So Jim, when you actually step out from the States and you look around, so I see the price of gold is going up. So the gold bugs are back and they're betting on a sort of slightly Armageddonist worldview, and they're looking at politics and they're saying, hold on a second, and they're looking at the Fed and the Fed is now, as you said, it's always accommodative. It's like always, it's always trying to keep the show on the road. What are your major concerns when you look at it? That's a really big, big picture because I know that you're a big thinker. Yeah, you identify companies, but that seems to me always to be the funnel through a perception of where the world is going. Yeah. So I always tell the story

of that in 1979, David, I was working every summer in a steel mill to pay my university costs. And I had to join a union and we made tubular steel. And I made more in my last summer in two months than I made in my first full year on Wall Street in 1980. I was earning $14 an hour as a union employee in 1979. And I was working as many hours as my fellow workers would give me because they all had lake houses in Wisconsin and boats, and basically supported their family on one salary. Now, I didn't know it at the time, but 1979 and 1980 was a watershed. You had Thatcher elected in the UK, you had Reagan elected in the US, and the grand pendulum of sort of capital and labor, which had by 1979 shifted pretty dramatically in terms of real high nominal GDP growth, higher inflation, high wages, and high real wages was about to change. And capital, which quite frankly, from 1929 to 1979 was treated pretty badly in real terms. You made some money, but you didn't make anything like the money you were about to make in the next 45 years. And with the election of Thatcher and Reagan, it all changed, I think. What did Thatcher do? She went after the unions. Reagan did the same thing. You had Volcker coming in in 1979 at the Fed, who absolutely committed to crushing inflation and over the short term real growth. And capital, when I got on Wall Street in 1980, nobody wanted to work there. I mean, nobody wanted to work there. That's so funny because it was regarded

when I left college as, wow, my god, you hit the jackpot if you went to work for one of these places. That was in the mid, you know, so the early 90s. Yeah,

by the 90s that had changed. So clearly the bottom was 82, but it was, I remember in one of my interviews in 1980, someone just said, why do you wanna come here? I mean, it was just, we're not doing anything to the investment bank. And so that, of course, now is completely turned on its head. And for 45 years now, we've had capital ascended over labor. We've had no inflation. And we've had relatively austere fiscal policies relative to the past. And that may have all changed in 2021. We'll see. But now we have governments that are clearly running higher deficits and paying no political price to do so, at least not yet. We saw resurgence of inflation that we hadn't seen in almost 50 years. You have political parties used to be fiscally conservative that are now just as profligate as liberal parties. I mean, we'll see if labor pressure on minimum wages at the low end of the wage scale for the first time upward. We'll see if there's been a change in this tug of war between capital and labor that occurred because of COVID that has continued since. You have a less globalization, arguably, you know, more onshoring of manufacturing as opposed to offshoring of manufacturing. You have the willingness to accept tariffs. I mean, that's all, again, relatively new. That's stuff we saw, you know, pre-1979. And the law of that is now back. And so from a big macro picture, if there was one macro thing that I would say investors need to know is what side of that pendulum are we on? Is capital being advantaged by policymakers and citizens, or is labor being advantaged? And as I said, something may have changed a couple of years ago, we'll see. Well,

it's fascinating you think that because that comes back to this big idea that economics, actually the world, moves in these large, multi, almost generational, multi-decade super cycles. And then it moves, the pendulum moves gradually, and within every big ideology is the seeds of its own destruction, because typically it goes a little bit too far. So now you have the United States, if you listen to the hustings, if you listen to Kamala Harris and you listen to Donald Trump, both of them are appealing to the average guy. Now, whether Trump decides if he gets in to reward his mates, the billionaires who've basically backed him, I'm sure he will. But the rhetoric is the rhetoric of the 1930s. It's tariffs against China. It is a clampdown in immigration. It is a working man needs to get his common wage, etc. I mean, I think you're absolutely right. Now let's think, if the pendulum swings back. How about increased defense spending everywhere? Absolutely. Hugely. You actually saw it, I even saw this morning, the Financial Times, the headline was the share prices of defense companies gone through the roof in the last couple of years, actually, and particularly in the last couple of months. So you've got defense. You're almost back to a cold war détente idea where you know who your enemies are, which you didn't ten years ago because you thought everyone was a friend, and it looks like maybe the 1960s into the 1970s again. Now, if it were that, what does that mean for American society? What does American society look like? Because it

might not be too bad. No, I mean, what everyone. Everyone forgets is, you know, again, we kind of stuck with narratives that play over and over in our heads. But having lived through the 60s and 70s, I can tell you that that for all of the the political excitement, if you will, for lack of a better term, that the 60s and 70s had there was exceptional real growth in both decades. And while inflation overshadowed real GDP growth in the 70s as a narrative, the 70s were a pretty good time. And they were a really good time if you were a worker, not in finance. And so you had the advent of women in the workforce. So a lot of families became two income families as opposed to one, but there were plenty of jobs for those women entering the workforce. And again, I mean, it was a time of relatively strong global, real GDP growth. It just was on the back of finance and finance was not the predominant factor that it is today in that economy. And so, it just depends where you're standing. And I would agree with you that most parties, and certainly in the US, are now hewing a populist lie. The difference, as we talked about at the beginning of the podcast, however, is that with Trump, you kind of really don't know since he did the same thing in 2016, and then immediately just adopted a sort of standard Republican set of policies.

Yeah, okay. It was almost like a Mitt Romney policy dressed up as a Donald Trump candidate, which is kind of bizarre. Yeah. But it's interesting. I remember saying about the 70s sending John a YouTube video of dinner-skinnered free bird at Oakland in 1977. And it was an image of the United States that we haven't seen. You know, it was like, no, seriously, it was a totally different looking country, you know, and it's a totally different feel in America. Can I ask you, Jim, just about other countries, right? In the same way as companies can have great run-ups and can look really, really robust and muscular and ahead of the curve and everything's going right. And revenues coming in countries can also do the same. Now you, you, you look at Ireland, you're a regular visitor. I have a sort of a naggling, niggling feeling that Ireland has taken a massive, massive bet on America that we're just thinking may well be changing, right? It's taken a big bet on Silicon Valley, but also on Wall Street. It has taken a massive bet on globalization. It has taken a massive bet on the world being open and free and no real enemies. It has taken a massive bet on defense spending being low and we can run along for the ride. It has also, as you know, taken a massive bet on inequality in the sense that the housing market is in the same way as it is in Boston and New York and all around the states of California, way beyond the grasp of the average guy or girl. You guys are not doing that again, are you? Oh yeah, oh yeah, yeah, yeah, yeah. We're doing it. We're not doing it with a banking system. We're not doing it leveraging the bejays out of everything, but we're doing it with supply side problems. We're also doing it with a massive boost of demand from immigration, all these sort of things. You know, when you look at a country, can countries go bad

quickly? Well, we certainly know they can go back quickly when they involve the banking system to square that circle. So the problem when it becomes a little bit more structural and supply side, to use your term, is that the unwind basically, if the free market does work and you get more boom and bust type behavior by countries, if you don't involve the banking system, it can take a long time to play itself out. And I think we're seeing the same thing, for example, in the property market in the US. It is not a credit problem because everybody learned the lesson from the last war. So they didn't leverage up. A lot of empty office buildings in the US only have mortgage debt of 50% of original value. So the mortgages are getting paid. It's just the equity has been wiped out. And people haven't realized that yet. And I suspect it's the same in a lot of housing markets around the world with maybe the exception of my friends in China. And I'm more concerned about the risks to equity type values in lots of countries like Ireland, like the US, as opposed to the banking system, which we saw in, of course, 05 to 08. There, once fear comes in, it manifests itself quickly through leverage and through the unwillingness of people at senior levels of credit to take any additional risk. So you get transmission that's much faster once it's a bank-led boom. Now that doesn't say that valuations and things like property and equities, whatever, aren't as sky high. They're higher right now than they were in 2007.

So people listening to us will know that when the Irish market collapsed, or began to collapse in 2007, Irish house prices are now beyond where they were in real terms, in real terms. So we're back there without the banking system. Yeah. Yeah.

Same in the US. And equity values, of course, are much higher today than they were in 2007. They're back to almost where they were in the 99, 2000. So, yeah, you know, each cycle is different. But in terms of price levels, you're right, David. I mean, in many asset classes globally, we're well through previous peaks in real terms.

And as probably the United States, one of the world's most famous short sellers, what does that tell you before we go? That's

a very low bar, David. There are

many of us left. Yeah, you are. You're definitely a dwindling. It's very hard to be a short seller when a central bank keeps printing money. That's a hard thing to do.

Yeah, after 45 years, you would have thought I would figure that out. But there's always something to do. I mean, we've been talking a lot of macro. And of course, where I've made my money historically is is not macro, it's micro. But you know, you do look for these big sort of broad things to if nothing else tell you where you might have a fertile hunting ground for silly things. And we've had these epic epic frauds that have been popping up along the way along this sort of golden road of prosperity and there's a lot more coming. I mean you've had the crypto space you've had which literally was designed for fraud. And that's back again. Oh yeah of course it is. And You have a wire card which was the Enron of the EU, you know, just a handful of years ago. You've got this massive Silicon Valley accounting scam going on that we talked about at the beginning of the podcast. So there's a lot of sort of silly things going on out there that will probably keep me busy for the next five to 10 years, I think.