The Biggest Economic Shift Of Our Lifetime Is Starting | Arthur Hayes on Impact Theory

This is the defining moment of what it means to human. Are we going to blow ourselves up because we couldn't decide how to share? Banks either adapt or they die. We all believe that the government is supposed to save us. Therefore, the government says, "Okay, great. We don't want to raise taxes cuz that's very unpopular regardless of whether democratic or not." If you own a house, you want what Trump wants to have have happened, right? He's going to pump your house price, too. I worry very much about society tearing itself apart. To say that he is against socialism just doesn't You didn't don't remember what happened in 2020. The United States is not going anywhere just because that GDP is at 135 or 140%. There's an immense capacity to add more debt in the US situation. If you don't like the way the situation is in the United States, there's a whole big old world out there. Leave. The economy right now feels pretty brittle to me. Crypto has dipped hard. Stocks are whipsawing. Uh AI looks like the biggest bubble ever. What What is the real force underneath all of this? And is the economy about to break? I know most of the listeners here from the United States, and I think that there's been a lot of discussion of the the the K-shaped economy. There's a very small percentage of people who are doing very, very well. And then the majority of Americans, if you take a look at some of the consumer sentiment surveys, think this is the worst economy since the '70s, even worse than the the global financial crisis, you know, when it looked like the world was going to uh implode on itself because of over-leveraged American subprime mortgages. And the question is like, why is that if, you know, GDP supposedly real GDP is growing at 3% a year, um supposedly people are making more money and all these sorts of things. And I think the name of the game is inflation. People really feel inflation. And I know that the authorities in the United States and around the world like to say, "Oh, the the year-on-year change is either decelerating or it's in deflation." But, you know, everyday people don't give a [ __ ] about the rate of change. They care about the act- the actual price level. So, like, how much does stuff cost right now? How much did it used to cost? Did my salary keep up with that? How do I feel about this situation? And obviously the answer is that majority of people in the United States and around the world are like, "I'm getting inflated away. I afford less than I used to. I need to buy all these things just to have a job, whether it's a cell phone, or it's a car, or it's a type of dwelling that I live in, or it's child care, or all these sorts of things. And you know, I look on social media and I see all the influencers are partying like it's 1999, but I'm broke as [ __ ] and I'm working, you know, one, two jobs and I'm barely treading water. And so, I think that's why a lot of Americans and a lot of people around the world feel this sort of apathy and disillusionment with this supposedly amazing world economy that we have right now. Mhm. Okay. So, walk me through. How did we get here? What is the driving factor? There's a lot of different um theses about what exactly put us in this position. I certainly have one. My audience will be very familiar with my take. Uh but walk me through what's driving all this. I mean, at the end of the day, it's all about money printing. Every single economy in the world is essentially a fractional reserve banking system with this sort of Keynesian economic bent, meaning the government's supposed to spend money to incite demand. And if there's ever a situation where there's too much credit or too much um over-leverage, then the government comes in and saves those who are the bad actors in the economy, prints a bunch of money, and then we eat, the party continues. And if we keep doing that over and over and over again, over time inflation builds up. And, you know, what an average person needs to be able to afford on an average salary, they no longer can. And, you know, pick your country, the average first-time home buyer is much older than they used to be. Household formation is down. People are having less kids. It's all the same symptom of the same thing. We all believe that the government is supposed to save us. Therefore, the government says, "Okay, great. We don't want to raise taxes cuz that's very unpopular regardless of whether democratic or not in terms of how people express their opinion politically. We're just going to print a bunch of money. And if you don't own financial assets, then you're screwed, essentially. And it And that compounds. If you've been doing this since, you know, the end of World War II, you know, uh 80 years ago, we get to this situation today where, you know, the average home buyer in the US is what, 40 years old? Is it 40 year Is it a the first-time home buyer is something something in that where it used to be, you know, mid-'20s in, you know, the '60s and '70s. At least in the United States context, it's literally just a symptom of of printed money. This is something that I don't think uh people really take on board in terms of going back to the what you were talking about with the K-shaped economy. Um that's what really got me thinking about all of this. I I wouldn't have been able to put words to it, but it just felt like there were two separate economies now that I do know how to articulate this. And you've got one, the people that understand that if you have an inflating currency, that where I'm able to buy less every day, and there is a way for me to escape it, then savvy people are going to go wherever that escape hatch is. And that means getting into something that has um is protected against inflation. So, assets to oversimplify, and right now, the stat that really drives me crazy is that 10% of Americans own 93% of the assets. And so, when you get a moment like this where so much liquidity is sloshing around because um the government, or the Fed, I should say, to be more specific, is just not raising rates. How do you think we have to factor fiscal dominance in this to really understand what's going on? Well, I think the underlying problem is that it's not all the government's fault is that nobody wants to take the hard medicine. In the 1930s, and whether or not you think this is was the correct thing, for a little bit of time after the the Great Depression, which was a credit-fueled boom, the thinking was, "Okay, let's let the amount of credit contract." People lost their jobs. Businesses went under. They had the keys handed in to the creditors at banks and, you know, different industrial companies. And the the medicine was there, and the US econ- US and global economy contracted a lot. And it was a Great Depression. But again, it was the hangover from the the '20s in the early 20th century when there was all this sort of money printing and activity. That sort of situation, obviously, you know, Herbert Hoover was a a one-term president because of that. Um Meaning because he was being fiscally responsible and not just continuing the party, they booted him out of office. It's one of the one of the one of the reasons. But again, at the end of the day, it's very unpopular. And so, I don't care whether it's the United States or you're talking about China, which is, you know, a different type of political system, nobody wants to be the politician that stands up and says, "Okay, whether or not this was your fault, maybe you're only 18 years old, and this is a result of decades of fiscal irresponsibility, we're going to stop it right now. No more credit. If your business doesn't have enough cash flow to generate to pay its debts, too bad. You go out of business. You fire your workers. We're going to create contract the economy, get back to a healthier level, and then rebuild. And, you know, unemployment is 20, 30%, whatever, some ridiculously high number. That is not winning you an election. The Or that is not going to keep the average person supporting you as an autocratic leader. So, you say, "Okay, what's the path of least resistance?" It's "Hey, I hear you. Things are expensive. Here's a check. Don't worry about how it's funded. You don't have to pay any more taxes. We're just going to hand out money. And you know, for your bills here, your health care there." And then it just makes the situation even worse. Because nobody's willing to stand up and say, "Okay, today is the day it's over. And unfortunately, you are you are where you are, and some of you are going to be losers. Some of you are going to be winners. But over time, this is going to be the best way forward for um the you know, our particular country." That just is not a winning political strategy. I don't care what type democratic or autocratic government you have. And therefore, we get what we have today. The way that I think about this is uh parent who's uh 14-year-old wakes up with a severe hangover, and the parent is reaching up into the cupboard to get the medicine and is like, "Listen, you brought this on yourself." Cracks open a bottle of vodka. Uh starts pouring it into some orange juice and is like, "You know, but I feel you. I get it. Uh so, here, drink this, and you're going to feel so much better." And because people do not understand how the economy works, they drink it down. And it does sort of push off having to deal with the hangover, but it is going to come for you. Like, eventually, you either become an alcoholic and you die of cirrhosis of the liver, or you eventually get sober and you have to deal with it. When I look at the economy right now, um I really try not to be an alarmist. I understand it well enough. I'm going to be okay. Um but I really don't like the sense that a lot of crypto people have where it's like, "Well, I know how to escape this in an un inflatable currency. Uh I've got a life raft. It's available to all you guys if you want it, but they will never cuz they they understand it." And so, I have this pull to really want people to understand the mechanism by which this works, and I want them to understand how fragile the economy is, all because of that very simple statement that you made about debt and money printing. And the fact that nobody, regardless of Democrat, Republican, um dictator, democratically elected, no one says austerity, everyone says print money. Do you think that I am uh I've taken one too many black pills, or do you think that I am seeing it correctly, but I should just stop worrying about it and learn to love the bomb, or what do you take away from all that? So, I mean, I think you contextualize it um well, but there are ways out of it. And I think the AI dream for a politician is the only one of the only ways out, which is we're going to create so much productivity and abundance that this debt doesn't really matter. We've taken all the all this debt, a lot of those wasted, but we created these AI companies, and then they created this magical thing called AI, and, you know, human or robotics, and all of a sudden, the cost of labor is essentially zero, uh and the cost of intelligence is essentially zero. So, I know, but I don't think they realize the problem that that brings for a fractional reserve debt-based society that we have, which is when the average investment banker and lawyer and accountant the most, you know, vulnerable people to AI are those who make the most money today, who have the most sort of like um debt, right? They have a house, they have a car, they don't have a, you know, a rolling credit card bill to the fourth and nice stuff that they're supposed to have that TikTok tells them that they need. Um when you fire those people first because, you know, that's the easiest thing to replace uh in the first iteration of AI, and they can't pay their bills, and what happens to the entire when the when the 9% of the 10% who own all everything can't pay their their bills because they lost their job because you don't need investment bankers and lawyers and accountants when an AI can do it for free, essentially. Well, then what happens to the system then? What happens when you have, you know, five companies who you spent all this money, you created the god AI, they have all this power, they've created all this abundance, are they going to share it with everybody else? They don't need any other workers anymore. What happens to everyone else? Is it just going to be, you know, Mark Zuckerberg and Elon and Bezos and Altman sitting in the club, and everybody else is starving because they said, "Well, cap- uh capitalism and property rights says that I created this, I invested. [ __ ] you. I took your data, I made it, but, you know, you didn't invest in my company, so you don't get to you don't get to experience this abundance post-scarcity world where we've, you know, eliminated the national debt because it doesn't matter anymore because we have robots and AI." I think that's what the conversation people should be thinking about in their head, the whole debt-based financial as economy. I think that's a post-World War II, the last 80 years. That's the last war. People are fighting that. What they should be thinking about is how do we reform society to share what is going to be created by these either supernational, you know, tech giants, this AI and robotics, this abundance that was based on our human data to create this. We're not getting compensated for that as a society. How do we share that? That's the conversation that people need to have right now rather than, "Well, what are we going to do about the national debt?" And I think if people start having that conversation and thinking about how they're going to reform political systems to deal with that, that is the next big risk. It's not whether or not, you know, the US or Japan or China or Europe can afford the debt. They can print the money. There's various ways to reduce your debt to GDP. It requires lots of high inflation, but I think that the real risk that people aren't talking about is what happens when we don't need everybody, or 20 or 30% of people anymore, especially the 20 or 30% of people who made the most money in the previous system. What happens when they're irrelevant? We'll get back to the show in just a moment, but first, let's talk about the most expensive mistake crypto traders are making right now. 70% of US crypto traders think tax obligations only apply to centralized exchanges. If that's you, you are wrong. Unfortunately, most people do not realize every crypto-to-crypto trade is taxable. 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The problem is that when you drive energy and labor to zero, um you, as you pointed out, you start obliterating a lot of jobs, and that isn't going to be instantaneous. That's going to happen over time. You can have a meaning and purpose crisis, and you're going to have a bunch of people that um will expect a government handout. Like, in the short term, I don't know, there'll be something where uh first, the wealth is going to accumulate to the owners. Then, we'll deploy all the things because I don't think there's any reason for the um bots and all of the energy to accumulate to the top. It's not sustainable. They will literally be murdered. So, uh the people that try to hoard that, there'll just be way too many people struggling. So, their first act of self-preservation will either to be to create a military, which I just really doubt, or to start deploying some of the abundance out to other people, but it's the transitionary phase where it will exacerbate both financial hardship and psychological hardship, which will lead to deeper fractures in society. America is just extremely prone to this. Europe is is like a powder keg right now. So, any sort of downward pressure, and you're going to get this, I think, very explosive response. So, it's like, even if you believe that AI is going to do all the things, AI doing the things is a problem unto itself. So, that's where I'm like, "Okay, you're going to take a a system that is economically fragile, and you're going to make it psychologically fragile, uh and if you think that it's going to be hard to get people to migrate into an asset class that would save them from this, I think it's 10 times harder to get them to uh or austerity. It's going to be 10 times harder to get them to understand that we have to completely reimagine nation-states and uh what an economy looks like in a post-scarcity world. Like, that is 10x more daunting to me. I think that's a going to come faster than we think. It's going to come faster than the debt doom loop that I'm sure that a lot of people will talk about, "Oh, writing a trillion dollars of this and that." Okay, cool, but what happens if we fire 10% of all of the most highly paid workers in the next 2 to 3 years because, you know, Anthropic can now do the job of a junior investment banker who was making $150,000 a year for $10 a month. I don't need an entire class of JP Morgan and Goldman Sachs and Bank of America analysts anymore. I don't need junior lawyers. I have an entire corpus of precedent all in machine-readable format. Do I need an an an associate at a law firm anymore? Do I need a CPA? It's just codified rules. They can follow them perfectly. So, all the jobs that people were telling their kids, "Oh, go to university, spend, you know, get yourself a quarter of a million dollars in debt to get this degree to do this professional career," that's over. You don't We don't need those people anymore. Why am I paying you $2,000 an hour? And I think that's going to happen faster than people think, and this conversation about what do we What is society? What does it mean to be a productive human? This is a something that people have to think about because there's going to be political leaders who are going to emerge to preach their own version of this, whatever that may be. Some of it will be very militant, like, "Fuck the computers. I will watch humanity first. We're going to go back to what the the way things were when everybody had a job, and everybody had purpose, and all that sort of things. You know, get rid of all this AI." There are going to be those that, "Oh, no, AI can solve everything. Just hold on a minute, we got this." And so, I think that's going to be the contentious debate, and it's going to happen way sooner than we talk about whether or not the United States or China or Japan can afford to pay the interest on their debt. Okay, so your bet is that that happens so much faster. So, let's say that my timeline is roughly correct, that it's 10 years before we buckle under the weight of the debt, you're saying 2 to 3 years, maybe a little bit more, and we have to contend with massive economic disruption from AI. Yeah, and it's I mean, it only takes about 10%, right? If you could eliminate 10% of the highest paying white-collar jobs, which are very formulaic and easily replaced with a very intelligent LLM, well, these are the most politically active people. What are they going to decide to do with society? Is the rest of the society that, you know, still has a job because they flip burgers to be a bit trite, and the robot can't do that yet, so they actually have a purpose versus the investment banker who went to, you know, XYZ Ivy League school, making $150,000 out of school. We don't need any We don't need him and her anymore. We do need the construction worker, the nurse, you know, the policeman. We need those people still, but they weren't that politically important in the old system. And now these people have been disenfranchised, what are they going to decide to do with society? And is the rest of society going to support them in what they believe at this post- scarcity or just 10% more efficient society looks like without the wealthiest folks. All right, let's extrapolate an answer to that from where we are today. So, there are certain things that we know in terms of how people respond, the way the people are responding to I can't make ends meet is is hyper gambling. So, they are not being fiscally responsible, they're not buckling down and saving, they're going on every gambling mechanism that they can find from Polymarket, sports betting, Pokémon cards. I mean, just literally at crypto, shitcoins, Bitcoin, Ethereum, like all of it is, in my opinion, and again, I am happy to fight about this stuff, but I think the only way to intelligently understand the markets is to think of them as gambling. Once you understand that humans step to them as gambling mechanisms, by and large. I'm not saying that sophisticated value investors are doing that, although yes, I actually I am saying that. Some I will concede that point isn't going to be the part that I like fight people on cuz that gets a bit semantical, but just in general, I think it is undeniable that that's what people are doing. So, we know that people are going to go into a gambling scenario. We know that right now over-educated people that are um underemployed are leaning towards, let's call it socialism. The left-leaning variant tends to be more popular among hyper-educated, underemployed people. And so, you put those two things together and it's like, okay, you're going to get some ungodly number of people that are like, all right, well, my only shot then is to gamble. And then you're going to get some ungodly number of people that are like, um not only am I going to gamble, but I want the government to give me the money with which I'm going to gamble. Um what say you to that? Do you think that is what we see in the tea leaves or do you see something different? Yeah, I think there's some variant of that and it's, hey, the mom dannies of the world, all all these things that we, you know, socialism is not a new concept, it's a very old concept. There was this dislocation. We have this thing called a money printer. Instead of dealing with the hard conversation with society of what it is to be a productive human, how do we share this abundance that we've created with this new intelligence? We're going to just print a bunch of money to paper over the problem because we don't want to deal with it cuz it's too hard to have this conversation. And yes, you get the hyper gambling mentality, which is I got a little bit of money, however I got it, maybe my parents gave me a little statement. I'm getting the government check, you know, universal basic income, whatever it is. I'm going to the stock market, I'm going to meme coins, I'm going to crypto and and and what have you. And yes, S&P might be at 20,000 and Bitcoin's at a million and it's all the same sort of theme. It's we don't want to deal with the problem, so we're going to print a bunch of money to mollify people until [ __ ] gets so bad, whether it's, you know, a bunch of young people in the streets protesting, violence, whatever it is, until we're going to have this cataclysmic conversation about what it means to be a productive human. Why was Margaret Thatcher able to pull this off? Like, what are we missing right now or structurally, what is different? Um because in the '80s, Margaret Thatcher was able to say to England, all right, like we got to tighten the belt, we got to do less, otherwise we're not going to make it or I don't know, she had some sort of convincing message. China. China was the deflationary impact that allowed the West to sort of de-leverage themselves and do these neoliberal policies, whatever you want to call it, and not suffer inflation. China shipped you the everyday low prices at Walmart and gave you all these great things super cheap because you essentially added, let's call it, half a billion people, very productive youngsters, to the global economy to make stuff super cheap. China was willing to degrade their economy beyond anywhere beyond, you know, produce the solar panels, produce the rare earths. Um they don't produce energy, but um all these things that they degraded their uh their local environment so that the West could enjoy the '80s to the early 2010s. That was all predicated on the Chinese entering the workforce. Unfortunately, you know, policymakers don't like to acknowledge that that's really the reason why they're able to pursue these policies and not blow up their economies. Hm. All right, so there's no new China >> right? There's no We don't We don't have another 500 million young people or another country willing to degrade its environment to the to the extent that China did for the first part of its, you know, grow up phase in the '80s and '90s. Uh right now, we have a different sort of problem and a different sort of situation. It's interesting. Um what do you think India entering the market is going to look like? Are they um already so plugged in we're never going to feel anything from them? Are um are are they going to be felt in a unique way? Well, I think it's a this right now it's a story of robots, right? Even if India plugs in, if you want if you think about I'm a manufacturer of some man you know, I own a I'm a big shareholder in a textile company. And you cannot beat how efficient China is at producing things. Just cannot. There is no other country that has the infrastructure available, the amount of labor and and the installed robotics um base that China has. And so, I don't care if you have India, you have Vietnam, Malaysia, Mexico, all these other places, which are essentially low-cost manufacturing centers, do not have the ability to have the infrastructure of China. And so, this isn't a story about adding a bunch of low-cost workers, it's how many robots per 100,000 people do you have for installed? Uh what percentage of your factory is mechanized? Because okay, sure, India can add a few hundred million young people to the labor force, but China has built a billion robots. Same with Japan. These robots are infinitely cheaper than than human, regardless of where they're at. And so, I think that that story of, okay, we're just going to repeat what China did in the '80s and '90s with India, with Nigeria, with Indonesia, all these growing young populations, is just not happening because we have robots and we have AI, we have these advancements. Human labor is going to be obsolete in a lot of these things that we did in the past. Ooh, okay, well, then let us face AI head-on. So, we've obviously already talked about a huge part of the puzzle, but we haven't talked about the economic part of the puzzle. What happens when AI is a better investor than anybody else? And so, you and I are like, we understand this stuff, bro. We're we're going to keep being rich all day. And then we get an AI that comes in that is loaded up with crypto and it just goes and does its thing. Does What does AI's impact into the competitive nature of the financial markets look like? I don't believe that AI is any better or worse than a a human investor. Every like today, sure, but in 5 years? Well, what is the market? The market is essentially a discounting tool for human preferences and scarcity. Right? And so, if we remove this is just going to Is it going to be better at predicting human preferences than a human? Yes. >> But if you are a This is already the case. If you're an investor and you're like, I'm going to be a day trader, right? And I'm going to go up against, you know, Citadel and Jump and DRW and all these massive Goldman Sachs and all these trading firms that essentially use very intelligent computers to do all of their trading, you're already losing money. So, it's not like this is a new situation. If you think that you're going to day trade yourself into, you know, being the best being Warren Buffett, I'm sorry, but there is a computer out there that is better than you, faster than you, smarter than you. What you have to do as an investor is say, okay, there I believe in a future where this particular product or service gains traction and therefore I'm going to buy and hold this stock, this crypto, this whatever, and over time I'm going to make money. But to be a systematic short-term trader hasn't been profitable for a retail investor in a very long time, and it won't be profitable when AI is there, either. So, I'm not exactly worried about that particular outcome. I just think that's the sort of style of investing that is suited for a lot of individual humans. Like pick something and just buy and >> can make you scared. So, we we just talked about that one of the things that we see right now today is when people are not able to have their income keep up with the cost of living, they go to hyper gambling. Uh you give them stimmy checks, they hyper gamble the stimmy checks. So, now, you are correct, They would be unwise to go into the markets and hyper gamble, especially given the AI is already better than them at that. Five years from now, AI is going to be really better. And by the way, the AI is going to understand how people respond to algorithms, how to sway algorithms. And so the AI is going to put out messaging that will humans will respond to. The AI is going to understand what I certainly understand, which is that markets are effectively entirely sentiment driven. And so now, AI manipulates sentiment. Humans hyper gamble against that sentiment. AI laughs all the way to winning at all the PvP stuff. Now, anybody who understands better will back off and go, "Listen, I play a long-term game. I'm not going to be able to beat the AI, so I don't even try." But my whole thing is there there is a generation, and I don't know if that generation is 2 years, 5 years, 10 years, probably not much more than 10 years. But there's going to be a 10-year span where we go from uh energy cost is racing towards zero, labor cost is racing towards zero, and everybody settles into the age of abundance. And in that period, oh dear god, AI is just going to hand people its ass in the same way it beats us at chess, in the same way it beats us at Go. It will beat us at the game of short-term investing. It It will just crush the average investor. Humans can already crush the average investor. And so you have this tiny number of people >> doesn't change anything. It's Okay, instead of Ken Griffin making $16 billion a year, it's some AI model. Do we care? Not really. >> Griffin becomes Ken Griffin becomes the [ __ ] that's getting his ass handed to him. So >> really. I mean, it's just like who who's going to take who's going to extract this vig from the desperate retail? The desperate retail is there. You know, that's what we should change rather than saying, "Well, the AI is going to beat you at stock investing." Well, Citadel is already beating you at stock investing and Robinhood and payment for order flow and all these micro structural things were already [ __ ] you. It wasn't like the AI is going to change the situation. You still were going to lose all your money in 5 seconds if you want 100x long, right? It just doesn't matter whether there was an AI on the other side or, you know, pick your large institutional investor. That was already happening. So we're just changing who makes the money potentially. It doesn't matter. What matters is just don't play that game. You already are losing it today when there was a little bit of AI. You were losing it yesterday and there was no AI. Understand that and just don't do that. I think that's got to be the message rather than, "Oh, let's freak out about the AI is going to be better at stock at stock picking." It's going to be better at being Citadel. But the money is still going to just go to that particular bucket. We'll get back to the show in just a second. But first, let's address the uncomfortable truth about business ideas. Ideas are worthless unless you actually know how to execute. If you're ready to make 2026 the year you stop being most people and actually start your business, then Shopify is here to help. Shopify gives you everything you need to execute well and sell online and in person. Choose from hundreds of beautiful templates you can customize to match your brand. Their built-in AI tools write product descriptions and headlines and help you edit product photos instantly. Marketing is built in as well. Create email and social campaigns that reach customers wherever they scroll. As you grow, Shopify is going to grow with you. This is your shot. Entrepreneurship has never been more important or available. So sign up right now for your $1 per month trial and start selling today at shopify.com/impact. Hear your first sale this new year with Shopify by your side. All right, let's get back to the show. Let's talk leverage. So one, will AI influence the rate at which leverage is available? I don't know if there'll be any impact there, but I've heard you talk about AI's interaction with leverage before. Um so I'd love to know that. And then, I would love to dovetail into the fact that Maelstrom, your company, does not use leverage, which I think is super brilliant. And so I'd love to get your take on those two aspects of leverage. Well, leverage will become more and more available as sort of the types of financial products proliferate that, you know, especially the the thing that I invented with BitMEX called the perpetual swap. It's a highly leveraged derivative that we invented in the crypto space. That's coming to equities. It's already started on some decentralized platforms. And it's going to become ubiquitous. Instead of trading a futures contract or an options contract that, you know, we're familiar with, it's going to be a perpetual swap on equities, on bonds, on crypto. And that is going to be very highly leveraged and and gamified. What people need to understand is, and I tell these people, there's nothing wrong with leverage. The problem is that people are not dedicated professional traders. And when I say professional, I don't mean that you went to a fancy school and you got a degree that made you a professional trader. I mean that this is your job. You live and breathe the market that you trade. You are on your phone all the time. You've got alerts. You go to bed, something happens in your market, you wake up and you deal with it. That is a very small sliver of traders. And if you dedicate yourself to this craft, you can become successful. What people don't want to do is they want to become successful without dedicating themselves to the craft. And so they want to work their job, do their passion, whatever it is, go on their phone for a few hours a day, trade for trade, use the leverage, make enough money to survive, and then that's it. And that's just not how it works, right? It's not The market doesn't provide you profit just because you got off of work at 6:00, you've got dinner at 8:00, you got 2 hours to make your money. That's just not how markets work. Markets work however they want to work, and they'll provide the profit whenever they want to provide the profit, and you need to be there studiously looking at things to be ready to accept it. And so I think people don't understand that. They don't want to put in the 24/7 365 mentality of trading. They want to trade 2 hours a day and make money. Therefore, they jack up the leverage. They approach it like they went to the casino. And what do you know? They get liquidated all the time. When you should never ever get liquidated as a trader if you use leverage correctly. And so my advice is, unless you are willing to dedicate yourself to being a professional trader, that this is your job, then don't use leverage. Long only. Pick things you understand, whether that's crypto or stocks or real estate or FX, whatever it is. Pick something you understand. Go long, and you don't have to worry about these sort of things. And over time, if you are studious and you buy things that you understand, you should do okay. All right. Again, that's not a sexy way to think about things. It's It's Well, it it is sexy for anybody that wants a long-term relationship. So for me, from a, you know, this is sort of the the Squares equivalent of dating advice. Instead of trying to bag chicks, it's I want to fall in love and I want to get married and I want to, you know, have something that is prolonged and has meaning and purpose and all that good stuff. So I I'm right with you. That is the eternal advice that I will give people. Now, for somebody that wants to do the fast and furious uh dry humping of the leveraged uh trade, how do you do that well? So you gave us the you've got to be 24/7, totally understood. Um is there cuz there was a recent event where somebody got liquidated like just some ungodly 6,000 Bitcoin or some terrifying number. Um what did they do wrong that we can all learn from? So you know, position sizing is the number one thing. Like how big is your position relative to the underlying liquidity? There's a big risk off event in crypto on October 10th. Um started at Binance and spread to a bunch of other exchanges. And it's actually what a lot of traders didn't understand the product that they were trading. They didn't read the information that was given by the exchanges about how these things worked. Something happened to the micro structure of the market, adversely affected their positions. They didn't know what to do because they had never thought about it before. But it was all written down. Been there for years. And so again, study your craft. Are you a professional trader? Yes. Okay. Well, then you better know every single way that your exchange operates, right? People in the stock market found out during the the GameStop crisis what settlement meant, what a DTC mean, how do these things interact with the exchange and the broker and, you know, your your trading app. Why were you locked out of the stock? Why So if you want to play the game, know the rules. Study the rules. Understand the rules. If you don't understand the rules, ask customer support. They want your money. They want you to spend time and effort on this app. If you don't understand something, ask them. And they're going to explain it to you cuz they want you to trade and pay them fees. But if you don't ask questions and you just ignorantly say that everything's going to be okay, then, you know, over leverage things happen. Certain policies that the exchange has you didn't read about kick into effect, and all of a sudden you find yourself liquidated, you don't know why cuz you didn't read, cuz you didn't dedicate yourself to what you're supposed to do as a trader. You should never ever be liquidated as a trader. That just means you didn't understand what it is you're trading, and you didn't size your position correctly. What are the things that people don't understand? How fast the market moves or how much collateral they need? What What's like the common mistake? Uh I mean, so specifically this last incident in the crypto space, there's a thing called automatic deleveraging where because there was um more losses than profits, some of the traders who had profit had to get their positions closed early. And some traders run these long short strategies where they're losing money on one side, making money on the other. Well, what happens when the side that you're supposed to make back a, you know, more than you lost gets closed out early, you don't make all that profit. All of a sudden now you have a loss. And people thought, "Well, what is this thing?" Well, it's been written about for I mean, I almost invented it 10 years ago. And people didn't read this stuff when I wrote it then. They don't read it now. And CZ and the other crypto guys write about it on their own platforms. So, again, it's you're trading a leveraged product. There are ways in which that leverage is created. Understand how that leverage is created. Understand the math. Understand how the exchange polices that leverage and how it protects itself with its margin system, how the clearinghouse works. And I mean, I'm sure a lot of you are like, "Whoa, this is a lot of information that I don't know, and I'm using these leverage products. I don't know if I want to expend this sort of time and effort to really go deep on this." Well, then don't use leverage. Just buy and hold. It's as simple Okay, so um punchline being that leverage is basically for the professional trader. Um you've already >> Professional being on effort, not on knowledge. Effort. It's all about effort. Very fair point. Um so, given the moment that we're in, given that you've got 10% of people that own 93% of all the assets, how can somebody today that doesn't want to trade on leverage, how do they get into the market and not feel pre-defeated by the fact that they don't have a lot of money to spend? And now, if you're telling them leverage isn't for you, um what's the play? Time and compounding interest rates. Uh so, I had a I had a I was having a conversation with a friend and he happens to be a lucky soul that has access to a rent-controlled apartment in New York City, and he was saying that rent's gone up, I think, since the '70s three or four times, whatever it is. So, if you break that down and look at the compound annual growth rate, it's about 2 to 3%. Right? So, a 2 to 3% compounding on a dollar gets you three to four times as more money over time in an exponentially increasing fashion. So, I think people need to understand very basic the compound interest rate and time works in your favor if you're patient. If you're not patient, then those things work against you. And so, yes, in the beginning it might look like, you know, the hockey stick isn't going anywhere. But then you hit an inflection point and then you go like that. And that's the whole point is to be able to survive long enough to get to the inflection point. Invest responsibly. Invest in things that compound over time, even at a small rate. Even 2% compounding inflation has taken the value of the dollar down 99% since 1913 when the Fed was created, right? So, compound interest rate and time are your friends if you use it that way, and they work against you if you use, you know, aggressive amounts of leverage and you're impatient. And so, I know it's not the most sexiest message, but patience, time, and interest will get you to where you want to be. Yeah, I'm not worried about the sexy, I'm worried about the effective. I I really do consider myself a uh evangelist for trying to help the average person. Like, the people that already understand the market, there there's plenty of people for them to listen to. I'm trying to speak up for the person that never uh wanted to understand this, never thought they would need to understand this, and they're just not able to get ahead. They can't afford a house, like all of that stuff. Uh so, yeah, I want whatever is true. >> other thing that people instead of instead of believe having the market do this for you, get politically active. Why are you supporting the same politicians, Democrat, Republican, pick your political flavor in depending on which domicile you're in, who continue to [ __ ] you with inflation? Stop supporting them. Just because this guy or girl has the right last name, went to the right went to the right school, wears the right clothes, oh, I need to support that person. They're [ __ ] you. Change it up. And so, yes, you can say the market needs to save me because I'm unwilling to ditch all these politicians, regardless of the party, who over many decades have continued to [ __ ] me, but I need to go and leverage the market instead of you know, using this thing, my voice, my political activism. You know, we have this thing called the internet and social media. You know, people can line up for hours outside of a Louis Vuitton store, why can't you get politically active and boot out all these guys and girls who are continuously [ __ ] you? Yeah, you're not wrong, and I have said something along those lines myself, but I do feel a little bit hopeless when I talk about that because the very nature of a politician is to gain and retain power. And you have been very eloquent on the hard truth, which is that you don't get elected by promising austerity, you get elected by promising free [ __ ] and free [ __ ] is exactly how you end up in the position that we're in now. So, that one, maybe of all the options, feels the most hopeless to me because I don't think that anyone will ever get elected that is sincere about austerity. So, Trump broke my heart when I realized, oh, he was never going to balance the budget. And when he put forward the big beautiful bill, I realized, oh, it's game over. Like, this is just a question of degree. So, maybe the Republicans spend a little bit less than the Democrats, uh but fiscally, they're both wildly irresponsible. So, when you look at the next 3 years with Trump in power, what do you see? Is it just money printing as far as the eye can see? Are is he going to be more like is he going to be more effective at generating growth than the next person? Um what do you see? So, let me technically speaking, you can generate growth, reduce the debt to GDP, and balance the government's balance sheet by going to, you know, a hypergrowth scenario, but it's inflationary, right? And so, again, you need to have the right kind of job, maybe it's a union job or whatever where you're able to negotiate high pay raises, or you need to be in financial assets in that situation. Like in the COVID area era, right? You had a lot of these unions that have been dormant for many years being able to negotiate 30, 40, 50% pay raises for the workers during the COVID because everybody needed them at that period of time, and they had the had the power. And if you take a look at the years from, you know, 2020 to 2022, the US debt to GDP actually declined because they ran this hot economy model. Again, it produced a lot of inflation, which pissed a lot of people off, but that is the way in which the textbook way, and Trump investing and sort of trying to say this, if that's what they want to do, that you can deleverage the the government's balance sheet, which as politicians who work for the government, that's their number one job is to deleverage their own balance sheet. And, you know, sorry for the inflation that we we generate. I hope you have a good job and you bought some financial assets. That's what they're going to try to do. And obviously, you have the Mom Dannys of the world on the left who are like, "Hey, I can I can produce better free [ __ ] rhetoric than you, Trump, and therefore I am going to, you know, win the mayoral election in New York and state elections in, you know, Virginia, New Jersey, and all those sorts of things." So, Trump is a not ideological politician. He wants to win. Uh he is the most prolific president since probably, you know, ever. He lost his stimulus checks. He can't appeal He was the first president to hand out money directly to every, you know, household, like 200 million households. No other president has done that before, like Trump has done it. So, to say that he is against socialism just doesn't You don't don't remember what happened in 2020. So, he's going to do something similar again because it's very popular. And then the question is, okay, well, if you get a stimulus check for or whatever it is, whether it's your house price goes up or there's a check by the government, how are you going to make sure that you leverage that money in the most effective way if you're not going to advocate for change, fundamental change in the political system? And then that is, okay, well, it's it's Bitcoin, it's a house, it's S&P 500, it's whatever it is you feel. It's gold, right? It's these sorts of things that you feel comfortable with, but Trump on one side, Mom Danny on the other, they're kind of saying the same thing. They have different styles in which they say it. Um whether or not you support them or not is not the the point. They're both kind of saying the same thing. And I think once you will realize that, then it's like, okay, well, I'm going to get this money from the government, instead of going out and buying a new washing machine or, you know, going to Vegas or going on vacation, how do I make sure that I parlay that into, you know, above-trend growth in my financial assets? All right, if we know that the government is going to print, if we know that Trump is doing everything he can to drive interest rates lower, and we know that both of those things are inflationary, they will drive up asset prices, they will make houses more expensive, they'll make rent more expensive, on and on and on, what does the world look like as that easy money continues to flood the system? I mean, S&P 10,000, Nasdaq 100,000, Bitcoin 1 million, gold 15,000, right? Pick your asset, they're all going up. Maybe some go up more than the others, um but that is the the state of play. And so, then the question is, how do you take whatever savings that you have and buy one of those things, whatever it is you feel comfortable buying, because those are the things that are that have to go up as a release valve for let's run the economy hot, let's allow wage inflation, uh let's reduce the debt to GDP on the government's balance sheet. Okay, so, you've talked about how Trump would effectively take over the Fed. Um how does he do that? Cuz right now, obviously, he's not able to get the things done that he wants to get done. So, how would he pull that coup off? And in a magical world where you have a wand, and you can either help him or stop him, would you help him get control of the Fed? Is what he wants what you want to see happen, or would you stop him? So, I have answer your last question first. I'm a financial asset holder, so I want what he wants. I want cheap money. I don't want it to be plentiful, right? I own the things that are going to go up because >> Yeah. because this works, right? So, and you know, that's that's just the the truth of it. If you own a house, you want what Trump wants to have have happen, right? He's going to pump your house price, too. Now, the the situation is, you know, how does he gain control of the Fed? So, first of all, every single US president since the Fed has been created always gets the monetary policy that they want. This is not a new phenomenon where the you know, the president and the chairman of the Fed are are budding heads. This is not new. And always the Fed chairman, whoever that is, caves or the Fed as a political body. There's a great essay written by Arthur Burns in 1979, The Anguish of Central Banking, where he essentially says that because the politicians want to provide this free money to do stuff for the people, cuz the people have elected them to do this, we as a Fed, whether we like it or not, are there to facilitate that. And the the thing that will let go is the value of the currency and sort of responsibility of you know, what is the value of the dollar. And we will always do that. And this is essentially the message that he said. This is in 1979. So, people need to do a little bit of history in terms of understanding that Trump, Biden, Clinton, Obama, Bush, Reagan, they all got the monetary policy that they wanted in the end. And so Trump will get it. I've written an essay called 47 and we and I talked about the bureaucratic machinations on how Fed votes and how you get control of this board versus that board. Maybe he does something like that. Maybe you know, everyone in the Fed is convicted of mortgage fraud and he replaces them all. I don't know. It doesn't really matter. All I know is that there's there's never been a president who's never gotten the monetary policy that they desire. Trump will get his monetary policy. How long it takes? I think sometime in you know, second half of 2026, he'll get you know, the monetary policy that he wants, however he does it. All right, you painted a picture or maybe I painted it and you agreed, uh of what's going to happen when Trump gets the um economy that he wants or the the Fed to do what he wants. And that's asset prices go up. But right now asset prices are down. So, what's going on with Bitcoin, Ethereum, um yeah, and other assets that we see struggling right now. What what's the underlying cause? The underlying cause is the Fed is not printing as much money as we thought they were printing as fast. And the technical thing is you know, the the government shutdown so the debt ceiling fight ended in July 4th and the US Treasury essentially had to pull a trillion dollars out of the economy to rebuild its checking account. And that's essentially in a very simplistic manner why Bitcoin all of a sudden caught up with that that structure of credit uh and is previewing what could happen to equities if the Fed doesn't change course. Now, starting in December 1st, quantitative tightening, i.e. the balance sheet reduction of the Fed, ends. Uh the US banking system is starting to issue more loans and these are loans that are going to the industrials that you know, the Trump administration wants to build things, whether that's weapons or nuclear or semiconductor or rare earth, what have you. The banks are starting to lend to those companies who are now getting government guarantees for contracts. That'll only accelerate. So, I think this this little bit of period of weakness in crypto is is you know, very minimal. It'll keep going back up as credit expands, the quantitative tightening ends at the Fed, Trump gains control of the Fed sometime in 2026 and money is printed in some way, shape or form. There's also the housing market, you know, a key policy of the Trump administration is to pump housing. It's a key policy of every single administration. I don't care if it's Republican or Democrat. Um and so again, if you I think you need to take out this partisan nature of like, oh, Trump's a Republican, he's bad because I'm a Democrat and I oppose these things that he's going to do. Well, put in Kamala Harris as a Democrat, she'd do the same stuff. And so I think once you remove all that, then you're saying, okay, well, why am I trying to fight this when I'm not going to fundamentally get politically active and change the system that you know, puts up puts this structure on how I am as a financial person in this world, then I better just get with the program. And it's buy stocks, buy crypto, buy gold, don't use leverage and just wait and it'll go up. What does it tell us about human nature or the markets in general that people just cannot bear to wait? They they always panic. Like uh they didn't expect that it was going to go down. This whole notion of this time is different is so wild to me. So yeah, what do you take away every time people start freaking out when the price dips? We're all human at the end of the day and this is this is human nature. The you know, the market is not there to make you money if you over if you overtrade. And this has always been the case. It's nothing changed. We're still humans. We're still these you know, lizard brained mammals that live in this you know, new computer age world. Like it's only been 150 years since we really have sort of emerged from pretty much like subsistence very basic subsistence. So, I I think that you know, human nature is human nature and so the average human is impatient, uh wants the future today, is willing to gamble to get it and unfortunately the politicians play on that. Yeah, that that is for sure. So, um as you look out into the future, you know that humans are going to react that way. Um do you see anything that can change the divergent economies? Because this is the thing that probably I worry the most about is given that human nature, given how busy people are, given that some people don't have the intellectual capability to understand it, given that many have the capability but just aren't going to put the time into understanding it. Um they are going to be moved by policy decisions, full stop. They are not going to go, oh, well given that there's money printing, I know assets are going to go up so let me go get in assets. Um do you worry about that? Do you not think about that at all? Like how do you factor that into your calculus? Well, obviously you worry about societal breakdown and I think we we talked a lot about this sort of this AI battle that we're going to have versus should we have it? If we do have it, who should benefit from it? Or maybe we shouldn't have it at all. These are that's going to be the colossal defining sort of battle of of this century in the same way that communism versus capitalism if you want to reduce sort of the and imperialism if you want to reduce the two world wars to those very, you know, simplistic terms was the defining moment of sort of late 19th to early 20th century humanity, right? And we're sort of living in that reaction to that and that post World War II World War I situation right now. This is the defining moment of what it means to be human. Are we going to blow ourselves up because we couldn't decide how to share AI? I don't know. I think that's the the number one question. I worry very much about society tearing itself apart. Oh, this is another reason. You don't live in America. So, in America, man, it's really palpable. And you can feel it. Like I even have to think about like what advertisers are going to consider me uh speaking to their demographic. Certainly politically everybody's on a team. When you listen to the way that people talk, everybody speaks in team talk. Uh if I wanted my channel to triple in views overnight, I would just pick a team and just do the team talking points. It is crazy. I know how effective that would be because people want that team perspective. Everybody wants to be in their own echo chamber. They want the heuristics of just tell me how to think. They don't want Like I'm all about cause and effect. So I'm always trying to lay out what's the cause and effect and where does this go? And so when I look at this particular problem, which is that most people, either because they can't or they won't, they're never going to get into assets. And so that problem is not going away. And so and then I have the belief, the base assumption that the only problem that's impossible to solve is the political problem. The other problems maybe, but the political problem I don't think is is ever going to be solved. They will give things away for free because it is how you gain and retain power. And only on the other side of tremendous pain will a culture change. This is why every empire has fallen. Uh so that's my big concern. So from a um why do I make the content that I make? I'm making the content in the hopes that I can make a simple set of choices accessible to more people so that at least more people will get on the life raft. Uh but for that people have to face what's actually going to happen. And Yeah, man. I don't I don't know how many people are going to do it. >> the the United States is specific cuz that's you know, majority of your audience, is not in the worst off shape of all countries that are highly indebted. There's no enemies, right? There's two big oceans. Canada and Mexico are essentially vassal states uh of the United States. The United States is energy self-sufficient at the right price, right? Oil's too cheap right now, that's why shale is struggling in some of these oil producers. There's plenty of offshore drilling to give oil and natural gas to the US have enough energy to be self-sufficient. There's plenty of food in the United States. Yes, maybe it's not the best quality and there's too much high fructose corn syrup or whatever nonsense that is in the food supply in the US, but again, there is enough food in the US. So the debt is a problem kind of but from a holistic standpoint, I don't see this like zombie apocalypse hyper inflationary problem for the United States anytime soon. You think about Rome, right? It took hundreds of years for Rome to fall after the underlying economic model didn't work. They couldn't import enough slaves to do enough labor and there is not were enough free you know Italian Roman citizens to do stuff. Took hundreds of years before you know Rome fell. The United States is not going anywhere just because the debt to GDP is 135 or 140%. Like there's you know an immense capacity to add more debt in the US situation. Life might not be the most fun and you know pleasurable for a lot of people but I don't see this as a sort of like oh my God the US is going to blow up sort of situation because again there's enough food there's enough energy at the right price and there's no internal sorry outside invader going to come into the US and sort of like take over the country. Like why would you want to do that? Who wants to rule the United States? Like that'd be the dumbest thing I could ever think of. Okay, well then let me walk you through my thesis on what's going to happen next. So this is how I see this playing out. We're stuck in Thucydides trap. China's on the rise. We're on the decline. Uh no declining power ever has just gracefully accepted that they were being surpassed. England being the most recent example only accepted defeat because they just got battered so hard during World War II and just found themselves so indebted us. They just didn't have an option. They were so fatigued. They had suffered so much for so long and they were so in debt. They didn't have a choice. So they obviously they go through war. So now 12 of the 16 times that a declining superpower has collided with a rising superpower they've ended up in open kinetic warfare. So it's like statistically the odds are not in our favor. We're already doing weird things in Venezuela doing currency swaps with Argentina from where I'm sitting as a way to let China know hey [ __ ] South America is our hemisphere. It is not yours. You will stay out of it. Be a real shame if something happened to one of your ships in the Caribbean. So obviously China is now doing all kinds of [ __ ] off the coast of Japan to let people know where they're at with Taiwan. Japan clap back. China clap back you know to Japan saying all right. Well, if you guys want to [ __ ] test us. If you want to start talking that it's existential and that you going to have to do something. If you're feeling froggy leap. So it's like I feel all that instability then factor on top of that you've got the US right now choosing between essentially brands of socialism. So we both agree that there's going to be what I will characterize as additional stress put on the system. So if I'm China and I'm looking at America I'm like oh good you [ __ ] wits are going to like tear yourselves apart fantastic. I'm going to keep going. I'm going to build a gold corridor in South America. I'm going to peg the yuan to gold. I'm going to make sure that the US loses the reserve currency status. I'm going to weaken you guys. Yeah, I don't plan to invade you but I am going to by the way take over Taiwan by 2027. You're going to do [ __ ] nothing about it. And so now you get in a situation where your biggest rival is picking off allies. Your biggest rival controls essentially your entire warfare pipeline. So they're going to be able to do effectively what they want cuz they can choke you off from rare earth minerals and drone parts and all kinds of stuff. And so the US is going to be just put in a weaker position. Like you I don't imagine this isn't you wake up one day and it's catastrophic. It's the US is just put in a weaker and weaker state. Is in a worse off position in terms of who they can influence globally which means things will get worse economically. You'll be in an economic battle with China for who gets to trade where with who with what. And given that we're already printing money ad infinitum that it just everything gets weaker and worse. And so that we are already doing political assassinations. We're already at each other's throat. You get the Venezuela fication or the Argentina fication of the US over the next 10 to 15 years. That's what I worry about. I mean I had a lot lot there to unpack but I think the US will transition from a you know unipolar hegemon to a very powerful country and I guess the question is how does the American psyche handle that? Could be bad could be could be okay. People just like hey [ __ ] it whatever. China is the number two number one number one number two. And you know we deal with it, right? And as you mentioned right China has rare earths US doesn't have any. You know that'll persist for how long however long it persists but it basically means that if China's not going to sell you the stuff to you know shoot the weapons and you can't shoot the weapons which essentially is a really good thing cuz if the US had enough weapons to shoot then this whole situation would probably be a lot more scary in terms of the global sort of situation globally. But because they can't shoot enough weapons then you know Trump has to stop the war in Ukraine. You know as sad as the Israel Iran situation was it lasted 12 days because Israel started to feel what happens when you get bombed by another country cuz if you don't have enough missiles to to defend yourself, right? And so again this is all predicated on China's there to make money and trade. They're not there to supply the United States with car plastic launching missiles at people which the US would love to do you know because that's just in the nature of the country. It's been at war for pretty much 95% of its existence. So again I I take a little bit more of a glass half full sort of attitude towards you know the declining you know empire of the United States where there are limits. There are other countries that can enforce these limits on the United States. And there are internal problems that will be dealt with however they're they're dealt with but hopefully we don't have a thermonuclear war where everyone is shooting hypersonic missiles at each other. And you know if we take that off the table then you know if you don't like the way the situation is in the United States there's a whole big old world out there. Leave. Yeah, that's easy for somebody like me that isn't easy for the vast majority of people. That's the thing that I worry about. Okay, that's enough doomerism black pill. Yeah, so now talk to me about 2030. What does 2030 look like? This is only you know four years really away from the time that we're recording this. What does that look like? What do we have to look forward to? I think that we have some sort of like massive market crash between now and then. Hey at the end of doom and gloom tell me about the market crash. Yeah but it's but it's not this more predicated on again AI adoption is going to happen faster than we think and impact the structure of the economy in a way that people aren't really appreciating right now but In the ways that we already talked about or something that we haven't touched on yet? >> No in the ways that we already talked about it but I don't think that's the common knowledge. The common knowledge is you know Facebook is going to be a $15 company because they've created the best AI possible or you know Tencent or whatever company, right? It's not oh [ __ ] what happens when all the bankers don't have jobs anymore. How does that change the society? But I think we get to 2030 you know we have a larger installed robot base. Cost of labor goes down. We we have essentially a very intelligent prediction engine called an LLM. Maybe we have AGI or whatever that means or not. I don't think it really matters but we do knowledge work cheaper and more efficiently and we take human intelligence and instead of sending the smartest and brightest people you know like myself to study [ __ ] finance versus being an engineer or being a dancer or being a poet or whatever. We have more people doing creative things. Whatever that means creating sort of joy for other people because there is no other option. You can't be a baker anymore cuz that's not a possible sort of profession but you can be a writer. You can be a philosopher. You can be a sports somebody who does sports whatever it is, right? And I think there is a better scenario where labor is cheap. We have a global conversation about what it means to be a productive human. We haven't killed each other as we've moved to this sort of much less scarce society definitely not post scarcity by any ways but we have much less scarcity and so we have much more creativity and intelligence doing things to just make the human condition better. So I I want to believe in that and I'll be you know positioned in my portfolio for yes aggressive money printing. Maybe there's a backlash to that because the inflation gets too unbearable in a lot of countries and so you have to have political rhetoric that sort of at least tries to pretend that there's austerity. And then we have sort of this AI not miracle but labor is cheaper. Knowledge work is cheaper and we have a better human existence in terms of more things to enjoy of just being ourselves and you know communing with each other. All right. So let's talk about the road to get there. So 2026 is here. Stable coins I think is going to play a big role. I know the Trump administration is trying to do some interesting things with stable coins. Does stable coins become the new bank. Does that start happening in 2026? Like, walk me through what you see in that near-term window. So, I think for stable coins as a way The reason why the Trump administration supports stable coins is they see it as a way to shove Treasury debt down the throats of the global population at very attractive rates. And so, I think that in 2026, you're going to start seeing big tech platforms and the large banks have their own stablecoin or be distribution platforms for things like Tether and Athena and, you know, Circle USDC to get these stablecoins out there. So, you will be more familiar with sending each other a stablecoin than you are with going on to your online banking system and sending somebody a bank wire. I think that's going to accelerate very, very quickly, especially for Gen Z and millennials who are already comfortable with online online banking. And that's going to lead to a proliferation of stablecoins and people are going to be using DeFi. They're comfortable with these solutions and then there will be a lot of banks that no longer are relevant. There'll be some like JP Morgan and Goldman Sachs who are agile enough to survive, but your average bank, I mean, go on I mean, I go on my I use a lot of banks. Most of their technology is trash. Right? And now you're going to say, "Oh, I can literally like move my money from my bank to this app where it does everything. I got an AI assistant to help me. I don't have to deal with humans that work 9 to 5 only 5 days a week and who are very, you know, annoying to deal with. I've got this awesome thing called a smartphone and an AI assistant. I'm going to use that in the stablecoin. I can send money 24/7, you know, 365. Great. I'm using that. I'm not going to use my pick your, you know, small little bank that is pretty [ __ ] So, they're going to face existential, you know, demise. The large banks will still exist. They'll offer their own solution to that, but I think we're going to be very comfortable with using stablecoins and then very comfortable with using DeFi. Um, whether that's a lending platform, that's trading. And, you know, some of these protocols, you know, like Athena, like Pendle, like EtherFi. Obviously, I'm all invested in these things and this is why. Um, we'll do well in this scenario, but again, we're just going to move to this post-banking world and the banks either adapt or they die. Either you adapt to this digital-first native way or you die. Yes, there'll be some banks for the boomers who still want to walk down the street to branch like my mother. There'll be that. Cool. Whatever. But, you know, the fun stuff's happening over here. And the money keeps getting printed. Like crypto keeps going up, but and we sort of crescendo in sort of the 27, 2027, 2028 2028 time frame where you're going to have at least a pushback on, "Hey, there's an affordability crisis." And maybe there will be some negative rhetoric to money printing, towards austerity and they might gain some support which will spook investors and like, "Oh, [ __ ] Is XYZ countries, United States, is China, is Europe, is Japan, are they really serious about stopping the money printing and allowing the credit to contract and putting out of business all these over-levered, you know, businesses and financial intermediaries? Maybe I should take some chips off the table. Right? Maybe, you know, Nvidia at 20 trillion market cap, with all this accounting nonsense that they're doing with these deals, maybe I'm done with that. I'm going to exit stage left. And that's when I think we get like a massive collapse in all these over-levered markets. And by that time, maybe the AI sort of effectiveness and usefulness will start to catch up with the hype. Maybe think about 2001 when all these massive fiber optics companies like Cisco and all them crashed, that they built out this amazing substrate that created social media in the next decade. It'll be much faster with AI. So, there'll be a massive crash in all these hyperscalers and, you know, model builders like OpenAI and Anthropic. And then in the wake of it, we'll get whatever useful application that entrepreneurs create to essentially make labor super cheap and make knowledge super cheap. And what are we going to be able to do with that as a human society? The pressure that you see that's going to make that happen in 27, 28 is inflation due to money printing giving us that K-shaped two tail of two economies. People get pissed off enough that they begin speaking up. The speak up then makes the politicians go, "Huh, maybe we need to start signaling that we're going to tighten." And just the hint of that signal is potentially going to spook the market and that causes the drop. Yeah, I mean, think about 2021, right? We had at least in the United States, you had what, 10% inflation or whatever it was. Again, that's not Zimbabwe or Argentina or Weimar Republic. Telefónica is high inflation. And just the act of the Federal Reserve in December saying, "Hey, we're going to start a tightening program in 3 months' time." Was the thing that that popped all the bubbles. Crypto, stocks, housing, whatever, right? And so, that's when we got the the bond market. Worst performing bond market since 1812 in the United States from 2022 to 2025 3 or 5 3-year rolling average, right? So, it doesn't take much when you're a highly levered economy. And the levers are like even more insane because people are going to print that much more money because they believe that that's the way to win elections. Uh, and so, when somebody stands up and says, "Hey, maybe we should try something different." Just the threat of it actually happening, just factoring in that probability, even if it might never happen, is what takes investors to say, "Guess what? I'm going to exit stage left and maybe I'm going to just sit in cash for now." Give me the scale of what you see happening. Is this um, 2008? Is this uh, you know, 80s minor downturn? Is this 1929? Like, what scale are we talking about? I think we're talking 1929 type 19 2000 because the AI CAPEX buildout is as big as Maybe I should say 1907. Um, the railroads. Um, the railroads 1907 1903, whatever the the crash due to the the robber barons in the railroad trust in the United States. The buildout of AI CAPEX is as big or bigger than the buildout of the railroad infrastructure in the 19th century, which was one of the largest, if you look at per percent of GDP CAPEX buildouts in modern human history. That is what we're doing right now with AI hyperscalers, whether that's in the United States or in China. And guess what? Railroad business is a shitty [ __ ] business to be in as a long-term investor. And sooner or later, investors will realize, "Oh, [ __ ] I'm investing in the new age railroad. I don't want to be the new age railroad. Google's not the new age railroad. They are now, but Google wasn't the new age railroad in 2001. They were the thing that used the cheap the cheap hyper the cheap fiber optic connectivity to build their service. Same with Facebook. Same with Amazon, right? They did well after the CAPEX boom. So, investors will re-re-realize that sitch situation like, "Oh, [ __ ] I'm investing in new age railroads. I don't want to be in that. Let me get out of that." So, uh, this is interesting. I've not heard this before. So, basically, uh, there are business types that are so capital expensive, but people get hyped about them, so they invest in them, but they're not going to make their money back ever, maybe or certainly not for a long time. And so, bad risk-adjusted return, they finally realize that, they get out, and uh, then we realize, "Uh-oh, like we had a whole lot of capital tied up in something." They got spooked, they pulled out presumably at a loss. And now we're basically sucking liquidity out of the system. Is that how that would play out? Yeah, I mean, it's yeah. If if AI is the thing that powers the American and Chinese forward economy, and literally all we're doing is building out essentially a railroad for other awesome entrepreneurs to build something on top of. Well, again, the railroads are not great businesses long-term. They're a natural monopoly, if you want to call that. >> I'm what I'm trying to figure out is, okay, fair enough, but uh, England would go into a country, the first thing they would do is build a railroad so they could extract all of the resources and England becomes a gigantic empire on the back of railroads. So, I get why it might not be a good investment for a small number of people that put a ton of money in, but overall, it's so transformative. I'm trying to figure out why you think this brings like a full-blown crash like 1903, 1907, whatever the year was. >> I think I think you mentioned it because the return on capital is not there. When you invest alongside the government, at first it feels great. Oh, great. I got the government behind me. They're just going to like pump my bags, right? People feel great that the United States government is now getting into industrial policy, that they're pumping nuclear, they're pumping AI, they're pumping semiconductors. Well, guess what? Go back and become a Chinese investor and look at the average return over the last 20 years. Who did really, really well? Yes, China built all all this amazing infrastructure that helped the average person upgrade their standard of living, but as a an investor on a long-term basis, you made no money in China. Right? You invest alongside the government, you provided your capital, China's government said, "Great. Thank you for that capital. I'm going to build airports, roads, apartments, whatever. On a on a macro basis, you made no money as an equity investor in China. Now, they're great for society, bad for investors. We're going to repeat the same thing with AI in the United States especially. AI is great for society, hopefully, bad for individual investors who hold these these investments too long. Because yes, it feels great investing with the government right now, but you know, maybe by 2028, not so great when, you know, Nvidia was up 10x, but now you're down 90% because you didn't get out in time. So, I think that's the the lesson. And as you said, right? These are great investments for the collective, but it's bad for the shareholder. Right now, you know, Trump and whoever else comes after him are going to be like, "Yes, we're going to support the shareholder. We're here to make sure that the private investor makes money." But, guess what? Trump's a politician. What if you invest with Trump on some semiconductor fat um fab, and you want to reduce headcount by 50% because that's more efficient, but Trump says, "Huh, that's a district that's at risk for my for this sector when so Republican, no, no, no, you're not firing those workers. I don't care if your return on equity declines. I have an election to win. These people uh you know, put me in power to make sure that they have a job. I'm going to make sure they have a job." And so, that's the risk when you invest alongside the government. The government has different goals than you do as a as an investor. And that's where it's essentially the AI is transforming into with all these massive deals uh that the US government is now supporting, whether it's semiconductors, it's nuclear, it's data centers, it's permitting for the building out of uh electric capacity with, you know, natural gas and utilities, whatever, right? You're investing alongside the government. It feels really good right now. It's good for the stocks right now, but you hold it too long, you're going to be, you know, best case at flat, more likely you're going to crash out. And you can look at China, and you can look at this and see it happen over the last 20 years, where, you know, the needs of the state came over the needs of private investors. Mhm. It always happens this way. That's interesting. That one was not on my radar. I will definitely have to spend some more time with that. Um talk to me about how you approach AI investing. Obviously, right now the stock market is effectively AI period, full stop, end of story, there's nothing else. Um and now you're saying that a huge part of what people are hyped about is going to get them in trouble. How do you approach AI? I don't invest in it. I'll I'll wait for what comes after this buildout of the hyperscalers. After they spend the hundreds of billions or trillions of dollars building these data centers, creating this amazing intelligence, okay, what can we do with this intelligence after the fact? Again, I don't want to be in the railroad business. Mhm. >> I'm not smart enough to know when to get off the train. So, let me just not play the game. I don't own Nvidia. I don't own Google. I don't own the Nasdaq. I know crypto. I know they're going to have to print money to sort of, you know, ameliorate the social pressures and the social dislocations created by, you know, knowledge work going to essentially zero in terms of price for price for intelligence. I know they got to print more money, so I'll just stay in crypto. Am I going to have the best return if I pick Palantir or Nvidia or whatever stock over the last two or three two years? No, but I don't know when to get off the train. I'm not that good. I'm just not going to play the game. I'll wait till, you know, I want to buy Amazon in 2003 and 2004, not in 1999. Yep. Uh that makes a lot of sense. Now, the conventional wisdom would be that it's not timing the market, it's time in the market. Um so, while I get you don't want to buy March of 1999 at the absolute peak, um you actually are in some ways trying to time the market in terms of waiting. Is it because you think the signs will be so clear on the other side, and or you don't mind missing an opportunity in an industry that you don't really understand? Well, let's say that Nvidia goes let's say that the this the the AI thing that's using Nvidia goes from a five trillion market cap to a a 20 trillion market cap, right? Cuz they just rockstars. Jensen's the man. Shiny titties all over the place with his leather jacket, right? Um 20 trillion dollar Nvidia. So, you 4x your money cuz you put if you put your money in now. But then, Nvidia goes from a 20 trillion company to let's call it uh let's go to it goes just go back down to like five, right? So, it goes down what is that? 80%? Or whatever the math is. I'm a little shaky on that right now. And then let's say that, you know, there's a period of lull, and then Nvidia goes back from five to 10. Right? So, I invested at five, it went to 20, it went back down to five or even even lower, and I basically done nothing over the last two years. And Nvidia's still a great company. Or I waited I waited for the first real shakeout, and then I went back into the the the really good companies that are still around, and I bought their stock after the crash. Even if they don't get back to the market cap that they were when I first invested, I still make more money than I would have in the first scenario on a risk-adjusted basis. Or you could say probabilistically. Right? So, you always want to invest from, you know, from two to 10 gets you a 5x return, but from like 10 to 20 is only 2x return. But I'm taking more risk cuz I already it's intrinsically believe that it's overvalued, but I feel like I've no other choice. I have to invest in AI. Well, guess wait. You can make more money in a shorter period of time once things have actually crashed out on the rebound than you can investing in something when you intrinsically believe you're buying at the top. And so, that's how I feel about AI, and you can look at sort of the internet stocks that survived the the crash, like Amazon, right? Amazon went down something like 95% from 2000 to whatever the low it was in like 2001 or 2002, and then it's up, I don't know, whatever, like 30, 40, 50x, whatever it is from from then until today. Yes, if you kept your money in from 1999 until the present, you've made money, but it took you 30 [ __ ] years. So, that's just how I I I look at things. Okay, so the investing that you do do, is it entirely just I'm in crypto because I understand it, I pay super close attention, or do you have a diversified strategy that you use? Um how do you approach this moment if you think that the most popular asset on planet Earth is overvalued? So, my view is I believe in money printing. I think everyone does, whether you are Warren Buffett or you're crypto degen in the basement. You believe that whenever there's a problem, there's going to be money printing. Okay, so if I believe in money printing, what is and I and I don't want to pick stocks. I want to invest in a broad-based either equity index or something that has a broad appeal, like gold or crypto or a house or whatever, right? I'm not a stock picker. Yes, stock pickers can outperform the strategy that I'm talking about, but I'm not a stock picker. I just want to invest in the fastest horse. What has been the fastest horse from 2008 till the present, which has probably been one of the largest periods of money printing, whether it's US, China, Japan, Europe in human history? It's been Bitcoin. Historically, hands down. So, if I want to bet on the fastest horse, an asset that's in fixed supply that cannot be debased by the government, that is digitally native, so you could imagine an AI using Bitcoin or people because now they're more comfortable using their phone or the internet to transact value, they'll prefer Bitcoin over, say, gold, for example, then I just want to own the fastest horse in this race in this debasement race. It's Bitcoin. So, just buy Bitcoin. That's it. That's all I'm going to do. The whole the my whole job at Maelstrom, and I tell my employees this is, we do investments to make a return. I pay you a bonus, I take my return, and I buy more Bitcoin. That's all I do. All I care about is stacking more Bitcoin because I believe that in this debasement scenario, as long as I can have my pulse on the money printing, the banking system, and this is why I study I read very boring reports about, you know, bank call reports and bank balance sheets, and I understand you know, how the central banks print money in all the different major jurisdictions. That's what I study because I believe if I get that right, then all I need to choose is the right horse. And the right horse, historically speaking, is Bitcoin. Obviously, his history doesn't portend to the future. It does advise the future. I believe that Bitcoin is going to continue to be the best-performing broad asset. Again, it's not like you picked Palantir and it went up 20x over the last years. Great, if you can do that, you're amazing. I'm not. I'm going to choose Bitcoin, and it's going to go up the most, whether it's gold or stocks or houses or bonds. They're all going to go up, but I Bitcoin's going to go up the most, and that's how I approach investing. And so, that's why I mostly focus on liquidity. What is the expectation of liquidity? How does reality conform to that expectation? And that's what informs you when you see me on, you know, when I write an essay or I'm on X, and then post like, "Oh, I think Bitcoin's going down to this level." Or I think Bitcoin's going up to this level. It has nothing to do with me reading the chart of Bitcoin. Everything for me to read, "Oh, I think the market's misinterpreting what's happening with the US banking system." Or with how China is printing money, or the fiscal situation in Japan, or how is Europe going to fund this war they want to fight with Russia with defense spending. Again, these are all the things I care about cuz if I get that right, then I guess I have to pick the right asset, and I believe the asset is Bitcoin. Mhm. So, given all that, do you think Michael Saylor's strategy is perfect, or is there something that you would do differently? A because he has access to the corporate debt markets, I think the initial strategy is perfect. He is able to um issue an asset, borrow dollars that are going to be an infinite infinite supply, and buy something that's going to be in finite supply. So, I think as a fundamental level, it is a great strategy. Now, the nuance is how is he able to do that in a price per share creative way for the MicroStrategy stock? Obviously, it was easier to do back when rates were lower. A little harder to do now. I'm not really sure how you are have a have a dollar of capital today if MicroStrategy is the best way to play that or to buy Bitcoin. I don't really play in the stock market very much. I'll just stick with, you know, straight Bitcoin. The thing that I've always found fascinating about what he's done besides the just absolute gigantic brass testicles is uh cuz I just could not do a single strategy like that. Um is that he basically pulled all of the like fancy gambling options that the stock market has on top of Bitcoin so that people can do all the fancy derivative tradings and all that but with Bitcoin as the underlying asset. Um is there any potential risk there given that on a long enough timeline Bitcoin should I mean Bitcoin's already going down in volatility. His strategy requires volatility. Does he hit some sort of problem or is it just that people will slowly stop investing if what they want is volatility? What does that look like? So he'll have a choice at some point. At some point he'll have to he'll have to take a lot more risk in the type of debt and structures that he issues whether that's coupons or it's the day or which he needs to repay things. And he either make a make a choice either it's a I'm going to take this add more leverage to my capital structure and then I have to really hope Bitcoin keeps going up. Or it's okay I'm going to stop playing this game and MicroStrategy gets me comes you know my one ex Bitcoin. Doesn't go it doesn't go up or down faster than Bitcoin it just is Bitcoin and if all you can buy is a listed stock that's what you get. I don't think we're there yet but at some point if he gets big enough he'll get to that decision and then that's a corporate you know that's a corporate decision on what they want to do. Mhm. It's interesting. What did you think when Michael Burry folded his hedge fund and said I don't understand how people are pricing this market I'm out returning the money back to shareholders or investors? I mean shorting is hard. It's I don't do it. It's a it's a mindset it's a skill and if you know maybe he the mentally just wasn't there to to suffer the the knocks right? He fundamentally believes AI is a bubble. I 100% agree would I ever short Nvidia? Never. But Michael Burry will do it. He's got that the the mentality for that I don't have the mentality for that. And so maybe he was like you know [ __ ] it I've already made so much money I've got my own family office to manage. I'll pursue these strategies that I won't have to care what my LPs think about why these returns are lackluster until I get to that situation when Nvidia goes down 95% right? Interesting. Okay the thing that keeps me up awake at night is China. Um I know you've spent a fair amount of time looking at China. What is their economy actually like right now? I hear rumors that I want to believe and so I absolutely hit the pause button because I know it's what I want to hear. I hear that Xi is losing power. I hear that their economy because of the housing bubble is just in terrible shape. Um what's really going on at least as far as you can see from the outside? So I I I haven't been to China since mainland since 2019. I've been to Hong Kong a few times. Obviously I live in Singapore with a large Chinese Chinese diaspora so you can hear what goes on in short. And I think that there is at some point we all write an essay about this. I think that China is a potential future for a post AI world. Let me explain that. So China has been one of the most aggressive in installing robots right? They have the most installed robot capacity in a in a industrial sense of any country per capita in the world. They've been the most aggressive in terms of AI right? There is no sort of like individual data the data all belongs to the state. The state says I want to use this data and they create these these AI services. Whether that's ride hailing it's ordering your food it's using your palm to pay for things on WeChat or what not right? You go to China right now it it it might feel like on the tier one cities I'm not talking about the countryside I'm talking Beijing Shanghai Shenzhen Guangzhou the four tier one cities in China they are the future. Right? Everything is seamless everything is clean stuff is [ __ ] cheap the quality is good and this is the future but youth unemployment might be 40% you have China yet. You graduate from university you go to you know very it's very difficult to get in the university in China. Um you have to be very and if you do get in the university you graduate probably 30% 30 to 40% of you will not have a job. And so you're literally living at home you're doing odd jobs they call it the lying flat movement you have some like micro apartment in Beijing or Shenzhen or wherever it is. But you you live. You there's great entertainment you've got you know WeChat everything's on mobile food. >> Kind of it's your parents. It's the savings of you know one child policy you have four you have essentially you know you two parents you have grandparents and so you have all these people contributing to you as this little emperor right? So you're just living off of your extended family. And it works for now. Now Xi has a problem or maybe he'll have a problem maybe he won't I don't know of dissatisfaction because he doesn't care about employment. He believes that AI is the future. Now when they get to that future what will this this Chinese state's policy be about taking care of the population? Will they increase the amount of social services that they provide? You'd be very surprised to know that you know the amount of social safety net in China is less than Europe and the United States which is why the savings rate is so high in China but Xi believes that the future is this AI manufacturing techno country um with lot but basically a homogeneous Han Chinese population. And that's what he is creating and right now it's now it looks like it's it's succeeding. This might be the future where again most people don't have a you know most people who go to university don't have the job that they went to university for but everything else is so cheap the services are so good doesn't really matter. They get by. Can you have a socially cohesive society when that happens? I've seen China because you have a much more ethically homogeneous situation and culturally homogeneous situation and scar tissue from you know the the 50s 60s 70s during the Mao era and then previous with the warring states and you know the century of humiliation right? Chinese people love the stability that Xi Jinping provides society so all this talk about he's super unpopular is kind of off the mark if you because you haven't read Chinese history to understand that people like the stability and the control that is you know right now in China. And so again but I also think the mis people think oh they want to go to war. Well what parent wants your only child to be going to the military? This is what's you know Chinese woman who was a very good analyst said like she does not have the the juice with the average sort of parent who's going to want their son their only son only child I'm going to ship them off to the PLA to go to war against who for what reason when you know from all you know ways to look at things there's abundance of food there's abundance of energy and there's abundance of services provided to the people why you what do you need to go to war for? So I think this whole sort of western um fear over this like Chinese army going to like going into Taiwan or like going into all these other countries is sort of misplaced because they don't understand Chinese history and the demographic situation that they're in they haven't been there to see these gleaming cities of sort of what AI and robotics can do uh and sort of mobile apps and ubiquitous data sharing between the government and big tech right? That is what China is. I think that the West is going to move more towards that situation than they might want to admit to themselves at this point but that's sort of how I see the Chinese situation right now. Okay very clear picture. Now on the economy the economy easy enough to bounce back from they have a lot more room to print money than we do. What's that feel like? >> Well I mean they Xi Jinping said houses are for living and not for speculation I don't know if that was 2018 or whatever it is and the other message is common prosperity. He doesn't care that people lost money in housing speculation. And as long as people are not rising up in the streets I think he'll continue to pursue this this policy. The Chinese government has not stimulated as much as the West has to abate this property crisis. He is stimulating to build more AI to overcome the semiconductor embargo that the United States placed on them um to make sure that their BYD car electric cars you know 2000 US dollars or whatever it is that they sell those to the emerging world. Right? You go to China everything that you get in America is better and cheaper in China. Uh and so it's just is a fact. Uh so that's what they've been focusing that's where their credit has gone. Whereas US credit went to go blow up Muslims in the Middle East China took their credit and we're going to build AI. I hate everything about that last few sentences there Arthur. That that was fantastic. Horrible but absolutely fantastic. Uh okay that's China in a nutshell. Give me Japan. Uh watching what they're doing knowing that they have a birth rate crisis knowing that they're eschewing immigration knowing that the yen carry trade is unwinding um what do you see there? Are they in trouble? Are they going to have some sort of contagion effect on the rest of the global markets? I mean Japan again is very wealthy country they have what three trillion three three four trillion dollars of net portfolio assets. And so eventually what will happen is the yen will strengthen the Japanese government will tell tell the Japanese people and companies bring your yen home invest it here in Japan you know stop funding the United States and and Europe and their build out of AI bring this money home let's build back Japan. I think the yen goes below 100. And they have robots right? Yes Japan does not like immigration but they've got robots and so the robots will be there. The population will fall but they've made a cultural choice where they don't care. They're not going to open up this big out of immigration to essentially fix that problem with humans. They'll fix it with robots. And again, another culturally and ethically homogeneous country. And so, they'll band together and they'll survive. I spent a lot of time in Japan. I love Japan. I don't see there's going to be, you know, any real issue. There'll be a lot of inflation to get there. But again, culturally and ethically homogeneous society that is banding together to do what the government tells them to do for right or for wrong. And so, again, I don't see a problem because as a country, they're very wealthy. And so, as they sell their US and European assets to bring that home, they will rebuild Japan to be, you know, again, a robot first society. That'll spell trouble for the United States and Europe to now need to fund those ex- all that capital leaving. That just promotes more more money printing, the same thing that we've been talking about over the last few hours. Interesting. The um yen carry trade gets a lot of breathless coverage on X for sure that it's going to have some sort of big knock-on effect. Uh it doesn't sound like you share that concern. >> I just think as we had in let's say August of 2024, whatever it was. Um yeah, when that sort of kind of blew up. What happens? The Fed, the ECB, they all have to print money to make sure that the capital that's leaving cuz that carry trade unwinds doesn't you know, destroy their bond and equity markets. And so, we know what happens when there is financial disturbance, the Western authorities print money. When the Japanese ink removes their money to repatriate it to Japan to build back better in Japan, the West will print money to plug the hole. So, there might be a bit of sort of market dysfunction for a while, but it won't take much. The authorities will say, "Okay, cool. We're just going to print the money. Yeah, Japanese versus we get it. You got to leave. Yen's got to appreciate. All that's cool. And the Fed's just going to print the money." Printing is uh the eternal answer. It is uh man, that is so true and so depressing that that is just the solve for everything. Ah. Okay. Um very interesting. Now, you've talked about France just uh hit my uh another country that I'm very curious to see how this is all going to play out. You've talked about France backing out of the euro that you think that would be a good idea. Um what's why? The euro is a terrible thing. It should never have been created, but it was. Uh it's essentially >> Because it centralizes power and stops competition between the different currencies or something else? >> 20 27 members of the euro. Are you saying that there is one monetary policy that's right for 27 different nations, 27 different cultures, 27 different desires? We have one monetary policy for 50 states. And well, used to be 12, right? There used to be 12 district Federal Reserve banks with a different uh discount rates in every district, right? Again, I think that decentralization is better than centralization. Uh the euro is a centralized, you know, monster. But again, it's fatally flawed and France is horribly in debt and very unproductive with that debt. They just spend it at the government level. That's coming home to roost because the United States and Japan will no longer fund them. And Germany for that matter. So, Germany and Japan are the largest funders of governments and assets globally. They have combined something like eight or nine trillion of net portfolio assets. A lot of that Whoa. to Japan. And essentially, they made that money off the back of the United States. The United States said, "Hey, you host our military to contain communism, aka Russia and China. We will let you export to our market and we'll let you restrict our companies from going into your markets." And that essentially gave them an eight trillion dollar wealth bucket, which they then bought US stocks, US bonds. And in the European example, Germany funded France. And so, as that unwinds, as everybody tries to go their own way because the population is like, "Hold on a minute. We created all this wealth and I'm still [ __ ] broke. [ __ ] this. Print the money. Give me health care. Give me whatever it is that I want. Stop investing abroad." That money leaves France. France is like, "Oh [ __ ] We have to fund this government. We don't have any real wealth to fund it with. Nobody's funding governments anymore. Everybody's funding themselves." Well, this euro thing, you know, Christine Lagarde in the ECB says, "We can't print enough money to do things domestically." [ __ ] you, Christine Lagarde. I'm going to print money and focus on France first. And that breaks the euro. As soon as France says, "I'm going to change banking laws, restrict capital from movement across Europe, or um not do what the ECB tells me to do, whether that's for like, you know, greater than 3% of GDP budget deficits, then the euro at all effect is over. And capital is not flowing freely around the eurozone. And that's what ends the euro. And so, you know, France is slowly walking towards that situation and you can take a look at the the liabilities of the French banking system within the EU system called the Target 2 imbalance. It's deteriorated rapidly since 2021. And eventually, whatever that is, this will come to a head. And the ECB will be faced with a choice to print money to save the euro. Uh and they'll print the money. And again, it doesn't really matter. Assets go up. Money gets printed. Euro is either there or it's not there, but capital controls are introduced. So, if you're in France, if you're in Europe, get out while the getting out is good. Get your money out of Europe. Put it somewhere else. All right. Man, there's uh there is a lot of money printing going on, a lot of uncertainty in the world. Uh through it all, you have stayed very sanguine. Tell people, what is the one thing that you have as a core belief that most people do not that allows you to be very even-keeled through what is uh certainly in our lifetimes completely unprecedented um instability? I read books. And when you read books, you find out that everything that we're experiencing today, yes, of course there is an AI. Money printing, debt jubilee, social discontent, empires on the rise, empires on the fall. We've done this all before. We've done it in Rome. We've done it in Weimar Republic. We've done it in World War II. We've done it in, you know, pick your ancient civilization. They've all had the same problems. They've all had the same, you know, menu of solutions. And every time the politicians chose to print the money. And every time math and the compound rate of interest and time worked against them. And every time, if you owned gold or certain other assets, you did well. It's something that you could keep them from being confiscated from the state. So, as long as you do that, and you don't use leverage, you'll be okay. Because again, time, math, and human nature are on your side. Awesome. Brother, I am grateful for every chance that we get to spend time together. Uh thank you so much for taking the time. Where can people connect with you online? So, on X @cryptohaze, on Substack @cryptohaze as well. I write my monthly by monthly uh newsletter. And yeah, you'll hear me on programs like your your yourselves and others across the the interweb. Awesome. I love it. All right, everybody. If you have not already, be sure to subscribe. And until next time, my friends, be legendary. Take care. Peace. If you liked this conversation, check out this episode to learn more. In the 1980s, under Reagan's leadership, the US economy exploded with 12% real GDP growth in just 18 months. And the man behind that boom, today's guest, economist Arthur Laffer. Now, with America sitting on 38 trillion dollars