The Coming Collapse of the US Dollar | Confronting Peter Onge.

the reason why I sort of laughed when he

mentioned Kathy Wood's thesis about

deflation is that the FED would never

ever let that happen because the whole

point is that the FED is using that as

the boogeyman voter fraud has been a

constant in America for really since the

beginning there's always fraud there's

always voter fraud I think on a long

enough timeline you're almost guaranteed

that fiat's going to die because Fiat

has always died there's an irresistible

temptation to print as much as possible

and currently the FED is still afraid of

the people but it it may not always be

afraid of the

people hey everyone welcome back to

another episode of the me Kevin show

today we have a very special guest at

Peter an economist with the Heritage

Foundation who posts daily videos on

economics when the market is open Peter

introduce yourself beyond what I just

did what did I miss your handle Prof

stanch on x/ Twitter for those of us who

still call it Twitter I do thank you for

being here well thank you for having me

on Kevin uh yep I'm an economist at the

Heritage Foundation and PhD from George

Mason which is the mothership of

Austrian economics and yep I post daily

videos on economics and freedom on Elon

musk's platform I love that so what I

think was so interesting is one of the

things it really hit me is I asked you

about

deflation mostly because we touched on

Kathy Wood how you know Innovation

creates deflation and I said are we ever

going to have deflation and you

immediately said absolutely not can can

you go into that as an a an economist

why you would say absolutely there will

not be deflation sure so deflation is

the natural state of a growing economy

so if an economy you know if we're

producing more stuff then everything

gets cheaper yeah right you you know

you've got a fixed amount of money

running around you got more stuff that

means that you know the money buys more

stuff all right so that is deflation

it's good it's healthy it's as the world

should be uh it describes really the

past 500 years uh at least in the west

so that's a good thing the problem is

central banks so the purpose of a

central bank is to take that natural

deflation and soak it all up in money

Printing and then hand the proceeds of

that money printing which is I mean

literally it's it's typing zeros on an

Excel sheet okay it it it is essentially

you may as well be sitting there

cranking a machine just cranking out

these this uh counterfeit money and what

the central bank is trying to do is to

you know essentially soak all that up

and then either hand it out in the form

of subsidized loans going through Wall

Street or to use it to subsidize the

cost of government borrowing so it

effectively transfers all of that

healthy deflation into free money for

the government and free money for rich

people and it makes it cheaper for the

government to pay back their loans and

cheaper for rich people to pay back

their loans because you have a slight

inflation that's exactly it now how bad

would it be if we actually had deflation

because that sounds bad and evil but

then I also wonder well what if what if

we just had straight deflation and then

people aren't at least what we're sold

is this idea well then then people

aren't incentivized to to spend uh

because they'll wait to spend or people

uh will be punished for being debtors is

that as bad as they say it is or is that

actually healthy and normal it's super

normal uh it means that your money is

buying more you know people are buying

stuff because they want to use it right

like you've got to eat food or you want

to go on a vacation if the you know

you're planning a Disney vacation with

your family this year the fact that it

might be 5% cheaper next year well yes

but a vacation next year is not the same

as a vacation right now right if you sit

the kids down and explain to them well

you see kids we can always go next year

because look you'll get 1.05 vacations

it's not going to fly right so you know

empirically going through thousands of

years of human history with deflation

people absolutely keep spending the sort

of grain of Truth in the deflation is

bad thing is that there are two types of

deflation so remember that inflation or

deflation what you're measuring is

dollars per thing okay so there's two

parts of that the number of dollars and

the number of things right so the

healthy normal deflation is when the

things are increasing we're making more

stuff okay that's the good deflation the

bad deflation in theory it could happen

if all of a sudden the number of dollars

goes down a whole bunch okay now why

would that happen well

because because the yeah or the the

financial system creates quasi dollars

credits okay and if all of us sudden uh

all of those quazi dollars so debts if

those vanish right because people uh

can't can't repay them now the banks

write them off that effectively destroys

dollars okay so before people were

sitting around with a bunch of dollars

in the bank and they were sitting around

with a bunch of you know loans and they

were thinking of those loans as assets

okay if those loans now crumble they're

not worth anything the defaults or

whatever yeah exactly then now what

happens is people actually have to start

instead of spending dollars they have to

start saving those dollars up to rebuild

their balance sheets so at that point

you get this giant sucking sound where

money yes drains out of the system it's

not in circulation anymore the reason is

that it's trying desperately to patch up

the holes that formed because of the

financial Panic now at that point you

ask why did Finance panic and there we

go back to the Federal Reserve so

ironically the one very special type of

deflation that the FED is using as it's

poster child why it has to exist is the

exact type of deflation that the FED

creates so it is it is the scam of the

century you know PE people talk about uh

you know covid or I don't know the food

pyramid or you know all of these sort of

greatest hits of government scams no no

no central banks are absolutely the one

so now we generally only have deflation

post fed when we're in a crisis so

looking forward now with a Fed we

shouldn't want the new modern deflation

because it would probably mean massive

joblessness would that be a correct

conclusion yeah that's what we were

facing in 2008 right so that's exactly

what happened is you had this massive

collapse in credit all of these loans

that appeared to be good loans okay they

were they were sort of propping up Wall

Street and all of those crumbled at once

there was doubts whether they'd be

repaid and If the Fed had done nothing

then at that point yes we would have had

a massive deflation you might have seen

the dollar go up 20 30% in value this

would have been fantastic for consumers

it would have been catastrophic for Wall

Street where all these rich guys jumping

out windows absolutely the American

economy would have been fine When the

Smoke cleared but that is exactly the

scenario now the reason why I sort of

laughed when he mentioned Kathy Wood's

uh thesis about deflation is that the

FED would never ever let that happen

because the whole point is that the FED

is using that as the

boogeyman okay so when you start to go

into 2008 and you start to get that

credit um deflation okay that's exactly

when the FED says okay kids it's

showtime spotlights on we are now going

to do our hustle and we're GNA you know

uh justify to the American people why we

run their economy like unelected

dictators okay so at that moment the FED

Springs into action it pours out

hundreds of billions or trillions of

dollars we saw a peak preview in March

when Banks started falling right so you

had Silicon Valley bank then you had

signature so fast it was incredible it

was like a pre-bailout right it was

nothing like 2008 where the banksters

actually had to go around wall or had to

go around Congress right uh threatening

politicians okay it was nothing like

that no no baby it was just automatic

they didn't have to raise a finger like

they woke up and coner service with a

chocolate on the pillow boom how many

hundreds of billions you want remember

they were letting Banks put f um uh

fictional values on their assets and

they were lending again I mean I would

love that man if I could just call my

bank and say like hey tell you what I

got some pocket lint it's worth a

trillion trust me here why don't you

lend me a trillion just to get me

through this tight spot and promise I'll

pay you back that was exactly what the

Fed was doing so at this point the idea

that the fed's going to let it go to

actual deflation absolutely not going to

happen so what does that mean for the

average investor today I mean it doesn't

even though the FED might be set up as

essentially this the scam uh the Ponzi

so to speak they could keep this Ponzi

going on for a while when's it going to

break yeah when and how does it break

yeah so you've got uh two constraints

one of them is inflation itself so

there's one point where the people get

angry right voters get angry about

inflation uh the FED kind of hit bumped

up against that limit this time around

right so a couple years ago they they

were at what 99.3% or 9.1% official June

July of 0 or 22 yeah there you go and

you know sort of the whisper number was

significantly higher because they have

funny ways that they calculate housing

and there's there's all these little

games they play to try to minimize the

number but anyway so at that point they

were kind of bumped up uh against the

edge of that and they couldn't really

print money uh and you know so they've

got to raise rates um that they then

know that that is going to typically

slow down the economy right so they kind

of get stuck where on the one hand the

voters could get angry about the

inflation but in order to reign in the

inflation now they've got to raise

interest rates which will make the

economy slow so now you get joblessness

right so they're kind of juggling the

two to try and

sort of um they want to watch the edges

where the voters are really going to get

angry right so they would like a little

bit of inflation and a little bit of

joblessness just enough to keep out of

the papers because if they don't then

you're going to get political

entrepreneurs in Congress who don't like

the FED to begin with and they're going

to start pushing for controls on the fed

the FED loses its independence so

fundamentally you know the FED gets up

there and pretends that it's looking

after the economy no it's looking after

the headlines because it knows that

there are two types of headlines that

are dangerous to it and it's got to get

just the right mix it's got to hurt us

just enough in those two ways without

putting all of it on one side or the

other so that's that's exactly where

they are now is that they're sort of

trading off they know that they've got

to bring inflation down because 9.1 is

not going to cut it uh but then on the

other hand they don't want the economy

to slow too much now the funny situation

that we're in right now is that normally

the FED has these sort of levers you

know where can slow down uh the economy

using interest rates but what's happened

in the past couple of years is that

there's been so much deficit at spending

yeah that even though they ramped up

rates and in fact they ramped them up

the fastest since the 1970s I mean I

mean it was really a panic hike in rates

even normally when they do that you

would expect this economic crash and we

started to get just an inkling of that

remember we had two negative quarters

back oh yeah and that was promptly too

that was right in 20 that was 2022

actually q1 Q2 of 2022 we very quickly

got those two negative quarters now

they're telling us Atlanta fed GDP as of

yesterday 3% for q1 what's going on

where's the joblessness yeah and the

reason is because these deficits are

just enormous I mean we're looking at

over a$2 trillion doll deficit if we

actually go back and look at the change

in debt it's about 2.7 trillion

annualized that is what about 11% 12% of

GDP yeah that is incredible and remember

you might see that kind of number during

the absolute worst of a financial crisis

like in some random European country

during the sovereign debt crisis or

something not even in a recession so

imagine the money Printing and fiscal

spending and stimulus in an actual

recession that's the thing right so

recessions typically pile another four

five% on top of that you're you're

starting to get the goofy town oh my

gosh so what you're s suggesting is

basically look you don't want to lose

the trust of the currency because then

you're screwed inflation runs away

that's the idea of we've got to control

the narrative basically we're trying to

control the psychology of people that

eventually as long as we tell them

inflation's going down they'll believe

it after after a few years and we'll be

able to go back to money printing

basically uh without losing the trust of

the currency but uh that uh right now

the only reason we're not actually in

contraction or seeing an empty you know

Universal Studios here and people are

losing their jobs everything seems to be

bustling like crazy is because of the

fiscal spending whether that's inflation

reduction act or chips act I mean I

think Goldman Sachs mentioned the 387

billion um inflation reduction Act is

being so loosely interpreted that it's

realistically like a $1.3 trillion

package yeah I mean is is that's just

the name of the game now eh yeah that's

exactly it so when does this end

fundamentally it it eventually ends in a

sovereign debt crisis like gree Euro

Zone yeah yeah and what's interesting

about Greece so a lot of the discussion

in the US centers on can we repay the

debth all right and on that measure we

can keep going for a long time right we

know this because of Japan so Japan's

Got about 250% maybe 270% twice hour of

GDP in uh national debt if you translate

that in the US terms you're talking

maybe 60 trillion okay we're at like 35

now so it can keep going for a long time

in terms of can they repay but a

separate question is will they repay and

that's where Greece comes in so if we

look at Greece during The Sovereign uh

debt crisis the European crisis back in

right yeah back then what was

interesting is that Greece at that time

the amount of um foreign interest that

they were paying on their debt okay as a

percent of GDP it was actually smaller

than it was than the US was paying at

that time oh wow so there was not a

crunch it's not a matter of being able

to repay it that wasn't the issue the

issue was that Greece had a political

entrepreneur who figured that he could

trash Rich German bankers and he could

say to the Greek people hey you want to

make a quick 100 billion so sooner or

later bingo so sooner or later whether

it's Donald Trump or somebody else some

political entrepreneur is going to show

up and they say they're going to say uh

Chinese investors who own a huge chunk

of that debt okay they are the least

sympathetic people to to the American

public uh well okay after Wall Street

which is you know the other least

sympathetic all right so if I'm a

political

entrepreneur and and my plan here my you

know um speech my stum speech is I'm

going to tell the American people you

want to make a quick 35 trillion stiff

the Chinese stiff Wall Street all right

you issue new new debt for the Widow and

orphans so Social Security you know

Medicaid the rest of it okay so those

those you have to protect or or else you

know people Revolt you're out of the

game yeah you won't get elected yeah

exactly and so but you know on current

numbers that's maybe about a fifth of

the debt right all right so you walk

away from the 35 you reissue a brand new

seven now 7 trillion debt is perfectly

sustainable for the US economy and what

are they going to do about it you know

finally you tell the American people

finally we can do something useful with

this giant military we have we can stiff

the Chinese it's a very very appealing

message so now it it may not work I mean

I wouldn't be surprised if Trump rolls

that out next week honestly so oh my

gosh but I mean there are a lot of

Americans who own treasuries as well are

you suggesting protect the Americans

just burn the Chinese uh well I mean it

would all depend on the politics and and

how you put together the the Coalition

but right I would expect them to protect

uh any individuals 401ks okay so any

anything that's impacting regular

Americans you would want to cover those

but you know Holdings on Wall Street you

basically make a list of all the people

who own the federal debt ranked by least

sympathetic to most sympathetic and you

know you you hold an auction you you go

around Congress and you try to get

together a coalition of people and you

know you bring in whoever you got to

bring in I feel like just the idea of

that would lead people to dump their

bonds and yields to Skyrocket absolutely

yeah yeah and you know we've already

gotten inkling of that like over the

past year there there was a lot of

discussion uh you know Yellen was

addressing this pal has as well how

there seems to be this

autonomous uh premium coming onto rates

where it it it's you know separate from

what the FED is doing and you know the

Wall Street Journal kept wondering like

where is this coming from and well it's

people are starting to get nervous that

this Trump could do that some kind of

default scenario could could start to

come into view what do you think Trump

will do I don't think he will um I think

he's got enough Apple carts that he's

upsetting at the moment and you know he

doesn't need more um he's also got one

heck of an issue on immigration right

now so I think you know he's going to

ride that um but I think inevitably

there comes some point where it's

guaranteed some politician will use that

as their leverage Point whereas Trump

maybe doesn't need to right now because

he's got enough weakness in Biden to

attack or whatever uh is Trump going to

get in or what's it going to depend on

the

economy yeah that's the ultimate

question um you know and the polling on

Trump is looking better and better the

uh Biden Administration right now I

think is really painted a corner on

immigration where they've got they're

trying to hold together a coalition that

really kind of doesn't agree on a lot of

things uh you've seen it with Israel as

well where they've they've kind of tried

to have a foot in each boat and you know

those are boats that aren't real close

together so you know I can it's it's not

a real comfortable place to be and I

think they're going to do the exact same

thing with immigration um they can't

offend the sort of open border activists

but on the other hand the wide open

border is pulling really horribly uh so

but I think they're stuck so you know I

think in terms of voter preferences uh

that Trump's just going to go from

strength to strength and at that point

the question becomes who's counting the

votes and we can go there if you want to

I don't want well I I want I want to

hear it from you are you nervous about

uh election Integrity uh yeah absolutely

uh I I wanted to be polite in case um no

I'm so curious I mean like so I mean to

be frank like you're professor at George

Mason and uh an economist at the

Heritage I'm so curious

like I hear so much from all sides like

no it's good we checked and then I

there's still fraud yeah what's what

happened in 2020 voter fraud has been a

constant in America for really since the

beginning there's always fraud there's

always voter fraud and the question is

is it a lot or is it a little right

enough to make a difference yeah so the

idea that like you know if you merely

raise the question of voter fraud that

you're a crazy person or that you should

be the antix you know

exactly right uh so yeah so you know the

first point there's absolutely no doubt

there's voter for I grew up in

Philadelphia and you know it was Legion

like the comps would bring the ballots

in and they would sit there and spoil

them in order to make sure that you know

the right guy won I mean yes there's

absolutely voter fraud it is

overwhelmingly concentrated in cities uh

cities appear to vote overwhelmingly

Democrats so you know one can guess how

that's going to swing the question is is

there going to be more or less uh there

are a number of states where they've

tried to put in new laws to be to

scrutinize it more closely uh I think

without a doubt based on the data I've

seen that mailin ballots

are dramatically increase the scope of

voter fraud uh so I think it's a it's a

very real concern is that because of

harvesting or why and and and could

second part could cities also be I mean

maybe there's more fraud in cities

because there are more people and more

ballots Y and traditionally in the US

the cities have had much um more tight

sort of political machine

uh just corruption across the board

occurs in cities you know if you're

running a bar in a city like DC or

Chicago or something you're surely

paying a variety of people I mean it's

just and you know this is always how

it's been our American cities especially

older cities tend to be almost Latin

American in terms of how much corruption

are you serious just to get your alcohol

license let's say or yeah for sure

really I I lived in DC for a long time I

was um active in the uh The Nightlife

Community there and absolutely

everybody's got to pay a lot of people

and you know of course the elections is

the source of the power in the first

place right you can't exact any kind of

bribe if you don't win the election and

so if you're not in office yeah yeah so

like the idea that these guys are dirty

in every single thing they do except

that you know they're they're sitting

there you know we must respect the will

of the people this is naive do you think

the state of the economy is the number

one thing that's going to determine like

who voters go for or do you think

immigration is a bigger issue that's

right so for the past really two or

three years ever since Co the

overwhelming issue has been the economy

so first it was lockdowns and then it

was inflation I mean just to an epic

degree right and we're just starting to

see I've actually got a video coming out

in two days on this we're just starting

to see now where immigration is starting

to pip the economy wow and you know I've

most of my life I've been an immigrant

um I was 5 years in Taiwan 5 years in

Japan about 5 years in Latin America

five is a theme um and you know always a

legal uh immigrant I understand the

immigration issue um but I've also seen

it from other countries perspectives and

is ABS you cannot have an open border no

country on Earth the only country that

might do that is like Somalia and not

not because it wants to go there because

yeah you know it just doesn't have the

resources like no it it is no voters

will ever accept an open border

especially not in a country that's this

rich you know it to illustrate the point

so Puerto Rico has an open border with

the US right because Puerto Rico is part

of the US roughly 60% of the population

of Puerto Rico has immigrated to the US

oh wow so at this point there's about

three and a half million Puerto Ricans

in Puerto Rico and then there's what one

and a half times that's so about 5

million Puerto Ricans in the US good so

this gives you a sort of natural

experiment what happens with an open

border where you've got a dramatic

difference in income levels so what

happens when 60% of Mexico Brazil

you see where I'm going right okay so

you've got whatever Bingo you've got six

billion people who live in poor

countries 60% of that is 3.6 billion the

population of the US is 300 million it's

not sustainable wow and I don't blame

folks in South America for wanting to

come I would immigrate without a doubt I

I have immigrated I I moved to Japan in

the '90s because the wages were better I

completely understand where they're

coming from but the thing is uh belong

to the citizens and if you would like to

go into that country like when I wanted

to go into Japan I couldn't just sneak

in I had to ask permission and I've got

to bring something to the table I like

that line skills uh belonging to the

citizens the citizens have to allow you

to come in essentially that's the

difference between being invited into

somebody's house and just walting in

there's there's a very big difference is

legal immigration into the us too

difficult should it be made easier or is

it right where it needs to be or is it

too easy yeah I think right exactly so I

think legal immigration is too difficult

so you know you know people who for

example have entrepreneurial backgrounds

uh or people who have skills that we

need you know whether it's doctors or

engineers and so on I think that those

people it should be much much easier to

come in here you know the US is such an

attractive place to live that we should

use the brain drain you know we should

suck all of the talent from the whole

rest of the world uh and then on the

other hand it we should vigorously

prosecute anybody who shows up and in

Uninvited as other countries do when I

was living in Taiwan if I had over stay

my Visa they would have thrown me and my

kids in prison this is how the world

works it's not because Taiwanese hate

Americans it's because they have laws

wow imagine um regarding mail and Bs why

are they bad because of harvesting or

what yeah there are too many um security

holes okay so you know as we look back

to the 2020 election there are I mean

you've got you've got the mules you've

got you know sort of people showing up

the people's houses collecting and pre

yeah uh filling in the ballots ahead of

time there there are just too many

points and in theory if you had some

neutral overseer like you know if the

FBI or something were managing the

entire process then in theory I suppose

you could plug those holes but the thing

is that the people who would be

responsible for the security of the

ballots are the same people who are

paying to rig the election right if it's

like a local election and so I I I think

it's just it's an insurmountable problem

uh you know fundamentally the security

around voting I think should be

comparable to getting on an airplane

they should want to know exactly who you

are because remember when you vote you

are effectively commanding everybody

else in the

country it's a really good point it's

you the power to change other people's

lives collectively yeah exactly uh so

you know it's not like American Idol

where you're just expressing an opinion

like you know I like this guy better I

mean you you you are literally taking

over the country and you are controlling

other people's lives that is far more

serious than getting on an airplane wow

wow wow that's interesting so abolish

the TSA and move them to

voting maybe not that

extreme I'm I'm I'm I'm just imagining

how they would screw up voting yes

apolish the TSA the second part is tough

yeah if the FBI was in charge of you

know monitoring elections would you have

full faith in election Integrity uh

personally I wouldn't but that's a

separate question on whether I have

faith in the FBI

doesn't yeah what do you think about his

campaign I think he ran a great campaign

um you know he's young it was his first

fora he doesn't have any political

experience uh so you know I wasn't

surprised that you know he didn't get

the nomination but I think he has got a

really bright future I think we're going

to see him again I agree uh okay so what

about um Biden is he going to get

replaced by like Michelle Obama that's

kind of the Parlor game in Washington

isn't it so you know is he going to stay

on long enough to try to get okay so one

one theory has it that they're going to

keep him on as Uncle Bernie uh just

until they get through enough primaries

okay that it goes to the convention all

right so the way that a primary works is

that if somebody drops out of the race

really late that means that when you

have the Democratic Convention all of

the activists get together and then they

choose okay so the voters are no longer

in the picture so that's the question is

does Biden St just long enough so that

now they say ah what can we do we're

going to have to do to the convention

and then at that point whether it's uh

Gavin Nome your esteemed Governor or

whether it's Michelle Obama or somebody

else comes into the picture so that's

the big question and I the Biden

people you know underneath each

candidate is this whole universe of

people who are kind of running their

world and and who are grabbing all the

power and those groups of people don't

like each other right so I I don't think

the Biden team is going to be

cooperating with this okay they're not

going to be thrilled about that I think

that they want their guy to hold on

through the whole thing then the

question is what kind of machia velon

you know Palace intrigues are going on

to try to push one group out or the

other the Democratic part is very

powerful yes it is overwhelmingly

powerful yeah wow okay what

about uh this idea of uh sort of going

back to the economy for a moment jobless

recession are we going to see that this

year the I have been expecting it I was

surprised how quickly spending Ram up

and I think the spending they're going

to try to keep up the spending

especially going to the election I think

above all uh Biden or Biden's handlers

really do not want a recession coming

into the election once the election is

over then you know there there's not as

much pressure uh but I so you're saying

the government's just going to keep

spending until the at least until the

election's over yeah I think they're

going to keep spending they're keep

playing games like draining the

Strategic petroleum Reserve you know to

try to uh get oil prices down things

like this I think they're going to

basically use up all the the seed corn

cashing all their chips to try to do

anything they can to get to 2024 I think

the result to that it could be either

mild negative GDP growth or it could

actually be positive it could be like

one one and a half% GDP growth that

seems to be roughly where the you know

professional economists are is is

somewhere around there so let's call it

between minus one plus one or plus one

and a half that's relatively anemic it

would probably feel a little bit like in

the wake of the 2008 crisis remember

there were a couple years there with the

econ 11 12 teering 10 even right so it's

kind of flirting with zero plus or minus

um you know of course the economy does

grow on its own just because population

grows so you know it's it's got kind of

a head wind and then there's the Border

yeah exactly but um but yeah so I mean I

wouldn't be surprised either way wait

are you saying open border no

recession the the the open border is

funny because a lot of it depends what

kind of people you're bringing in right

so if you're bringing in people who are

merely taking a job that would have

otherwise been done by an American then

you've got no net gain in production

however you do have a gain in spending

because so there was uh the city of New

York said that the average migrant is

costing them

$144,000 a year in government services

because of health care or social

essentially here's your driver's license

processing or whatever unpaid tickets

rent subsidies whatever yeah they're

putting them up in hotels they ging them

free food they you know clothes and the

the the healthcare is a massive amount

so that shows up as govern as as as

spending it appears that the economy is

growing in terms of GDP now of course

you know if you were 144,000 isn't

actually producing anything right this

is this is you know in a sense

destroying wealth um so for that reason

we could see robust GDP even as the

country is becoming impoverished by this

government spending so the Wall Street

Journal had an article about it recently

that they talked about how over half of

the jobs created last year were they

called it the welfare industrial complex

but they were either government jobs or

government assistance and a huge chunk

of that was the migrant crisis so you're

getting this massive jump in spending

but meanwhile of course you have

American veterans who are being kicked

out you've got American homeless people

who are being kicked out in order to

make room

so not all GDP is actually good for the

people yeah that's very interesting

because you're essentially saying short

of the loose border policies we've had

over the last year or two years we may

have actually had negative months of

employment already wow because you

mentioned half so if you're at a 200k

average 1.2 million to be about 600,000

remove that you could essentially have

six months in a row of zero yeah wow

yeah and in fact there were a number of

states uh the journal laid out the

states but there were a number of blue

states where the government and

government government related jobs they

were actually greater than all of the

jobs created Created that um created

during the year so in other words the

private sector jobs actually

shrank and I think this is kind of a

trend that that it's probably going to

accelerate this year as they keep trying

to pour out government spending

specifically to win the election where

you're shifting towards really a Soviet

model because remember the Soviet Union

had amazing GDP growth wait tell tell me

about this I want to hear this and for

sure that was uh you know the big

discussion in the 1960s and70s the you

know of course left-wing economists were

all going on how we were going to get

wiped out by the Soviet Union because

they showed the GDP and here was America

going at two 2 and a half perc and the

Soviets were doing 6 8 10% amazing rates

of GDP because remember GDP includes

government spending so I mean the and

the government can print money right so

they spend as much as they want it's

magic it's amazing should we be aiming

towards this perfect economy with no

government intervention or do you think

it's a necessary evil yeah absolutely

unary don't need it get rid of it okay

so without getting into the Sci-Fi you

know the sort of you know with the uh

private enforcement agencies and you

know the Moon is a Harsh Mistress okay

without going that far on it uh at an

absolute minimum if we could look back

to say 1912 okay before the FED existed

uh before the income tax by the way so

we look at how the country functioned

1912 you had roads you had all of the

functions you had streets you had lights

on the streets you had a milit you had a

Navy you had everything that a

functioning country could possibly want

and back then the federal government was

taking less than 5% of GDP right so in

modern terms that would be on the order

of about $1 trillion okay they actually

spend like six and a half trillion so as

an opening bid I'd say let's get the

government down to 1 trillion in

spending let's get it back to the 10th

the 10th Amendment of course lists out

the things the government's allowed to

do and that includes almost nothing that

it currently does so you wipe out the

98% of of government functions that are

unconstitutional you get the budget back

down to 1 trillion and at that point we

can pause and see how everybody likes it

you could by the way throw out the

income tax I mean if the government

reduced spending by five and a half

trillion you don't need an income tax so

you wouldn't have an IRS you know you

wouldn't have to tell them uh you

wouldn't have to tell them anything

about what you're earning it's none of

their business right the federal

government could literally sustain

itself on tariffs uh sales taxes you

know if you had some kind of small

National vat something like 2% maybe I

mean it would be a whole different world

and of course if you were to do that

right so you would have no income tax uh

you could start a business you wouldn't

have to do any registration you just do

the business if you're doing something

illegal then of course that's you know

that's that's fraud fraud has been

illegal for thousands of years uh but

beyond that you don't have any

compliance you know you could have uh

some guy could just uh go out on the

street and you know open up a little

restaurant through out some deck chairs

and okay so if you had that kind of an

economy you just imagine how rich you

would be right I mean it be an entirely

different world so you'd have a much

smaller government we'd be two three

times richer than we are today just

absolutely you know a country like

Switzerland would look like well Mexico

compared to you know the kind of wealth

levels that we would have so I as an

opening bid let's aim for that at that

point then we can sit and have the fun

conversations about you know the private

protection agencies and all the sort of

ancap stuff I personally like the ancap

stuff if the discussion is uh you know

how we're going to manage space colonies

that Elon puts on Mars then yes it's

very topical but for now you know when

we're talking sort of the political over

tin window and what people are ready for

I'd say let's just get back to the 1912

economy no income tax no Federal Reserve

you got hard money you got gold you got

healthy deflation year after year in

fact if you look at the US before 1912

okay so if you look at the period

between around

1880 and

1910 that was the Golden Age of humanity

Industrial Revolution it well the

industrial revolution had started really

in the early 1800s yeah like by the late

so in that period between you know

whatever 1880 90 1900 Edison era they

had really slow Wi-Fi though didn't they

they did they did yeah but but they were

on their way I mean it's astounding like

if you look at the things that were

invented in that 30-year period it's

everything gasoline engines airplanes

electricity computers pneumatic uh

Subways in pneumatic tubes in other

words Elon musk's uh hyperloop they had

it in New York in that air it is

absolutely astounding you had robotic um

car parks where where you would drive

your your your model A in and then and

then it would you know just like they

have in Japan and Americans see that

today and they're like wow that's so

high-tech we had it in 1910 the city of

Chicago when you delivered mail they had

a pneumatic system that ran through the

entirety of downtown and you put the

mail in the pneumatic system and it

sucked up to the other I mean just

unimaginable this is like 140 years ago

what the heck happened and what happened

was the progress has broken they broke

it with the income tax the regulatory

superstate the Federal Reserve so if we

look back to the world where you know my

idea when we get the government down to

5% and we obey the 10th Amendment which

is in the Constitution after all the

world that we get for that is is is that

late 19th century world and it's

beautiful I mean people today you know

they watch Victorian dramas why because

everything was awesome the architecture

the you know people would would dress up

to go to the park right they would have

their gloves and and the top I mean it's

it was a civilized age there were not

people taking a

dump Park you know it's a completely

different world but that is what a world

of prosperity looks like when you trim

the government back I mean it sounds

incredible and highly desirable the

issue that would obviously be debated

would be the transition period which

seems like it would be somewhat painful

to many people in terms of joblessness

and you might be in a depression quite

frankly for 5 Years or or whatever it

might take eh it it depends how you get

there so if you started off by lowering

uh wasteful government spending let's

say on Foreign Wars okay so that that

that creates nothing in the United

States but what about all the safety it

affords us and to prevent

terrorism exactly right which you know

um the attacks that we've had on our

soil have all been because we get

involved in Foreign Wars so perhaps we

should stop doing it all together and

just have a coast guard and maybe a

border patrol instead um but right so

you know if we were to get rid of the

wasteful spending uh you know the

144,000 on migrant thing things that

aren't actually improving the quality of

life um of American citizens and then

you ratchet down the taxes alongside

that right so you start with the taxes

the income tax corporate income tax

capital gains all those things are

incredibly dis uh destructive because

they discourage people from creating

businesses right right so you re that

back you bring back the regulations

especially on small businesses right so

if somebody wants to start a small

business in you know I I was living in

Taiwan and I had a friend who started a

uh an English school over there and he

didn't pay his taxes he didn't fill out

any forms he just he he was he he was

flying under the radar and about a year

in the local tax woman comes to visit

her uh him and she's got the local

police guy with her the police chief and

they come in they have tea and she says

so we know from the the um you know uh

Patrol policemen walking by okay we know

roughly what your traffic is we can

figure out how much money you're

probably making uh this is about what we

think you owe in taxes taxes in Taiwan

are very low and she said but we know

it's hard as a new business so don't

worry about any of it okay um you reach

out to me and I'll help you with all the

compliance okay so they had a person in

the tax office whose job was to help new

businesses get set up and make sure

everything's clean and I laughed when we

first talked to the tax office office

it's actually true that and they have

like English speaking like Taiwanese

Americans with like California accents

and they'll like come over and help you

and it's bizarre it's all free why

because they want you to pay your taxes

and they want you to create businesses

because then you create jobs it's a

completely different mentality well just

when you started with they sit down to

Ft the IRS ain't coming over my house at

te yeah and and and and the reason that

she brought the policemen was to

communicate that everything's fine oh

wow it wasn't to threaten on the

contrary it was to say everything is

fine All Is Forgiven because it's hard

being a new business oh my gosh it's

just a completely different mentality

and I think we used to have that here

yeah but now I guess the another counter

argument would be we probably ain't

going to get any of that anytime soon

I uh we could if the government runs out

of money then we will AB a large default

event for example yeah this is why part

of me is is definitely rooting for the

default yeah uh if if the government

runs out of money right and specifically

what happens is that if you default then

you can't borrow any more money because

only a sucker is going to lend you new

money right the trust factor is gone

yeah so you get like an instant balanced

budget like like for free yeah nobody's

lending anymore I guess I can only spend

what I make yeah exactly and so they

would necessarily have to trim back on a

whole bunch of stuff they spend now the

government is always going to pay their

petorian guard right so they're always

going to pay you know the FBI and and

the military and all these things

they're going to start trimming back the

unnecessaries and you've already started

to see that in California for example

right where uh Newsome is sort of

setting off different activist groups

against each other so he's been

squeezing the environment and you know

trying to put that money into something

else so you get that in this just

beautifully concentrated form where you

have this uh sort of gladiator battle

between all of the different functions

of government spending and when you sort

of sift through those

the one that wins the one that defeats

everything else is social security uh

Medicare and then Security Services

right and police fire yeah yeah and once

you sum those up you're actually pretty

close to everything else has to get cut

because of how much they're spending now

oh my gosh so yeah this is what I'm

rooting for you know the um you get the

fall and then because of the budget cuts

and and you know I would Advocate

pairing that with a boost in Social

Security because Social Security as I'm

sure you know it's just complete ripoff

you know the the rate of return that you

get on that is something like one one

and a half percent it's just complete

ripoff uh at least people should get

whatever government bonds were during

that period because that's you know

that's what investors got but right so

um you know you would you would boost

Social Security you would cut off

everything else and like magic you would

not you may have the regulations on

paper but if there's nobody there to

enforce them they don't actually exist

so the clean thing is to repeal them but

the alternative is just defund them wow

that's this is so fascinating I mean uh

when is this

possible I still feel like we can kick

this can down the road frankly multiple

Generations yeah I mean they they're

going to fight this tooth and nail y fat

included so when do you lose faith in

the dollar well I mean what other

currency are you going to trust and I

did think it was also interesting you

touched on not to tangent here but

before I forget this GDP printing in the

Soviet Union must also be Sim SAR to

China yeah for sure that's a big

question about China so there was a

study recently that looked at light

output in Chinese cities okay and this

is a pretty good proxy for how much um

indust or you know how much economic

activity is happening modernization or

whatever yeah you can just look at

satellites and see how much light is

there and they estimated that the

Chinese economy I think it was

overstated by something like

70% by an absolutely enormous number yes

and you know exactly how it happened

which is that they got some number that

year

and then all the bureaucrats were told

you better do better next year and so

they said yeah wa it's a miracle we did

just a hair better you know and then you

let that run long enough and and uh and

it compounds but yeah I think they're

absolutely going to try to kick the can

down the road that's where I think the

grease solution comes in where it's not

so much can they but will they uh you

know every day there's a wider and wider

opening for somebody to come in and

propose shaking it up you start to get

to the sort of Javier Malay moment where

you know he had really radical he had

radical voice but he had radical uh

proposals that normally people would say

no no no it's too risky but there you

know there's a point where people start

to get desperate and they say you know

what we got to try something crazy so

you know in terms of how long the can

can be kicked down the road I think a

lot of that has to do with the

personalities involved so which

individuals show up you know Argentina

they weren't automatically going to get

a Javier Malay right so you need a

combination of the person and the the

moment um sometimes the person comes

before you expect the moment um Trump I

think in many ways was similarly

disruptive and you know things in 2016

were were not really that bad like you

you wouldn't have normally expected a

Javier Malay type sure I mean that's 40%

poverty and and massive inflation yeah

it's like 189% or something inflation

right so but of course as things get

worse becomes more and more likely that

he some kind of disruptive character

like that and then the other question is

the dollar and you know that's something

that a lot of people have been

interested really over the past year um

partly because of inflation uh but

partly because the dollar is sort of a

metric on the collapse of the entire

system right so if you're asking how

long can the can be kicked the dollar is

actually pretty good metric and the

problem with the US dollar is that it's

been the reserve currency for the world

for I mean really about 100 years now

and and which means that foreigners use

a lot more dollars than Americans do

right so it's the dominant um currency

used in international trade uh when

countries are holding Assets in their

Central Bank okay they're overwhelmingly

holding dollars and things like that so

that's all good fun the problem is what

if you lose

it okay because so the number of dollars

in circulation in the world or number of

dollars in existence nobody actually

knows how many there are okay so every

so often treasury the FED puts out a

paper where they try to spitball how

many dollars nobody knows how many

dollars there are and but those

organizations estimate that something

like two times more dollars floating

around in the world than Americans have

wow which means that if foreigners stop

using the

dollar then all of those dollars come

flooding home and there's only one

country in the world where you have to

use the dollar which is this one so you

know to today a rich

Mexican he is not saving his money in

pesos he's he's he's been around that

block okay yeah he's got a couple months

you know spend in pesos and everything

else is in US Dollars that's true in

India it's true in Nigeria it's true

everywhere if however the Federal

Reserve if people start thinking that

it's not really a very good custodian of

the dollar that it's not real good about

inflation all right so they start saying

you know what no no no I'm not going to

hold dollars I'm going to hold gold or

Bitcoin or Euro or Japanese Yen or

something

if they start thinking that then all

those dollars come flooding back and at

that point yes we get 20 30% inflation

that could potentially go on for a long

time Dollar collapses the value of the

dollar is down therefore inflation right

interesting exactly and once that starts

of course it can keep going faster and

faster right because once that process

starts where the dollar starts crashing

then you know you get normal dollar

holders like people who don't really

have an opinion about the dollar either

way like say Japanese Banks they'll say

well you you know for them I mean it's

just an asset like any other they have

an opinion so they'll say well that's

starting to look risky get rid of it you

know so you get this just like a rush

for the exit go and of course there are

several countries that would like to

start that process off that would start

sort of start a dollar run like China

for example Russia would love it China

would love it because they know that if

you can cause that kind of a flood into

the US you would essentially knock the

US off the world stage for a number of

years you need an alternative and that's

is that the yen is that the Euro do we

trust those more or do you just go to

crypto and then you give no Central Bank

that power right right and so those are

really the the three main contenders so

you've got uh other currencies uh you

know the Yen and the Euro are slightly

less liquid versions of the dollar

they're seen in general as about the

same as the FED in terms of inflation

and and and and how good they are uh at

running a currency the other alternative

is of course the the the Chinese huan

that's not convertible H it's it's not a

real good tool as it is to be a world

currency also China in general likes to

keep it cheap because they want to

subsidize exports it's been pegged so

often manipulated yeah right so like

when people were talking about bricks

there was some discussion about uh sort

of this China bricks group of countries

creating an alternative to the US dollar

I don't think they would do it as a

paper currency I think the

sort of game Cher and something that

both Russia and China have talked about

for a while is creating some kind of a

gold backed rail oh wow okay now that

would be fascinating right so the gold

standard you know 50 years ago the

entire world was running on the gold

standard it's not science fiction you

can have a perfectly modern Financial

system with a gold standard and if

bricks were to create some kind of

currency that was redeemable in Gold

they could use that to replace the

dollar for

trade Okay so so you know for example

when Saudi Arabia is selling oil they

could do it with with a brick instead of

doing it in the dollar something like

that China would very much like to have

that uh you know and if you could get

the market to actually believe that

you're going to redeem the paper for

gold okay initially nobody would believe

you right but you know if you actually

have a gold window where people can like

send their bricks to you know someplace

in Singapore Switzerland you initially

do that to build trust here's your coin

and here's your coin back then at some

point people believe it if you had that

right if you had an actual gold-backed

currency as an alternative to the US

dollar and one where China was willing

to sort of seed the market and kind of

make the the the Venture Investments you

know to make that liquid enough that

could be a genuine threat to the US

dollar I don't think it's happening

anytime soon but the fact is that would

be so massively beneficial to China

because it would knock out the US dollar

right exactly so where does this put

crypto yeah say is the crypto the third

one yeah yeah so and then once you get

off currencies then you've got either

gold or crypto right and within that you

know if currencies in general collapse

then I think it would certainly be one

of those and I think that's been the

case for thousands of years right so you

know many times through history we've

had currency collapses every single time

traditionally it's gone to Gold

specifically and there's reasons for

that gold has a very nice uh Supply

profile um one of the most amazing

things about gold is that over thousands

of years gold inflates meaning new gold

is discovered or or put into circulation

at like a percent or a percent and a

half per year and that's been constant

for thousands of years right think about

the technology we had in like 1880 and

the technology we had in like 080 no

change it's it's absolutely sounding so

gold is beautiful um I think that if

currencies all collapse and you know

China doesn't get it attacked together

and the Yen and the Euro okay if all

those collapse then I think the most

likely is going to be gold just because

there's a lot more institutional

familiarity with it there are actually

Bankers who started their careers when

gold you know was literally the backbone

of the financial system so I think that

would be the most likely gold it's not

as liquid as a goldback currency right

okay so you know if if some kind of like

a gold back bricks existed then I think

that would be more likely but if not

then yes gold is is the highest

alternative and then the other one would

be crypto and so I think the most likely

there is going to be Bitcoin the reason

is because Bitcoin has a nice Supply

dynamic as well the supply Dynamic is

actually better than gold at this point

but beyond that Bitcoin has a very thick

social layer right so there is an army

I'm sure you know they're very vocal

online yes there's an absolute Army of

people who you know fervently believe in

Bitcoin many of them are extremely good

uh programmers and they they pay

attention to every Twist and Turn

they're really committed to defending

Bitcoin I think if you compare that to

any other coin out there so you know

Doge for example is terrible Supply

Dynamics ethereum is a mess it's not I

mean I don't know if you've been

following the road why specifically just

because of the difference of the

eips there's a lot of problems yeah um

it's not really centralized uh the you

know overwhelmingly influ the

overwhelming influence of one single

person

the current road map on what is it V2 V3

it's very convoluted I think ethereum is

a hot mess it may turn out to be

something really cool I like it in terms

of the sort of world computer hosting

apps and and to be clear it's not very

decentralized was what you were thinking

uh it's not decentralized exact yeah

yeah sorry thanks um yeah I think as a

money that ethereum is lousy uh I think

you know people complain that Bitcoin

it's it's too slow or doesn't grow

enough for things like this okay

compared to gold coins it's fantastic

it's much faster than a gold coin

exactly and you know gold coins have

served as the sort of safety I love that

comparison by the way and that you know

gold isn't exactly the fastest way to

transfer money either but it's it's

secure I mean you look here's my gold

coin and Bitcoin is obviously very

secure Peter shf had an interesting

argument about gold uh versus Bitcoin uh

versus say the dollar he said one of the

things that the dollar has that Bitcoin

doesn't is a government saying You must

use this currency and therefore

potentially the only reason I mean we

know Peter shiff is anti- Bitcoin but

there's an interesting argument this

idea of because there is no bully

forcing you to use Bitcoin the people

using Bitcoin are just speculating on

the greater fool theory that somebody

will pay more whereas you need the

government to support something and so I

think he also believes that the

government will eventually use gold

again yeah okay yeah I think that's very

likely and you know when it boils down

to Gold versus Bitcoin I think a lot of

that has to do with when the you know

Ragnarok when the collapse occurs so if

we're talking the next five or 10 years

then I think it'll certainly be gold

you've got a lot more familiarity pretty

much nobody over the age of 50 or 60

understands Bitcoin in the first place

and those are the people who run Banks

those are people have the assets how

many people really understand it even

under 50 I wonder exactly right and you

know I think over time that you've

you'll have a greater share of people

who do understand it who feel uh

comfortable with it remember you don't

really have to understand it completely

like if you ask your grandma how Fiat

banking works okay fair so so like she

goes to a bank and she puts her money in

there and that gets lent to hedge funds

in like Argentina okay the money's not

there all right this may surprise her

right so I mean like in other words uh

credit cards right ask the average

person who uses a credit card exactly

how that works where's the debit where's

the credit where where where exact

nobody knows uh they see other people

use it nothing happens to them Boulders

don't fall on them and they say okay

good enough it works right so in

practice the vast majority of people

will never understand how Bitcoin or

gold or Fiat or credit cards work

they'll use stuff because other people

use stuff and so you know if if it's

happening in five or 10 years there are

too many people who look at Bitcoin and

say no no it's crazy it's all over the

place uh I don't get it um and they'll

go with gold if on the other hand we're

talking 30 40 years from now then I

think gradually you know people like it

when I look at the libertarian Community

or the Austrian economics Community if

you look at people under 30 almost none

of them care about gold they all care

about Bitcoin Bitcoin specifically not

crypto Bitcoin uh and almost everybody

over say 60 doesn't care about Bitcoin

at all they think it's goofy it's a scam

they only care about gold right so you

know if the collapse is coming in 30

years then we all those 30y olds will

become those 60y olds and at that point

I think we skip gold and we go directly

to bitcoin what are the odds

uh 10% within the next 5 10 years

50% uh I think high enough that it's

prudent to have between 1 and 5% of your

portfolio in either gold or Bitcoin um

this is generalized advice not not

investment advice I'll just talk about

if if I were um you know I think broadly

speaking you want to have a combination

of them because bitcoin's got a lot

further to go up on the other hand crazy

things could theoretically happen in

Bitcoin it's never been hacked but you

know that's not to say it could not be

um so yeah a mixture of the two but y

would you uh I mean what's your price

Target on bitcoin no idea if it took

over you can kind of back into asking

what if it took over so if Bitcoin

replac the global monetary Supply then

it' be something like three to5 million

in today's dollars of course as we get

closer to that it would be trillions

because everybody's using it yeah of

course and because the dollar would be

collapsing on the way on the way there

so so so in that sense you can say

trillions um but right so in today's

term something like two to five million

3 to five million a coin if it's

guaranteed and so at that point it's fun

because you can just say okay what

percent chance do you think that it will

happen Okay so if you think there's a

10% chance that it'll happen then you

would say between yeah 300,000 and

500,000 and you know I think on a long

enough timeline you're almost guaranteed

that fiat's gonna die because Fiat has

always died there's an irresist an

irresistible temptation to print as much

as possible and currently the FED is

still afraid of the people but it it may

not always be afraid of the people for

some reason or another perhaps because

of mail in ballots but

anyway they maybe some reason why the

FED is no longer afraid of the people

and so it just lets inflation run um but

you know so at at any rate if we could

say that it's more or less guaranteed

that Fiat is going to die so it's on a

long enough timeline you know

approaching 100% that will either have

gold or Bitcoin and at that point we ask

okay well in the competitive sweep

Stakes between gold and Bitcoin you know

even if we start out with gold like if

the collapse happens in 10 years and we

go to Gold what are the odds that over

time we'll go to bitcoin well I think

Bitcoin is a lot

more it's a lot more attractive

fundamentally as monetary based than

gold and the reason is because gold goes

through these Cycles where Fiat

collapses we you know go back to honest

living with gold the problem with gold

is that if you're gonna have a goldb

currency so coins are are are very very

um are very inefficient right like oh

gosh yeah manufacturer of them the

carrying the shipping the security the

accounting exactly and you know like

imagine paying your your Netflix bill or

buying something on Amazon with a coin

right so inevitably once you're on gold

you're going to want to use paper gold

yeah and at that point you have to

centralize the gold you have to put it

somewhere and you can't just tell people

so these are my gold paper and I have

the gold but I can't tell you where a

secret place right you actually have to

tell people where it is and maybe you

even have to put like a camera showing

them that that's the gold maybe you have

to cut it open every so often to show

it's actually gold all right the problem

is that the government can look up the

address of your gold repository and they

can come visit you and they can come up

with creative uses for that gold right

so this has been the problem throughout

history is that you go back to honest

living you have gold that centralizes

and then government sees it and now they

treat it as Fiat right so they they they

hold that as their base and they print

that paper and so you have this cycle

over and over again with Bitcoin you can

break that cycle because it is not

seizable right so with Bitcoin you can

actually use it as a currency you can

buy stuff whether it's lightning Network

or whether they have some better

transaction technology in the future you

can actually buy stuff with it uh it's

you know much less transaction costs

than gold coins so yeah so so you don't

actually have to centralize it the last

question I I have for you yeah uh

Bitcoin is not the best currency right

now because it's so volatile in price do

you think bitcoin's ever going to

stabilize in price or do you think it's

going to continue to be volatile or is

it going to go up linearly like what

what is your prediction there yeah so

that's easy it'll absolutely stabilize

in price once it's monetized gold if you

look back to the period when um gold was

demonetized by Nixon okay so over the

past 50 years gold has doubled or

dropped in half several times over the

period of two or three years gold has

been all over the place it's been

extremely volatile now if you looked at

Gold since 1970 whatever 7173 you would

say gold could never be a currency are

you kidding you can't have a currency

that doubles in a year and a half no way

you can't base an economy on that so

what went wrong well the thing is that

once you are the currency once you are

the main money being used you have this

huge ballast of demand that stabilizes

your value right so the US dollar barely

fluctuates in ter you know it fluctuates

in Gold massively it doesn't fluctuate

in terms of your rent or a gallon of

milk because it is the money at the

moment but once as gold gets closer to

being monetized it will get it'll

stabilize more and more more because a

larger share of its demand will be

people you know essentially speculating

and and and holding on to it for that

okay and then if gold were remonetized

then we have thousands of years of

History to tell us it was stabilized if

it's not gold if it's Bitcoin instead

exact same process so as Bitcoin

asymptotically approaches monetization

it gets calmer and calmer and calmer

because a larger amount of the demand is

sort of being held as speculation that

it's going to become the currency once

it actually does become the currency

just like gold be super duper stable be

probably going by gold would be more

stable than the US dollar ever was

remember Bitcoin actually it's got lower

Supply creation than gold itself and you

know gold had even when gold was the

money it had various periods where drama

happened so for example the the

discovery of the Americas was an

enormous amount of gold flooding out

into the world that was very

inflationary right so you know if you

were innocently holding your gold

in Kev and all of a sudden you're like

why doesn't my gold buy what it used to

well yeah because the Spanish just

brought a whole bunch okay so you know

gold does have some problems um it's got

some

unpredictability uh in South Africa they

could find a new mine or they figure out

a way to suck gold out of ocean water

right the vast majority of gold in the

world is actually in ocean water it's

just um in such amounts yeah right it's

Trace Amounts but of course if you had

some energy efficient way to do that and

that's only a function of energy right

so if you have cheap energy somehow uh

say if you've got a bunch of green

boondoggles that are taxpayer wastes and

there's nothing better to do with them

and so you just flood ocean water

through them and suck out gold and yeah

so wow okay so why not um or and and

maybe that is an answer expose yourself

to something that could really be

denominated in anything let's say real

estate who cares yeah if it's

denominated in the dollar Bitcoin or

gold I don't have to pick the winner I

just need to pick the asset that is

productive in an of itself and then if I

want to sell it for bananas or bread or

Bitcoin it doesn't matter yeah I'm a

huge fan of both real estate and

equities actually I think a lot of

people in our space you know who talk

about dollar collapse and things they

tend to be really negative on certainly

on equities I'm not at all uh equities

are real things like if you buy a share

of Apple a apple is real it exists

produces money exactly it is not a myth

yes they have like engineers and they

have marketing and they have products

and we all use the products it's a real

thing um you know if you look back at

vimar Germany for example when the

hyperinflation started people were not

sitting around talking about

hyperinflation they were talking about

how much money they were making on the

stock

market yeah right because the value of

your share the proportion of ownership

in the business becomes more expensive

relative to the Fiat which is becoming

less powerful yeah yeah so I'm a huge

fan of of equity huge fan of real estate

for the same reason especially because

you the Fed works for you because you

know part of what the FED does is pump

out subsidized credit sure and it's

doing this partly so it can make life

easier for the government but you know

you can you can drink from that fire

hose by getting a mortgage and you know

you're getting subsidized rates I got

what like a 3.1% mortgage the other year

when when inflation was 91

so they're they're paying me 6% now it's

averaged over years but it's it's free

money it is literally free money uh for

most of my life it's been pretty close

to free money from the FED uh that

they're willing to give you for mortgage

so huge fan of real estate and you know

the only caveat I think is location you

know you want to be careful where you

buy one of the mantras in real estate is

by real estate they're not making

anymore but of course they do make more

which is that um they make highways they

make improvements people move to places

okay so Florida when I was a kid Florida

had basically four cities let's say and

today depending on how you define a city

it's got like 20 it's got like Fort

Meyers sure it's got places that never

would have been called a city at some

point in the past why because people

moved there and so what that means is

that if you were the guy who bought a

Shack in the middle of Fort Meyers in

1975 you made out right on the other

hand if you were the guy who bought the

shack in like Berlin New Hampshire in

1975 so you know there there's a caveat

to it and that's why you know I think

it's important that you know people like

you can sort of guide people on on what

types of properties and what locations

but fundamentally real estate and

equities these are both things you can

drop on their foot they're absolutely um

good places to bark your money forget

the forget the prepper you know boxes

yeah buy byy real estate by stocks yeah

I also think I curious would you ever

buy real estate in California

you know so you've kind of got to play

out this long-term um almost a game

theory where you've got to say okay so

things get bad enough and then the

voters do this and then they do the

worst thing and then the voter you know

and if you look at a place like Detroit

that really played that out step after

step you know there may have been a

point once it was clear that Detroit had

lost the plot so let's call it you know

1980 in theory you could have gone in

there you bought up a whole bunch of

houses for nothing right and they're

still worth nothing right that's the

problem you know I I like um it's it's

like when you're buying into a city and

you're deciding which neighborhood to go

into so my my dad you know used to

dabble in real estate and he would buy

into the really really bad neighborhoods

which is why I had to learn how to fight

as a kid and you know I like buying into

the neighborhoods that are right on the

edge of glory and just riding that

sucker up and then get off that one and

go find the next one so I'm I'm not a

huge fan of buying somewhere like whe

whether it's Detroit or California I I

like something that's a little bit more

of a safe got it got it so specifically

the riskier towns maybe stay away from

that could either go bankrupt or

politically or population wise yeah and

you know for sure you've got a bigger

payday if it works out but of course you

have to look at like a venture

capitalist right so you know what are

the odds of it working out and then you

compare that to all the potential losers

and so one thing that I think is so

interesting because it relates so much

to our supply discussion

is one of the things we're finding now

is you go to Texas and we're seeing so

much new construction in multifam that

we're starting to see rent compression

to a substantial degree in certain areas

like Dallas uh where we look at an area

that hasn't been corrupted uh in

California whether that's you know maybe

a part of San Diego or Ventura County or

whatever uh

you can't build anymore so you in a

weird way are almost insulated because

whereas you can build very easily and

more quickly in certain areas you can't

in in the Edge of Glory areas of that

are left in California let's say yeah

absolutely and that's been a big part of

what's Driven in real estate uh in

places like San Francisco or Seattle is

that there are so many places that you

can't build that um you know it's it's

it's like a tsunami up a canyon like it

it just concentrates it and so the

prices have gone up a lot and indeed

like if you look at a place like Dallas

Houston most of Florida still has tons

of buildable land and so you know in

terms of really making a mint I think

Florida is probably not as good as you

would expect it to be for that reason uh

so I live in Orlando and just looking at

all of the land that they're adding new

developments to I think that they can

absorb really a ton more people in

Florida before prices necessarily go up

but then of course on the the flip side

to that the zoning it's not a guarantee

right so you know again if we take

Detroit what ended up happening is they

actually knock down tens of thousands of

houses just literally they're reverting

Back To Nature uh so it's just horrific

oh and some of these houses they're like

victorians from early 1900s 1908 late

1800s gorgeous from the Golden Age

yeah I I mean it's a perfect side by

side you know that was good that was

good back then you had middle class

families building just ABS I mean

gorgeous palaces with the stained glass

and the whole thing and

then just uh knocking them down so but

yes that's a caveat the I think one of

the funniest markets is when you look

out west right so if you look at places

like Boise uh a lot of places in Utah

where on paper it looks like you got

lots of buildable land but if you

actually look at the zoning Maps the

mountains of topography it's incredible

just tiny little slivers of land that

you can build on so i' imagine that

those are actually going to be really

really good uh places like Wyoming where

you have sane government then you may

not have as much buildable spaces maybe

like uh maybe in the western portion of

Wyoming not in the part with the prionic

because they'll just keep building

forever wow this has been amazing and

very insightful what what are we not

asking that we should be asking what are

we missing uh boy we covered a lot of

ground yeah that's really good yeah

where and and so tell us where can

people follow you and and uh where are

you going to be posting the most because

this was phenomenal thank you so much

yeah well yeah thank you for having me

on I really appreciate I've been a huge

fan for a long time so no seriously at

all thank you so then X yeah uh

definitely X that's where I post most of

the time uh Elon Musk has been

phenomenal on defending free speech he

did what uh republicans in Congress

didn't have the uh yes bravery to do

bravery thank you that's the word uh so

yeah most of what I do is on X uh and

then I'm also on YouTube and I've got a

site petersons.com where you know do

substack and podcast over there you

gonna buy a

cybertruck I am gonna wait until the

Kinks are worked out uh I want it to be

proper bulletproof Kevin you know good

answer the the places I go in Orlando oh

no okay very well thank you so much

again it's a pleasure y it was great be

on even though I'm a licensed financial

adviser licensed real estate broker and

becoming a stock broker this video is

neither personalized Financial nor real

estate advice advice for you it is not

tax legal or otherwise personalized

advice tailored to you this video

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deemed endorsed by me this video is not

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or either paid affiliations or products

or Services we may benefit from I also

personally operate and actively managed

ETF and hold long positions in various

Securities mentioned including potential

short positions however I have no

relationship to any issuers nor am I

presently acting as a market maker