Economic Collapse is Coming | Confronting Peter Schiff

the whole banking system is completely

insolvent and the FED hasn't even raised

rates anywhere near high enough to get

rid of inflation we actually need much

higher rates than than where the FED

stopped the media keeps saying there's a

disconnect between the voters and the

economy no the disconnect is between the

data and the economy see people think

governments give them things government

doesn't have anything it has to take it

first it has to take it from somebody

who produced it to give it to somebody

who didn't but in the world of all

powerful AI everybody can have

everything and you just put your goggles

on and get your stimulus check and you

don't need a stimulus check your goggles

give you whatever you want right the AI

is so super intelligent that it's almost

like a God because of finra the little

guy can't even get professional help

they end up having to do it themselves

and they're more likely to get scammed

mean I wish we had no finra wish we had

no SEC eventually there's a collapse

eventually inflation Runs Out of Control

I've been trying to help people protect

themselves from this crisis for a long

time I'm investing to win the game I

don't have to get out of my stocks I own

the right stocks I have the winning

hand welcome back to another episode of

the meet Kevin show today we have the

honor and privilege to once again be at

Peter schiff's home Peter the last time

we were here it's about 10 months ago

Bitcoin has since doubled and we had a

big debate with your son about Bitcoin

what's going on well I guess I should

have bought some

huh what's the future I mean FS now is

well you know my son was trying to get

me to invest in uh AI stocks back then I

didn't even know what they were you know

he should have told me Nvidia you know

now he's been pushing me to Nvidia for

some time uh because he's really into AI

now not so much crypto anymore he

doesn't really talk about that oh really

what happened well AI you know he's just

you know that's his new thing so what

and so what do you think what what's

your position been I mean the ETFs are

these the next big thing for Bitcoin

much like uh when gold had its ETF back

in the early 2000s yeah you know that's

what the Bitcoin Community is is hoping

for or is you know that's the story

they're telling but I don't think that's

going to happen I I I don't think

there's this huge penup demand for

Bitcoin bitcoin's been around for a

while now and it's certainly been in the

spotlight since 2017 when it had the

initial big run but then really 2020

2021 you know with all the uh Super Bowl

commercials and you know just all the

hype uh and you know we they had the

Futures ETFs that came out a couple of

years ago uh and a lot of stocks you

know like Michael strategy came out

coinbase you had you know uh um what's

El

Salvador lots of stuff in the news about

crypto all the the uh celebrities and

influencers that that jumped on the

bandwagon so I think that most of the

people that wanted to buy bought I don't

think they were just nah I can't buy we

don't have a spot Bitcoin ETF like I'm

just waiting for that I don't think

there's all this demand I mean they they

think it's kind of like the Field of

Dreams well if we build an ETF then all

these investors are going to come and

they're going to buy it and I think the

buying already happened I think it was

you know buy the rumors sell the fact

for

years um the rumor of these ETFs was a a

major Catalyst to get people to buy

because they wanted to buy before the

ETFs so that they would already own it

and then when everybody else came to the

party and bought the ETFs you would make

a lot of money if you front ran it well

I think that that trade was was already

done you know the the gold ETFs the the

value

there was a lot of people didn't want to

buy the physical gold didn't want to

store it they were worried about losing

it and when you buy gold you you can't

really buy it at the spot price you have

to buy it in some form you got to buy a

coin you got to buy a bar so that adds

to the

cost and so the

ETFs took away some of that cost because

now you're buying into 100 ounce bars

which is a lot cheaper than you know

coins but you know you didn't have to

worry about storing it you can buy it

very simply in your brokerage account so

it did make it easier for a certain

segment of the market to buy gold but

with

Bitcoin anybody who wants Bitcoin can

just go buy it just set up a wallet I

mean that's what everybody has done in

fact the whole point of Bitcoin is not

to have a third party uh it's your own

Keys you don't have to trust somebody

else you don't have to pay storage fees

the

only I think reason it might make sense

for somebody to do an ETF is if it's in

an IRA and of course they have Bitcoin

IAS already uh but it is easier to buy

the ETF than to set up one of these IAS

but how much Ira money is really you

know wanting to go into Bitcoin that's

not already there I think people already

bought Bitcoin in their taxable accounts

it's completely inappropriate for an IRA

I mean most of the big firms probably

won't allow it certainly they wouldn't

allow it to be solicited in an IRA

because the broker could get sued uh for

putting something very speculative like

that they're making the allocation

decision so to speak or even if they

made a recommendation you know for cuz

an IRA I mean it's supposed to be a

retirement money supposed to be more

conservative I mean not gambling with it

uh so I don't I don't think there's a

big uh case to be made for the ETF it

was part of the hype and as you can see

you know the day the ETF started Bitcoin

almost hit

50,000 and it just got below 40,000

briefly a couple days ago so it sold off

and almost all the ETFs in fact all the

ETFs dropped 20% or more from their Peak

price on the day they started trading

which technically fits the Wall Street

definition of bare markets so we already

got kind of an immediate sell the sell

the F sell the news but I think there's

a lot more selling to come even more so

you you don't think that I mean the idea

is this institutional allocation might

leave Bitcoin becoming this next1

trillion gold-like asset so in other

words there should be at least a 10 plus

X in it and with the finite Supply Kathy

Wood says we're going to 500,000 inner

bease scenario what's your bare case

scenario well I mean first of all I mean

the idea that the institutions are going

to come and be the bag holders here like

the the little guy got in years ago and

now that we built this ETF you're going

to see Pension funds and endowments and

you know all the big sophisticated money

is now going to buy in to this Mania

right late in the game I I I I just I

don't see that happening I you know I

mean could there be some money dumb

enough to bite at it you know like oh

I'm going to just buy this because it's

going up right the

fomo um it's possible and I'm sure some

money has flowed in but remember there's

a lot of money coming out especially

grayscale I mean people were buying

grayscale when it was at a 40 50%

discount to nav to play the eventual

move to ETF which is now happened so and

a lot of money is already coming out of

a grayscale and a lot more money is

going to come out of grayscale I mean

even if you want to stay in an ETF why

would you stay in grayscale at 150 basis

points when other people are you know a

fraction of that but you know grayscale

used to be a big buyer of Bitcoin and

now they're a seller and it was a

one-way street right Bitcoin checked in

but they never checked out because it

was a closed end fund that's why it was

trading at a discount well it's not

going to trade at a discount anymore

because when people sell they got to

sell Bitcoin into the market

so I I think the Dynamics have have

flipped I think you're going to have a

lot more Sellers and then eventually I

think the money that went into these

ETFs I don't

believe these are the you know the the

the Die Hard hoders even though one of

them has the symbol hodal right one but

but I think this is more trading

money I think to the extent that people

are going to be in the ETFs it may maybe

people who were trading on coinbase

which is why I've been saying it's

negative for coinbase because I think

some of the day trading is going to

happen now um in the ETFs versus uh

directly in you know crypto

exchanges but I think a lot of the

people that are buying now are you know

buying as a trade buying to make money

and if we start to break down Bitcoin um

you know maybe cracks 30,000 or whatever

the key is going to be 20,000 I think

you could see a lot of people just

getting out in fact people could put

stops in on these ETFs you know just

Market orders like if it dumps get me

out at the market I don't know how

Bitcoin is going to handle that I don't

know what's going to happen when you get

a bunch of sell orders that hit the

market and one of the things that's

happened in the past when you had a lot

of sell orders with Bitcoin is all of a

sudden there'd be more tether tether

would just come out of thin air and buy

up all that Bitcoin right well if

they're just counterfeiting tethers and

they can expand a supply of tethers and

kind of use it as a like a plunge

protection and and and buy Bitcoin but

if people start

dumping um the

ETFs you can't there's no tether the

ETFs need dollars when people redeem the

sellers need to get dollars they can't

take tether so all of a sudden you could

have a lot of Bitcoin dumping on the

market and only actual dollars would be

able to buy so you think the ETF is a

net negative for for Bitcoin I think

it's going to be I

think the potential of the ETFs was the

positive that was the Catalyst hey you

got to buy it because the ETFs are

coming you got to get in before the ETFs

because once the ETFs are here you're

going to have all this new buying that's

just like been sitting on the sidelines

for years and it never made sense to me

because first of all there were Futures

ETFs which pretty much the same thing I

mean same exposure there were lots of

stocks that were Bitcoin proxies like

micro strategy like coinbase like some

of these other stock Michael sailor's

company right I mean it was essentially

at one point I think he even called his

company an ETF I mean obviously it's not

no one even knows what software they do

I mean who cares you know you're not buy

you're not buying micro strategy because

you like their software business right

all those guys have sold it anybody who

is in micro strategy because they they

like the company they're gone it's all

you know crypto people that are in it

now right um plus there are and have

been spot Bitcoin ETFs in Europe in

Canada the institutions are not limited

if you're managing money for a big

institution there's nothing that stops

you from trading in Europe nothing that

stops you from trading in Canada so if

you wanted to buy a Bitcoin spot ETF

they were there it's not like yeah you

know so I think that now that you've got

these there and there's 11 12 of them

whatever all right that's it so now what

now what are you going to do what's the

next big thing that is going to happen

that's going to sucker in more buers to

keep the the Ponzi going um that's it I

think this this is the end of it there's

nothing left up your sleeve in crypto

now that you've got the ETFs and what I

do think is going to happen and people

are missing the point you know Gary

gansler did not want these ETFs but he

kind of got backed into a legal

corner but you know before they came out

he was warning hey this is risky you

know don't buy I think they're getting

ready to come out with some more

regulation on crypto and Bitcoin not

just from the SEC but the B

Administration uh you know AML kyc kind

of stuff that's going to significantly

increase the cost of trading in crypto

but I also think they're going to issue

some warnings to the broker dealer

Community the invest advisor Community

like hey we don't want you recommending

this stuff and if you do recommend it

and your customer loses and they take

you to arbitration you are going to lose

wow so it's going to be like and I know

how the arbitration and you're I got out

of Fina I I've never liked this about

this heads eye win tails you lose

mentality but it encourages uh customers

to gamble knowing that they can get

their money back if they lose and in

fact one of the reasons that Wall Street

a lot of the big firms won't take small

investors right you try to open up an

account for $10,000

$225,000 at maril Lynch right you know

uh Morgan Stanley they they won't let

you take open the account they won't

take you and the reason is they say

those small accounts come with a free

put and what that means is if the

investor loses money you have to give it

back

because they'll file an arbitration

there's all these lawyers that'll take

it on contingency and it costs you 50

100 grand every time someone sues you

even if you win so if a guy opens up a

$10,000 account and loses it and sues

you for the 10 grand what are you going

to do fight them no you write them a

check so they just they won't take the

accounts because they know it's like a

casino where you're betting with the

House's money but that you know one of

my big critic criticisms of of finra you

know cu the whole idea Finn was like oh

we want to we want to help the little

guy who's not sophisticated he's going

to get ripped off by these you know

brokerage firms well thra has made it so

expensive to be a broker dealer and to

service the small customer that nobody

will even work with them so because of

finra the little guy can't even get

professional help they end up having to

do it themselves you know self-directed

and they're more likely to get scammed

they're more likely to fall victim to

fraudsters because the legitimate firms

refuse to work with them because yeah

because of the because of the government

more people get ripped off I mean I wish

we had no finra wish we had no SEC you

know the SEC and Fina bless Bernie maid

off in fact you know they said hey you

can trust me look the government says

I'm I'm okay I got the government's uh

Good Housekeeping seal of approval you

know I I'd rather have the free market

if if broker dealers want to join a club

you know if finer was voluntary I would

have been all in favor of it but it was

like you want to be a stock broker you

you have to be a member so a lot of

folks say that regulation would help be

a catalyst towards Bitcoin crypto you

actually think it's completely the

opposite yeah you know and and it's

ironic to see the crypto Community we

need more regulation we want more

government no the whole point of it was

like we don't want government we want to

get away from that but isn't that like

an FTX where you have no supervision at

all and then you get a collapse uh like

like uh you know yeah well look again

FTX collapsed the government didn't do

that the the government didn't do

anything about FTX until after it

collapsed you know the Ponzi was the

original creator of the Ponzi scheme

right it wasn't it wasn't called Ponzi

scheme until after Ponzi pulled it off

but there was no SEC there was no finra

when Ponzi was around his collapsed in

less than a year the free market figured

him out and and collapsed it Bernie

Midol pulled off his Ponzi scheme for a

lot longer right under the the nose of

the SEC and and finra so the free market

does a much better job of fiing out

frauders than the government the

government actually comes in and then

cozies up with the criminals you know

and ends up helping perpetuate their

their crimes because the industry

captures The Regulators and then ends up

using The Regulators to stifle

competition which is what happened I

mean the reason I initially sold my

broker dealer that I started in the mid

90s was it was too expensive to continue

it I was spending millions and millions

of dollars a year on

compliance and when I first started

compliance was a fraction of the cost so

I started my own broker dealer but could

a young Peter Schiff start a broker

dealer today no way impossible so there

are a lot fewer broker dealers they've

gone out of business they've merged

because they can't handle the regulation

I mean my bank before the government you

know conspired with the media to shut it

down you know and ironically I a media

falsely accused me of using my bank to

help people launder money and vade taxes

I spent millions of dollars a year

making sure that nobody used my bank

that was the biggest cost I had 65

employees of my bank 30 of them worked

in compliance wow 30 I had one person in

marketing one so one person to get

business 30 people to to shut it down

right to prevent business from happening

we turn down um like 75% of the account

applications and and we screened them

most people wouldn't even apply because

we had such a a rigorous process we said

if you're doing this you're doing this

don't even bother applying you know so

we we we screened out who could apply

and then we turned down 75% I mean what

business wants to turn down 75% of its

customers it's like but we did it um but

yeah so I don't even have have that bank

anymore you know I I sued the media in

Australia for defamation in one uh but

you know it doesn't come close to uh

recouping my losses I'm I'm filing more

lawsuits over there I didn't sue the New

York Times but the guy that wrote the

article I don't know if it was

defamation but they he definitely lied

he miss represented the facts in the

article and and in because the the media

wanted to create the false impression

that my bank had lack a customer vetting

or compliance when we actually had a

stronger customer vetting than just

about any Bank in fact one of the guys

that the uh the only guy that the the

New York Times Reporter Matthew

Goldstein cited as evidence that my bank

had lacks compliance I just dug up a

YouTube video from 2018 where he's

actually talking about the very account

that he opened at my bank that he never

used he only put in

£425 and never even used the account so

it's not like you know he has any

experience really but it took over three

weeks to get his account open but the

guy was talking and I tweeted this out

or not I posted it on X but I he he says

you know I opened up the account and my

God they asked me so many questions I

wasn't expecting it it was very rigorous

they needed all this information they

needed all these forms they asked so

many questions about the account about

the the company he said it's a lot

harder to open a bank account there than

it was in the UK where it takes one day

and you just give them like 12 pounds I

mean he even admitted in fact everybody

that the reporters in Australia and New

York interviewed about my bank all the

former customers former employees

referral agents everybody said oh my God

their their compliance was like over the

top I've never seen anything like it I

mean the main reason we lost accounts

was because they couldn't handle the

compliance because every time you wanted

to send money out we we put you through

the ringer so as an entrepreneur why why

go into banking in the first place a

broker dealer you know you shouldn't I

learned that I mean I'll never do it

again but you know I I saw a niche that

I wanted to fill I me I was a 100%

Reserve Bank didn't make any loans my

bank was you know no customers were at

risk all these Banks now are in solvant

in the US because they they loaned out

money for 30 years they bought mortgages

and government bonds I didn't do any of

that I probably had the most solvent

Bank in the country and of course when

they shut it down The Regulators claimed

they were doing so because it was

insolvent even though I had no debt and

millions more in cash than than my

deposits and you know when the the false

allegations came out in the media in the

New York Times and in Australia my bank

at the time had about 270 million in

deposits by the time they shut it down

in June of 2022 there was only about 70

million left so 7 34 of my deposits got

withdrawn because of all the problems

that the media

created we sent them the money how what

bank could handle a 75% run right

apparently none of them in March of 2023

when we had a banking crisis well none

of them can handle it now I mean they

only they don't even keep they only keep

a couple of percent it's fractional

Reserve so I was able to send back all

the money but then the government took

over the bank they've been in control

for 19 18 months and since they took

over not a single dime has been returned

that's F receivership no not FDIC we

didn't have any FDIC Insurance the local

Puerto Rican government took it over oh

wow but the IRS I think is the reason

that they closed it they came down here

because they wanted to send a message to

the world that Puerto Rico wasn't going

to tolerate money laundering or tax

evasion because my bank got investigated

by the US government for two years they

they they they took hundreds of

thousands of documents for thousands of

accounts

and they found nothing they found not

only did they find that the bank did

nothing wrong they've investigated

thousands of customers and they haven't

found a single customer that did

anything wrong anywhere in the world yet

they made my bank was the target of the

largest money laundering tax evasion

investigation in the history of the

world five governments investigated my

tiny little bank they probably spent

more money investigating my bank than

anybody else I mean one of part of the

irony of it is you know we mentioned FTX

Sam bankman freed was running his giant

fraud out of the Bahamas that's not too

far from Puerto Rico right they didn't

do anything to him they were spending

all their time investigating me well he

was donating to everyone yeah well he

was yeah I didn't give any money to any

Democrats and he was out there virtue

signaling he was talking about how he

didn't want any money for himself he was

just like I just have this one pair of

tennis shoes and a T-shirt and I live

with 14 roommates and here's my beat up

old car right like meanwhile behind the

scenes is like lifestyles of the Richard

famous right but you know I'm honest

about you know what I'm doing so are we

going to have another banking crisis I

mean you've got a unique Insight here

you were in banking and I'm sure I mean

the banking crisis happened within a

month of the last time we were here we

had the bank term funding program that's

coming to an end here on March 11 so

they right right we'll see I think that

needs to be followed up by a rate cut

right away to hopefully uh prop up uh

some of those bonds again otherwise

we'll walk into another banking what do

you think they're probably going to go

back to QE you think so look in March of

last

year we would have had a worse financial

crisis than 2008 had the FED not stepped

up now that doesn't mean they did the

right thing they did the wrong thing

they they should have allowed the crisis

because a worse crisis is going to

result from the delay and and what

another worse crisis is ahead of us 2008

Yes and worse than what March would have

been last year had we had it in March of

last year right they they always kicked

a can down the road because they'd

rather have a problem tomorrow even if

it's a bigger problem tomorrow than a

smaller problem today because then it's

somebody else's problem right uh but I

think the banking system is completely

insolvent in the United States I think

it is much in much worse shape than it

was in 2008 when it collapsed

and usually people will say well yeah

there's problems but it's not not like

2008 but they think it's not like 2008

because it's not as bad it's actually

not like 2008 because it's much worse

you know so there there there there's

two big real estate problems or problems

the bank has in

2008 the problem was mortgage loans that

went into default people stopped paying

their mortgage

and the reason this was a problem for

the banks is because when somebody

doesn't pay their mortgage well you got

to sell the house that's the collateral

for the loan but if you remember back

then people were making zero down

loans um and so they didn't have much

and real estate prices went down so I

loan somebody 500 Grand to buy a

house um now the house is worth 300

Grand the fact that that's happened in

and of itself is an incentive for the

borrower not to pay of course walk away

yeah and especially if they had a teaser

rate on their mortgage so their mortgage

started out and the guy was paying maybe

2,000 a month but now he's paying 3,000

a month but he only makes you know 2,000

a whatever he was he was paying a lot of

money for his mortgage because he

thought he was going to get rich owning

a house when it turns out that he went

broke he's not going to make that

payment why why why why make payments

when you're so underwater that sounds

worse than it is today where you've got

people locked in at 2 and a half%

mortgages 30-year no it's not worse it's

it's worse for the borrower although the

borrower just walked away if they put it

down payment they lost it in 2008 they

just walked but you know you could go

and rent a place or do something else so

the problem was when the loan defaulted

the bank lost and you know when I was a

CR critical of the um you know

adjustable rate mortgages and nothing

down and things like that I never

criticized it from the point of the

borrower I always said the borrow was

smart to put nothing down because then

you got nothing to lose I mean if

somebody is dumb enough to let you

freeroll right Putting a down payment

was the mistake that the problem with a

zero down or low down no dock arms was

the lender the lender was giving

somebody you know a free BET

on real estate hey I'm buy this real

estate if heads I win tails the bank

loses well it was tails the banks lost

and and so they lost money and you know

a lot of banks should have failed and

unfortunately they got bailed out by by

the

government but most mortgages did not

default it was still a small percentage

but that was enough to wipe out the bank

Capital because they didn't have a lot

of capital it was big pyramid well today

it's the opposite problem the problem

isn't the mortgages that default it's

the ones that are current that keep

paying because this time real estate

prices haven't crashed the mortgage

prices have crashed H so the bond market

essentially has crashed so the the the

homeowner doesn't own the mortgage he

owes the

mortgage he owns the asset the bank owns

the mortgage the mortgage has crashed so

if I loan somebody $500,000 at 3% and

they don't have to pay me back for 30

years what's the present value of that

mortgage oh maybe you know 30 40% half

so the banks are underwater not on the

real estate but on the mortgages now the

borrowers they're going to pay they're

not going to stop paying on these

sweetheart Deals they got

3% right they're going to they're going

to they're going to take that mortgage

to the

grave and um it's the only thing that's

not going up right everything the price

is if everything is going up except your

mortgage right so it's the the mortgage

is the homeowner's biggest asset it's

the bank's biggest liability so the

banks are losing money on every mortgage

and the homeowners aren't going

anywhere um and they they even if they

wanted to they can't they can't sell

because they can't buy anything else

because they can't get that mortgage the

mortgage is ortable they can't take the

mortgage from one house and move it to

another house and the buyer of their

house can't even assume that mortgage so

they're stuck there right so the real

estate Market's not moving houses aren't

for sale so home prices are still high

no one could afford to buy because the

price is structured for 3% mortgages and

they're 7% so the housing market is dead

but so the banks have lost a ton of

money but it's not just mortgages they

bought they bought treasuries and things

like that so they're way underwater

that's why the banks can't afford to pay

interest go to your bank and say hey how

much interest can I get well I can't get

anything oh then I want my money I'm

taking my money out of your bank I'm

going to put it in a money market where

I can get

5% right that's the crowding out

everybody's loaning money to the

government the banks don't have any

money that's why the banks had to go to

the FED why did the banks need money

because the Depo depositors wanted their

money and the banks didn't have it well

they still don't have it because they

gave it to the customers how are they

going to repay these loans in March all

any that's why I think they're going to

extend this program so you think uh this

uh this the only way essentially the

Ponzi keeps going is If the Fed extends

the bank term funding program and if

they don't and they call these $160

billion of loans due will have banking

crisis 2.0 what does that do for the

consumer exactly exactly and but also

depositors if the if the FED doesn't

extend

this that's going to create a bigger run

on the

banks because you're going to have to

take your money out of a bank if you're

worried it's going to fail because the

FDIC only goes to what 100 250,000 now

what is it you know so if you've got a

lot of money to bank you're not going to

leave it there you're going to take it

out and put it in one of the two big to

fail Banks so any bank that's not too

big to fail is going to fail that's

another example of where the government

comes in and and distorts the market

because they give a comparative

advantage to the bigger Banks uh but the

other thing I wanted to point out about

why the banks are insolvent particularly

a lot of the regional Banks it's not

just a Residential Mortgage book it's

commercial and Commercial is a different

problem commercial is more like 2008

where it's the default problem and the

collapse of commercial real estate

values because when people bought a lot

of this commercial real estate interest

rates are at zero and Commercial Real

Estate is like a bond it trades at a cap

rate and the lower interest rates are

the more commercial real estate is worth

because what investors just do is they

look at the income right and they

compare it well I can buy this piece of

property and collect rent or I can buy

this Bond and and clip coupons so it's

you know it's the interest rate

determines the value of the commercial

real estate so when interest rates were

at

zero um and and you had rental streams

from property commercial property prices

went way up and that was also helpful

because in 2008 when the banks were

losing money on on their uh residential

loans they weren't losing any money on

their commercial loans because

commercial real estate went up and

everybody paid but now what's happened

well you had covid and that started the

work from home craze so a lot of office

space is

empty you also had the

bankruptcy of um what's that company um

the the banks sorry no no no the the

company that that rented out all this

office space Oh we work again for the

second time we work yeah so now you have

all this we work space right we work

didn't that was my joke always always

about it but uh but now you have all

that space on the market right they were

some of the biggest tenants in the major

major markets in the country uh that

space is up for up for sale interest

rates have risen a lot so that's also

brought down real estate but the rents

have collapsed because the properties

are offices are vacant then you also

have uh shopping centers malls that are

half empty why well not only are people

working from home they're shopping from

home uh and they're shopping less

because they're spending all their money

on food on on rent on utilities on a

healthcare they don't have as much money

left over for you know things that you

know restaurants or or you know or or or

stores you know that they would just go

and and buy buy things that they don't

really need just stuff that they you

know they like liked so you have all

these vacancies that have collapsed the

income so commercial real estate prices

you look at most markets they're down

30% 40% 50% and in some cities you know

where the crime has exploded ever since

uh you know we had the black lives

matter protest with um um uh uh chovin

and George Floyd and all that stuff when

you know all the police just stopped

enforcing the laws and they stopped lock

lock up the

shoplifters um insurance rates have gone

through the roof losses due to theft so

stores are shutting down and a lot of uh

uh employers don't even want their

workers coming to work they're afraid so

what do you think how does this manifest

like well this so this this these are

huge losses for the banks because the

owners of this commercial real estate

when you borrowed let's say you borrowed

$200 million from a bank to buy a piece

of property and and that property is now

worth $100 million and your loan was 7

years and now it comes due and when you

borrowed the money you were paying you

know 4% and now they want 10 I mean

what's the odds that you're going to you

know even want to stay in no you're

going to mail in the keys you're going

to give the bank back the

building better give them a $100 million

building than a $200 million cash so the

banks are looking at massive losses on

their commercial real estate

at the same time they have massive

losses on all their Residential

Mortgages and and government bonds so

the whole banking system is completely

insolvent and the FED hasn't even raised

rates anywhere near high enough to get

rid of inflation we we actually need

much higher rates than than where the

FED stopped and not only do we need the

FED to tighten more oh I forgot I had my

phone it's all right turn that off so

how let me finish this but not only not

only do we need the

FED not only do we need the FED to

tighten more we need the government to

tighten because you need contractionary

fiscal policy as well as monetary policy

right you can't have one without the

other because the engine of inflation is

the government spending more than it

collects in taxes because you're you're

you're putting artificial into the

economy now it's worse when it's

monetized by the FED when the FED is

printing the money to buy the bonds that

facilitates this extra spending but

budget deficits are still 2 trillion

plus per year that's stimulative policy

and also look at the credit

markets Consumer Debt is at an all-time

record high credit card debt is at an

all-time record high household debt the

savings rate continues to plunge every

everybody keeps spending well that's the

fuel for the

inflation what the FED needs to do to

put this inflation Genie that it let out

of the bottle on purpose right it's not

like this happened out of left field not

only do they have to contract a money

supply which is growing again rather

rapidly but they have to contract credit

and they have to change uh people's

behavior they have to increase savings

and reduce consumption and spending

that's how you fight inflation but we

haven't done that at all

and if you go back to the very

definition of inflation which is an

expansion of the supply of money it also

includes credit inflation is an

expansion of the supply of money and the

supply of credit so credit expansion is

inflationary and we've had credit

expanding the entire time that the Fed

was fighting inflation which means the

fight has been inadequate now why is

inflation come down the way they measure

it it was 9% now it's 3% well again

nothing goes in a straight line right so

maybe it goes nine then it goes three

and the next move is 12 right it's just

in a wave up the trend is is higher

right you'd want to buy the dip in

inflation right if you're looking at

that but the main reason inflation came

down was the market anticipated all the

rate hikes and that strengthened the

dollar the dollar Index Rose about

30% and uh in that environment brought

down oil prices commodity prices and the

strong dollar put a l on import prices

so that helped we also had a small

contraction in the money supply after a

major expansion but through QT then eh

quantitative tightening yeah which is

now pretty much ending the fed's rate

hikes are over so now the markets are

starting to look at the Great Cuts which

is going to weaken the dollar so

ironically the FED says Hey we've won

our inflation fight we can cut rates by

indicating that inflation is going to

come roaring back because that brings

down the the dollar right it's actually

loosening the financial conditions but I

think the dollar is turning I think it's

top it's getting ready to fall

Commodities have bottomed oil is

bottomed uh we're going to start to see

a a big move up and the FED is in a box

now because it's promised the market

rate cuts it can't you know pull the rug

out from under it but when inflation

really surprises the thing that's going

to be a big problem is we're going to be

in a recession fact we're probably in a

recession right now now you know that I

know the economic data doesn't say that

you know we just got this you know big

GDP number right 3.3% unemployment is

really low but they were saying the same

thing in the summer of 2008 they were

saying we're not going to have a

recession even though they were in one

it's just that the government data

didn't recognize the Great Recession

that started in December of 2007 they

didn't recognize it until December of

2008 so the government in December of

2008 came out and said you know what all

the economic data we released for the

last year was wrong all the good data

was actually bad data we've been in a

recession the whole time and they went

and revised down everything so they

could just as easily do the same thing

now they could come back and say you

know what you know all those good

numbers that we gave you all those jobs

that we said were created they actually

weren't created we actually lost

millions of jobs and you know all that

economic growth that we said was there

actually we we were in recession the

whole time they could easily come back

and do that and I think it's it's likely

that they will and I think that the

reason that Joe Biden is so unpopular I

mean it's unprecedented how unpopular

but nobody has ever been less popular

and the same thing with KLA Harris she's

the most unpopular vice president ever

why what does she do I mean I I don't

know I could you name anything she

stands for anything she's done that

would would justify this degree of

unpopularity I think it's just the

voters taking out their frustration on

how bad the economy is the economy

stinks and the American electorate tends

to either blame or credit so if the

economy is bad the White House gets

credit I mean if the economy is good the

White House gets credit if the economy

is bad they get to blame whether it's

their fault or not the voters are just

going to vote their pocketbooks remember

Henry uh Carville it's the economy

stupid well if you want to know why

Biden is so unpopular it's the economy

stupid right so the econom is bad so the

media keeps saying there's a disconnect

between the the

voters and the economy no the disconnect

is between the data and the economy the

voters have got it right the economy is

awful wow so why not keep uh or

potentially as the fed the the Ponzi

going so to speak If the Fed starts

lowering rates or at least signaling

that rates come down now losses at Banks

start evaporating start reducing the

cost of borrowing maybe start reducing

some of those credit defaults which you

mentioned debt and and delinquencies are

higher now than where they were before

covid so it does seem like there's some

unsustainability with the spending even

just this morning we saw once again

Lower inflation and pce numbers yet uh

higher spending so it seems like the FED

should be in this position of cutting is

it just your position that that will

create substantial inflation again or uh

can we uh can we bail out the banks that

way and remember that spending was

financed in large part by a depletion of

savings which are already low so it's

more debt it's more credit but there's a

reason that Ponzi schemes are illegal

and and and that's because they can't

continue indefinitely they always fall

apart so there's always people holding

the bag that end up losing money uh and

so no they can't keep the Ponzi going

indefinitely because it's a Ponzi by

definition now governments can generally

get away with it a lot longer than you

and I could uh because they they protect

themselves they kind of write the rules

but they can't you know suspend the

rules

indefinitely uh and and the reason I

think they can't really get away with it

anymore is the way they've gotten away

with it in the past is by creating

inflation that's how they they do it

right quantitative easing is inflation

by definition it's just a better name

it's a euphan ISM because if the

government said our policy is to create

inflation people would well I don't like

that I don't like inflation that makes

prices go up so if they just call it

quantitative easing they don't get a lot

of enemies although in Europe they were

even more abrupt they kept saying you

know or even here we need more inflation

you know that was they actually told us

that they said the problem is we don't

have enough inflation like we have a lot

of problems that was not one of them

lack of inflation is not your problem

but the government said it was and they

had to solve it by creating more

inflation so that's what they did every

time we had a problem they created

inflation to solve it but they've

created so much inflation at this point

that inflation is now the biggest

problem and how do you solve the

inflation problem with more inflation

you don't so when we get the next

economic

downturn when it's going to happen in an

environment where you still have high

inflation right it's not going to be 2%

or any you know close to

it now let's you know inflation is let's

say four 5% whatever it is and

unemployment really spikes the banks

start to fail and they print a bunch

more money and now you take that

inflation rate and send it right into

the double

digits that's it I mean you're

the dollar crashes I mean the bonds

crash you know cuz the bond market

remember you look at that chart of the

bond market all the time the FED has

been doing these policies we've been in

this secular bull market for bonds which

started in 1980 81 and ended in 2020 so

you had a 40-year bull market in bonds

which is now the beginning of a bare

Market which who knows how long it's

going to last it's going to be brutal

it's going to be around for a long time

so now if the FED is going to try QE in

a bond bear I don't think it's going to

work I think the next time the FED

prints money to buy bonds bonds are

going to go down and not and of course

what are really going to go down are not

just treasuries but the bonds that the

FED is not buying because treasury

buying of you know the FED buying of

treasuries will will offset some of the

decline it should pump up prices right

but but they're not going to buy all the

treasury so other people would be

selling but what about the mun bonds

who's going to buy them what about

corporate bonds you know as you know

rates are going to Surge across the

Spectrum but nobody could afford to pay

I mean just look at the national debt

this is where it's it screams at you the

national debt is 34

trillion it's growing by a trillion a

quarter in calendar

2024 something like 12 trillion of that

shes has to be rolled

over in addition to the 4 trillion of

new bar that's 16 trillion who's going

to buy that right now the FED is selling

fed's adding to the problem you know who

else is selling Social Security they

were one of the biggest buyers of

treasuries during that bull market

they're now one of the biggest sellers

because Social Security because so many

people have dropped out of the labor

force or retired Social Security doesn't

collect enough money in payroll tax

taxes to cover the cost of the benefits

of the people who are already retired

not to mention the ones who are going to

retire next week or next month so

they're selling treasuries the other big

buyer of treasuries were foreigners

Japan China you know they're not buying

I mean that they're selling too uh so

this is a huge problem there a it's a

huge bond market B you think there'll be

a lack of buyers and as they return to

QE and increase the supply substantially

of bonds there won't be enough Bond

buyers there already isn't enough Bond

buyers that's why Skyrocket again that's

why they're going to go back to QE and

again the other point interest on the

national debt is about now the same as

National

Defense a year ago it was nothing it was

two or 300 billion a year now it's

almost a

trillion in another year or two interest

on the national debt if interest rates

just stay where they are right don't go

higher which they could do they just

stay where they are interest will be

more than Social Security or Medicare

it'll be the single biggest expense in a

couple of years about 50% of every

dollar the US government collects in

taxes income taxes Social Security taxes

50 cents of every dollar will be needed

just to pay the interest on the debt not

pay back any of the debt just the

interest on the debt and before the end

of this

decade assuming that we can get there

without a crisis which I I don't think

is possible do you think it's imminent

oh yeah well it's it's been imminent for

a while but before the end of the decade

which is not that far

away

100% of government tax revenues will be

for interest on the dead now obviously

that circumstances can't exist you can't

have a government that simply transfers

money to bond holders and has nothing

left over for anything else I'm not

talking about I mean not even to pay the

salaries of the the people that that

that clean the toilets in the capital I

mean nothing no money for anything

except interest on the debt so this is

how much this thing is ballooned out of

proportion you know even Janet Yellen

you know a year ago or a year and a half

ago when she was asked if she was

worried about the $30 trillion debt she

said no the debt didn't matter as long

as the interest payments were low that's

what she said I remember at the time

saying well doesn't she realize that

those interest payments aren't fixed the

FED is going to be raising rates you

know I'm only worried about it when

interest rates go up well then you

should worry about it now because

interest rates are going to go up but

this is why the FED is going to stop

cutting rates it's not because it's one

it's battle against inflation it's lost

it's going to surrender it's cutting

rates because nobody can afford to pay

it's going to cut rates to prevent

default

insolvency right but that's going to

lead to Runaway inflation could your Sun

be right where artificial intelligence

expands GDP so much that that our debt

just doesn't matter anymore and

everything's great and there's no

recession what what are the odds of us

being able to escape massive pain and

you mentioned it yourself layoffs and

unemployment which is obviously a

lagging indicator yeah I mean obviously

I mean my son thinks the odds are High

um I don't know why he's he's that

confident but I think the odds are very

low I mean look

obviously if if

AI you know leads to such an

enormous uh increase in

productivity I mean in theory right if I

everybody can have their own a AI that

was so super intelligent that it can

conjure up anything you need almost like

you remember Barbara Eden from I dream e

genie right whatever Tony Nelson wanted

she just blinked and he could have it

right well if AI could do that oh I'd

like a brand new car and the AI just

creates it from the molecules in the air

you know it creates your food it it

gives you everything you need and you

don't nobody have well sure no one no

one needs anything I mean we don't need

money right the problem isn't money it's

stuff we need things right we need food

we need shelter we need clothing we need

entertainment um um you know there are a

lot of things that we need and we can't

have them unless we produce them right

we don't have to produce them ourselves

somebody has to produce them and we have

to do something of value to exchange

with the productive people so that we

can have things

but if nobody needed to work if we could

if we could just have all the things

without having to do the work well then

the problems are over right we we don't

need anything uh and then it doesn't

matter about you know any of this right

you just put your goggles on and get

your stimulus check and you don't need a

stimulus check you you know your goggles

give you whatever you want right you the

AI is so super intelligent that it's

almost like a god it has harnessed the

the powers of the universe the force

right I mean this is like the ultimate

where it can just give you what you want

you don't have to work to earn something

and of course government see people

think governments give them things

government doesn't have anything it has

to take it first it has to take it from

somebody who produced it to give it to

somebody who didn't but in the world of

you know all powerful AI everybody can

have everything you know because you're

every AI so obviously you know we're not

going to be there but to the extent that

look if if if a if a factory can you

know get rid of a 100 workers and

replace it with you know an AI chip or

whatever it's a computer chip an Elon

robot um then you know we you know

production productivity goes up you know

if if if we could have a much more

efficient Health Care system because all

the doctors are robots and they diagnose

you immediately or they they figure out

a cure so you don't even need an

operation they're so super smart that

they just here take this pill it'll cure

everything that you have right all our

health care costs go down you know I

mean so yes I mean you could say that we

could get a get out of jail free card

from this productivity

Miracle um but look you know I think

that there is a lot of potential in Ai

and it may take many more years or

decades for it to fully

uh develop and in the meantime you know

to the extent that AI

does uh eliminate uh the need for

workers the way governments are set up

today those workers just might

immediately start getting government

money it's not like they're going to do

something else that's valuable they're

just going to start collecting

government money uh and that's more

inflation and also you know the these

programs like Social Security and

Medicare they depend on people working

for a paycheck if I replace my workers

with a robot there's no more

FICA right because you know and so the

government loses a lot of that tax

revenue and if they start spending money

because they're they're giving everybody

like a stimulus check because they no

longer have a job so in the short run

there could be a a a negative to the AI

not because of capitalism but because of

government because of because of

socialism um but you know the other

thing is that AI is not just in the

America it's all over the

world and you know to the extent that

the world is a lot better off then you

know that could be a negative for the us

because we kind of depend on everybody

else being in trouble because they buy

the dollar like as as a safe haven

people are worried about Europe they're

worried about Japan and when they they

buy the dollar so we're the best of the

worst so to speak so people buy the doar

perception of that right so if things

get better hey they don't need they

don't need

it but also you

know America is uniquely vulnerable

because of the Dollar's status I mean we

it's like you know you live by the sword

you die by the sword I mean the dollar

status is the source of our standard of

living right so right now we we benefit

from the doar being the reserve

currency because we don't have to work

as hard as everybody else we don't have

to produce because we could print money

instead and we can exchange that money

with for the stuff everybody else

produces because everybody wants our

dollars because they're the reserve

currency not because you could do

anything with them um you know we have

huge trade deficits you know trillion

dollars a year so the source of our

strength is actually going to be our

undoing uh because once we lose that

privilege

the whole economy collapses because

we've built it on the foundation of that

privilege being there we have this

service sector economy right where

everybody is in the service sector well

that's only possible because we don't

have to manufacture as much because we

can rely on China or other countries to

manufacture for us because they need our

paper money but if they don't need it

anymore because the dollar has been

demonetized as a reserve currency

because we've created too many of them

we've created too much inflation because

we have too much debt now we can't

import anymore without exporting and so

now the economy doesn't work I mean

imagine a Walmart with no with no

nothing on the shelves I mean so all

those workers at the store are going to

lose their jobs if there's nothing to

buy right those jobs are predicated on

their being stuff on the

shelves and and a lot of the service

sector economy is is predicated on

you already having stuff you know that

you bought but if you don't have the

manufacturing if you don't have the

actual Goods then you can't afford the

services and the whole thing is going to

just implode so the economies on the

verg collapse the dollar crashes I guess

two things to ask is what can I as an

individual do to protect myself and then

beyond that Beyond just me covering my

ass like what can we as a society do to

kind of remove ourselves from this

centralized government and this

impending doom yeah well I've been

trying to help people protect themselves

from this crisis for a long time and

because we haven't had the crisis people

think well shift's wrong right he's

preparing for you know this crisis

that's never going to happen no I'm

preparing for a crisis that is going to

happen it's just happening

later um but all

of the the

things that make the crisis inevitable

all those problems

not only still exist but they're they're

bigger so the crisis looms even larger

than it did a decade ago you know um

we've just blown a bigger bubble but

while we've you know kicked a can down

the road all these problems have gotten

so much worse and so what this means is

that we have the crisis it's going to be

much deeper because we've dug ourselves

into a bigger hole now again maybe AI

could soften the blow you know anything

that that that the free market could do

uh to counteract the damage that

government does I mean that's basically

the dance that we do capitalism is a

positive Force for good uh the free

market which is constantly finding ways

to increase abundance uh make things

better make things cheaper increase

living standards and then you have

governments that are working at the

exact opposite purp purpose they're

trying to undermine productivity they're

trying to add unnecessary burdens and

regulations and red type they're trying

to counteract the benevolent forces of

the free market that want to allocate

resources and labor to their highest and

best use politicians want to allocate

them to their friends sure whoever's

going to give them the the most

donations so FTX yeah so government

government is acting and then you have

the free market that is trying to lower

prices and the government that creates

inflation to push them up uh you know so

whatever the government the the free

market can do to undo the damage of

government but you can only imagine the

world that we would live in today if

Government had stayed at the same size

it was in 1900 you know had we never had

an income tax have we never had a social

security have we never had a Federal

Reserve had the government stayed the

same size it was in 1900 which was less

than 5% of our GDP had we had no

government borrowing right imagine

imagine the world that we would live in

would even recogn I mean would we have

less control of domestic policies uh

International policies uh you know the

idea of government is they're here to

protect us Peter who would protect us if

the government wasn't as massively large

as it is like I said with my bank you

know every customer could have taken out

all their money and then the government

came in to protect them and now no one

gets any money for almost two years no

one's gotten their money now that they

have government protection when when I

was protecting them in the free market

everybody had access to all their money

at all the time but no what the world

would look like look I I think that had

the government not get involv gotten

involved I think that you know the

typical family

today um would have one bread

winner most likely the man but it could

be the woman but you wouldn't have a

husband and wife both having

jobs uh people wouldn't be Moonlighting

you wouldn't have people with two or

three jobs my guess is by now we'd

probably be down to maybe three or four

days a week working so the weekends

would probably be maybe four four days

long five days long uh we'd be so much

more productive we'd have a much higher

standard of living God knows what

inventions we would have come up with uh

what drugs we would have come up with

you know without the FDA you know uh you

know screwing all that up I mean we

maybe we would have cancer by now who

knows right where we maybe we would have

developed AI a decade two ago I don't

know but I know I used to watch The

Jetsons when I was a kid did you ever

see that show so yeah they The Jetsons

came out in the 60s and they just

assumed that you know we would just keep

expanding the way we were back then you

know um but I think George Jetson worked

two days a week he was complaining about

these two-day work weeks are killing me

and he was say look at my button pushing

I had to push the button four times

yesterday like that's all he did right

it was his job um he worked at this

place spacely sprockets right they made

sprocket so who the hell knows what a

sprocket is right it's was like a widget

a sprocket uh but I think it would be

something like that I mean maybe we

wouldn't be flying around in you know

the flying cars but we would all be

working a lot less we would have a much

higher standard of

living uh than we do now you know and if

you look at you know America relative to

the rest of the world Americans had a

standard of living in 1940

1950 that was unrivaled there was

nothing like America we I mean American

capitalism created the middle class

which didn't exist in Europe I mean

Americans used to go to Europe and there

was an expression the Ugly American and

the reason that we were ugly is because

Americans would go there and all of a

sudden they'd be rich because everything

was so cheap there and so we would act

kind of arrogant when we were there just

you know not on purpose um but you know

I mean

everybody was rich when they went to

Europe because it was they were poor in

comparison to America's middle class uh

but today Americans don't live that much

better than the rest of the world in

fact there are a lot of countries that

have higher standard of livings than

America uh and and the only reason our

standard living isn't much lower is

because of all this debt but that just

means that in the future it's you know

our standard of living is is going to

come way down when this bubble bursts

and we can't

uh live beyond our means anymore do you

think the wealth Gap is just going to

widen or will there be some great reset

that gives everybody that opportunity to

you know help reduce the size of

government and get back to a normal

playing field yeah I mean the wealth Gap

I think is going to continue to widen as

a result of the fed and government

policy remember the biggest wealth Gap

is in Socialism or communism right you

have a few people who work for the

government that have all the wealth and

everybody else else is in abject poverty

right and yeah there are a few people

that are connected to the government

that that manage to get some get

something capitalism is the great

equalizer you know that's what uh

Narrows the Gap and it creates a lot of

wealth now you're going to have some

very rich people in capitalism but they

earn it because in capitalism you're

rewarded in proportion to your

contribution the more you benefit

Society the more money you earn because

that's what profit is profit is the gain

that's derived from doing good right if

if you're able to uh combine the the

resources in the economy that are scarce

right everybody the resources are scarce

so if you're going to use these

resources you need to use them

efficiently and if you can take these

resources and create products and and

services that people value more than the

resources it took to create them you get

rich because people buy what you have to

sell but a capitalist can't force

somebody to buy anything they have to

voluntarily do it people make a choice I

want to own that I want to buy that

because it's going to make my life

better and I'm going to give money to

the company that made my life better so

the more money you collect the more

people's lives that you've improved

that's the Invisible Hand of capitalism

and that's that's the beauty of the

system but yes I mean there are going to

be people that work harder that are

smarter and do more good and they're

going to achieve more wealth but you

always have people who become envious of

other people and the

politicians play on that Envy right and

they say these people are rich that's

not fair you should have more money vote

for me and I'll steal their money and

give it to you right because you're more

deserving you're more caring because

they have their money because they're

greedy right you know they're you know

they're just they're just ripping people

off and exploiting their workers right

that that that's what they tell you to

get get they get they get the votes and

people yes the reason I'm not rich is

because I'm a good guy I don't exploit

people I'm not Cutthroat in evil right

like those rich people are right because

that's a way to kind of L you know

justify the fact that you're not rich

instead of saying I'm not rich because I

don't work as hard I'm not ambitious I'm

not as smart right that's why you're not

rich on that note uh Brett Whitten over

from Arin vest I know you love Arin vest

and Kathy over there slightly different

opinions uh but uh they argue that

there's a chance the Federal Reserve

might be biased in cutting interest

rates substantially maybe even before

the election to preserve the stability

of the Dollar by preventing potentially

a trump election and keeping their jobs

what's your take on that well I agree

with the idea that the

FED wants to reelect

Biden and that they don't want

Trump and that they know know that the

economy is going to

be key and so one of the reasons they'll

try to pump it up between now and

November is to help Biden and how do

they do that well they need to cut rates

they need to go back to quantitative

easing uh they need to you know create

some more phony wealth they're try to

artificially boost up the economy so

that people feel better and and and vote

Biden so yes I would agree uh that that

is you know part of the reason that the

FED is going to cut it's not the only

reason or part of the reason they're

going to go back to QE um but what

they're hoping is the the negative

effects of that meaning the the the

spike in inflation won't happen until

after the

election so basically you know the

voters won't realize what they're

getting when they when they buy Biden

right they because they they're they're

in for a shock um in 2025

when the negative consequences of you

know the fed's actions show up of course

though the government will never accept

responsibility right when like during

covid they print all this money and

create massive inflation and then we see

the consequences of it with you know

soaring prices and they never accept

responsibility for their actions it's

like yes well we we printed all this

money just to to send out these stimulus

checks and everybody spent them and

that's why prices went up right they

they don't want to accept responsibility

they act like this just happened

coincidentally oh it's all the supply

bottlenecks that's the problem look if

if we gave everybody a million dollars

right and then everybody ran to uh uh

you know uh the the Ferrari dealers to

buy a Ferrari you and then well

obviously Ferrari prices would go way up

and you would say well it's supply

problem there's not enough Ferraris of

course no no there there's never enough

Ferraris there's too much money right

you could always claim it's a supply

problem right if you just print a bunch

of money and give it to

people yeah they want to buy stuff but

Supply is always the problem because

stuff is scarce and

limited you know it's the demand that's

the problem when you give people a bunch

of money to spend the only way to get an

equilibrium is for the price to go up so

if the government just doubles the

supply of money right away and the

supply of stuff is the same everything

has to double in price so that the

economy works right it's like if we have

an

auction and in one room everybody has

$100 and that's all they have to bid and

you have the same merchandise and you

have another auction everybody has

$1,000 to spend where are the prices

going to be higher yeah it's a great

analogy yeah yeah I mean it's where it

the the because the limiting factor is

the stuff

the money is just how we allocate the

stuff right and and we set a price based

on the quantity of money and the

quantity of stuff you know now different

things will have different values

depending on how much people want

something versus something else right so

prices some prices can go up but then

other prices have to go down they all

have to adjust but all of a sudden

everybody has more money like they did

during

covid and especially worse because in

covid we gave people money to do less

work so cuz it's the work that produces

the stuff so if you stop working you you

don't have the stuff right worse to both

case scenarios you're supposed to if

you're so what we should have done is

told people okay you can't go to work

because of covid so you're not going to

get any money either because you're not

working so you can't spend we told

people don't go to work but here's money

go out and spend it spend more money

while you're staying at home than you

used to spend when you actually had a

job so it was the worst possible

combination of monetary and fiscal

policy I called it out at the time I

said this is a inflationary cocktail

this is terrible and you know of course

I was right so to distill uh all of

these issues that we have it sounds like

you've got uh mortgage back Securities

that are in the toilet office real

estate multif family commercial real

estate potentially in the toilet maybe

not so much multif family's office

obviously but you've got these these

massive issues that are creating

revaluations and losses at Banks your

thesis is that the FED May prop up Biden

here which would continue fiscal

expansionary

policies uh and basically worsen a 2025

reignition of inflation and then when

the FED finally realizes that they've

reignited inflation and you still have

the bond issues a lack of bond buyers

you've got the commercial real estate

issues and now inflation uh combined

with the debt and the debt instability

now you actually have the real

unemployment skyrocketing because

companies have to lay off just to have

any earnings left over and you have a

real crash yeah I mean you have to

understand

that the FED causes the problem by

keeping interest rates artificially low

that's the source of the problem because

in capitalism the interest rate is very

important and the price has to be right

and the price has to be determined in a

free market you never want the

government to set a price and we

understand that for most things like we

don't have a a bureau that decides how

much milk is going to cost or how much

gas is going to cost or how much

anything is going to cost we let the

market determine that right because if

the government picked a price it would

guess wrong and either we'd have a

shortage we'd have a surplus right

but for some reason we've decided that

interest rates there we need a pilot

Bureau we don't want capitalism we just

want a bunch of men in a room to get

together and decide what they think the

price should be now once we've done that

it's not a surprise that they always

think the price should be lower than it

it really is because low interest rates

benefit who debtors borrowers right

artificially you know we got this

consumer economy so

there there is a bias to wanting rates

lower than than than they need to be but

by doing that by setting a rate that's

lower than where the free market would

have set it you are causing problems

structural problems that get worse the

longer interest rates stay low now every

time the FED tries to raise rates back

or normalize them that's what exposes

the problems that the FED has created

and now the market tries to fix the

problem

by reorganizing resources repricing

assets and that causes a recession or

crisis the government's response is

always oh my God we can't allow this

cure we need to make the disease worse

so now let's print more money let's shut

it lower interest rates even lower keep

them there even longer so because of qe1

QE2 qe3 uh covid stimulus all that the

problems in the US have never been

greater than they are right now right

all we and everybody who credits the FED

for solving the problem doesn't

understand the problem or that the FED

has made it worse and so right now you

know all the warnings that I was giving

a decade ago or more the problems that I

warned about haven't gone away they've

gotten worse but the people who didn't

understand them still don't get that and

they're still looking to the FED to

solve the problems that the FED

creates if only there was some sort of

digital currency that the FED couldn't

manipulate so yes if that's yes yes

Bitcoin fixes this that's what everybody

if only there was this but you know what

but Bitcoin doesn't do that you know bit

Bitcoin you know again Bitcoin is just

one of tens of thousands of digital

currencies except Bitcoin isn't even a

digital currency because it's not used

as a currency it's a digital asset but

it's a digital asset with no value

because it doesn't do anything you know

and people claim well that's the same

thing as gold gold doesn't do anything

yes it does gold look I mean this watch

is made of gold right so there gold is

used for this watch um you have a cell

phone there's a little gold in there uh

you know so there gold is used but yes

there's a lot of gold that isn't used it

just sits there in a vault but what it's

doing is it's storing the value of its

future use that's what that gold is is

doing every ounce of gold that's stored

could be used in industry and maybe will

be used in industry at some future date

right um but when you're storing your

Bitcoin you're not storing anything that

anybody can ever use because you can't

do anything with your Bitcoin all you

can do is hold

it um and there's 20,000 other

currencies that you can also hold that

don't have any value but actually if you

wanted to use a

cryptocurrency as a med of exchange or

as a unit of account there are hundreds

of them that do it much better than

Bitcoin

and who knows what new one is going to

be created I mentioned you know my son

lost interest Shin yeah well my son my

son lost interest in Bitcoin I mean look

AI is coming right tell us about that

why why did he lose interest in Bitcoin

I don't know it's just a fat I mean

people lost interest in the hula hoop

you know you know the pet rock what

happen you know once upon a time people

used to stuff phone booths now we don't

even have phone booths but even what you

know but people stopped stuffing them

long before we lost the phone boots look

you know it's a fad but look I think

people made money like just like people

made money trading beanie

babies um you

know people jumped on the bandwagon I

mean why did people buy tulips in

Holland you know I mean so it's happened

I mean people it's it's it's been a

giant bubble Again part of the FED a lot

of bubbles were inflated due to the

fed's cheap money and people looking for

Alternatives um but Bitcoin doesn't fix

it you know it

look if everybody with Bitcoin the

problem is so you take something that

inherently has no value and we all just

pretend that it has value we agree it

has value and because we agree it has

value we we want it and because we we've

limited its Supply right um the price

goes up if more people want to buy it

and there's no increase in Supply or the

supply is it increases

slowly um the price is going to go up

but the problem is what happens if

people stop

believing what happens if new people

don't want to buy

it uh it implodes if it's all about

buying and holding it and the only use

cases to hold it

and you only hold it because you think

somebody else is going to want to pay

you more for it in the future because if

you want

something if you have Bitcoin but you

want a car you want food you want to buy

a house you want to take a vacation you

got to sell some

Bitcoin you know the the the grocery

store doesn't want your Bitcoin and even

if they took it they'd have to sell it

because they have to pay their workers

their salary they got to pay rent they

got to pay tax ta um So eventually the

Bitcoin has to be sold and if there's

not new people to buy it then the price

is going to implode I mean that's what

they're doing now with these ETFs

they're hoping to draw in new buyers

because they need new buyers to keep it

going and the higher the price is the

more money has to suck in to sustain

it um but the whole thing could collapse

I mean if people stop buying you know

one Satoshi could crash the market I

mean if I want to sell one Satoshi and

is not a buyer you know where you know

wherever that Satoshi trade sets the

market for all the others right last

trade so is it because the dollar let's

say is the the reserve currency it

always has that imputed demand whereas

Bitcoin doesn't necessarily always need

to have that imputed demand because it's

not a reserve currency then should you

make it a reserve currency well it's not

a currency it's not a reserve anything

um but the dollar

has that uh Demand right

now

because everyone in

America will sell you whatever you need

and accept dollars that is the unit of

account that is that we use that is the

medium exchange because everyone

believes in it everybody believes in it

um now at some point they may stop

believing they will stop believing but

one of the things that keeps the belief

going is the legal framework because

remember there's a US government that

collects taxes and a big military right

but the military isn't the thing it's

paying for the military so the US

government

um takes all those taxes and taxes have

to be paid in

dollars and so every American who

doesn't want to go to jail needs dollars

because the government said you know you

give us these dollars you know I an

example that my dad told me a long time

ago of how this works which you know uh

is a good example think about a bunch of

kids in a schoolyard and there's one

bully that beats the crap out of

everybody and the bully says you know

what I'm going to uh come up with a

little uh

note and if you pay me

$5 I'm going to give you this note and

this note says you paid the $5 you won't

get beat up and

so you give me the you know

and so every time I come around you got

to show me this note if you don't have

it I'm I'm going to kick the crap out of

you right so all of a sudden people want

to buy these notes because if you own

these notes you're not going to get beat

up well now you know the people in the

schoolyard will value those notes if

they you don't have a note you might you

know hey I'll give you my my lunch for

your note right because you know but

what gives the note value is the fact

that the bully is going to beat you up

if you don't have it right that that's

the US government the US government is

like look you know you got to have my

paper you got to have these dollars cuz

if you don't have them come April 15th

we're taking your ass to jail right you

need these so everybody has to get these

dollars because that's what the

government takes that's really so what

you're saying is because Bitcoin doesn't

have a bully who is forcing you to

choose that exactly there's no one

there's no one that can kick the crap

out of you if you don't have Bitcoin

right the government the government in

fact the government won't take your

Bitcoin for taxes you have to sell your

Bitcoin to get dollars that's the only

thing that they

will

accept um is is is US currency uh and so

that gives it value and that's the same

thing with uh every other currency you

have a Sovereign Nation that says this

is how you have to pay your taxes right

and so everybody needs to earn these so

that you can pay your taxes because that

is the law so that helps keep it going

but that doesn't mean that you can't

have hyperinflation me they have taxes

in zagu they have they you know they

have taxes in you know other countries

if they print too much money it's not

going to matter weaker bully I guess huh

but what about the other strong bully in

the world China can we should we invest

and buy the dip in China and the Chinese

consumer and Alibaba yeah look you know

the Chinese stocks have gone down a lot

um you know I own some I mean I I really

would like to own more than I do um

but you know part of the risk the

political risk is that the US government

comes up with sanctions and basically

says you can't own these stocks you it

forces you to sell them is that a trump

reference well Trump did it but Biden

didn't do it I mean you know who would

be worse for for investing in China oh I

I I I assume Biden is worth worse for

most things um but you know it's it's

unconstitutional that the US government

can tell you that you know you can't own

an investment but if the government

forces Americans to divest themselves of

Chinese assets it just benefits the

person who gets to buy the assets it

might actually benefit China if they get

to buy their assets back right they sell

them to Americans and then they buy them

back cheap um but look China is the

rising economic

power and yes they are

experiencing growth pains they have

problems some of them relate to

uh they're hitching their cart to our

wagon I mean they're you know they're

accumulating trillions of dollars and

they're financing exports they're

basically vendor Finance they vendor

Finance trillions of dollars of exports

to the United States that was a mistake

um but these are growing

pains uh China is on the ascent America

is on the decline you know from where we

were as a world power uh so we're we're

on a different slope unfortunately you

know they they they went from total

government complete communism and they

are introducing elements of capitalism

into a communist structure we went from

almost pure free enterprise and we've

been gradually introducing socialism so

we're kind of you know moving in

opposite directions we started at

different points the key is have we

passed you know when do we get to the

point where we're more socialist than

they are right you think that'll happen

well in in a lot of things it's already

happened I mean it hasn't completely

happened um but if you're like a small

entrepreneur you're a young kid want to

start a business General business it's

join finra well forget about finra but

if you're young if you're you know 20

years old and you want to go out and

start a business it's probably easier to

do it in China than wow I I I'm shocked

by that why yeah I mean you fewer forms

and regulations and permits and licenses

and it's not just the federal government

that licenses you you know you have

states and cities there's all kinds of

things you know that you know let's say

you just wanted to you know open up a

barber shop and and cut hair you just

can't do that you need to get licens as

a hairdresser hair styler you you need

to go to

school why can't I just cut people's

hair what the hell you know it's like I

mean like what's the worst thing that

happens you get a bad haircut you don't

come back you know I mean a lot of

people found out you know my my wife

started cutting her hair during Co she

did a pretty good job she never you know

she never took any lessons she just has

a little aesthetic you know looks at the

hair and you know um so but yeah I mean

it's it's the government makes it a lot

harder and then you have to keep all

kinds of Records yeah you know when my

grandfather came to this country uh my

father's father he became a carpenter he

came here he was 13 14 years old didn't

speak any English didn't have any money

no welfare no food stamps no government

assistant he survived and he started a

small business hired some people I mean

he never became rich but he was

self-employed but I don't know that he

could have survived if he had a deal

with workman's comp and payroll and and

ta Social Security I mean he just

probably collected some money and paid

his workers with cash he earned cash and

he probably didn't even keep records he

didn't pay any income taxes I mean that

stuff started in the 30s but when he

came here

1900 they didn't have any of that 1890s

whenever he got here you know it was

like wow you know you didn't have I mean

you wanted to start a business you just

started a business and you didn't have

to keep all these books and records of

course it's easier to keep books and

Records now because we got computers

thankfully you know they didn't have any

of that stuff back then do you think

that there's a a chance we can continue

to see spending the way it is now uh the

stock market continues to run into the

election rates come down and despite the

fact that we're spending more because

we've expanded Supply so much through

greater manufacturing that we actually

end up with deflation or well first of

all manufacturing has been in a

recession for about two years yeah so

we're actually producing less not more

um we're importing more so is capacity

going up though maybe utilization no

it's not it's not now now some companies

are starting to introduce AI in a way

that is helping productivity but we're

not seeing it in the the end results yet

I mean maybe things would be worse if we

didn't have this these gains uh and

there's a major investment going on

right now in capacity you know in in in

in in computing power that's why nid is

stocking everybody is buying all these

gpus and and so they're making a major

investment that may pay off in the

future uh and may not I mean who knows

maybe people are overestimating how this

thing is going to be I you know I don't

know you know um but no there's it it's

not going to happen in the next year now

does that mean that the stock market

can't keep rallying of course not I mean

the stock market could keep

rallying um and uh

but that you know the dollar is going to

have to break because the only way to

keep the stock market going up is not to

fight inflation to surrender to

inflation which undermines the dollar

which ultimately undermines the whole us

system because it's all predicated on

the dollar um the deficits are going to

keep

Rising um unless you know and the

government's going to have to step up

QE to fund them especially as I

mentioned Social Security deficits are

going to get bigger I mean nobody is

talking about cutting soci Security

benefits very politically unpopular

nobody wants to raise the payroll tax in

in fact all we've done is cut the

payroll tax that was one of the things

we did in Co every time there's a

recession oh let's lower the payroll tax

you know well you know and now we're

forgiving student loans where's that

money coming from again that was an

asset that the government owned but

remember every time we forgive a student

loan it's inflationary because when

people are paying student loans they're

they're not spending that money on goods

and services they're sending that money

to the government which is reducing the

deficit or making it smaller but when

you tell somebody as a student loan you

don't have to pay that loan anymore well

that now they have more money to buy

stuff and you've expanded the money

supply uh and it's inflation and who's

paying for it people think that student

debt relief is free no it costs

everybody money because the price of

everything that you need to buy will go

up the more student loans are forgiven

there's almost $2

trillion of student loans outstanding

and because the government is forgiving

them the the the they're growing even

faster because there there was always a

moral hazard that's the problem where I

mentioned how government always does

harm student loans is one of the best

examples

because in the 1960s is when all this

started right student nobody borrowed

money to go to college my

father and mother went to college none

of them took out loans now my father was

the youngest of eight kids said his my

grandfather was a carpenter he said they

could couldn't figure out if they were

upper lower class or lower middle class

but they were not even you know middle

middle class yet my dad didn't need any

student loans Wow and his parents didn't

pay for college he had a summer job he

weighed tables and that's what his

friends did there was an old expression

I'm working my way through school that's

what people did now they borrow their

way through school but the reason we got

these student loans is during the

Vietnam more days the voting age was was

initially 21 they lowered it to 18 they

said well if you're old enough to fight

you're old enough to vote so they which

was BS but they lowered the voting age

so now you have all these people who are

18 who are voting well what are 18-y

olds doing they're all going to college

how do you get their votes let's give

them loans let's happens to it so this

is what they told people don't work over

the summer have fun right have a

vacation go to Europe we'll give you the

money for college we'll loan it to you

pay it back later when you've got a

great job right so this is what started

it what started these student loans now

the minute the government started giving

kids money to go to college the colleges

were like Whoa We Could raise our prices

and they started increasing prices

because of the access to money and they

started throwing things in to college

you know nicer dorms nicer gymnasiums

different things because the kids had

the money well then tuition went up and

then the government kept saying oh

college is now more expensive we need

bigger loans we need more money you know

I went over like I looked I did an

article about this years ago I looked at

the tuition in Harvard because you can

go back to like you know 17 you know 100

or 1800 and Harvard's tuition would stay

the same for 30 or 40 years in a row

exactly the same then it would go up a

little bit then it would stay the same

for 30 or 40 years right it's not like

now where they raise it every single

year right so before the government got

involved College was affordable right

nobody had to borrow money to go to

college it was you know it wasn't cheap

you had maybe you had to get a job now

if you were Rich you didn't have to work

your parents could afford to pay you and

it wasn't anywhere near as expensive as

today but the government came in with

student loans to make College affordable

and they made it astronomically

expensive and in fact not only did

government artificially increase the

cost of a college degree right they made

a college degree much more expensive

they also destroyed the value of it

because now because the government loans

all this money to kids to go to college

everybody

goes when my father went most people

didn't go to college you just you know

you just you know you just got a

different type of job because most jobs

didn't require a college degree so if

you actually got a college degree it had

some value but now everybody gets a

college degree right so they used to say

like hey you got to go to college right

otherwise you're going to be working at

McDonald's right well now you got to go

to college to get a job at McDonald's

right because they all have college I

don't know if you ever saw this I did a

video this is about 12 years ago you go

on YouTube and type put in Peter shiff

college right and I walked around

Bourbon Street in New Orleans one one

day I'm down there for this conference

and I went to all the bars and the strip

clubs and you know whatever was there

and I I I talked to the people that were

you know the bouncers driving the petty

cars uh cleaning the the trash cans I

asked everybody did you go to

college uh when did you graduate what

was your major and everybody I talked to

had a college degree

everybody and everybody had debt but

nobody had a good job interesting some

of them had multiple I mean you'll laugh

you watch this thing but the government

did this to people and now you have the

government saying oh look at all these

students they have all this debt this is

terrible why do they have all this debt

they never could have gotten that debt

in a free market the only reason that

Banks loan them the money was because

the government guaranteed it and now the

government makes the loans and think

about this you can borrow money it

doesn't even matter what your degree is

doesn't even matter what your GPA is

right you can go to college and major in

you know uh you know women's studies you

know or gender equality or some whatever

kind of nonsense and you could even get

a master's degree in it and you could

borrow all this money the same the same

as if you're you know Ma you know doing

mathematics or computer science or

engineering they don't care and they

don't care what your grades are you can

be flunking out as long as you pass you

can keep borrowing the money and you can

go to school four years five years six

years you can keep change I mean it's

ridiculous the free market would never

screw something up this badly and who

benefited from student loans because it

wasn't the students they they suffered

it was the colleges un ities that got to

overcharge the students you know they're

living high right they you know they're

making all the money that that that

everybody is Bor the country is poor

because all of this money that could

have been used to finance the building

of factories right productive investment

was loaned to students to blow in

college you know and waste four five six

years of their lives when they could

have been out working doing something

productive said they were just getting

drunk how does do gen Z get ahead today

your or your children for example8 and

10 I believe how do they how would they

make it in kids white kids made it

because they won the lottery of this the

sperm Lottery right so how does a normal

child that age make it yeah no it's it's

going to be difficult some of them might

leave the country to make it really I

mean if there's more opportunities like

look look at what's going on now in down

in

Argentina uh I you know I with jaier M

yeah I mean look if this is the

beginning look you go to

1900 Argentina was one of the richest

countries in the world per capita I mean

there was an expression you know riches

in Argentine right I mean they were

making a ton of money they were very

wealthy down there uh and socialism

destroyed the country they bankrupted

themselves they finally elected a true

free market libertarian you know he

walked right out of the pages of an Iran

novel you know you we've got you know as

a president of a country now why did

Argentina elect somebody like this well

because there it's a basket case down

there they've had so much socialism for

so long that they're just they have a

belly full of it right and they're just

barfing it all up right um we're not

there yet we're not willing to elect a

guy that's promising Freedom we still

want to elect people that are promising

free stuff the argentinians don't want

any more free stuff because they know

how expensive it is right they can't

afford any more free stuff they want to

be left alone they want the government

to get out of the way and so to the

extent that these

reforms stick and Argentina stays on

that path a lot of Americans may be

moving down there maybe me well because

they had to go through massive uh

economic pain 40 plus% poverty to I

guess come to the recogn recognition

that either their currency wasn't strong

enough or they had too much inflation or

just mismanaged government policies or a

combination of all of those so now you

have basically that great reset

happening in Argentina do you think that

same sort of reset will come to America

well I mean we're definitely going to

get the pain right we're definitely

going to experience the consequences of

this whether we make the right decision

like Argentina has potentially made I

don't know you know we could make the

wrong decision and make it worse we yes

I mean we could we could completely go

all in on communism socialis we could

you know if our

politicians succeed

in blaming this massive crisis that's

coming if they say you see this is what

happens when you have some capitalism we

need no capitalism we need government to

control everything we need the

government to take over the means of

production you know all decisions must

be made by the benevolent leaders in

government because these greedy

capitalists have already proven how much

damage they could do right I mean who

knows uh you know what the voters are

going to uh you know buy into but yeah

there's a lot of risks uh but eventually

there's going to be some kind of uproar

there's going to be some kind of a

revolution you know that's one of the

main reasons that I object to all of

this um intrusions on our privacy on the

part of government because at some point

you know we may want to have a

revolution and you know the more power

the government has to monitor and

control us the less likely it is that

that Revolution is going to succeed it's

like a free market Revolution you're

saying people or no like people just

like civil disab are just people just

trying to fight back wow you know that's

one of the reasons that a central bank

digital currency would be so harmful why

because the government would know

everything that you do the minute you

bought something they knew exactly what

you bought you know oh he bought some uh

some uh article on freedom or something

on how government look get them or ammo

yeah whatever you got a gun or yeah I

mean they would force everybody

underground if they you know they can

control you to that degree they know

every you know every little dime that

you spend

is that true of credit cards though

already well they they already have

access to that but it's not even direct

because it's still a private company

that has the records they'd have to get

the records but if it's the government

currency they have the records then they

they have it automatically they are the

record yeah they they have they have

everything they don't have control yeah

they they have all that information on

you wow and yeah so I mean I mean it

should be resisted that's at least one

of the things Trump is saying is no dig

no Central Bank digital currency I'm not

going to allow that uh because you know

he does see the threat there what do you

think

Mikey uh one more cryptocurrency

question you mentioned before that the

free market is really good at finding

the Ponzi schemes even better so than

government would be yes how come Bitcoin

hasn't been discovered as a Ponzi I know

now we have the ETFs and all that but go

back a few years how come nobody's found

Bitcoin as a Ponzi scheme and sold out

why isn't it crashed yet maybe it's not

a

Ponzi well yeah well yeah it's obviously

it's gone on for a long time and so to

the extent that I'm right that it's a

Ponzi and it's not like a classic

Ponzi it's more of a a a of a hybrid you

know it's kind of got elements of a

Ponzi got elements of a pyramid elements

of a chain

letter um but it's new right it hasn't

been used in this form

before and due to the

the internet and the commun the way we

can

communicate the potential audience

participants has been greatly expanded I

mean when Ponzi was operating his scheme

or even Bernie maid off I mean how many

people really could could get in you

know uh but it was so easy for people to

to get into it so I think that it's not

that it's not going to collapse it's

just that

this has enabled it to have a longer

life and I do think that ultimately the

governments are going to react in the

future and probably Outlaw a lot of this

stuff I mean China has already done it

but once everybody loses you know their

money the government's going to come in

and do something um which they always do

right after all the horses have left the

barn they they try to come to the Rescue

by by closing the doors on on an empty

Barn um but yeah I mean it has gone on

for a long time but the interest

interesting thing about it is the peak

was almost three years

ago so it really

stopped growing now some people say well

that's just temporary well we'll see but

if you go back to 2021 which was really

the peak that was when we had uh all the

big money coming in the ads were going

nonstop I mean the ads have kind of

recirculated again resurfaced with the

ETFs but we had all the ads we had all

the all coins we had the nfts uh we had

um uh you know uh El Salvador we had

sailor uh all this stuff was going on

you know we had three or four Super Bowl

ads I don't think there's any

cryptocurrencies crypto companies

advertising in the Super Bowl this

year um you know we had stadiums that

were named for crypto crypto.com

so

um I think that was like the blowoff top

and so I think now you know the air is

coming out of the bubble it's it's

taking longer they've been able to

breathe some life into it again with the

ETFs but now that they're

here um I think that that good news is

in the past now and it's set up for a

disappointment if we don't get all this

new buying and then all of a sudden the