hypothetical. You're adding a trillion dollars to the debt every 100 days. Every 100 days, Drew. And so when you do that, you are now in a debt death spiral, where very soon the interest payments on the debt are more than everything else. They are more than Medicare, Medicaid, defense is already more than defense, education Ah. Everything. And you get to the point where you only have money for the debt. Now, I don't even I try not to talk about that all the time because then you're talking about like Weimar Germany hyperinflation. All I need people to understand is when you are at When your debt to GDP grows by 6 to 7% a year, you very rapidly get to the point where you have to print money to keep from defaulting, which means that you just Imagine stealing 7% more of everybody's wealth every year like clockwork. Dude, you you can never get ahead. And so if people are wondering, "Why can't I get ahead?" It's because businesses aren't going to be able to afford to pay you that much more every year. So now every year you're moving backwards. Every year you're not able to afford things. That causes people to become more haves and have-nots because as I have said many times, people that own assets will be pulled up into the upper class. People that don't have assets will be pulled into the lower class. And one more time, 10% of the US owns 93% of the assets. So, you're going to have 10% of people that spiral into just wealth inequality, the likes of which people have never seen. And so, if people need to hear that I'm just this selfish prick, then let me just say this. I don't want my head separated from my body. I'm a student of history. I look at France, and I see, "Oh, when wealth inequality gets too bad, people just get so angry, they start killing people." What did Napoleon understand? Once people start killing each other, they don't stop. want to stop. They get like this blood lust. So, Napoleon ends up becoming emperor because he looks at all these uh French people literally just killing people for no reason, killing each other. Some of the people that started the French Revolution are the people that got their heads chopped off cuz people don't They don't stop at the elites, bro. They just keep going. You annoyed me, so now I'm going to cut your head off. So, uh Napoleon looks at that and goes, "Cool. Uh I'm going to point all these people at every other [ __ ] country. And we're just going to go take them over." And bro, he's They started taking everybody over. He makes himself emperor for life, wild [ __ ] and had he not ended up losing in first to the Russians and then finally in Waterloo, if he hadn't lost, dude, he would have been a dictator until the day he died. People just It It's like they don't look at history, and they don't see how this stuff play out. So, they hear like this rant, "Uh I heard about like let them eat cake, and there was like some French Revolution or something, but I France is great. France is great country." Yes, if you don't mind doing a hundred years of darkness, devastation, economic backwater, anybody can recover. Uganda is Hey, Drew, they've only been down for 50 years. Give them some time. They're coming back. I can feel it. It's The [ __ ] What is happening? Argentina went through a hundred year a hundred years of madness, and maybe now they're coming back because you've got essentially a lunatic economist who campaigned with a chainsaw who finally got people's attention. You want to talk about oversimplifying things. Who campaigned with a chainsaw, uh got back into power, and is now whipping them into shape with austerity, which people hate. But when you suffer enough, you can finally get people back on track. Money follows physics. It's that simple. Map the physics. I still got three more sentences. Let's Let's keep it going. Additionally, some context is needed when discussing our national debt. Yes, it is way too high and growing rapidly, but at 37 trillion, it's only slightly more than our GDP. The US has a 30 trillion >> god. Hold. Stop. Pause. Uh okay. There's three types of debt. He's just talking about government debt. So, government debt is already more than our GDP. K? That's bad. Then you've got private debt, which is again, I mean, some ungodly figure. Then you've got corporate debt. You put them all together, it's over a hundred trillion dollars. So, kids, we are so underwater. We can get out of it. Corporate and private debt is another 13 trillion. Yeah. No one needs to be panicking. Like, yay. Well, if we do the right things, we can back away from the cliff. But first, we have to do the right things. What's the total debt, by the way? Like, all in debt debt debt. Cuz I thought it was over a hundred trillion. See? See? Over 100 trillion dollars. The total US debt, encompassing federal debt, corporate debt, and household liabilities is estimated to be over 100 trillion dollars. Kids, we are in way more debt than people think. Way yeah. more debt than people realize and we will just keep printing and printing and printing and printing. >> Venus is going to come But we owe money to each other. That's the thing. We owe money to each other. We owe money to We owe money to China. We owe money to Japan. We We owe money to everybody, man. This is like This is one of those Okay, I don't want people to panic, but I do want them to wake up. And so I'm not trying to fear monger. cold water. I'm trying to snap people to [ __ ] awake. And so no, I'm I don't want anybody panicking. Panicking is for [ __ ] if I may be so bold. I want people to wake up. I want people to focus. Partly because Drew, I was so blind to this. I knew how to make money. And I made a whole lot of it. And then all of a sudden during COVID, I just wanted to help the people back at Quest cuz line workers are not making a lot of money. When COVID happened, I was like, "Oh my god, these guys are all going to go bankrupt. They're not going to be able to take care of their families." What is the tool I have at my disposal? A YouTube channel. Great. I'm going to help people. I'm going to start doing financial content. Like balance your checkbook type financial content. And then I kept being like, "Huh, there's something I don't understand here. Something I don't understand here." cuz I would have another guest on another guest on. They would say something. I'll be like, "Wait, what?" And the more I started researching researching researching, I finally realized the one like linchpin in my brain that once you removed it, my entire world view fell apart. That was I thought inflation happened naturally. I didn't realize it was man-made. And I thought, "Oh my god, I'm a 40-year-old man. I'm reasonably smart." And I thought inflation was a naturally occurring thing. I just never thought about it. And so then all of a sudden I was like, "Wait. The government's taking my money through inflation?" Because the first time I heard somebody say it's an invisible tax or it's theft." That was so confusing to me. It's like, "What are you talking about? Like, how are they doing it consciously?" And then you realize, "Oh, they're doing it consciously. It It is a very simple system." If you are deficit spending, you are printing money. And if you are printing money, you just made it up out of thin air. There It's It's not tied to any value creation. Here's the problem, Drew. You want to know why I simplify things? I can explain to you cuz people As soon as I said that, people they don't know what I mean. Gloss over >> There's a whole fractal right there. That I always stop myself from going down. Because you can create money out of thin air if you do it in the exact proportion of the additional value that you create. But people don't even know what that means. What does he mean by value? If I build another chair, I've just created additional value. If I have the same number of chairs and I print money, now I've got more money fighting for the same chairs. If I make another chair, I can print a little bit more money. And now the two stay even. And here's the part I can never get people to like really grasp. They'll look at 2.7% inflation, which is roughly what it is now at the time that we're recording this. People think that's not so bad. And I want to scream. Because what they don't understand is a whole bunch of new chairs are being made. They're printing money to match all the new chairs that are being made. Plus >> the 2.7 >> 2.7%. Your TV should cost $1.45. But instead of that, the TVs get better in quality, but they never go down in price. And the reason they never go down in price is because they are inflating the currency like mad. And so, instead of getting like real stuff getting cheaper and cheaper and cheaper over time, Anything that's been mass produced should get cheaper over time, but it doesn't. It stays roughly the same. And it stays roughly the same because the government is taking all of those wins that we should be feeling in prices. And they have convinced people This This one is enraging. They have convinced people that deflation is to be feared. That is lunacy. There's two types of deflation. There's crisis-led deflation. Fear that. >> Mhm. People are panicking. They're keeping their money. They're not spending it. Worry. That is bad. Then there's innovation-led deflation. Your TV's now cheap and easy to make. That you should be excited about, but you never feel it cuz the government takes it all. Mhm. Landing the plane on this. Uh but at 37 trillion, it's only slightly more than our GDP. The US has a 30 trillion GDP. In that context, it's like an individual making 100k per year that has a 120k mortgage. Yeah, they owe more than they make in a year, but it's not by an outrageous amount. Additionally, a fair amount of that {quote} debt is owed to ourselves. So, is it a problem? Yes, absolutely, and we should work on reducing it. But is it at a point where national collapse is imminent? Not even close. Just my humble opinion. I feel like I've already addressed his This is not a big deal. We don't know that much. Uh that it's owed to each other. Cool, let some banks fail. Is is that where the debt jubilee comes in where like >> Dude, a bank failure is a debt jubilee. Mhm. Hey, sorry people that deposited your money. The bank doesn't owe you money anymore. Whoopsies. Yeah, but people freak the [ __ ] out. So, uh what? Like people think they're not the one in the debt jubilee. They always think I'm the one that doesn't have to pay this [ __ ] back. It's like, bro, this is wild. Th- This is people that do not understand how money works. They don't understand that if you crater businesses, because all those businesses that you owe money to, you just don't pay, oh, when they fold, sorry, we had to lay off 17 million people this week. It's like you don't think that's going to have a systemic impact on the government, on on the nation as a whole? Now, listen, again, these crazy ass comments are pushing me to like really make a point by being bombastic. I don't think that we're at the gate of imminent collapse, but we are at the point where we have to wake up and start doing like moving in the other direction. Because right now, you're at 122% debt to GDP, you're adding a trillion dollars to the national debt every 100 days. Uh your interest on the debt payment is already more than you pay for in defense. Aren't people a little concerned about that? You're marching towards Thucydides' trap with China. You are almost certainly going to have to arm up for a conflict that hopefully never comes, but you're going to have to arm up for it. That's going to cost a fortune. So, I I'm just not sure what signals In fact, forget all of that. Just think about that 33-year-old couple that you know that can't buy a home. Think about the fertility rates, the birth rates plummeting. What do you think's causing it? So, once people start realizing that people can't get ahead, and even though it is true, you can be dirt poor and still have kids, and should. And so, there's some cultural thing that plays out. But that cultural thing is fed, in part, by the fact that people can't get ahead. By the fact that the American dream is dead. By the fact that we don't have that like jubilant spirit that Americans used to have. Like the '80s felt different, man. I'm telling you right now. They just felt different. Like a kid from Tacoma, Washington felt like he he legitimately be anything he wanted. Even though my parents didn't make a lot of money, and no one in my family had a lot of money, but it just was like, well, that was America. It was in everything. It was in the movies were telling me that I could be rich. Uh books were telling me I could be rich. TV shows told me I could be rich. Like everything told me that I could be rich. And I saw it. I saw people become successful. We told those stories. We celebrated people that were successful. Like, we don't do that anymore. We villainize success. We look at people that have money and we're mad. And then you start going, okay, why is that? And it's that way for a hyper-predictable, mechanistic reason. But I'm just having trouble getting people to to see what that mechanistic reason is. Even if you don't think, like, maybe this is like a 50-year problem. But it's like it's not like everything's fine, fine, fine, fine, fine, fine, fine, break. It's malaise starts setting in. The country starts feeling like, hey, maybe we should be more socialist. The innovation begins grinding to a halt. China continues to rise. We lose the um dollar reserve status. All of a sudden we can't do the things that we want to economically. And then we're in the boat like everybody else, and we're coming to China with our hand out. And it's like people just cannot grasp that you don't have to collapse and be dramatic for it to [ __ ] suck. So, uh we're number one. But people have actually lost the will to remain number one. And that to me is that's a tragedy. And so, anyway, I'm going to do my part to push back. I'm going to do my part to walk people through first principles, mechanistic, how we got here, what we need to do to get out of it. And I find it bizarrely motivational when people uh are like, "No, everything's fine." Look look at any stat. Bro, I'm rich. Like, I get some people just think that I'm a a narcissist who needs to hear the sound of his own voice. There are easier things that I could talk about. I got a lot more views telling people they could do anything they set their mind to, right? Phase one, baby. I was a lot bigger than I am now. So, if this was just narcissism, I would have just looped on that [ __ ] but I realized very quickly it's not real. People are not doing anything with this information. And so, now I'm trying to get people really down to first principles. We'll get back to the show in just a second, but first I want you to picture this. You walk into your kitchen and open your freezer and instead of empty shelves and random leftovers, you see rows of premium cuts stacked like treasures. Filet mignon, wild-caught salmon, grass-fed beef. When your freezer is stocked with premium protein, you are always just one step away from an incredible meal. ButcherBox made this possible for me and now they're making it possible for you. I worked with them to create the Bill Yu Box, but here's where I may have gotten a little carried away during my negotiations. I demanded free bacon for life and somehow they actually said yes. So, you guys get my curated selection as your first box plus bacon showing up forever. After the first box, you unlock 80 premium products to customize however you want. Get the Bill Yu Box plus free bacon for life and $20 off. Just go right now to butcherbox.com/impact and use code impact. And now, let's get back to the show. SDR0505 said, "This is the usual excuse of someone obsessed with capitalism and when it fails, blames it on socialism or communism. US is a capitalist society yet it's still failing even when it had the ability to print money. Why? Because of greed. Socialist and communist countries will survive just fine if US and Western governments don't illegally sanction them, create wars, coups, etc. But they interfere with all these countries to protect capitalism. Why? Because that's the only way the rich can stay rich, by manipulating and brainwashing the public to keep working without any actual lasting benefits. Keep them spending and staying in a debt-ridden, etc. While keep BSing about free markets and eventual prosperity. If you are a fair and strong government free of corruption that regulates corporations and protects the public's interest, things will just be just fine. First of all, let's establish some ground rules. Uh America's not strictly capitalist. The problems that we have are all caused by the parts of the economy that aren't capitalist. The way that the money printing works is that it's fine in the beginning and it moves in a really predictable cycle. The thing that I'm trying to get people to understand is that cycle is predictable. It's knowable. Ray Dalio has turned himself into the most successful hedge fund manager of all time by being the most educated about the cycle, by being able to look at any country that prints and go where are they at in the cycle because I know what's going to happen next and I just place my bets based on what I know is going to happen from this historical trend. So, I'm ironically, I've won capitalism. Like the the parts of the economy that still work, maybe I've won them. Uh and I'm screaming at the top of my lungs that you can't ever do anything that betrays the middle class. And so, if I thought that socialism was the thing that would help the middle class, then I would scream for it. But, the historical record for anybody going to bat for socialism, communism, it is the single most murderous economic structure the world has ever known. I don't know what they're arguing for. I don't know what they look at in history and go, "But, see how it's working so well?" They literally don't have anything to point at. So, I can point at 500 years of what we would now call modern monetary theory where people have the ability to debase their currency and show you exactly how it moves in a cycle that starts fine. You have a little bit of debt that ends up being good for growth, but then the growth slows down. The only tool that you know how to use is debt, so you use more debt, you get some growth, but not at the rate of the accumulating debt. The debt carries an interest burden, the interest burden you have to print money to cover it. Printing money debases a currency, that eliminates the middle class because of a very predictable, known mechanism called inflation. The only way to protect yourself from inflation is to own assets. So, what ends up happening to the middle class is roughly half, it's probably less than half, but it gets pulled up into the upper class, and then the remaining people get yanked down into the lower class because they don't own assets. So, people get pulled up to own assets, they get pulled down if they don't own assets, then it gets wealth inequality gets rampant, and then it self-destructs. Like, it's it's this super knowable loop, and it self-destructs, by the way, because people just get so angry. Now, the only system that has more inequality than late-stage capitalism is socialism and communism. So, it's like I I Obviously, I worry for all of us when I laugh at Gallo's humor, I really am willing to spend a whole lot of my own time and energy into just really trying to get people back to where I was in the '80s, where I really believed that if I worked hard, I could do something incredible, and then I worked hard and did something incredible. And I want that to be true again, but there are When you get into that late stage five, and I'm it might be worth us going through the five stages, but when you get into late stage five, everything really starts to break down, and people have a reason to be mad. Like, if you can't afford housing, the vast majority of people will just never own assets. And so, that's why we're in the situation that we're in right now in real life in America, 10% of people own 93% of all assets. So, that's the wealth inequality that people are talking about. But like the sort of vague nebulous um capitalists are evil, socialists are good people, leave the socialists and communists alone and everything is going to be fine. Money has physics. And the best explanation of capitalism is capitalism's a terrible system, but it's the best of the terrible systems. So, what I hope I can get people to take away from this video or even most of the economic content that I do is things feel broken now because they are. They're broken because of inflation. Inflation is a product of modern monetary theory, but modern monetary theory is a trade-off. If you re-harden the money based on gold or whatever, >> Mhm. that has its own trade-offs that are going to create problems. And so, we just have to be honest about what happens when you print money, so hopefully we can interrupt it and focus on like if we were just going to focus people on one metric, it would be debt to GDP ratio. And so, if you can start driving that We're now at 122%. 130 is a historical redline over which only bad things happen. And then, if we can start pushing that in the right way by being more fiscally responsible, then we can make things better. But when we have this sort of vacuous argument, it's we're just going to deflate. Can you break down a difference in your opinion between capitalist, socialist, communist? There are more systems than just capitalism, socialism, and communism, but given that these are the three that we see most frequently, let's talk about them. So, capitalism is meant to be a free market system in which capital goes to the places where people are going to get the biggest return on their capital. So, you've got the workers and you've got the capitalists. And the capitalists say, "I'm going to build this factory not because I make money today, but because over time I think I'm going to make money." And so, as you aggregate capital, you then deploy that into assets that you think will make a return. That asset could be a business, it could could a factory, uh it could be a stock, could be a bond, could be a treasury, like all of the things. Whatever you think is going to return that principal plus plus interest back to you. Socialism is where you confiscate the means of production and you say, "Okay, the state now owns all of the means of production and we're going to give as many things away as we can for free to make sure that people have um the distributed profits of the the economic engine." So, instead of going to capitalists who are using um intelligence, market signals, hard work, discipline in order to figure out where to put their capital, and they sometimes win, they sometimes lose, uh and they take a disproportionate amount of the rewards, we're going to spread that out across everybody. The problem is that you lose market signal, so the state is able to just say, "Well, we're going to keep investing in that, and that is what it is." Um and we're going to control everything, and so you end up in a situation where you don't have the information coming from the price signals, and so you start making too much of certain things, uh you start making the wrong things, you don't have enough of the things that people really need. So, in socialist systems, you tend to have shortages of things, you tend to have too much of something, and so it just ends up being all over the place because you're trying to centralize the market signals. You're trying to say, "We know what's best, so go do this thing." Communism is socialism distilled. And so, it's that all the way to the extreme, where the government controls everything, um all of the decision-making is centralized. People will often refer to you socialism as just a step on the way to communism, and I think that that is the right way to look at it, because what ends up happening is as you seize the means of production, things will start to break, they will start to go wrong because you've removed all the incentive structure, you've removed the price signals, and so now the only way to get people to do what you say is to point a gun at them. And so, and you just slide into communism, where the government realizes they have to control everything to keep people in line. Now, people will often say that the Nordic countries are socialist, but they're not. They're a social democracy, not to be confused with democratic socialism, which is actually socialist. They're a social democracy, meaning it is a democracy. Uh state is involved in very few industries. Typically, only things like oil and stuff like that will get put into that. But, they'll have a few industries that the state will run. Everything else is privatized. There's still uh price signals. So, when you look at a Denmark or a Sweden, they still have privatized healthcare. It's just that they have a gigantic welfare state that makes sure that everybody has that paid for for them. But, one of the big bridges that has to be crossed is if you want to be a social democracy, then what you have to do is tax the life out of everybody. So, you're going to tax the wealthy, you're going to tax the middle class, and you're going to tax the poor. It's the only way to have a big enough tax base that you can pay for all that stuff. >> Mhm. Uh Gurche Bernat 4785, I like it because he throws rocks at socialism as he's detailing the problem we have stems from capitalism. I feel like you addressed that. >> um certainly happy to give a speedrun of this. Again, people need only point to what socialist system do they see that's working? I will certainly drink it in. If there's something there that will make people's lives better, I'm all for it. But, historically speaking, socialism is horrific. Horrific because you remove incentive structures. Once there's no incentive, the only way to get people to do something is at the end of a gun barrel. Period. All right. And Dragon of Paradise says, I want a deep dive on the Nordic model of democratic socialism. Yeah, I mean, look, that's fair. And remember, that's social democracy. That's not a democratic socialist. Democratic socialist is, I think, a largely American phenomenon. It's absolutely terrifying. They want to do things like abolish the family, uh confiscate the means of production. Like that that one's really like going down a dark dark road. The kinds of things that like even China doesn't do. Uh so, you've got to be very careful with that. In fact, one of the fascinating things is the way that China has embraced capitalism with Chinese characteristics. Um because while they implant government officials inside the company and they will admittedly force them to do things. So, they'll pick let's say they'll go, um we're going to make sure that we win in AI. But then they let all the AI companies for real compete against each other. So, it's very different than when people want to seize the means of production. Now, the reason that China ended up there was first they tried being truly communistic in like an old school Russian model Lenin Marxist. And they'll even pay lip service to it today, but the fundamentals of the way they run their economy just isn't Lenin Marxist. Though, you're hearing more things like that from Xi Jinping, which is why people are worried about him. Set that aside for now. Uh what Deng Xiaoping realized was okay, Mao just straight told everybody you're going to do this. It ended up starving millions of people to death. Not because he necessarily wanted to starve them to death, though he clearly didn't mind, but because he thought he knew best and people should listen to him. And the problem is it's very hard to know everything about everything. And so you end up making these catastrophic mistakes like the one that I talk about often is he told everybody all across China, which has giant uh it it spread out over a giant geographic region. And so the climate's different, what grows in one area is not going to grow in another area. And so he said everybody plants the same thing everywhere at the same time. And so the vast majority of the crops failed because he just didn't know what he was doing. And so people starved to death. And so it's not until you let farmers compete for who's going to be the best that you actually have a shot at winning. So, if we were to deep dive into the Nordic model, what we'd be looking at is they understand the same thing. That you need the private market. And so, they're not trying to um make everything public. They are trying to make sure that the private market stays active, but the welfare state is funded through huge tax burden across everybody, not just the wealthy. Got it. KD Penland 87 put the deep dive into AI. He says, "Take it for what it's worth. I still enjoy the the content otherwise." I'm going to point three from the AI. This is where the thesis overreaches. Debt equals guaranteed collapse. The US is not directly comparable to Argentina, Weimar Germany, or Zimbabwe. Unlike them, the US issues debt in its own reserve currency, enjoys global demand for treasury bonds, and has vastly greater productive capacity. Collapse isn't a given, though fiscal strain is real. Redline at 130 debt to GDP. Japan has exceeded 250 debt to GDP for decades without collapse. Debt stress varies depending on monetary sovereignty, demographics, and central bank control. Hyperinflation prediction. The US has inflation risk, but current Fed policies and global demand for dollars make Weimar-style collapse unlikely without catastrophic mismanagement. Selective history. The video only highlights collapses cases. Many nations with high debt, inequality, or populism, e.g. UK, France, post-World War II US, adapted rather than collapse. Dashboard flashing red rhetoric. While emotionally compelling, it oversimplifies complex systems and amplify amplifies fear. Bottom line, not pure fear-mongering. The debt, inequality, and trust issues are real and well-documented, but not a guaranteed collapse. The US still has immense structural advantages, reserve currency, deep capital markets, innovation engine that differentiate it from past collapses. Best described as a dramatized, but partially grounded worst-case outlook. Useful as a cautionary thought exercise, but overstated if taken literally as imminent doom. I think that there is a lot of truth in what the AI is saying. So, if you take something like Japan, Japan has been over 200%. I don't know that they've been over 250%. They may have like popped up above it, but I don't think they've stayed there. Anyway, that's a fact check that people could run. But, they when people say that 98% of countries that have spent any meaningful time over 130% debt to GDP, the reason they say 98% is Japan is the 2%. So, there's no doubt that there are exceptions. And there's no doubt that I really do feel a heightened sense of emotion. There's also no doubt that I use a heightened sense of emotion to try to get people's attention. Uh but, the reality is you're already seeing people commit acts of um political assassinations. Like this collapse Weimar-style, I'm not saying that we are on a guaranteed collision course with uh a Weimar-style Germany. I'm not saying I'm certainly not saying that Trump is the next Hitler or anything like that we're guaranteed to have a Hitler or anything like that. But, I am saying Drew that to uh a 100% like it happens every time. Empires stop being empires. Nobody escapes it. So, it used to be I mean, what? Spain had an empire for a while. People are going to get weird about the word collapse, but they stop being an empire. What word would people like me to use? Managed decline? So, uh Spain had a managed decline. Italy had a managed decline. England had a managed decline. The Dutch had a managed decline. Uh Argentina had a managed decline. Zimbabwe had a managed decline. Some of the managed declines were more bloody than others, but like hey, let's look at England. I think most people feel good about England. Drew, World War II was pretty bloody. And so, when you look at World War I chipping away at England, World War II chipping away at England, massive bloodshed. Now, was that massive bloodshed entirely economically driven? Yes. Was it all economically driven by England? No. So, did England end up paying a huge price for the Treaty of Versailles, which they put Germany under? And it was Hitler pushing back against the Treaty of Versailles that he used to rally his own people to make them as angry as they needed to be to go in and confiscate wealth from the Jews, to kill the Jews, to feel like they had a right to Russia, which is a long story, and anybody that doesn't think that Hitler had his eyes on Russia from the jump has not read Mein Kampf. So, look, all of this stuff gets very complicated. There is no doubt that you could go through line by line and give like a really measured version for like, "Okay, this is what we would have to do to pull out of this." And I try to always end my videos with precisely what we need to do to get out of this. I don't want anybody to believe that any of this stuff is a foregone conclusion. I really don't want anybody to feel hopeless, but I don't know what else has to happen. You've got men not having sex anymore. And so, there are a whole host of things that are leading up to that, not the least of which is uh social media, dating apps, OnlyFans, like just egregious amounts of access to pornography, but I really believe to the core of my existence that the biggest driving factor is when young people cannot get on the housing ladder, they are not able to start building wealth, when real wages don't grow, people like begin to check out of their uh pursuit of goals via a um working uh through their careers. And so, it's like you've got all of these structural things that have one underlying cause, and I really believe that people hide behind complexity instead of just saying, "Look, yes, I'm giving you a non-nuanced take so that people don't pretend that oh, this is uh it's all so complicated, Drew. We'll never know what could possibly be driving this." What is driving it is very simple. It is debt. And once you understand that debt forces the government to print money, that even when it's your reserve currency, you are debasing the currency. And people will react in a very predictable pattern when you debase the currency. Now, you can export that debasement to the world when you're the reserve currency, so you can drag this on a lot longer than you could otherwise. But every single empire that has been the reserve currency has stopped being the reserve currency. England used to be in a position where the sun never set on its empire. Drew, it's now a small island off the coast of Europe. It's like they they are not an economic backwater, and if you live there, I've lived there for a year. My wife is from there. It's not like you're crying yourself to sleep every night because it's like a a brutal dictatorship, or you know, it's a Uganda or a Zimbabwe or something like that. But anybody that held the pound through the transitionary period lost like 99% of their wealth. >> Jeez. So, uh did people survive? Yes, but do you really want to lose that kind of money? The US dollar has already lost 95% of its wealth over the last 100 years. Do you want to keep doing that? We've lost 25% of our wealth in the last 5 years. So, it's like I these same people are going to look at the world and they're going to say, "We have a screaming problem, Drew. We have a something is wrong. I know something is wrong." And all I'm doing is saying, "This is the thing that's wrong." And yes, for the purposes of making it accessible, I'm I'm going to simplify. But Drew, I'm not making it up. Even the AI is like, "Look, he's maybe overdramatizing, but it's grounded." So, I'm happy to go line by line if people want like, "Hey, give me the nuanced read on this. Give me the nuanced read on that." I'm more than happy to walk people through it. >> Mhm. But the reality is you have a screaming problem. In the last 5 years alone, the US government has stolen 25% of your wealth. And that's just the part they've taken invisibly. That's not the part that they taxed outright. Oof. I still fact out of that. Uh democratic solutions disagree. Debt out of control, dying middle class, and society resentment are fairly modern phenomena. The fundamental factors have transcended from the fall of Roman Empire to the fall of Soviet Union. They are one, the lack of participating population on common cause, demographic change versus disloyal migrants and immigration problems, low fertility rates due to disease or social class, unfavorable culture change toward insensitivity to solving nations problems. Number two, inflation due to dwindling supplies such as food and necessities and national resources. Three, political instability. Pagans versus early Christians, liberals versus conservatives, capitalist bourgeoisie versus proletariat socialist, and finally four, impractical empire size in the context of both land mass and political interest. Given the army as an instrument of political might supported in head counts and financed by the population, end of story. Unfortunately, the US has experienced in various degrees all four fundamental factors that led to empire collapse. Okay, so this is actually a really this is a great comment. So, all of that is true. Uh including the point that America is suffering from all of these to differing degrees. Ultimately, you've got to focus people on a subset of issues. People are already checking out. They They are at the slogan level. They just want bumper stickers, man. And if we can get people to focus on a thing that they can take action on so that they can protect themselves, we're going to be in a much better position. Now, everybody's going to have a thing that's like their bailiwick that they really want to bang the drum about. And so, if somebody wants to bang the drum about impractical empire size, go for it. If you want to bang the drum about immigration, go for it. I'm largely going to be focusing on the economic side, though I find all the other stuff very interesting, and at times I'm sure I will do videos about those things. And then when I'm talking about immigration, people are going to be like, "But it's money printing." So, this stuff is all incredibly complicated, but again, if you set aside the complexities for a second, and you really start looking at things like black and white, super binary, uh give me a finite number of things that I can deal with, you really can boil the world down to a small handful of things. Now, given that Ray Dalio has made so much money by paying attention to the big debt cycle. I look at that one, and I'm like, yeah, there's a ton of predictive validity in terms of a thing that I can do something about, buying assets that will reward me financially. And then once I have access to those resources, I'm in a much better position to either make myself impervious to immigration, uh to if I'm in the place that's the declining empire, and I want to go to the inclining empire, I can do so through the accumulation of wealth. So, it's like focusing people on don't let the government steal your money through inflation. Uh make sure that you can get into housing, that's critically important. So, from a thing that I would want people to focus from a regulatory perspective, all of that, it would be protect businesses, which drive the economy, and make sure that housing is available to the average person. Like, just beating that drum over and over and over and over and over, because people can do something about those things, and it will have a massive material impact on their lives. So, yes, that we could drive ourselves crazy with every video reading the comment that says, "This issue is more nuanced than what you've put into this 40-minute video." And it's like, yes, of course. Um I remember once reading a biography about Churchill, and they literally talked about the length of of grass in his front yard, and I was like, "Oh my god." Like, some things are meant to be left out. So, uh I'm trying to make things clear for people, and in making them clear, I am admittedly intentionally shaving off some of the nuance. Um, for anybody that really wants the nuance, join me for the lives. In the lives, Wednesday, Friday, 6:00 a.m. Pacific time, we cover all the nuance because we've got a much longer format. >> Hope to see y'all there. Check the Check the live out. Check the live out. Uh, LMT1701 said, "Tom, we're spiraling into authoritarianism with no help from communism. Malignant capitalism and runaway greed have caused this ruination. You're surely You're surely preemptively blaming socialism when our destruction is imminent regardless." Wow, that's bleak. Uh, so one, I like to believe that this is not inevitable and that we can pull back out of this. I think that there are a certain set of steps that we could take, even if it's simply to prolong the decline, to uh, manage it more efficiently than others have managed their decline, um, I I would be very happy. So, there are definitely systemic issues that we face, but I feel like we can point at all of those things and say, "This is what we have to unwind." There really two things that scare me far more cuz I can teach people what to do, how to avoid the impacts of inflation, but men and women becoming antagonistic towards each other is so like that will take generations to unwind, I fear. Uh, and also because the same things that caused that problem are still going to be present. It's like, man, I really feel like that one's going to ratchet up and then political division. We are in a populist moment and so this tends to be a flywheel that just keeps going and going and going and going until there's violence. And then you finally build up enough pain in the system either through revolutionary conflict inside of the country, uh, and then there just ends up being enough bloodshed in a civil war that people back off, or through Thucydides' trap, we go to war with China. There's so much bloodshed there that people again just they're so fatigued, they just want to go back to a normal life and they're willing to sort of give up on almost anything just to have normalcy again. Uh, so, yeah, I I don't want to see us go down that road. I would much rather remain hopeful and optimistic and do my small part to try to nudge people back into a sensible lane. But he's Listen, he's not wrong. We are getting more authoritarian by the day. Uh I thought both the Biden administration when you realize that the people behind him were calling themselves the Politburo, which by definition is the small group of elites that run a communist country, and they called themselves that. Uh and then obviously Trump has wildly authoritarian tendencies. Uh so, yeah, I feel their pain. Welcome to populism. Maniacosta 1560 in ancient times it was a practice of forgiveness of debt because they understood exactly what you were presenting. Get free Debt forgiveness is a pressure relief valve, but no one is willing to release the valve. Everyone wants their peace and everyone is willing to let everyone else burn if they don't get their peace. Yeah, very well said. So, this is People put a nice name on debt forgiveness. Uh Ray Dalio will call it a debt jubilee, debt forgiveness, all sounds very lovely. Uh but this is going, "Hey, that money that you loaned to that guy, you're never going to get it." And so you're like, "Wait a second, I was wealthy 5 minutes ago and now I'm not and I worked my ass off to make that money. I loaned it to that person so they could do a thing and now you're just telling me that like sorry, you don't get any of it?" So, once you understand that one person's liability, debt, is another person's asset, you realize, "Oh, snap, like to forgive this guy is to hurt this guy." So, that's why it's not going to be popular. Mhm. But, Ray Dalio talks about the solution to the debt to GDP ratio being as high as it is and growing, it's called, again putting nice words on a horrible thing, but he calls it a beautiful deleveraging. Now, beautiful deleveraging requires some debt forgiveness. You are going to tell some people sorry, you get pennies on the dollar or you get nothing. Um I think, speaking of the most sinister debt that we have is student loans that can't be discharged in bankruptcy. That's one where I I really believe that history will judge us very harshly for making homes unaffordable via inflation. And I think that they will judge us very harshly for saddling students with, I mean, 80 to $250,000 in debt for a college degree, some of which you know are never going to be able to return that lifetime. And because the government backs those loans, like we'll just keep giving them and giving them and giving them, there's no discipline that's forced into the system. Whereas if you let them discharge it via bankruptcy, all of a sudden people are like, "Whoa, whoa, whoa. I'm not going to lend for underwater basket weaving degrees. Those just don't yield the return." And I get it, feels mean cuz you're telling that person you can't go study that thing, but that's just the the reality of money, man. So, uh you need people to be disciplined. We don't want to let people get buried under debt, that is for sure. You're going to have to do debt forgiveness, that is for sure. It's going to be destructive to some people, you have to acknowledge that. You have to understand if you do that in isolation, cuz the beautiful deleveraging is four levers that you're going to pull. If you do that one in isolation, then you're going to um create a political problem for you if nothing else. So, but you do have to do debt forgiveness, you are going to have to tax the wealthy more. Uh you are going to have to do um austerity, so just spending less, and you're going to have to print money. You have to do all four of those, but they have to be done in this insanely delicate balance where you're constantly pulling a lever a little bit and then watching, pulling another lever and watching. And all anybody ever talks about is do one. And so everybody picks their favorite lever and is like, "Yank the hell out of it." Uh so we see we hear eat the rich all the time, and it's like it just doesn't work, not in isolation. It's a part of a very complicated cocktail, uh but just pulling that by itself, oddly enough, ends up giving you less tax revenue. We'll get back to the show in a moment, but first, here is the brutal truth about scaling. Most entrepreneurs don't outright fail, they plateau. And if you're stuck right now, you know how true that is. It could be that your revenue flatlines every time you step away, or maybe you're trapped in a commodity market that's racing to the bottom, or maybe you're one of the lucky people who is navigating a very complex partner dynamic that turns every decision into a battle. These problems and a whole lot more can seem impossible until you break them all down into first principles. My partners and I used this thinking to grow Quest Nutrition by 57,000% in our first 3 years alone and scale to a billion-dollar exit. And now, I'm teaching this framework to a select group of entrepreneurs who are ready to scale. Now, I want to be clear, this is not for everybody because I'm looking to work with serious entrepreneurs that already have an established business and a proven track record of execution. If that's you and you want to learn how to break through your biggest business bottlenecks using first principles thinking, be sure to apply now. Just go to impacttheory.com/scale or click the link in the show notes. Again, that's impacttheory.com/scale. Now, back to the show. Okay, Chriselle 1290 said, "Tom, you often mention owning assets. However, the only two you mention specifically are own a home and what you call gambling in the market. Could you please do a video about the different assets have a regular person can acquire them and why how they should own them?" Okay, well, let's do a micro deep dive right now. >> Mhm. Um if you look at Ray Dalio, he talks about an all-weather portfolio. So, something that's going to do well across different times and places, different economic conditions. He said he put it together so that once he dies, his family would know, "Okay, I I don't want to have to know about it the way that Ray did. I don't want to have to have all the analysts and stuff that he had. I just want to like set and forget." Uh and so, it's going to be a broad basket of goods that's going to do well in an inflationary environment, in a deflationary environment, if we're in the middle of stagnation, all of that, that we're always going to perform well, you know, call it the 5 to 7% um, over time and not have to like count on like we're in an inflationary environment or count on we're in deflationary, whatever. That you just you're going to do well all the time. Uh, Lynn Alden who we just had on the show, same thing. She's saying, hey, there's a saying she calls the three pillar strategy and same idea. It's basically an all-weather fund. So, um, she's saying you should be in um, stocks like traditional equities. She would say reasonably priced, high performing, meaning that they pay dividends, that they've been profitable for 10 plus years. She's like, that's 60% of your portfolio. 30% of your portfolio is going to go into um, hard monies, commodities, things like that. So, Bitcoin, gold, silver, um, and then 10% is going to go into um, what she not what she calls, but TIPS, which is a certain kind of um, treasury bond that is actually corrected for inflation. So, as inflation goes up, it goes up. Now, whether you need to be just in TIPS or just treasuries and bonds in general are going to get you there. Obviously, you need to be careful and that's going to be 10% and that one's designed to protect. So, in times where like things really go haywire and you don't want to have to panic sell, you want to have something that's highly liquid, you want to have something that's not nearly as volatile as the other ones. And so, everybody's just sort of trying to get you to that. Where it's like, okay, you're not going to spend all your time like thinking about this, trading. And by the way, the the majority of day traders get host. So, it's going to be the elite, elite, elite that do well. To win a day trading, you basically have to bet again bet against the consensus and be right. And so, the people that make a billion dollars in one day, I mean, these are once in a generation financial minds that see something in an exact moment that other people miss. This is not like the average thing that people do. And so, even the people that have made like a gaggle of money in crypto, it's because they were in it for the long run. So, they got in super early and then they just held. Most people can't do that, even though the best advice you're ever going to hear in the stock market is buy low and sell high. Most people buy high and sell low. It's an emotional roller coaster. Nobody can see the future clearly. So, anyway, you want something that's as close to set and forget as you can. Have enough cash on hand that you can you never have to panic sell. You can live, let's say, for a year and not have to change your lifestyle. Like, those kind of basics, blocking and tackling become incredibly important. And then, if you want to get a little more exotic, you start getting into things like crypto. And so, if you have a thesis about something like Bitcoin, which I do, then you might invest in something like that. But, if you don't understand it, like, it's probably not a great place to be. At least the stock market, aka equities, at least the stock market has shown over the last 200 years that over a long enough time period, it is going to beat inflation by like 6 and 1/2% I think is the average over the last 200 years when you look in like 20-ish year time horizons. Nice. All right, this is from Mount Brockton. You identify the problems, but give over simp- oversimplified let them eat cake solutions. Most people can't buy assets of the kind that produce the wealth like real estate. >> I I literally won't even tolerate that. That is false and this is exactly how people get themselves into the situation. That is a dumb [ __ ] statement and one of the reasons that I'm trying to simplify is everybody wants to hide behind like [ __ ] complexities and make the sound hard. Anybody can go spend $10 on a fraction of a share. This is why, even though I think that people should be angry as hell that they're forced to gamble in the stock market. The stock market is a modern miracle and for the last 200 400 years we've been able to buy pieces of public companies. Now, for a long time you had to buy a whole share and so that could be very expensive. I mean shares of Berkshire Hathaway are like I think at one point it was over $100,000. Don't quote me on that but it's like a lot of money. Now, that's not the case. You can literally buy a piece of a share. So, it just isn't true. Now, if people are talking about I want to get rich quick. Sure. You're not going to place the kind of bet that George Soros is going to place where you're able to break the back of the British pound and make a billion dollars and then do another billion dollar trade the next day with the proceeds from breaking the back of the Bank of England. I get it. But like what you can do is go put $10 into Apple. You can go put $10 into Meta. And dude, like but this is arguments like this come from people that have no money in the stock market either because they're paralyzed by fear, they're bitter, they're angry, whatever, but they're telling themselves a story that is defeatist and inaccurate. So, the thing I'm trying to drive home, Drew, even though the criticism that I'm oversimplifying is accurate, the thing I'm trying to drive home is no matter how oversimplified the following statement is, it is still factually true. If you do not own assets, you will get eaten alive by inflation. There There's no argument that anybody's going to be able to present that makes that statement untrue. So, I don't know what people want me to say. That's the only way out. Sartorius Strands, Tom is worth an estimated 400 million. He's just doing what he can to protect his assets. That's all. He doesn't care about you or any viewer. If you had 400 million, would you be such an egomaniac that you have that you need to have your own YouTube channel where you can tell all the poor people how to live and what they should believe and every other idea in your head or maybe you just enjoy your life. Funny how many super rich people there are that just absolutely can't stop themselves from telling everyone else how to live and what to think. None of these videos are for you. They're to feed his massive ego. Okay. So, everybody has an ego. So, I'm not even going to spend time arguing about that. There was a brief period in my life where I thought maybe getting rid of my ego was the right answer and if people want to go be a monk or do a heroic dose of mushrooms every day to have ego dissolution, by all means go for it. Meaning and purpose matter. Uh once you understand, no matter how much money you have, you need meaning and purpose. You need to feel like I'm contributing some way to society, quite frankly. It is an evolutionarily placed algorithm that runs in your mind. So, I need to do something every day that makes me feel like I'm contributing to the group because that's what evolution wants from me. Um it didn't have to be a YouTube channel, fair point. So, uh there is a certain amount of ego to think you can build anything. I remember when I was a little kid and was telling my family that it never had a wealthy person in it that I was going to be rich one day, they all thought I was out of my mind. And to some extent I was, but because I believed it, then I actually went down the path of getting the skills that I needed to do the thing. When you do that and you realize, "Whoa, everybody told me that I would never amount to anything. Nobody thought I was going to be successful." My mom, who always supported me, finally admitted to me that she never thought I was going to be successful. My best friend said, "Oh yeah, I just assumed you were going to marshmallow your way through life." That's a direct quote. My father-in-law, when I asked for his blessing to marry his daughter, said no because he did not think I would be able to take care of his daughter financially. So, nobody thought I was going to be successful. Then you realize, "Oh wait a second, there are physics to this. There's physics to getting good at business. I got good at business. I was rewarded for getting good at business. Then you realize there's physics to money that you can learn to invest and you can reap benefits. I've learned to invest and now I've made millions of dollars just off of investing. Uh and so you start going, "Whoa, like all of these things follow a knowable set of rules." It doesn't mean that everybody's going to win, but it does mean cuz like I'm not I'm not a once-in-a-generation economic mind by any stretch of the imagination. So my gains compared to somebody that really like gets into this is going to be extraordinary. Um and I'll explain why I do a YouTube channel in a minute, but once you realize that there was rules to this, you want to teach other people, at least I did. And so long before long before I stepped in front of a camera, I started doing something I called Quest University and I told all of my employees, um I'll teach you everything I know about entrepreneurship up to and including building a competitive nutrition company because I want you to know I care more about your success in your own mother. That was like my whole stick. And the reason I did that was I really going from scrounging in my couch cushions to find enough change to put gas in my car to becoming wealthy was insane. And so I wanted to see like could other people take these rules, run with it, and do something with their life. Now the tragedy is that I've seen that it's like a 2% ratio. You can tell people think like this, act like this, and only 2% will do it to go on and be successful. But I did that long enough that the 2% of people now I I'll bump into people that I don't even remember and they're like, "Hey, I used to work for you at Quest." Or "Hey, I watch your content." Guy literally is like 2 weeks ago came up to me at a restaurant and was like, "I don't know if you remember me. I worked for you at Quest. You gave me advice. I've now gone on, my business makes over a million dollars a year." I was like, "That is so cool. I love that so much." So anyway, I'm wired for that. I don't expect people to believe me, but I've now been on camera for 10 years. Now people can watch how I moved. People can talk to people that knew me before there were any cameras. And did I help them when I got nothing out of it other than I love to see people succeed? Okay. Now, is it ego? Yeah, of course. Like I feel good about that. Makes me feel good about myself. The ultimate punchline to life is self-respect. End of story. Nothing else matters. Uh billionaires commit suicide because they don't like themselves. And figure out what your value system is, live according to your value system. You will have your own respect. So, my whole life is geared towards that. Now, why do I do a YouTube channel? I do a YouTube channel because I the reason I got into business in the beginning was I wanted to be a storyteller. Now, I always thought it would be filmmaking, but the film industry has changed so dramatically. Video games just ate the world of storytelling. And I have since fallen in love with games and game development so profoundly that I love it more than I've ever loved filmmaking. It's It's really pretty crazy. But, there are two paths before you as a content creator. Path number one is what I call straight line. Alex Hormozi, Cody Sanchez, straight line. The thing they talk about in their content is the same thing they sell. The other way is trust building. Um I talk about politics, world affairs, economics, little bit of gaming, but like I'm in that universe. And then I will tell people, "Hey, by the way, I also have a school for entrepreneurs. Come and sign up. It's paid." Uh and I'm building a video game, which in about 2 years people will be able to buy. And it's all trust building. So, I've been viewed over a billion times. That's super advantageous. Uh people will have me on their podcast. I have an audience that will show up when I ask them to. So, all of that stuff is incredibly useful from a marketing perspective. I've never tried to hide that. I'm a dyed-in-the-wool capitalist. I understand how the game of content creation works. I understand that attention is the most valuable thing anybody could give you. Um and so, for a guy that's trying to make sure that his life has meaning and purpose, uh who understands also building a community, which matters a lot more to me than an audience, uh that that's also who you solve problems for, build things for, and can generate ongoing revenue. So, I mean, I've never tried to hide that. I've never tried to bamboozle people. Like, this is an exchange. All right. That's all I got. All right, everybody. Thank you for that, and truly thank you for the comments. I love it when people challenge me. It makes me sharper. My thinking evolves like every day. So, I'm very grateful for everybody pointing out things that they think that I'm not seeing. Well, I certainly appreciate the opportunity to clap back, uh, and see if I can convince you guys. I really, really want the best for people. I want the best for myself. I want the best for you guys. I want a lot of people to win. I want mobility. I want people to be able to fall from the top, and I want people to be able to rise from the bottom. I will be consistent on that, and I will try to put out a message all the time that is grounded physics of whatever thing that we are talking about. Thank you for being a part of this community, and if you're not already joining us for the lives, please do. Wednesdays and Fridays at 6:00 a.m. Pacific time. Till then, my friends. Be legendary. Take care. Peace. If you like this conversation, check out this episode to learn more. >> Two-thirds of Americans now say the other political party is not just wrong, but a serious threat to the United States itself. Trust in the government has collapsed to just 22%, which is near historical lows. The middle