Schiff Sovereign Podcast

There’s hardly anything that POTUS loves to brag about more than his ‘economic success’. He is, after all, a self-proclaimed “capitalist”. Even in last week’s State of the Union address, he boldly claimed that he “cut the deficit by more than $1.7 trillion– the largest deficit reduction in American history.” And he’s made that same assertion over and over and over again. Unfortunately it’s a complete lie. And just yesterday the Treasury Department released financial documents proving it. Every year the federal government publishes an annual financial report; it’s sort of like what big public company like Apple does. The annual report contains financial statements, plus hundreds of pages of discussion, details, and footnotes. And yesterday afternoon they released the annual financial report for Fiscal Year 2022, which just ended a few months ago. It goes without saying that the government’s financial condition is completely atrocious. Their “net financial position”, which is sort of like the net worth of the federal government, fell to MINUS $34.0 trillion… which is worse than the MINUS $29.9 trillion in FY21. The projected social security funding deficit also got worse… from $71 trillion to $75.9 trillion. The real headline to me, though, is the budget deficit lie. The President claims that deficit last fiscal year was $1.4 trillion, and that he (and he alone?) brought it down by $1.7 trillion. But that’s not true at all. It turns out that the “budget deficit” is actually an inaccurate figure that can easily be manipulated. If you’re a finance or accounting type, you might be surprised to learn that the budget deficit is determined on a ‘cash basis’ and not ‘accrual basis’. This means that officials can easily accelerate certain revenues and push off certain expenses to massage the data and make the budget deficit appear better than it really is. Businesses aren’t allowed to do this. Nearly every other organization in the country of any reasonable size has to follow strict accounting rules, booking revenue when it’s earned, and accruing expenses when they’re incurred. This provides a more honest, transparent, and standardized way of reporting financial results. So whenever they talk about the ‘budget deficit’, this is really just a manipulated number that doesn’t conform to proper accounting standards. Naturally this raises an important question: how much would the federal government’s annual budget deficit be if they conformed to those proper accounting standards? i.e. the same ones that every major corporation has to follow? Well, lucky for us, we don’t have have to guess. Because the government actually publishes that number too. They call it their “Net Operating Cost”. And it essentially represents the REAL budget deficit. It turns out that the FY22 Net Operating Cost of the federal government was MINUS $4.1 trillion. And that figure was MUCH worse than FY21’s Net Operating Cost of $3.1 trillion. So this guy did not, in fact, “cut the deficit”. The real deficit, as determined by Net Operating Cost, INCREASED by a trillion dollars. There’s so much more in this report, though. One of the other interesting points, in fact, is that the government actually failed its audit. Again. The Comptroller-General states very plainly that there are numerous “material misstatements” in the government’s financial reporting and internal controls. There are actually laws that are supposed to prevent this from happening. Twenty years ago Congress passed something called the Sarbannes-Oxley Act, which imposed CRIMINAL penalties for company executives who fail their audits. If the federal government were held to the same standard as the private sector, dozens of officials should be facing jail time right now. Instead they’ll retire to their generous, fully-funded pensions and receive lavish board seats and prestigious awards. They will never be held accountable. You, on the other hand, will have to bear the costs of their incompetence, in the form of higher taxes, inflation, reduced Social Security, and other broken promises. Personally I find it extremely unethical and unjust that the irresponsible, criminally incompetent decisions of politicians and bureaucrats should be paid exclusively by the citizens. It’s just like all the destructive decisions they made during the pandemic. They will never be held accountable for the mental health crisis, the suicides, the substance abuse, the entire generation of children who fell behind. Nope. There will never be so much as an inquiry. Instead they’ll make millions from their memoirs where they cast themselves as heroic saints who saved the world. This is the topic of our podcast today. We start off with another historical example showing that, even though our problems are gargantuan, they are fixable. Good leadership works wonders, and it is possible to put the government’s finances back on the right track. Unfortunately there is a dearth of real leadership. Instead we have people who are incapable of telling the truth or even recognizing real problems, let alone solving them. So don’t hold your breath that they’re suddenly going to turn things around. The Roman Emperor Marcus Aurelius used to write in his works on stoic philosophy that we shouldn’t stress about the things we cannot control… but instead to put our energy into the things that we can. That’s great advice, and it’s an excellent way to think about these national and global problems. And in today’s episode, I walk you through a few specific strategies to really move the needle in the right direction for yourself, in ways that you absolutely control. You can listen in here. Download Transcription as PDF Open Podcast Transcription [00:00:00.570] Today we're going to go back in time to the year 165 Ad. To ancient mesopotamia, essentially, where modern day baghdad is located in Iraq. At the time there was a city there named Salucia, and salusia, though originally part of mesopotamia, was a very old city, but it had been conquered by a group known as the parthian Empire. A lot of people haven't heard of the parthian Empire, but at the time they were pretty big deal if you look at it on a map, the Part Empire, they were essentially iranians, early iranians. And the parthian Empire would have taken over all of Iran, all of Iraq, most of Turkey, parts of Afghanistan, Pakistan.   [00:00:34.630] It was a pretty big deal. And it would have been, should have been probably one of the most feared and most powerful in the world, except for one thing, of course. Their next door neighbor happened to be the Roman Empire. And not just the Roman Empire, the Roman Empire in its golden age, in its sort of peak tax romana. This, of course, is the time from the age of augustus in the late first century BC.   [00:00:57.180] Through the next nearly two centuries, through the first century Ad. Through the second century Ad. This is the time period in history where if you ever sort of play the thought game, if I could go back in time, this is sort of the error that might be really high on your list. rome's golden age. I mean, life was really good by comparison in other places in the ancient world, throughout history, the romans lived such a great life, it would be virtually unparalleled for, I mean, more than a thousand years afterwards.   [00:01:26.560] I mean, it was really, really good. They had a boundlessly, prosperous economy, global trade all over the world. I mean, they, they brought in goods and services from all over the world. There was a greco Roman writer, a guy named aristidis, who wrote, quote, whoever wishes to see all the goods of the world must either journey throughout the world or visit Rome. Basically saying everything in the world is right here in Rome.   [00:01:49.110] It was incomprehensible to most people. I mean, whatever animals and exotic fruits and nuts and silks and robes and spices and everything, it was all in Rome. They brought in everything. And they had, of course, all the famous engineering works the aqueduct and the plumbing and the roads and the bath, which, when you think about it's, actually another good reason why if you got to go back in time, this might be a good era to go because they have really good hygiene, they have toilets and all these sorts of things that were conveniences, that were unheard of in most of the places in the world. They had honestly really great nightlife and theatrical performances and literature, travel, and people were able to travel across the empire and, and it was relatively low crime relative.   [00:02:33.750] There was no crime but there's relatively low crime, relative peace and stability. And the thing about this era, 165, this is also the era that later on in history became known as the era of the Five Good Emperors. These are guys like hadrian and trajan and Marcus aurelius, Marcus raelis, who actually was emperor or co emperor here at the time in 165. Now, I said it was an era of relative peace. And of course, it wasn't to say that there was never any war.   [00:02:59.870] In fact, in 165, there was a war because Rome was at war with this parthian Empire. And that was not unusual. It was sort of like the relationship between Rome and the parthian Empire was like Rome and carthage, which is sort of like, in a way, the Us. And Russia. There was like a traditional adversarial relationship there.   [00:03:18.270] They never trust each other. They never got along. And in the case with the parthian Empire, with good reason, the parthian Empire had made incursions into Rome. There was a really nasty tradition going back to you might have heard of this guy, myth or deedes, back in the second century BC. There was a lot of war between the two back then, and the parthian Empire sat right on these Silk Road trade routes to the east, blocking some of rome's path to the east.   [00:03:44.730] And so they had different reasons to go to war. And they had been at war a couple of times already in the past. And so now it's 165 Ad. They're at war again. And there's this Roman general's name is Evidence cassius, and he takes the city of Salutia, where we started this podcast.   [00:03:59.220] Salutia, even though it was really mesopotamian in origin, it at that point had been conquered by the parthian Empire, had become a major city in the parthian Empire. And a video cast, he takes the city and says, you know what? I'm tired of this. I'm just going to burn this thing to the ground. I'm not playing around anymore.   [00:04:14.210] I'm just going to burn it to the ground. So they destroy the city. Now, according to A very famous legend that's handed down to us by the romans during the destruction of the city, there were some Roman soldiers. And according to one version of this legend, even a general named lucius Virus, who go into the in the city of Solution, they go into the Temple of apollo and they disturb the Golden Casket. The golden casket in the temple of apollo, which is they're offending the gods.   [00:04:41.620] And the next thing you know, soldiers start getting sick. Now, that wasn't terribly uncommon if you understand the nature of warfare and the history of warfare all throughout history. So many soldiers died in some wars, it's even more common. People, more commonly people die of disease on the front lines than in actual combat. And that's because conditions are harsh and soldiers are packed together tightly like sardines.   [00:05:03.800] It's easy for disease to spread. This is the case even in World War I, world War II, we saw just rampant disease ravaging the front lines, and it was not that unusual. He said, oh, soldiers are getting sick. People are dying. It happens, right?   [00:05:17.700] But you think about obviously, we know a lot more about how diseases spread. These guys are marching back all the way to Rome. Remember, solution was basically where modern day baghdad is. Think about how long that journey is, how many places they stop, all the local provinces and peoples they meet along the way. They're spreading that disease everywhere.   [00:05:34.420] And by the following year, this was basically a full blown pandemic. They called this the antonine Plague, and we have substantial sources about this people that describe conditions, and it was nasty. The modern historical consensus is that it was smallpox, and people think might have been something else, but smallpox is sort of the consensus. And again, the death toll varies. You have some of these ancient there's a lot of hyperbole in the ancient world.   [00:05:57.650] People go 90%, 100% of the population was wiped out. Come on, that's ridiculous. But a good estimate, probably at least 10% of the population wiped out from this disease at quite a high, dangerously high mortality rate. In fact, this guy mentioned earlier, aristides, that greco Roman writer, who said, you know, all the goods in the world, you know, being here in Rome, this guy got it. But he didn't die.   [00:06:17.360] He actually survived. He was one of the lucky ones who survived. Now, there was a there was a doctor. I want to just pause for a minute and talk about the leadership at the time. There was a doctor, this guy who his name was Galen, and he was a famous guy.   [00:06:33.650] He's probably one of the most famous physicians in ancient history. And he had been physician to the gladiators at a certain point, sort of like the team doctor for the Dallas Cowboys or something. So he was sort of a big deal. And he was summoned by Marcus aurelius, who was co emperor at the time, and he said, Listen, Marcus aurelius, he's with his troops camped in northern Italy and is this mysterious plague. And he goes to gayle and said, you figure it out.   [00:07:00.760] And Galen to his credit, even though there's a bunch of voodoo belief and medicine at the time, galen kind of realized, well, this seems to be an airborne virus. He got sort of on the path to realizing that. He wrote in his works about how these people are sort of spraying pestilence in the air, and you got to stay away from that. So he was really sort of on track to realizing that it was an airborne virus. But the way that they dealt with this, they didn't tell everybody to cower in fear, hide in your basements.   [00:07:29.060] They didn't say, we got to shut down the empire.   [00:07:33.390] They didn't suppress origin stories. This is actually kind of funny that Christians at the time were the social outcast. accords are people that blamed Christians. There are people that blamed you offended the gods by opening the casket in the temple of apollo. Other people thought that it came from China.   [00:07:48.400] Nobody got canceled for saying that. They didn't suppress these opinions. They didn't suppress information that people had. There are a lot of people that were experimenting, trying different treatments, things like that, and people wrote about it. The word spread.   [00:08:01.700] They didn't try and suppress information. People had differing opinions. People they didn't try and force treatments. They didn't try and prevent certain treatments. You're not allowed to use this particular route in treating this plague.   [00:08:13.720] Nobody ever did that. Everybody was sort of free to figure it out for themselves and share information and figure out their own cures. And of course, there are plenty of cuckoos running around. There was one guy, he called himself a prophet. His name was Alexander, this prophet Alexander, he went around, told everybody, you need to put this icon of a snake above your door, and that's going to save you from the plague.   [00:08:34.230] The guy probably made a fortune going around selling these snake icons to people, and some people believed it. But even that, they didn't suppress that. They didn't censor, they didn't cancel anybody. Galen himself, this guy who was essentially who became the official court physician, he was basically fauchy, right? Except he was actually really big on galen was big on mental health.   [00:08:54.320] Galen did not think that you should sacrifice the mind or the soul in order to save the body. In fact, Galen was also really big on fundamentals. He said, you know what? Everybody get outside, get fresh air, get exercise, eat a healthy diet, don't cower in fear. And for his own part, Marcus aurelius was also pretty relaxed about it.   [00:09:12.530] He understood, as romans understood, that, you know what? This stuff happens. This wasn't like it was the first time there was a plague in Rome, that these things happened quite frequently. This was the first time, at least in their memory, that it was this big. This was a really, really big deal.   [00:09:29.510] It was dangerous, it was virulent, it spread rapidly, a really high mortality rate. But they had seen plagues before, lesser plagues before, so this was just a worse version of what they'd already seen. And Marcus Raylis was pretty stoic about it. In fact, he was quite famously a stoic philosopher who wrote extensively about stoic philosophy and life and all these things. And one of the things that he wrote in his book, and I actually really encourage you to read some of the works of Marcus aurelius.   [00:09:53.830] And he wrote, I think this is great advice, really. He said, you got to focus on the things that you can control. Don't stress about the things that you can't. And in this particular case, you can't control the Pandemic, you can't control. It's like they all sort of realize this thing has just got to run its course.   [00:10:09.760] The pandemic's got to run its course. It's going to rip through our empire. A lot of people are going to die. That sucks. There's nothing we can do about it.   [00:10:16.070] Try not to stress about it. Focus on you. Focus on the things that you can control. And really that makes a lot of sense. Now, Rome did get through it again, it became known as the antonine Plague, sometimes in honor of this guy Galen, the physician who wrote really extensively about it.   [00:10:31.470] Sometimes it's known as the Plague of Galen. But it lasted for a long time. It lasted for years. A lot of people did die, but life went on. This was important, though, to understand, because up until this point, life was pretty good in Rome.   [00:10:46.280] Of course, they'd had their share of idiotic emperors in the past. They had nero and all of this. That was in the past. But they were still in their golden age. And Marcus aurelius.   [00:10:55.180] Things were good. Peace, prosperity, all these things. But this plague kind of starts to mark the beginning of the downward spiral for Rome. Because after Marcus aurelius, quite famously, he succeeded by commodus. Now, if you ever seen the movie gladiator, I think it was from the year 2000, I think it was at least nominated for an Academy Award, but not even one best picture.   [00:11:15.200] I don't remember this a long time ago, but comedy was actually this is actually one of the rare instances where Hollywood doesn't overdo it. commodus is played by the actor joaquin Phoenix, and he comes off in this movie as this pompous, arrogant, dangerous psychopath. And they were probably being actually kind to communist was combust, was insane and he was so cruel. He was terrible. This is guy he really used to go he was so enamored with himself.   [00:11:40.340] He thought it was so handsome and so buff and muscular. He would go into the gladiator arena, go into the coliseum, and rip his shirt off and flex his muscles and slay beasts. And then he would go and slay his opponents and steal from people and plunder and the taxes. It was just a terrible, terrible, terrible, terrible person. But even worse leader and ruler.   [00:12:03.600] But obviously things got worse and they had comedy. This guy lasts for more than a decade. They get two emperors after that who lasted combined only a few months. I mean, we start getting the murder and intrigue. Everybody emperor is getting assassinated.   [00:12:17.430] They end up with a guy named septimus severus, who was a hardcore, hardcore warmonger spendaholic. Another guy who used to go around and execute his political opponents. He debased the currency, he raised taxes, he vastly increased the size of the state. He created this. He made the Roman government so big primarily because of the military, because he essentially turned Rome into a proto fascist military dictatorship.   [00:12:43.530] Rome had basically, under septimus severus, sort of become almost like a little bit like Nazi Germany under the Third reich. And that created this really unsustainable fiscal burden. It was so expensive to maintain this huge military and the bureaucracy. And of course, his son Carrakala was even worse. carica is the guy who famously they say, oh, the treasure is empty.   [00:13:04.580] We don't have any money. And he's having this conversation supposedly, I believe, with his mother, and he sort of jingles his sword and he says, as long as we have this, we shall never run out of money, which really tells you everything you need to know. I think you kind of get the idea here. It's a terrible situation. They get to the point where taxes become outrageously high, inflation is rampant, trade plummets, both internal trade and external trade.   [00:13:29.900] We start getting into this period that historians call the crisis of the third century, and it's so bad that the empire almost vanished. I mean, really just broke up, started to disintegrate. caracalla's success was a guy named macronus. macronus macris had the Parthians knocking on his door on the Eastern Front. He had barbarian tribes making incursions into Roman territory.   [00:13:52.790] The treasury is totally depleted. And this poor guy, he probably knew that taking the emperor position, he was going to be executed. Sure enough, he was. There were rebels that basically came in and executed this guy in like a year. He was followed by ella Gabolis.   [00:14:06.820] And elle Gabalus was to be honest, it was a transgender ruler who was supposedly said to have offered half of the empire to a physician who could turn him into a woman, which again, I don't care. I have zero issues with anybody's personal choices. But you don't get to pony up state assets for your own personal choice. That's just not okay. It's just not okay.   [00:14:27.320] You don't get to do that. And again, this sort of sets the tone for the next several decades, the empire would basically collapse. It really, actually did break apart. They ended up in this thing called the Ted sharky. They had competing things that used to be part of Rome, broke up into their own sort of spin off breakaway republics and breakaway empires.   [00:14:47.600] They had another plague as well. They had something the plague of cyprian, it was called, which a lot of historians some historians believe might actually been ebola, originating from Africa. And if you guys remember ebola, this is something that popped up in the was terrifying. You just sort of just implode from within. Like all your organs just melt and practically you just burst into flames.   [00:15:09.480] All it just really nasty, nasty thing. And some stearns believe that this plague of cypriot might have actually been ebola. We're also talking about in addition to this plague, the breaking apart of Rome collapse of trade. No no price stability, no confidence in the currency, no confidence in government, anybody with any wealth hit it away. They hit it from they hit it from each other.   [00:15:28.890] They hit it from from corrupt tax officials. They hit it from corrupt politicians. They hit it from corrupt soldiers. And people would just go around. I mean, the Roman just become just this criminal organization.   [00:15:39.550] At that point, there was intense social conflict, rebellion, and of course, you had these completely incompetent bureaucrats and continued just tidal waves of migrants coming across the border. You can just imagine again, you have to imagine just being back in history. Just imagine living in that time. And if the TV news was available back then, you could read the stuff on if the Internet was there, you could read this and you could see politicians putting up, we've been to the border. We've been to the border.   [00:16:09.890] The border is secure. No, it's not. You could just imagine just the lunacy, their idiotic ancient Roman word salads of trying to convince people that everything's okay. But people knew. They knew.   [00:16:21.520] The Empire is broken apart, everything is terrible. And again, things are going pretty okay. Things are going pretty okay. In 165 Ad, then they had a plague, then terrible leadership, and then the empire literally broke apart and was about to collapse forever. But then there was one guy, it almost sounds like one of these movie trips, but one man, but this is actually the case.   [00:16:45.960] This is what happened. There was one man. His name was lucius Dumitius Aurelianis. He's known to history as aralian and arrayan, was no saint. There's plenty of reasons to criticize everybody, plenty of reason to criticize a rally, but this is a guy who became emperor and reformed everything, the coinage, the military, government finances.   [00:17:06.270] There were welfare programs. There was one called the alimente, I believe it's called, and he just said, no, we're going to get rid of that stuff. I mean, all these things, people are on the dole. We're creating incentives for people to be unproductive. That doesn't make any sense.   [00:17:19.180] Too many corrupt politicians, too many corrupt officials. I'm going to get rid of these people. I'll even execute them if I have to. I'm going to put down these foreign incursions. I'm going to do the things that need to be done.   [00:17:28.540] And again, he's no saint. Plenty of reasons to criticize this guy, but he almost single handedly turned things around. He put Rome back on the right path. He actually reconstituted the empire. He went to all these breakaway empires, said, no, you're part of Rome.   [00:17:45.350] And for this reason, they actually called him the restorer of the world. Because Rome was considered really, especially by romans, consider themselves like, this is basically the known world, and this is the guy that pieced it back together and put us back on the right path. Restore of the world, that's actually pretty high praise. The city of Orleone in France, and by extension, New Orleans in the United States actually named after Oralian orLeon Oralian, that became sort of the French aurelian orLeon is actually named New Orleans, named after this guy Oralian, who was again, almost single handedly put Rome back on the right track. Now, we did a podcast about this a couple of weeks ago.   [00:18:21.710] I told you about Britain, I told you about the failures of all these British kings. We sort of ended with George III. This is a guy who notably lost his mind. I mean, he was bona fide crazy dementia. People sort of talk about like, what exactly did he have?   [00:18:36.390] But I mean, this guy had really lost his mind. He was all these stories. He was supposedly to have shaken hands with a tree thinking it was the King of prussia. You know, stop me when this sounds familiar, but, you know, but, but yet, even though they had and you think about Britain in the early 18 hundreds, you got this guy shaking hands with a tree thinking it's the King of prussia, totally lost his mind. The king has completely lost his mind.   [00:19:00.930] You got napoleon knocking on your door about to invade. You've got inflation, you've got a currency crisis, your treasury is depleted. Things look really bad for Britain in the 18 hundreds, and yet they too got on the right path and they grew their way out of trouble. Now, you obviously get the parallel. We've talked about this before.   [00:19:19.280] Like Rome in the third century, today's dominant superpower. In the 18 hundreds, the dominant superpower was the UK. Today's dominant superpower, the United States also beset by similar circumstances. We see the inflation and the economic decline, all the issues related to the pandemic social conflict, the border incursions, external conflict with major powers, the internal conflict that we have with ourselves that nobody can compromise, nobody can have a discussion, everybody's canceling everybody. And there's a lot of things on this list you could add to this list all day long.   [00:19:52.910] You could add climate issues to this list if you wanted to. You could add all sorts of social issues to this list. Some of these are really existential issues. And I have to say among these existential issues really, is this enormous fiscal hole. It is an enormous fiscal hole because not fixing this will create catastrophic problems in the future.   [00:20:13.220] And I'm not talking decades and decades from now, we're talking the relatively near future. And to explain this a little bit more, I want to tell you, hot off the presses, just came out yesterday, February 16. Today is February, Friday, February 17. So yesterday, February 16, they just came out with the annual financial report. It's called the financial Report of the Us government.   [00:20:32.800] And you can actually pause for a minute and go, and I'm not going to say Google this because I don't use Google, I use Brave. I think anybody that cares about privacy shouldn't use Google. But whatever your favorite search engine is go and just find financial Report of the Us. Government and the fy 22 fiscal year. 22.   [00:20:51.010] Remember the Us? Government runs in a fiscal year that starts on October 1 and ends on September 30. So fy 22 went from October 1, 2021 to September 30, 2022. And they put out this essentially annual report like it's a publicly traded corporation, like it's Apple or jpmorgan or something like this. They have this annual financial report just like any other big company or big organization that has financial statements and management discussion and analysis and so forth about what's going on and why.   [00:21:21.130] And the financial statements, as you can imagine, are absolutely atrocious. Now, the President of the United States loves, loves, loves to brag about he said he brags about how he's a capitalist, and he loves to brag about the fact that he brought down the deficit, you know, by more than any other president in history. And he brags about how the deficit, you know, the fy 22 deficit was, quote, only $1.4 trillion. Even in the State of the Union address just recently, he was bragged about this, I brought down the deficit, and blah, blah, blah. So first of all, I don't know how somebody could brag about how the deficit is only $1.4 trillion.   [00:22:00.540] But second of all, everything that he's saying is a lie. It's a lie. It's a lie. He lies. And the financial statements prove it.   [00:22:09.360] The government's own financial statements prove that this guy lies. And it's very easy to understand. It's very easy to see because it's right there literally in their own financial statement. Page 17 of the report, if you're following along with me, page 17 of the report actually explains this. They actually have two metrics for how they measure this.   [00:22:27.200] One is they talk about the budget deficit on a cash basis. Now, cash basis means that you can actually massage the numbers. You can massage the budget deficits because it's based on literally like, cash in and cash out at the time. And so you can accelerate certain revenues. You can push off certain obligations in order to massage the numbers and sort of make up a little bit of number, which is amazing.   [00:22:50.200] It's like, really? $1.4 trillion? That was the best number you could make up. But the same way, you can imagine, let's say you incur, like, some big spending bonanza at the very end of the fiscal year, but you go, we're going to push that into next year, right? So we don't actually incur any of those expenses this year.   [00:23:08.880] Well, that's not actually how accounting works, right? The real accounting system that every company in the world, any sizeable business of any real size, uses something called accrual accounting. Accrual accounting basically says, will you incur an expense really at the time that the obligation is undergone all these different rules? But it's basically, if you get an invoice, right, that's an expense the expense isn't recognized when you actually write the check. The expense is recognized when you get the invoice or when the invoice is due.   [00:23:40.030] So There are very specific rules about this, and you don't have the option of doing what they do on this cash basis budget deficit, pushing out Expenses and accelerating revenues. And So We don't actually have to Wonder if You Go, well, if the federal government followed its own accounting Rules, right, these generally Agreed Accounting principles gap, Us. Gap rules, the same rules that they require, by law, all These Big corporations follow. If they follow the same accounting rules that everybody else has to follow, what would their Actual deficit be? Well, we don't have to Guess because they calculate it for us, right?   [00:24:13.170] And So the actual true budget deficit, which they call in their versions, they call the Net operating Cost was actually not 1.31.4 Trillion. It was $4.1 trillion, negative $4.1 trillion. And in case you're wondering, this is also the part where this is a complete lie. Because they said, he brought the deficit down. No, you didn't, bro.   [00:24:36.890] No, you didn't. Because, as A matter of fact, the previous Fiscal year was terrible, but it was, quote, unquote only -3.1 trillion. So it got a trillion dollars worse the net operating cost went from -3.1 trillion to -4.1 trillion. It got a trillion dollars worse. So this guy is going around town telling everybody going on camera, go, I Brought down the budget.   [00:24:57.560] I said. No, you didn't. It's a lie. It is a lie. And your own financial statements prove it.   [00:25:03.760] Your own financial statements say right there in black and white. You can read it for yourself. The net operating costs of the federal government went from -3.1 trillion to -4.1 trillion but wait, there's more. Because in addition to that, and In calculating their Net Operating costs and actually putting the real numbers, they also put out a balance Sheet, right? The balance sheet, just like Any human being, any business, we all have assets and liabilities.   [00:25:29.470] We have Cash in the bank and we have whatever cryptocurrency and Real estate and stocks and Bonds, all Whatever it is we have. And we have liabilities, maybe a home Mortgage or a car loan or whatever. The government has that as well. Their assets are things like tanks and Bullets and Acres of national parks, the Strategic Petroleum Reserve, monuments and buildings and all this sort of stuff, minus Liabilities. Things like the national debt, et cetera.   [00:25:54.280] And the difference between those two is the government's net Worth, right? Obviously, we'd like to see a net worth. It's Positive. Most people want a positive net worth. When they say elon Musk is worth whatever.   [00:26:05.490] $100 billion. $200 billion. They're talking about his net worth, the value of his assets, minus his liabilities. Well, the government's net worth is really bad. It's -30 $4 trillion.   [00:26:18.650] This is not my calculation. This is right there in the. Government's own financial report -30 $4 trillion by the way the year before it was -29.8 trillion so they went from -29.8 trillion to -30 $4 trillion It's absolutely Insane and yet there's still more because on Top of that on Top Of this -30 $4 Trillion sort of Negative Net Worth they also have the Social Security funding gap we talk about this a lot, so I don't need to hash this too much. But this is the idea that they made promises to taxpayers. They made promises to their citizens.   [00:27:01.850] You can retire at this age. You get this much money? blah, blah, blah. Well, guess what? That requires that they have a certain amount of cash.   [00:27:07.960] And that cash means that they have to have this cash set aside and these trust funds in order to meet those needs. And they don't have that cash. They don't have the cash. So the difference between those two is they call that the Social Security funding gap. And the funding gap again, these are their own calculations is $75.9 trillion.   [00:27:27.570] $75.9 Trillion. That is an enormous funding gap. That's basically the difference between how much they owe over the long run to Social security beneficiaries current and future and the amount of money that they project they'll have set aside for that program. It's a $75.9 trillion gap. And by the way, the number last year was $71 trillion.   [00:27:47.810] So they went from 71 trillion to $75.9 trillion. And you put the two of these together? They're negative net worth. The Social Security funding gap, we're talking about $110,000,000,000,000 in negative net worth. That's more than four times the size of the entire Us.   [00:28:02.400] Economy, even by their own projections. This gets worse. You can look at this on page 28. They have a little section headline that says an unsustainable fiscal path. Yeah.   [00:28:14.380] You think so? You think so? Maybe. That's probably an unsustainable fiscal path. That's an extremely polite way to put it.   [00:28:21.230] And in there again, their own analysis. They got a neat little chart. You scroll down to page 31. Page 31. It shows their projection of the United States public debt, which this is a little economic nuance, but there's actually a difference between the public debt and the national debt.   [00:28:37.590] The public debt is sort of a portion of the national debt. It's not even the entire national debt. It's just a portion of the national debt. Right? So the actual number is much worse.   [00:28:46.550] Over the next, they think about this stuff over decades. They always project. They use 75 years in their projections. So they project the national debt or, sorry, the public debt, which is just a portion of the national debt over the next 75 years. And they show it reaching nearly 600% of GDP over the next 75 years.   [00:29:02.750] It's basically just this sort of straight line going up and to the right. This is completely insane. And you got to look at it and say, does anybody actually think they have they can keep doing this for 75 years. Does anybody think that anybody, any reasonable investor in the world can be like, oh sure, you're 600% GDP in debt. Let me keep loaning you money.   [00:29:24.600] That makes sense. That sounds like a reasonable investment to make. No, of course not. This is totally this is completely insane. They don't have 75 years.   [00:29:32.390] They don't have seven decades. It's hard to say how long they have, but it sure as hell isn't seven decades. It's not five decades. Not four decades, not three decades. Is it two decades?   [00:29:42.070] Who know? We don't really know for sure what the timeline is, but it's not that long. It's really not that long. Now, there's a little bit of a little bit of humor in this. One of the things you might also find in the report, if you scroll down to page 43.   [00:29:55.360] Page 43. Remember, the government these are, these are audited financial statements. The government has an auditor. It's actually, this it's, it's a government office. It's called the Government Accounting Office.   [00:30:03.880] The Government Accountability Office and the gao audits the federal government. And the federal government, if you're familiar, if you've ever read audit reports before, the whole point of an audit is they don't prepare necessarily the financial statements. The auditor goes in and looks at the financial statements, and they perform certain their responsibility is to say, these financial statements that have been provided to us by management, we believe that these are, in fact, an accurate representation of the financial condition of the business or of the organization. That's what the auditors are supposed to do. And the auditors the government failed its audit.   [00:30:38.270] That's the bottom line. The government failed its audit. Again, this happens almost every year. The government fails its own audit. It's totally ridiculous.   [00:30:44.690] And you could see this on page 43 that the gao cites, quote, certain material weaknesses in internal controls, which is a very polite way of saying that the level of financial mismanagement is absolutely insane here. And they go on to say that they said, look, we looked at the federal government's assets, and again, we're talking about that balance sheet. These are the tanks and the bullets and the parkland and the monuments. They said 49% of the assets were reported to us by agencies, federal agencies, whose financial management could not be relied on. Right.   [00:31:21.740] This is hilarious. And the reason why is because all those people should be in jail. And that's not even hyperbole. Back in I think it was 2003, maybe 2004, 2003, I think the Congress passed a law. This is in the wake of their bunch of financial scandals, most notably enron.   [00:31:39.000] We had all these corporate executives that were cooking the books and misleading investors by just literally just making up numbers. I mean, putting out publishing numbers every quarter. Oh, our earnings are, you know, we're making resilience of dollars. And it was all it was all a lie. They just completely made up everything.   [00:31:53.060] It was just, it was a fraud. It was a scam. And Congress, of course, what they do, they passed laws. I mean, there were already laws on the books saying you're not allowed to do that. But what, they just went and passed another law and this time this law was called the sarbanes oxley Act.   [00:32:05.030] And they passed this law and, and they actually created criminal penalties for executives that essentially fail their audits. And that if you don't, this is, you know, section 404 and 302 compliance. You know, if you go in and, and as an executive, if you preside over an organization that fails its audit, you can be held criminally liable, personally thrown in jail because you fail your audit. Right? And so here you have the government not just failing its audit, I mean, just completely blowing it to a level that is literally a level of financial mismanagement that rises to the level of criminality.   [00:32:39.740] And any, any corporate executive, any publicly traded company that had an audit that bad, where the auditors came out and said 49% of the assets can't be relied upon, those people would be in jail. But the government does it pretty much every year, right? So it's just a way to show that the situation is so bad. But it's even worse because even though you can't even rely on the data, it's so bad because the financial management is so piss poor, you can't even actually have any reliance on the data that they provide. That's how ridiculous it is.   [00:33:12.810] And it doesn't take a rocket scientist to see where this goes on current trajectory. realistically. This is why I was saying, like, who knows how long they have? It's not 75 years, is it? 20 years, 15 years, ten years?   [00:33:26.640] We don't really know for sure. Right? We don't know for sure. And it's quite a gamble to just sort of roll die. Well, I'm going to assume it's going to last for another 50 years.   [00:33:36.310] That's a very dangerous and risky position to take on current trajectory where they are right now. The only realistic solution is to default. And what does that really mean? Well, they can default on the debt. They could default on the, on their external debt to all the, you know, to, to the, the Chinese and the Japanese and the europeans, et cetera.   [00:33:52.750] Well, that's going to cause a massive currency crisis. That's a bad news ending. They could default on their internal debt to, for example, Social Security, the Social Security trust funds on a lot of Us. Debt. So what are you going to do?   [00:34:06.060] You're going to default on Social Security trust funds and now you completely screw over all Social security beneficiaries. You're going to default on the Federal Reserve, cause another massive currency crisis. You're going to default on the banks, Us. Banks, cause all deposits to get wiped out. I mean, there's no good solution there by defaulting on the debt.   [00:34:22.220] And that kind of leads to defaulting on promises that they've made to their citizens and their taxpayers, like, you know, paying social security or maintaining a stable currency with, you know, supposedly 2% inflation, or the promise to maintain a strong national defense, or the promise to not completely plunder their citizens'wealth through confiscatory taxation and all these sorts of things. Well, guess what? All those promises are probably going out the window now. Again, we talked about this a few weeks ago that Britain was in a terrible position. It's the early 18 hundreds got George the Third shaking hands with trees, napoleon's at the gate, the treasury's depleted, inflation is getting out of control, and yet they grew out of it.   [00:35:01.410] They had a little bit of luck on their side. They had the Industrial Revolution, technology and a lot of economic growth and they did what was necessary to sort of liberate the economy and free things up and they grew their way out of it. This is similar, right? But we talked about Rome. We talked about a rally.   [00:35:19.570] This is a case where you had literally one guy turning everything around. A Raleighan had the authority to go and impose his will and make all the reforms that were necessary. And in the case of Rome, obviously the emperors that came after Iralin weren't so sound. But Iranians'reforms meant that the empire, the Western Empire, lasted another 200 years, basically because of what this guy did. So it's a really, really big deal.   [00:35:43.840] He was able to extend the life of the Western Roman Empire, reconstitute it, put it back together and put it back on a path where it lasted another 200 years. So that was quite an accomplishment. The Us. Is more complicated than Rome. Again.   [00:35:56.530] In Rome, it only took one emperor. In the United States, you need a whole lot of stuff. You need a president who's actually sentient who knows who he is, where he is, who he's shaking hands with, et cetera. You need a filibuster proof majority in the Senate. You need a super majority in the House.   [00:36:12.460] You need all three of these bodies that have total alignment in philosophy and priorities, et cetera. And this is, of course, a huge problem because there is no alignment. There is no alignment in priorities and this is reflected in voters. Voters have no alignment in their priorities. And you can see this based on the people that they put in office.   [00:36:32.140] They elect complete and total buffoons over and over and over again. They elect people. It's amazing. You got to look at some of these districts and you go, how do you keep electing this person who's clearly corrupt and competent, narcissistic like, why do you keep putting these same people for decades and decades in the same position? Is there really such a dearth of leadership?   [00:36:54.220] There's nobody who can step up in that jurisdiction who can be possibly better than this complete idiot? But this is what you end up with, is because I can't explain it. I wish I knew why people keep taking these same essentially criminals and putting them in office over and over again. I wish I could understand it. It just seems so counterintuitive.   [00:37:14.180] It seems so illogical. But they just keep doing it, right? And because there is no alignment, we can see this reflected again in voters choices. We can see this as well in the leadership that has no capacity to solve problems whatsoever. In most cases, no capacity to even not only they can't solve the problems, they can't even acknowledge the problem.   [00:37:34.990] They can't even address the problems. You guys are probably aware of this. I mean you might not be aware, I mean, that the media has been strangely silent on potentially one of the biggest environmental disasters of our time, where you had this train derailment in Ohio and they spewed all these chemicals and they just went, oh let's go light them on fire. And all these chemicals ended up in the air. The EPA was looking on, all these state officials were looking on and said, okay yeah, sure, let's light them on fire.   [00:37:59.020] And they killed off all this life, plant life and animal life in the community. And the EPA, of course, is totally downplaying. It. The Secretary of Transportation, Pete buttigieg the other day, though this was just a couple of days ago. I mean this has been going on for what, week, week and a half.   [00:38:16.340] Pete buttigieg is out making public remarks, did not once even bother to mention the Ohio train derailment. Bear in mind, train derailment kind of falls under the Secretary of Transportation, right? This is sort of his thing. And yet no word about train derailment, no word about toxic chemicals killing off life in the community. But he did have time to complain that there's too many white people working construction jobs in federal infrastructure projects because that's the priority, right?   [00:38:42.710] We can't acknowledge the obvious problem, the clear priority. You have plenty of conversation about racial disparity in the infrastructure and construction industry. Fine. Is that really the priority or is the priority toxic fumes in Ohio killing off plant and animal life and probably extremely harmful to human beings? But again, that's just apparently not the priority.   [00:39:07.780] And when you see situations like that where there's a clear difference in what the obvious priority should be and they're not even close. They're not even close. And so with all that, I think you could hope that maybe there's going to be some major crisis, that they get really close to the edge. They go, oh well, Social Security is out of money and now we're in this major financial crisis. Maybe some major crisis knocks some sense into people, right?   [00:39:39.370] Make them realize, I got to stop electing these criminals. I got to stop putting the same criminals over and over again the same people, and I don't want to keep using the word criminal. I'm sure there's some very nice, very well meaning people and there's a lot of people that are just completely incompetent. We know the names. I don't need to get into this.   [00:39:55.550] But I mean, they realize maybe, jeez, we need different leadership. It hasn't happened yet, right? I mean, there have been crises in the past and it hasn't happened yet, so I'm not holding my breath. We can hope, but I don't think it makes sense to hold your breath for this. And that's why, again, I think it makes sense to think about the future, think about some of these risks, think about I mean, these are really existential issues.   [00:40:17.400] You've got to really consider what happens at the point where the Us really does get to the point where the debt is so high, their financial obligations are so high, there's no room to cut anything, right? They have to do away with the military. They've got to completely eliminate Social Security. I mean, we're talking about major radical issues. These are clearly existential issues to the way that the United States is and exists right now.   [00:40:44.910] And it's important to think about these things because they're not that far off. They're really not that far off. I've been writing about these sorts of things for a really long time, and now if I go back and I look at things that I wrote ten years ago and I look at where we are now and go, oh my God, this stuff is really happening. It's really happening, all these things. We look at the social conflict and the decline in power and all the fiscal issues and the inflation, all these things.   [00:41:08.840] I've been right about this for a really long time, and it's important to think about the future because it's happening. All these things are actually happening. I don't have this end of the world is nigh mentality. I do not believe that at all. I'm incredibly optimistic about the future of the world, the future of humanity.   [00:41:24.080] I think everybody has control and power over their lives and can take back control and can take that power and do a lot of things with it. But it's important to think about risks. You've got to think about risks in life, and there's some pretty obvious risks here. If you look at some of this fiscal hole and you think these guys become these fiscal challenges become so great, they become more and more desperate and they're starting to get it. You can see these guys talking about the debt ceiling and so forth, and it's starting to actually cause a lot of concern among politicians going, jeez, we really got to get this under control.   [00:41:55.410] Unfortunately, that's a pretty small number of politicians that think we need to get this under control. Other people saying, no, you've got to keep raising the debt ceiling. But this is going to be a situation where they're going to get desperate, taxes are going to rise. That's pretty much a given. I've got to say, at face value, I don't have this issue with taxes per se.   [00:42:18.250] I don't think anybody really loves paying taxes, but it's not tax in and of itself. It's it's how they waste the money. If you look at all the money that they collect, trillions and trillions of dollars, and then you look at the stuff they do with $2 billion on a website, paying people to stay home, all this all this all this crazy stuff that they just waste, constantly waste money. That's not their money. That's our money.   [00:42:43.360] That's our money that they waste on the most made, the most offensive, insulting waste of money. And you're sitting there arguing about the debt selling, and there's no that there's, like, no discussion about, jeez, maybe we shouldn't pay people to stay home. Maybe we shouldn't waste all this money and all this silly stuff and just feel like we can just spend whatever we want on whatever we want, and there will never be any consequences forever and ever until the end of time. That's a terrible attitude to have. But of course these people go and waste all this money.   [00:43:11.840] They will never be held accountable. They will never be held accountable. They of course they go. They'll be awarded the Presidential Medal of Freedom, and they'll have elementary schools named after them and get honorary doctorates from universities and get very lucrative gigs on CNN and Netflix and all this sort of stuff. You'll be forced to pay for it.   [00:43:32.560] They will never be held accountable, but you'll be forced to pay for it. And this is the problem that I have with taxes, especially higher taxes, is because this is essentially a remedy to fix their own stupidity, their own corruption, their own idiocy, their own bad decisions. And you think about the pandemic is an obvious example, right? You think about all the decisions that people made and the lockdowns and et cetera, and the consequences, the mental health consequences, the consequences on children's development, children's education and learning, the massive increase to the debt, the supply chain issues, the inflation, all these things. These are all decisions that they made.   [00:44:07.230] You pay the price, they don't pay the price. They retire, and they get all their fancy awards and speaking gigs and their book tours and all this sort of stuff. You pay the price. It's your responsibility to pay for their mistakes. And I think that this is extremely unethical.   [00:44:23.690] I think it is extremely unjust to force citizens to pay for the literally criminal level of incompetence of their political leaders. And I do not use that word lightly. I don't use that word as hyperbole, literally criminal level of incompetence. Again, go back to the financial statements. 49% of the assets can't be relied upon because of the complete and total financial mismanagement of the government, of the leaders, of the bureaucrats and the politicians, that's a level of criminal incompetence as defined by the Sarmains oxley Act of 2003.   [00:44:53.690] This is not I'm not being excessive here in my vocabulary. This is criminal level incompetence. And I think it is extremely unethical to force people, to force citizens, hardworking people, to pay for criminal incompetence of their political leaders. And so, you know, my view on this, I think it makes all I never advocate violating the law, but fortunately, a tax code that's so vast that it takes an entire football stadium to fill it up, there's plenty of room. There's plenty of ways you can take absolutely legitimate steps to reduce what you owe.   [00:45:26.790] And again, just simply following the law, simply taking legitimately, legally allowable deductions and setting up perfectly legal structures and so forth to reduce what you owe following the law makes total sense, right? It makes total sense because, again, if you can see, if you look forward and you see this trajectory towards they're going to they're going to have to default. They're going to have to default on their promises. They're going to have to default on their promise to maintain a stable currency. That means inflation, which we're already experiencing.   [00:45:55.380] I mean, they said, oh, inflation fell to whatever, six something percent. I mean, get used to it. Hey, it's better than nine, right? And I think that's going to be sort of thing going forward. They're going to get it down to five and go, job well done.   [00:46:07.340] It's only 5% now. It's hard to imagine that they're able to, again, over this long period of time going over, if we think about 10, 15, 20 years, to think you're going to be able to maintain an average 2% inflation over that time when this is their financial condition, that just seems ludicrous to me. And so if you think about this and you think about this trajectory towards inflation, for example, you think about this trajectory towards default. So higher taxes, take steps to reduce your taxes, take steps to reduce the impact of inflation. And there are ways to do that as well.   [00:46:39.980] It's not rocket science. I mean, there's plenty of historical precedent for that. We're not reinventing the wheel. We say, oh, what works well during inflation? Well, maybe diversification into real assets, businesses that are exposed to real assets.   [00:46:50.760] These are things like energy, metals, agriculture, productive technology, not swipe and scroll, but actual productive technology that makes people better, faster, swifter, more productive real technology. All these things are out there, and especially right now, to be honest, there are really great, well managed real asset businesses out there, both public and private, that are trading for absurd discounts. There's companies in the energy space that are trading. Natural gas companies trading two to three times earnings while gas is at $2.30 right now. Even though they want to do all this LNG to europe, which is probably going to make the gas price go up, and they're trading at two to three times earnings at $2 and 30 cent natural gas.   [00:47:31.270] I mean, there there's a lot of really good deals out there. There's technology, productive technology, companies that are traded really on the cheap, agriculture, businesses, fertilizer business. There's so many of these opportunities that are available. And so if you think about inflation hedges, go, jeez, I hate paying, you know, $12 for, you know, $15 for a dozen eggs. Well, guess what?   [00:47:49.830] There are plenty of these inflation hedges out there. And what I'm ultimately sort of outlining is that these politicians are making your cost of living go up, and so why not use their own laws to give them less money, right? Use their own laws to say, here's the taxi go. Great. I'm going to follow the tax code.   [00:48:07.610] And by following the tax code, I'm going to give you less money because I shouldn't have to pay for your criminality I should not have to pay for your criminal level of incompetence. That's one way to help ease the burden of inflation. And then you can take that savings and put it in things that do very well and can make a lot of money in an inflationary environment, and especially in different investments right now that have very attractive entry points, right? So this is just sort of one way. I'm not here giving anybody investment advice.   [00:48:36.040] I'm just giving you a way to think about all this because there are things that you do have under your control. Remember, it closes as I'm going on. It's 48 minutes now. I want to stop here, but I want to go back to ancient Rome. And again, think about that.   [00:48:51.630] Things are pretty great in 165. They were in their golden age. Sure, they'd had troubles in the past. They had idiots like nero in the past, but things were pretty great in 165. They had a nasty pandemic, and that was sort of, again, the start of this downward spiral that led to an inflation crisis and a migration crisis and financial crisis until the empire actually did break apart.   [00:49:11.670] One guy put it together, one guy put it together, and we can hope that that happens. But again, I wouldn't hold my breath. I'm certainly not holding my breath, because it turns out there are plenty of things that you can do. While we maintained hope and optimism, there are plenty of things that you can do. You cannot control how tens of millions of people vote.   [00:49:29.640] You can't control the stupidity of leadership, the gigantic fiscal problems, the inflation, the tax increases, all the things to talk about. Just the crazy woke mobs and all this silly stuff. But remember the words of Marcus aurelius. Remember Marcus aurelius saying, you know what? Don't stress about the things that you cannot control.   [00:49:45.840] Focus on the things that you can. And it turns out there are really a lot of things that you can control to really move the needle in your own life. Thanks so much for listening, and we'll speak to you again next week.   Close Podcast Transcription

Most people have a peasant mentality. Throughout human history, in fact, the vast majority of people never thought much beyond their tiny village, let alone traveled. But there have always been some people who have had the intellectual courage and curiosity to think far beyond their own borders. And they’ve often been richly rewarded for it. Adopting a global mindset essentially means thinking about the entire world when considering your options. And more options is almost always more beneficial. If you’re thinking about retirement, more options will greatly increase the chances of finding the right place that has the right weather, cost of living, medical care, and lifestyle that you desire. If you’re thinking about business, considering your overseas options will greatly increase your chances of finding high quality, cost effective labor… or lucrative new markets to sell your products and services. If you’re thinking about investments, looking abroad increases the likelihood of finding wonderful, well-managed businesses trading at a steep discount to intrinsic value. Or a trophy property selling for less than the cost of construction. This is the topic of our podcast today– we discuss WHY it makes so much sense to look abroad, and cite some very specific examples. We talk about asset protection, for example, and I explain why foreign asset protection structures are so much more effective. (I also explain why asset protection structures exist to protect against professional criminals who abuse the legal system to steal from law-abiding, hard-working people.) I cite specific legislation from some of the best jurisdictions to show precisely why they are so much more effective at helping to protect honest people from thieves. We also discuss taxes… and specific ways that thinking globally can dramatically reduce your taxes. These are all completely legal. We’re not talking about any ‘loophole’ that requires a creative interpretation of the tax code. I tell you about one international strategy, for example, to slash your tax bill by 50%. It’s no loophole. In fact there’s an entire section of the tax code dedicated to it. Bottom line, diversifying internationally doesn’t mean you need to go anywhere or do anything exotic. It just means expanding your thinking to consider a wider variety of options… and that can have an enormous benefit in your life. You can listen in to today’s episode here. Download Transcription as PDF Open Podcast Transcription [00:00:00.890] Today we're going to go back in time to the 8 January in the year 1198 Ad. To the ruins of the ancient Septicoleum Temple, located in the city of Rome. Now the Septic Soleum temple doesn't exist anymore. It was demolished hundreds of years ago. But if you know Rome at all, it was used to be located nearby, the Circus Maximus.   [00:00:21.030] And on that day, the 8 January 1198, the Pope Celestein III, he had just died at the tender young age of 92 years old. And the College of Cardinals met very quickly at that Roman temple, the Septicoleum Temple, to elect his successor. By Vatican standards, the deliberation was very quick. The vote only took two ballots. You probably know, the black smoke and the white smoke and all of that.   [00:00:45.790] It was very, very fast. They had two ballots. And so very quickly they chose their new Pope. It was a young guy's, 37 year old Italian nobleman. His name was Latario Descendy.   [00:00:55.390] Latario descende chose as his new papal name. He chose innocent III. And right from the beginning, this young guy, he's young, he's full of energy, he's actually quite fixated on power. Innocent III felt that his predecessor had really weakened papal authority. You got to remember that for a long time the Church was the dominant influence in everything in Europe.   [00:01:19.600] Politics, economics, daily life. They controlled everything. And over time, at this point, by the late eleven hundreds, that power was really starting to wane. There were individual kings and kingdoms and empires that were saying, no, I'm going to be in charge. And Innocent III thought, no, I've got to go back and I got to reassert the Church's dominance and everything, and politics and economics and all these things.   [00:01:42.340] And Innocent Third, quite famously, meddled with elections. For example, in the Holy Roman Empire, they had an electoral system where there were these people that were called literally electors. And to be an elector in the Holy Roman Empire was a big deal. It meant that you had the power to choose the next Holy Roman Emperor. But Innocent III went in and he meddled with these imperial elections and the Holy Roman Empire.   [00:02:06.080] He says, no, I'm going to be the head of the Holy Roman Empire. The Emperor is just some stooge who reports to me. And so this guy went and basically rigged the vote. He threatened to excommunicate people who didn't acknowledge his pick for emperor, all sorts of things like that. I mean, he went into England, he declared the Magna Carta to be void, which basically sparked full blown rebellion in England, the barons war against King John.   [00:02:31.270] He interfered in politics all over the continent spain, Norway, and probably most famously, Innocent the Third was the guy that started the Fourth Crusade. Everybody knows about the crusades. Everybody's heard about the crusades. They had been around at that point for more than a century. 1095.   [00:02:48.140] Really? The first Crusade. It was this back and forth over who controlled Jerusalem, the Muslims, the Christians and various territorial changes. The Crusades were really disruptive.   [00:03:01.190] Really, really disruptive. They were expensive. A lot of people died, very costly, depleted people's, treasuries, and kind of most importantly, the Crusades always seemed to come at this time where there were European powers at war with each other, and the Pope would come and say, oh no, we got to go invade Jerusalem. We got to go and take back the Holy Land. And people say, oh, jeez, so we've got to put down our we got to sort of press pause on our war so that we can go and fight this other war.   [00:03:26.020] Now we're going to be on the same side. We're on opposing sides yesterday, and now we're going to be on the same side. It's like the All Star Game in the NBA or the NHL or something like that, where you go halfway through the season. All these guys that played against each other yesterday, now they're on the same team. Or like Olympic basketball or something like that.   [00:03:42.220] That's sort of what it was. And it was really at this point, by the time they got to the Fourth Crusade and there would be many more to come after this, people were kind of over it. They didn't have the money, they didn't have the manpower to spare.   [00:03:58.730] They'd been back and forth so many times, people were just sort of over it. And the Fourth Crusade in particular was just so bizarre, so bizarre. This was one of the most bizarre episodes in history. Jerusalem had just been taken, had been taken back by the Muslims. And again, Innocent the Third, he's determined, he's all about the power and the authority of the Pope, which basically is his power and authority.   [00:04:24.600] So he's determined he's going to use his authority, he's going to exercise his authority to sort of assert his dominance over all the Christian rulers and say, I want you to go back to Jerusalem and take it back. But again, most people are over the kings and various emperors across Europe. They were over it. And after a lot of negotiation and cajoling, they finally said, okay, fine, we'll go ahead and do this. And the ultimate target they decided on was Egypt.   [00:04:50.320] Egypt at that particular time, in the late one one thousands, early two hundreds, egypt was the biggest sort of Muslim power at the time. Said, all right, we're going to go to Egypt and we're going to go and take out those Egyptians. And that clearly meant going by sea, right? They had to leave from somewhere in the southern Europe, along the Mediterranean, go across the sea into Egypt and vade Egypt. They're going to have this wages Fourth Crusade.   [00:05:14.090] But at the time, that wasn't really a really powerful navy among most of these European nations. The guys who had the most powerful fleets were the Italians, were the venetians. The Venetians were really, really interesting, quite actually anomalous along with a couple of other very prominent Italian city states like Genoa, very, very different than the rest of Europe. You think about France, you think about the Holy Roman Empire, the Germans, the Spanish, everybody was very futile. They're very traditional, to be honest.   [00:05:45.680] I mean, it's censorship and kind of closed mindedness, very focused on agriculture. By comparison, venice was free, venice was commercial, it was focused on trade. They had this early form of capitalism. They created really, they didn't create it, they actually borrowed it from the Muslims. An early sort of proto limited partnership, a type of business structure that they called a commenda.   [00:06:08.720] And a commenda was essentially it wasn't a limited partnership, it was a way that an investor could come in, finance a business, which would usually be a trade voyage or something like that. It'd be some young merchant saying, I want to go across the Silk Road somewhere and I want to trade these goods. And obviously he would need capital to do that. And so it would create a way for an investor to say, all right, I'm going to put up the capital, you're going to go and do the work. We're going to come back and we're going to split everything 50 50.   [00:06:35.140] And there was this ironclad contract and they developed courts and so forth in Venice to be able to judge and adjudicate commercial disputes and all these things. This was just alien level stuff for the rest of Europe. And at the same time, also, they didn't have this same feudalism that was so common across the rest of Europe. Venice was this place where anybody could come to Venice and anybody. If you were willing to work hard and take some risks, you could actually become wealthy.   [00:07:06.560] You could become a landowner. You could become this really rich merchant and powerful and all these things which would just be unheard of in the rest of Europe but you could do it in Venice. And so it was totally different. And again, everything, the value system was different. Everybody in Europe, it was all fealty to the king and all these sorts of things.   [00:07:26.270] In Venice, the loyalty, the duty was to commerce, was to industry. In a way, the rest of the Europeans, they just didn't understand. They didn't understand the value system. They felt like they couldn't quite trust the Venetians, because the Venetians are very commercial people. If you're a fan of Star Trek, the Venetians were sort of like the forengi, the ferengi, it's all about profit and all these things, and then nobody really ever quite trusts the forengi, because you can't trust people that have a profit motive.   [00:07:53.250] And that's been a sort of ridiculous trope throughout all of human history and also sort of felt that Venetians might do some things that are immoral, unethical, do what they have to do to turn a profit. But at the end of the day, they've got the best fleets, they've got the best maritime technology, and so they were sort of the obvious choice. And they go to Venice. Now it's March 12 one, it's March 12 one. The Innocent the Third said, we're going to have a crusade.   [00:08:19.730] And people go, okay, fine. And so they actually had to, a lot of it came from France and Flanders and sort of that part of Western Europe as all these guys came, and the leaders of the fourth crusade, now they march of twelve one ad, they go to Venice, they start negotiating. The Venetian authorities, they say, look, we need ships. We need lots and lots of ships because we got 30,000 guys we got to transport because we're going to take the Egyptians. And the Venetian said, all right, but it's going to cost you.   [00:08:47.870] It's going to cost you. And look at it from the Venetians perspective. To go and build all of these ships basically meant monopolizing the entire Venetian economy. So Venice would have to all these people that are in all these other industries, they got to stop what they're doing, they got to stop their trade, they got to stop their other industries, and everybody's got to focus on building these ships for the Crusaders. And so the opportunity cost for them is quite high, the opportunity cost for Venice is very high because they're going to miss out on all these other things just to do the ships and make this mission happen for the Crusaders.   [00:09:20.540] So they said, all right, we'll do it, but it's going to cost you. And the amount of money they'd agreed on was 85,000 marks. 85,000 marks, that was an enormous amount of money back then. A mark was an old, it was about 250 grams or so, which is kind of more or less, I guess maybe about one troy ounce. I'm a little bit off on my metric to Imperial conversion, but this was a lot of money, lots and lots of money.   [00:09:45.360] And the Venetians did actually hold up their end of the bargain. They built the ships and everything was fine, good quality ships, everything. But the Crusaders did not hold up their end of the bargain. So now it's about a year later, a little more than a year later, it's May of twelve two. Everything was ready, the ships were ready, everything was great.   [00:10:01.570] But the Crusaders didn't pay up. The Crusaders didn't have the money. And so at this point, the ruler of Venice, he said, no, you know what? You guys aren't going anywhere. You guys aren't going anywhere.   [00:10:10.300] We're not letting you leave on our freaking ships until you pay up, just like you agreed. And what's interesting is, when you think about it, the Crusaders had like 30,000 guys. So they could have taken these ships, they could have taken the city of Venice in theory, but they didn't because everybody was so terrified of the Venetians. This shows how powerful the Venetians were, is that even though they didn't quite understand them, they didn't quite get along with them, but they were still the Venetians were held in incredibly high regard. And it wasn't even on the table to say, well, let's go forget these guys.   [00:10:42.810] Let's just go take the ships. That wasn't even on the table. Instead, the Crusaders like, jeez, I guess we got to figure out how to come up with the rest of the 85,000 marks and pay these guys. So this is where things really go totally off the rails. Completely off the rails.   [00:10:58.600] Why? They said the Fourth Crusade was just super weird, because the Venetian said, well, I think we can come to a deal. And the deal was that the Venetians basically said, go down the Adriatic coast and rough up my competition. That's what I want you to do. I want you to go all these little towns on the coast here across from me.   [00:11:16.310] I don't like any of those guys. They're kind of cutting in on my business. So go and rough those guys up and just send us a message. And the Crusaders basically became thugs at that point. They're supposed to be the Christian Crusaders were going to take back the holy Land from the evil Muslims and all this that just same nonsense back and forth throughout history.   [00:11:36.190] They didn't even pretend to that point. He said, all right, we'll go down the coastline and we'll rough these guys up. And one place in particular was the city of Zara, the kingdom of Zara, this modern day city, if you've been to Croatia, the town of Zadar, and Zadar was sacked by the Crusaders. Zara is one of these places. The Venetians did not like Zadar.   [00:11:56.140] They then called Zara. They did not like Zara. They did not like having a rival. And the Crusaders, basically a bunch of thugs, just showed up and sacked the town of Zara. And it was a huge deal, right?   [00:12:07.610] Because again, these were Christian crusaders. Catholic crusaders taking a Catholic town. Zara was Catholic. So you got a Catholic army taking a Catholic city, because the Venetians, because they got to pay off their debts to the Venetians. Then when you think about it, maybe that's what the Venetians wanted all along, right?   [00:12:27.220] Maybe the Venetians sat together in these negotiations and knew there's no way these guys are going to come up with this sum of money. So they said this outrageous price for the ships, knowing fully well that the Crusaders did not have the money. And we're basically too unsophisticated to realize this whole, you know, this whole ploy, and said, you know, we'll we'll do the ships because our cost of building the ships is way less than 85,000 marks. And then we'll basically pressure these guys to go and take out our competition. And in the long run, that's going to be a huge return on investment force.   [00:12:57.840] Maybe that's what they wanted all along, right? And so now you've got the Crusaders. They've sacked this Catholic town, Innocent III. The Pope hears about this, he freaks out. Remember, this is a guy he's all about, you know, he is the authority, he's in charge.   [00:13:14.430] He's got everything under his control. And now there's clearly no control. Everything's lost all control. He got his Catholic army totally broke, indebted to the forengi, running around in Croatia, sacking Catholic towns. I mean, he's completely lost the plot here.   [00:13:31.410] In order to try to reassert control, he bounces back and he says, I'm going to excommunicate all you Crusaders, right? He's going to excommunicate them as punishment for second as Catholic town. But the leaders of the Crusade, they don't bother actually passing it on to their troops, right? Because I say, well, now we're going to have outright tyranny. We're going to have just a total anarchy if we tell people, they don't even tell people like, hey, guys, you've been excommunicated by the Pope for doing what we told you.   [00:13:55.920] So they just sort of keep it a secret. And now you've got the Crusade. So the pope's furious. The Venetians have just ridden themselves of their competition, and you've got basically this, like, gang. That's what the Crusaders are at this point.   [00:14:08.210] They're just a gang. It's just like an armed, you know, a mercenary militia hanging out in Solder. They just sacked the town, demolished a lot of stuff, stolen pillaged, and they're camped out there in the winter, and they get a new opportunity comes to them because now it's like people sort of see, like, oh, this is an armed gang. We could probably use that to our advantage. And so at the same time now, right around the same time, you've got the Byzantine Empire.   [00:14:32.300] Remember, the Byzantine Empire is based in Constantinople, and technically they are Christian, but they're not Roman Catholic. The Byzantine Empire is Eastern Orthodox at this point. And the emperor of the Byzantine Empire is a guy. He was deposed, he was chased out of town, just par for the course. In the Byzantine Empire, there's always murder and intrigue and assassination and all this sort of thing.   [00:14:56.530] The Byzantine Empire, again, this is supposed to be the continuation of the original Roman Empire. This is back. We talked about this in a previous podcast. Constantine, the Roman Emperor Constantine ends up building a new capital in this area in Byzantium, which became known as Constantinople and became later on the capital of the Roman Empire. 100 years, 150 years after that, basically, the Western Roman Empire just sort of fell into the abyss and was taken over by all the barbarians.   [00:15:24.510] But the Roman Empire itself continued. In fact, in Constantinople, they viewed themselves as Romans. They viewed themselves as the Roman Empire. And so now you've got essentially the Roman Emperor in Constantinople who's been deposed, and his son, this guy named Alexios, the fourth. Alexa the Fourth is his close relative, and he says he reached out to the Crusaders that are wintering in Zada.   [00:15:48.770] And he said, Fellas, I want to make you an offer. I want you to retake the city. I want you to retake the city of Constantinople and kick out these pretenders and get rid of these guys, and I'm going to be Emperor, but I'll pay you a whole bunch of money as soon as you retake the city for me. The Crusaders, again, at this point, they're just a gang, they're just a bunch of mercenaries that go, yeah, sounds good, you know, I mean, we took ZAR, we might as well take Constantinople. And it seemed like a less, less controversial, because again, Byzantium wasn't even Catholic.   [00:16:17.760] They were Christian, but they weren't actually Roman Catholic, so it wouldn't be that big of a deal. So that's what they do. So they go in twelve three, they go to Constantinople, all the Crusaders, they pick themselves up, they leave Zatter, they go to Constantinople, and they take the city after a siege, and take the city on August 4, August 1, Twelve Three, and then they went to Alexios the Fourth. They said, all right, man, we held a bar into the bargain. We took the city for you and up, pay up.   [00:16:44.800] Wouldn't you know it, Alexios doesn't have the money. That's because his predecessor had fled with all the gold and they didn't have any money. The treasury was practically empty. And so Alexis does something really, really unpopular. He takes all of these Eastern Orthodox relics, these icons, these scepters, and all these different things, and they're all made of gold and silver, and he melts them down to pay the Crusaders.   [00:17:06.560] Now imagine you're a local, Eastern Orthodox, local citizen, living in Constantinople at the time, and you see your Emperor supposed to be this Eastern Orthodox guy, melting down all of your precious religious icons to go and pay these foreign people that aren't even of your religion. You're furious about this, and people were rightfully furious about this, and say you're melting down all of our stuff to go and pay these foreign guys just so that you can be emperor. People got furious, riots broke out, all sorts of things, and eventually Alexios the Fourth was assassinated. So now the Crusaders are going, oh my God, the guy that was supposed to pay us, and he was trying to pay us, now he's been assassinated, somebody's got to pay us. Now.   [00:17:46.890] The crusaders are furious. So they actually took the city again, there was actually a second siege, which actually became known as the Sack of Constantinople, and this time they were really mad and they totally looted the place. They just gutted the city. So we have now this supposedly Catholic army who was sent by the supposedly all powerful Pope, supposedly to take back the Holy Lands, supposedly to fend off the Muslim invaders. Now they took this Catholic city in Croatia.   [00:18:13.330] Now they're looting and raping and murdering their way across Constantinople. It was so bad, it was written by one historian who called it, quote, a scale which even the ancient Vandals and Goths would have found unbelievable. So it was quite a vicious and violent assault on the city of Constantinople at this point. They said, you know what? You know what?   [00:18:31.830] Forget it. There's no more Byzantine Empire. We're tired of these people. They lie. Everybody lies.   [00:18:36.940] And now you think about these Crusaders, like they were supposed to go to Egypt, and now they end up in Constantinople. They've been in debt. They've been promised the world that everybody keeps lying to them, and they're under the thumb of the Venetians. They're so tired of it. So they said, we're just going to reconstitute this place.   [00:18:51.390] We're going to take this Byzantine Empire, and now it's ours, and we're going to rename it the Latin Empire. The Latin empire. And Concentrate became the new capital of the new Latin Empire. And again, remember before that, it was the Byzantine Empire. Byzantine Empire was Eastern Orthodox, not Roman Catholics.   [00:19:09.160] Or didn't fall under the Pope. And so if you think about it from the leadership of the Crusaders and their perspective, this is kind of a face saving consolation prize, because they didn't take Jerusalem, they didn't take Egypt, but hey, at least we got this Eastern Orthodox place, and we're going to put this under the Pope's control. So the Pope Innocent the 30, can claim, oh, at least we got Constantinople. This was great for the Venetians. If you're Venice, you're just rubbing your hands together and saying, oh, yeah, because you gotten rid of your competition on the Adriatic, you've gotten rid of Constantinople, and basically these guys are all under your thumb, right?   [00:19:44.760] Venice holds all the political and economic influence. Now, actually, at this point, they control roughly 40% of all the territory. That was supposedly the Latin Empire is actually under the control of Venice. Venice basically now controls the Dardanelles, which is strategically one of the most important sea passages in the history of the world. Right?   [00:20:05.730] So now this is all under Venice's control. Great for trade. They've got no competition. I mean, it just can't possibly get any better for Venice. And naturally, Venetians began pouring into Constantinople.   [00:20:16.910] Business was brisk, and it remained that way for for several decades. And there was even there were so many Venetians in Constantinople this point. There was even a Venetian quarter in the city. And by around the middle of the century or so, you know, 1240s, 1250s, there were a couple of young guys from Venice and two of these Venetian guys that were there, these traders were a couple of young traders named Nicolo and Mafao. They were brothers.   [00:20:42.110] And the brothers Nicolo and Mafeo were excellent businessmen. They had accumulated quite a strong fortune, especially for young guys of their age. But they saw the writing on the wall, it was clear to them that this Latin empire wouldn't last. And that was pretty obvious to them as soon as they showed up and, and it didn't last. I mean, this, this Latin empire, it was like 50, 60 years and it was done that's because these, these European guys that had taken over, they were all weak.   [00:21:11.120] The emperors were weak. The city's defenses were nonexistent, the treasury was depleted. Social chaos is on the rise. You've got again, intense ideological conflict between the Eastern Orthodox and the Roman Catholics. Again, to us we view that as all of our why do people get so fussy about these subtle little religious differences?   [00:21:30.830] It was a really big deal for them. In the same way that people, if you bring somebody from the past, from the 1002 hundreds and bring them to our times and go why are you guys so fussy about social justice and all these sorts of things that might seem silly to them. Again, everybody's got their ideology and people get very entrenched in their ideology. Nobody likes being forced to do anything. And when they have forced conversions and you have to be this ideology, you have to be that ideology, nobody really likes that.   [00:21:57.420] And it creates a lot of conflict. And so there's all this going on. Again, the treasure is getting depleted. Emperors are weak, politicians are weak. They've got enemies at the gate.   [00:22:07.020] And Nicola and Mafiao say, you know what? The getting has been good here. We made a ton of money, but it's time to go. Their time in the city had been very, very prosperous. But again, they saw the writing on the wall.   [00:22:16.490] So they got out of town around 1250, 912, 59. They've been there for a while, but they got out. It's 1259. They travel east. Now, that turned out to be a really good choice because Constantinople would actually fall a couple of years later.   [00:22:29.860] A new emperor would assert himself and burn the entire Venetian quarter to the ground. They were so sick and tired of the Venetians at that point and Nicolo and Mafiao would have most certainly been exterminated in that carnage and that revenge. And so it's basically 1260, 1261. The Byzantine Empire was reformed, re established. We're Byzantine again, we're Eastern Orthodox again.   [00:22:50.780] Forget about everything that happened over the last 60 years, but Nicolo and Mafiao, they're out of there. They're on the road. And instead of sticking around and waiting for disaster to strike, they got out early and they started making their way across the Silk Road. They didn't go back to Italy. They went east.   [00:23:05.120] They went across the Arabian Peninsula. They went across the Silk Road. They made it to Uzbekistan, modern day Uzbekistan. They had a blast there. They stayed in some of these areas for even a couple of years and they kept going east and finally made their way to what is today modern day Beijing, and they met the guy.   [00:23:22.830] They were presented to the court, to the ruler, the guy who ruled over all the lands they had just crossed, from Beijing, all the way back across the Arabian peninsula, across the Silk Road, uzbekistan, India, all these places. They met the guy that ruled over all of that. And his name, of course, was Kubla Khan. Kubla Khan was a very inquisitive guy. He was perhaps this is all very relative, but certainly much more inquisitive than his grandfather.   [00:23:49.120] Genghis Khan, also known as Genghis Khan, also known as chengas Khan. A lot of different ways to pronounce his name. Kublai Khan was was a lot more sophisticated, a lot more inquisitive. He was a curious guy. He really appreciated and valued foreigners and foreign culture.   [00:24:03.940] To him, the more the merrier, even if it was a point where people were sort of disputing. And he had disputes with one another over cultural differences, he thought, well, it's better they have disputes with one another over cultural differences than they have disputes with me as their ruler. And so Kublai Khan was quite enamored with these two brothers, these Venetian traders, and he said, here's what I want you guys to do. I want you to go all the way back to your leader. I want you to go back to this guy.   [00:24:29.670] I've heard about this pope. I want you to go back to this pope, and I want you to set up an exchange of ideas and information. Information. And he sent in this sort of emissary. He sent to the pope a request.   [00:24:40.320] He said, I'd like for the pope to send 100 scholars to our lands here in Mongolia so that we could all learn from you western customs and religion and education, all these different things. And so he gave these guys, Diecolo and Mafeo this golden tablet, something called a Pisa. And the Pisa was literally it was a tablet made of gold. It's about a foot long, a couple of inches thick. I mean, it was quite a hefty thing, and it was sort of like a passport.   [00:25:03.800] This was normal in Mongolia that different emissaries and court officials and government officials would have this thing because it was this thing that was stamped by the khan himself, and it would threaten everybody. The pope threatened people with excommunication. The Khan just threatened everybody with a vicious and horrible death. And the Pisa would basically say, give these guys whatever they need, whatever they want, and ordered by the con, and if you don't, I'm coming for you. And so everybody generally would abide by the Pisa.   [00:25:33.140] Somebody showed up with his golden pisa. You were practically throwing rose petals at their feet, and it ensured the protection and comfort and safety and food and money, whatever they needed all along the journey, all the way back to Italy. And so they finally returned home. Nicolo and Mafia, I remember these guys. What.   [00:25:49.410] An incredible journey. They were in Constantinople, they went to Crimea, they went to Iran and Persia, they went to India, they went to Uzbekistan. Now they're in China. They go all the way back, all the way back and they finally get back home to Italy. They land in Venice in 1269, ten years after they left Constantinople.   [00:26:09.450] So that was a long voyage and what do you know, it nicolo found that he had a son who was now 15 years old. 15 years old. And he decided after this whole back and forth with the Pope and all of this, he decided, you know what? You're 15. I'm going to bring you back with me on the voyage back to Mongolia.   [00:26:26.750] And his son, of course, is very famously known to history as Marco, marco Polo. And Marco Polo would spend most of the rest of his life traveling. He went to some of the most exotic places that very, very few Europeans had ever set foot. And he wrote about it. He wrote about it in his book.   [00:26:42.930] It's called The Travels of Marco Polo. And like a lot of works from history, some of it's factual, some of it's completely fantastic, some of it is very chest thumping, self aggrandizement. This is a similar common theme throughout history where you see Julius Caesar. Julius Caesar wrote an account of his wars against the Gauls. And this is actually the same.   [00:27:02.710] I mean, Caesar is pumping himself up. Caesar refers to himself in the third person in his book. It's totally ridiculous. But he's praising caesar is praising his own genius on the battlefield and making outrageous claims of victory. We vanquished millions of Gauls without a single law.   [00:27:18.590] I mean, all these just silly things that are total fantasy, total fiction, but there are certain factual things about it. And Caesar and his writings and his travels about himself, I mean, there are certain things that are factual. We can see this in the works of Herodotus. We can see this in the Old Testament. I mean, there are so many things throughout history that are, again, part fact, part fiction, part whatever.   [00:27:39.650] In Marco Polo's book, he makes himself out to be this great guy, probably gives himself a lot more credit than he deserves. Some of things are clearly completely made up. And even back then, to be honest, there are so many things that people just didn't believe. They read this book and they go, yeah, okay, dude, no way. But it was still things that people just never heard about, things that people never even imagined.   [00:28:02.100] And there are a lot of things that are actually quite factual from his books. You also got to remember that a lot of the books, it was basically pooled together from the notes and things that he took. And a lot of this was written by a teenager. A guy was 15, 1719 years old. So of course there's an obsession with the sexual customs of all these different peoples that he encountered.   [00:28:20.920] He writes, for example, he travels to Tibet, and this is a place where, at the time, chastity and virginity were frowned upon and women were encouraged to sleep with travelers. And Marco Polo actually says explicitly in his book, like, I highly recommend going to this place, especially if you're a young man between the ages of 18 and 30, whatever. I mean, he loves this place, and he basically rates women in every country that he goes to who are the most beautiful, who are the least beautiful, who are the most this and that. And in fairness, again, these are also the musings of a horny teenager, but in fairness, is also a source of intelligence for Kublai Khan. Kubla Khan, in many respects, is an overgrown manchild who was always on the lookout for more concubines.   [00:29:04.410] The guy had thousands of people whatever he wanted to in his palace. But they had actually, in the Mongol Empire, they had a highly formalized system of concubinage where they had literally officials on staff who would assess beauty. Objectively by taking measurements of women's the distance of their eyes and the thickness of their brows and the pumpness of their cheeks and all these different things and assess women's beauty. So Marco Polo was essentially gathering intelligence for Kublai Khan and all these things. The book, if you've never read it, a lot of people have heard about it, in some respects, very frustrating, because there's very little chronology.   [00:29:44.670] It's hard to separate, in some respects, fact from fiction. Sometimes Polo talks about places that he's never been to, as if he's been there, just hearing different accounts from what other people say and all these different things. But it is quite a fascinating book, especially if you keep in the back of your mind that was written by a very, very, you know, basically a teenager, a guy in his early 20s, but as well, like, having been to places that nobody in Europe, most people would never have dreamed about. And this is the way the guy lived his life. He ended up going back to Europe for a time.   [00:30:13.010] Actually, he was put in captivity when he was in Europe, but he was treated very, very well. He's treated as a very distinguished, dignified nobleman. So he's treated incredibly well, given all sorts of luxuries while he was in captivity. That was the point where it actually dictated his book and had it published. And even after he was released, he continued to travel and explore and go all over the world and really just maintain that global mindset.   [00:30:38.550] Marco Polo, for his faults and eccentricities and the silly things that he wrote, was clearly a guy, regardless of all that, who recognized that the world was a really big place and it was full of unimaginable opportunities. This is a guy that has gone down in history as one of the world's more famous travelers. Have been other people. There was a Viking, a guy who's named ingvar the far traveled, ingvar the far travel. This is another guy who was a famous traveler throughout history.   [00:31:09.750] You've got Strabo who is an ancient sort of Greco Roman lived during the time of Augustus. In fact, travel in certain places, in certain areas was actually somewhat common. The ancient Romans did travel extensively. They had roads and they had sea routes and they had all these things, the Romans along their roads they had a very formalized system where every several miles there would be new post, where there would be stables and fresh horses that you could hire, there would be inns after that. I mean all this stuff was actually very highly regimented and organized to make it a lot easier for travel to take place and these are things that ancient people always understood during the time of Augustus in the first century BC.   [00:31:53.150] First century Ad. Travel was very, very commonplace, especially around the Mediterranean. People would travel to expand their horizons and learn, especially for scholarship and trade and these sorts of things. And it even predates, far predates the Romans, I think. Last week, the week before, we talked about trade and travel from the ancient phoenicians and establishing various colonies and trade posts, one of which became Carthage and the Carthaginian empire.   [00:32:15.590] All these things establishing wealth and prosperity and this has been a very, very common theme throughout human history. There have always been people. Some people, some people always had a peasant mindset and that there was no world beyond their tiny village. Others had a level of sophistication understand that there's more out there in the world, and they had a more international, global mindset, and they realized that that mindset was the gateway to far greater opportunity. And there was a lot of opportunity.   [00:32:44.480] There was the opportunity for profit potential, as the case of marco polo shows. The guy became very wealthy. His father and his uncle nicole and mafiao became very, very wealthy. But there were lifestyle opportunities. As marco polo wrote about you going to tibet.   [00:32:57.870] And he thought, this would never happen where I came from. And now all of a sudden he goes to Tibet and this is a teenage kid getting laid everywhere he goes and different things like that. I mean you've got health opportunities in the case Marco Polo in his book he writes about he actually got very, very ill at one point along the voyage to go, going into Mongolia for the first time. People think that it might have been tuberculosis as a matter of fact. And he was told you got to go up into the mountains.   [00:33:24.280] They had a place here in the mountains where he could go up and basically to help reduce the altitude, reduce the pressure, help him breathe a little bit more easily and he did recover and it's possible that the guy would have died if he hadn't had that opportunity. And that mindset of okay, what can I do? Where can I go? Let me expand my horizons beyond what's in front of me right now. And he ended up recovering from that.   [00:33:45.670] A lot of people realize travel and having that global mindset was just a great way to have more freedom. We talked about how the rest of Europe was under this era of this system of feudalism. But in Venice they didn't have that. And so people moved from a few you know, from Germany or France or some feudal society and they came to Venice where they could be more free or people were fleeing persecution and all sorts of things like that to increase their level of freedom. Or we've seen throughout history people going somewhere for more opportunity, lower cost of living, safety and security because people moving to the United States at a certain point in the 18 hundreds because they're just giving away land for free and they know they can have a better life and take care of themselves and their family.   [00:34:30.650] This has been a very common theme throughout history. Today it's obviously so much easier to have this global mindset because we have practically infinite information at our fingertips. We have the opportunity to network with people around the world without leaving the house, without leaving our living room. We have the ability to be on the other side of the planet tomorrow morning. And we also at this point have very relatively limited bureaucratic requirements.   [00:34:56.630] And what I mean by that in terms of travel, in terms of restrictions, things like that. You think about travel from the context of travel bureaucracy like visas. Visas are kind of interesting. Just as an aside, a little bit of a historical aberration. Most places never had visas.   [00:35:10.680] Of course, we didn't have passports or anything like that either. Long ago, if you were a traveler showing up to place you were probably a curiosity. Many respects welcome mostly because if you had the money to travel then probably good enough to hang out in our town. And that's the way most people most people really looked at it. Or you were bringing things, you're bringing trade, you're bringing goods, you're bringing something that was sort of welcome.   [00:35:35.760] It wasn't until there were some isolated episodes of widespread emigration usually because of some sort of crisis like, you know, the Israelites fleeing slavery in Egypt or Protestants fleeing Catholic and Polish oppression and being welcomed by Frederick the Great and Prussia. All these different instances of people fleeing persecution. But the idea of widespread migration, people coming, showing up and immigrating somewhere in Mass that was a relatively recent thing that started in the late 18 hundreds when we see just boatloads of people showing up every day to Ellis Island looking for capitalism and opportunity and all these sort of things. And it became so common, it's really at that point that governments finally said no you can't just show up. You've got to go through a system.   [00:36:19.290] And they started setting up, you know, visa regimes and health inspections and all those sorts of things. And and there's actually, you know, the Canadians, believe it or not, had at a very regimented system, they had they had an act, the Chinese Immigration Act in 85, which required a $50 duty for every Chinese person seeking entry into Canada. Obviously, this seems like quite a racist thing to say, well, we've got too many Chinese people, so we're going to charge $50, lot of money back then, $50 for every Chinese person wanting to come into Canada ended up actually increasing all the way up to $500. And, you know, it's you can say, well, that's that's very racist, and so forth. And it is.   [00:36:56.420] But it also formed the foundation of excluding people based on nationality. That's what visas are today. In a way, when you think about it, it's just a way to exclude we don't like people from this country, we do like people from that country. So whatever Chinese people, Venezuelans and Nigerians, you need a visa and you got to go through jump through all these bureaucratic hoops. But if you're from Switzerland, you can come in without a visa.   [00:37:20.010] That's basically where the foundation of this thing came from, was Canada's 1885 Chinese Immigration Act.   [00:37:29.470] In 19 six, they passed an immigration act. Section 28 of the 19 six Immigration Act in Canada prohibited the entry of, quote, poor people. Poor people. They didn't like poor people. Also prostitutes, panhandlers, all sorts of things.   [00:37:41.940] They specifically prohibited in this 19 six Immigration Act. But this is also somewhat of an anomaly because this idea of very heavily, heavy, heavy, heavy visas, this lasted for a long time, but really since the 1970s, the world started opening up and started getting rid of all these visa free, these visa regimes, little by little, specialty in Western countries, north America, Western Europe, et cetera. And over the last 30 years, in particular, from 1993 and 2013, if you're a European passport holder, for example, visa free travel, visa travel among European passport holders, meaning you require a visa, fell from about 35% of countries in the world to just over 10%. Right? So this has been a trend where it's become easier and easier and easier to travel, fewer visas required, et cetera.   [00:38:30.440] And we see this it's not just with travel, we see this with capital controls and exchange controls, where you can change money and transfer money and transfer funds and all these sorts of things freely, openly around the world, no problem. You can establish a bank account, you can wire money, settle transactions and invoice and so forth. It used to be a really difficult thing to do. It used to be really hard to travel to a place and do business and settle international payments. Now it's very, very easy.   [00:38:54.560] Right? And the larger point here again, isn't to suggest like, oh, you should get on a plane tomorrow or go set up a company in Timbuktu or anything like that. The idea is really just to highlight that point, that sophisticated people throughout history have always understood that there is great opportunity beyond their own borders. And this is still absolutely true today. And the basic logic behind this is that when you start thinking globally, you give yourself a lot more options.   [00:39:22.100] You give yourself a lot more opportunity, more options. More opportunity is always better. It's always better. And if you think about it, let's just a few examples. I mean, some of these are silly, but if you think about retirement, for example, you say, oh, I'm going to retire.   [00:39:37.180] I'm going to move to the suburbs, or whatever. Okay, that's fine, that's fine. I'm going to stay in my home country, I'm going to stay in my state, whatever it is. But if you look abroad all of a sudden, you might find that looking abroad, retiring abroad might mean a much, much lower cost of living and a very high quality of life. You might find that, wow, I could live in a place that's got exactly the weather I want, that's got exactly the lifestyle I want.   [00:39:57.890] And even on a modest fixed income, I can afford a beautiful home. I can have a maid, a cook, a driver. I can have top quality medical care. I can go out to nice restaurants and nice dinners regularly. All these things that I can do because I've expanded my thinking internationally.   [00:40:15.350] Medical care is actually another great example that I got to pay. It's going to cost me a kidney to go and get this MRI, but instead I can go overseas. I can get this whole workup done just south of the border or whatever. I mean, there's so many places I can go and get dental work done or cosmetic surgery, whatever else it is that you want. By expanding your thinking internationally, you might find a whole lot more options that it might be better, faster, quicker, cheaper, whatever.   [00:40:44.020] And you just end up in a better position by giving yourself more options. It's the same with investing. It's the same with business. You expand your universe of options, increase the chances of finding high quality, well managed businesses with excellent growth prospects and an attractive entry price as an investor. That's what we want, right?   [00:41:00.450] Wide. Limit yourself to this very narrow pool of options where you have a much greater pool of options. It's going to increase your chances of finding a really great investment. It's going to increase your chances with business. You increase your chances of finding lower cost, maybe remote workers, new markets, growing markets, all sorts of things that are just going to be more beneficial.   [00:41:18.320] It doesn't mean you actually have to do it, but at least puts you in a better position. Even personal stuff, let's be honest. Are you looking for the man or woman of your dreams. If you think internationally you'll end up with a lot more options. You greatly increase your chances of a better match.   [00:41:35.790] Asset protection. Let's think about I actually want to talk about asset protection for a minute. Asset protection is very interesting, especially if you live in the most litigious country in the history of the world. A lot of people engage in, they hear about these things like, okay, I should probably do something and they set up like an LLC. And I think they're protected because they have some domestic LLC or maybe even set up a domestic trust or something like that.   [00:41:57.830] I'm telling you there's just no contest looking abroad to foreign asset protection structures. It's just no contest. I got to say a lot of people think when we talk about asset protection setting up whatever trust and foundations, whatever. And people think there's this common trope, especially in mainstream media, and you see this in these papers or that paper, the paradise papers, the whatever papers the media loves to beat up on anybody that has you know, they say, oh, they got to trust and such and so place, and they think they just automatically it's so ignorant and so stupid. They just associate having some kind of asset protection plan as something that's for criminals.   [00:42:37.660] It is not for criminals. It's not. All these people, tax cheats and fraudsters, et cetera, they always get caught. They always do. It's nothing else.   [00:42:46.920] If you go around cheating people, it's just a question of karma. You're going to get caught. These people always get caught. This sort of stuff is not for criminals. Asset protection is for honest people to protect themselves from criminals.   [00:42:57.990] It's to protect yourself from blood sucking lawyers. And people, honestly, these criminally minded people whose whole purpose in life is to abuse the legal system and steal from hardworking professionals, hardworking business owners, hardworking talented people that have saved their money and been responsible. And there's people, this is what they do. They float around out there and they make a big stink. They make a bunch of noise and they abuse the legal system.   [00:43:21.800] They abuse the law to go and steal from people. Asset protection is to protect honest people from those dishonest people, to protect honest people from those criminals. And this is why it makes so much sense, especially if you live in the most litigious country to have ever existed in the history of the world and for people to set up some kind of structure. Now most people again, they don't expand their thinking to the whole world. They say, oh I'm in this country so I'm going to do whatever I'm going to do exactly in this country.   [00:43:48.540] Well guess what? Domestic asset protection structures, you set up a trust, you set up an LLC, it's not going to do anything. It's not going to do anything for you because a court in your home country. A judge can basically set aside all of that because they have jurisdiction over the trust. They have jurisdiction over the LLC.   [00:44:05.300] So it doesn't really do any good. I've had lots of conversations with lots of asset protection lawyers, all these people that basically say, look, all these things that you read about asset protection in certain states that say, oh, we've got rocks, all of this, the bulletproof, that it's all clever marketing gimmicks. It actually doesn't do very much for you at all. However, if you look overseas, there are entire countries that have passed clear legislation specifically for the purpose of for honest people to protect themselves from these dishonest, abusive criminals, right? So Belize.   [00:44:42.370] Great example. Belize actually under its Limited Liability Companies Act, part Six, Section 53, says, quote, any action, any action made under duress shall not be honored. The idea basically being that if somebody is being threatened, if somebody is being sort of forced to do something against their will, that any action, the LLC doesn't need to listen to that the banks don't need to listen to, that the LLC is actually legally required to disregard the instructions from anybody giving instructions under duress. So this is something is specifically wrote with asset protection in mind. A lot of jurisdictions, including Belize, other places that are famous for asset protection, like Nevis, et cetera, they have something called a charging order which basically says, first of all, somebody wants to come after your LLC.   [00:45:27.890] They got to do it in this country, which in a case like Belize, for example, it's something like $100,000 bond just to bring a lawsuit, right? So that's a really pretty high barrier to entry for a lawsuit. It helps. It helps just get rid of these frivolous lawsuits from these ambulance chasing, bloodsucking lawyers and professional plaintiffs and people whose entire job is to go around suing people and abusing the legal system, even though there's not actually any real grievance. They just basically steal from others, right?   [00:45:55.250] And so they said, we're going to make a very high barrier to entry to discourage anybody from doing that. And then even if you win, you bring a case here, even if you win, the thing that you end up getting is something called a charging order. And a charging order is basically you don't actually get control of the property. You don't get control of the property. You basically assign certain economic rights associated with the property.   [00:46:13.640] And not to turn the listen to a legal lesson, but the reason that matters is because it can actually be. Even if somebody comes and brings some frivolous lawsuit and they go and they want to pay $100,000 to do it and all these different things, even if they win, they actually lose because a charging order doesn't actually give you anything. And that can actually be a net negative from a tax perspective. You end up with this giant tax liability, but no assets. So it really discourages, again, these dishonest people that abuse the legal system.   [00:46:38.420] It really discourages them from going around and trying to steal from honest, hardworking people. And that's why these things are actually important. But most domestic structures won't hold a candle to this. People that are thinking that, well, at least I've got some domestic asset protection structure so I'm safe from these dishonest, abusive criminals. Well, no, you're actually not.   [00:46:59.750] Domestic structures are okay, but they just can't hold a candle to some of these places. If you expand your thinking internationally, there's just one example. Tax is another example. We talk about taxes all the time, and there's a reason for that. It's because reducing your tax burden is an incredible return on investment.   [00:47:17.840] It's one of the best ways to actually, in my opinion, actually move the needle, make a real statement. People would say, like, oh, if you don't like the politicians, you should go vote. I think if you don't like what politicians are doing with your money, stop giving them money. Not illegally, but use all the legal ways at your disposal to stop giving them money. It's a much stronger statement to make.   [00:47:37.120] It puts more money in your pocket, puts you in a position of strength that if you want to, you can actually still give that money to the government if you want to. If you think, well, the national debt is too high, well, you can actually pay less tax and then make a donation to the treasury to pay down the national debt. I mean, you can still give it to the government if you want to. It's entirely up to you. You can go fund charities, do all sorts of things.   [00:47:57.050] This has been sort of an annual ritual for me where I take a lot of money that I don't pay in tax and I do things with it that actually move the needle for individual people or causes that I think are worthy. You have the ability to do this if you take completely legal and legitimate steps to reduce the amount that you owe. Most people do have the ability to do this. The tax code is enormous, and there are plenty of ways to reduce the amounts you owe completely and totally legitimately. But this is becoming a thing that will continue to be more and more necessary if we think about I'm just going to review this briefly.   [00:48:31.580] We'll probably talk about this in more detail in the next couple of weeks because there's more numbers coming out. But I talk about Social Security a lot. The program is completely underwater. The annual report, Social Security's Annual Trustees Report says the trust funds are going to be fully depleted in ten years. Probably going to happen sooner because of inflation.   [00:48:46.240] But they basically have very few options. They can just let the trust fund run out, slash everybody's benefits, which is essentially a default on the promises they made to taxpayers, or they could cut benefits now, or they could change the retirement, and you say, oh, we told you you could retire at 65. Now it's going to be 72. Well, that's also a default on the promises they made. Forget about everything we told you for the last 40 years.   [00:49:07.260] Now it's going to be something else. We're going to move the goalpost. They can also bail out the program, but that's with money they don't have, so that creates inflation. Or they could drastically raise taxes, which is also very inflationary because it squeezes your standard of living. So basically, essentially, their options are either default or inflate, and it's probably going to be a combination of both of those.   [00:49:25.670] If you look at it, really, if you think about it, Social Security, if you do the math, Social Security is basically 12.4% from a federal level in the US. 12.4%. So you're taking 12.4% of somebody's salary, investing it at these, you know, treasury rates, they're getting 2.3%. It's nothing. 2.3% annual return barely keeps up with inflation, even over long term averages.   [00:49:46.710] So basically, taking 12.4% of somebody's salary and paying out a benefit of one $800 a month, do the math. It just doesn't compute. You just can't do that, right? You just can't do that. You look at the average somebody's average salary in the US.   [00:50:00.510] The Department of labor says it's less than $60,000. You take 12.4% of that, you just don't get to one $800. Even if you accumulate all that for decades, it still leaves a giant hole. You just don't end up with enough money to pay one $800 a month for the rest of somebody's life. It just doesn't compute.   [00:50:17.470] Social Security knows this. They acknowledge this. This is why they estimate their funding gap at negative $47.6 trillion. It's so obvious, right? And the solutions are either need to Social Security that needs to be able to generate a much, much higher return, but they can't, because by law, they're only allowed to invest in US.   [00:50:38.330] Government treasuries. They can't invest in the stock market, they can't invest in real estate, they can't invest in private equity. They can't invest in anything where they can generate more than a 2.3% return. So unless they're allowed to do that, it's not going to work. Or they got to raise the tax, right?   [00:50:52.000] So instead of paying 12.4% tax, they got to pay 20, 30% tax, which is actually more normal. If you look at the rest of the world and most social insurance programs like this, most countries have 25, 30, 35% taxes on payroll to fund their Social Security programs. In the US. It's 12.4%. You can't offer the benefit and not have enough money to pay for it.   [00:51:13.750] You either got to raise the tax to pay for it, or you got to raise the investment return to pay for it, or you got a default on the promise, whatever it is. But it. Just doesn't compute. And that's just for Social Security, right? Then there's the rest of the budget.   [00:51:27.770] The fiscal year 22 numbers will be out in the next couple of weeks. And so this is just going to be completely gruesome. But if you look back to the previous fiscal year, FY 21, the net operating loss of the federal government was negative $3.1 trillion. Right? $3.1 trillion loss.   [00:51:46.200] It's absolutely incredible. So again, they just don't and it's going to be horrendous for FY 22. It's already horrendous for FY 23. They're already on record for this crazy high budget deficit. The budget deficit has grown in FY 23 in the first four months of the year than it did over FY 22.   [00:52:01.110] I mean, these guys have no hope of actually running a balanced budget, and they consider running a balanced budget now irresponsible, and they're not going to make any changes. Just the other night, there was this at the State of the Disunion address, and the President aviator sunglasses in chief was up there talking about, oh, we're not going to touch Social Security. I mean, they're not even interested in discussing it. They won't even discuss it. It's off the table or it's off the books, as he called it.   [00:52:27.700] They're not even going to discuss it. So they're clearly in no interest in solving this problem whatsoever. And that leaves them very, very few options either. Again, they either inflate, they print a bunch of money so they can pay off their debts, or they default on their creditors. They default on those citizens.   [00:52:43.210] Most likely, it's going to be a combination of all these things, including dramatically increasing taxes. You are going to be punished, because even though you had nothing to do with this, you just happen to be living in the country, therefore you will be punished. You had nothing to do with this. You didn't make any of these decisions. The people who are responsible for these decisions, the people who are responsible for this financial mess, will never be punished.   [00:53:05.070] They will receive the Presidential Medal of Freedom. They will have schools named after them. They will be Harold in textbooks as the greatest speaker of the House of all time. All these things. They will be given accolades.   [00:53:16.520] They will never be held responsible. You will be held responsible. You will be punished. And that's why I think it makes sense to look at at least look at the legal steps you have at your disposal to reduce your taxes. You could do things that are completely and totally legal to reduce the amount that you owe.   [00:53:32.950] This makes sense. From a moral perspective, it makes sense. From just a pure, just rational perspective, it makes sense. And there are so many options available. There are domestic options available.   [00:53:42.380] We talk about some of these things a lot like maximizing retirement contributions, setting up the right kind of structure that gives you the ability to reduce your taxable income by tens of thousands of dollars and allowing that money to grow tax free in a retirement account. I mean, there's a lot of things you can do to reduce your income, and they're coming up with all sorts of conniving ways. They want wealth taxes and national sales taxes, all these things. And so there's always going to be new threats and new challenges, but there's always going to be completely legal ways to reduce what you owe. If you look overseas, there are always, honestly, even more ways.   [00:54:15.990] And a lot of times those overseas methods of tax mitigation are even more effective. If you think about it from a personal perspective, you can move abroad, which I understand is not, you know, it's a lot of people that just don't have the ability to do that. And that's fine, but it is an option. It gives you access to the foreign earned income exclusion, which can basically slash your tax bill to almost nothing, and you can earn $250,000 or more per household. You could move to a place like Puerto Rico where you could earn virtually unlimited income and pay 0% capital gains, 4% combined business and personal tax.   [00:54:51.370] I mean, there are ways to do that if you look abroad, but you don't have to move. You don't have to move if you have a business, for example, you can actually take advantage of this thing they call the global intangible low tax income provisions, right? If you spell it out, it's G-I-L-T-I. They came up with this, like, this name. They call it Guilty because they want you to think, oh, if you look overseas, it makes you a bad person.   [00:55:14.020] No, it makes you actually a very rational and sensible person. And this is a way where you can cut your corporate tax rate in half down to just ten and a half percent, right? So you can effectively reduce your global worldwide tax rate, setting up a company in the right kind of place, and you'll still pay tax in the US. But you'll basically pay ten and a half percent, right? So this is an example of literally cutting your corporate tax rate in half if you expand your thinking internationally.   [00:55:40.020] This is what a lot of companies do. Apple does this. Google does this, and Facebook does this. This is not just for big, giant multinationals. Anybody can do this.   [00:55:47.550] You should obviously, it's not for everybody. The reporting is a little bit more complex and you should be of a certain size. But I mean, honestly, plenty of small businesses, medium sized businesses, can absolutely benefit. And these are just barely scratches the surface of the different options and things that are available to cut your taxes, especially if you have that global mindset and you look abroad. So, again, the bottom line here, these are just examples.   [00:56:13.190] The bottom line here isn't you don't have to be Marco Polo. You don't have to spend your life roaming for one place the next. You don't have to travel to 122 countries. You don't have to leave your hometown. You don't have to leave your living room.   [00:56:23.610] But it just makes so much sense to expand your thinking to the whole world. There's so much benefit. It creates so much more opportunity. It creates so many more options. More options is better.   [00:56:33.900] More options means more freedom. And you'll be so much better off for it just by expanding your thinking to the world. That's it for this week. I want to thank you so much for joining me and giving me some of your time. And we'll speak to you again soon.   Close Podcast Transcription

Gold is really an amazing metal when you think about it. It doesn’t corrode. Coins buried underground or sunk at the bottom of the ocean for hundreds of years are routinely pulled up and brushed off, and they’re good as new. This strength and durability is precisely what makes gold so interesting as an inflation hedge. It undoubtedly takes a lot of work to produce a gold coin or bar– so much labor, energy, technology, etc. A gold coin essentially represents all of the work… all of the effort and labor… that went into producing it. This is not unique. In the same way, a bushel of wheat represents all the labor that went into producing the grain. An iPhone represents all the labor and effort that went into producing it. Except that wheat doesn’t last. iPhones don’t last. Gold does. So gold essentially encapsulates all of the resources, including TIME, that went into producing it… in a way that lasts forever. Right now, for example, it costs major mining companies about $1,270 to mine a single ounce of gold. So if you buy gold today, you’re essentially locking in a $1,270 production cost. This is the reason that gold does such a great job of maintaining its value against inflation, because, over time, production costs tend to increase. And higher production costs eventually result in higher prices. This is true with just about any product or industry. We’ve seen companies like Procter&Gamble, Unilever, CocaCola, McDonalds, etc. all increase prices because their production costs are rising. Again, though, you cannot use a Big Mac as a store of value. It won’t last forever. It won’t even last a day. But gold lasts. You can buy a Canadian Maple Leaf coin today, and, ten years from now, your 2023 coin will be worth exactly the same as a brand new coin minted in 2033. And if you anticipate that inflation will push up production costs over the next decade (which tends to happen), you can easily make a case that gold prices will be higher by then. This is the topic of our podcast episode today; we take a deeper look at why gold has long-term value– a variation of ‘proof of work’ that I call Proof of Time. We start out in Yap Island, in Micronesia, and discuss how the natives there developed one of the most advanced financial systems in the history of the world based on the concept of ‘Proof of Work’. Anthropologist William Furness wrote that, despite the Yapese having no understanding of economics, they realized that “labor is the true medium of exchange and the true standard of value.” I believe this is true. But more than labor, I believe that TIME is real standard of value. Time is the ultimate scarce resource. No one, no matter how rich or powerful, can create any more of it. And once it is used, it is gone forever. Labor is one of the ways that we use time. And gold is a rare asset that transmits both time and labor… forever. We also talk about different BUY signals for gold. We talk about miners’ gross profits– and why it makes sense to think about buying when profits are low… or even when the price of gold falls below the price of production. In a way that’s like buying a house for less than the cost of construction; it’s a SCREAMING deal and definitely worth considering. Gold isn’t at that level right now. But it could be soon… and that’s why it’s worth understanding how to think about gold, and many other assets, through this lens of ‘time’. You can listen to this week’s episode here. Download Transcription as PDF Open Podcast Transcription [00:00:00.970] Today we're going to go back in time to the 26 January in the year 1543. Our location is absolutely nowhere, just the middle of nowhere in the middle of the Pacific Ocean. A tiny speck that you'd have to zoom and zoom and zoom in just to find a little tiny island that's a couple of dozen square miles, an area at most. Now, this is a time in history where you've got super powers that are vying for economic dominance over one another. You've got Spain on one hand and Portugal on the other, both of them empires.   [00:00:33.190] And they were really at each other's throats trying to figure out who was going to be number one. They were feverishly establishing colonies all over the world trade routes, exploiting natural resources, trying to be number one. The Americas had already been picked apart. Spain was dominant, and the Americas really had the lock. They had colonies and outposts all over the Caribbean and Hispaniola, where modern day Haiti and Dominican Republic are, puerto Rico, cuba.   [00:00:58.120] By the 1543, they had vanquished the Aztecs already. We did a podcast about that some weeks ago. They taken Mexico, they'd taken Peru, where they were pulling literal shiploads of gold out of the out of the ground and shipping it off to Spain, flooding Spain with so much gold that they pulled out of Peru. They had Chile, they had Colombia, and not to be entirely left behind, the Portuguese, they had a foothold. They had really a giant landmass in South America that became Brazil.   [00:01:24.050] And the Portuguese were also more international. They had taken some outposts and colonies in Africa. They put Zanzibar, India, they'd even taken a spot in Asia where modern day Singapore is located. And again, the competition between the two was fierce. They weren't at war.   [00:01:40.320] They didn't have armies marching on the battlefields, shooting at each other, but it was about as vicious as you can imagine today's standards, we think about trade disputes between China and the United States, or if you're old enough to remember, the 1980s, everybody was terrified that the Japanese were going to take over the world. And the Japanese government had all these unfair practices in its business. That's nothing. It's nothing compared to what these guys would do. There is one story, this is actually with the French.   [00:02:04.490] The French went and established a small outpost in Florida, in what is today Jacksonville, Florida. And the Spanish didn't care for that so much that they actually just sent a group of guys and slaughtered all the French people that were there, because they said, well, you're not going to go to Jacksonville. So they just slaughtered all the people, all the French people there. It should have been an act of war, but everybody just sort of shrugged their shoulders as well. That's what it is today.   [00:02:26.910] That was the sort of stuff that was kind of normal and commonplace. So they used every dirty trick in the book to trip each other up, even including straight up violence. Now, at the time, the big prize for all these guys was Asia. Again, spain had had the Americas locked down. Portugal was getting into India and getting into Africa.   [00:02:47.570] Asia was still relatively virgin territory. There wasn't a major European power that had its hooks into Asia yet. And at the same time, it was also a different level of resource. In the Americas, it was all about gold, it was all about silver, and that's what Spain was doing. They had all these mines everywhere and they were just pulling metal out of the ground and shipping it off to Spain.   [00:03:08.580] Well, in Asia, it was different. It wasn't about gold and silver, it was about it's about the spice trade. And the spice trade was a really big deal back then. Spices were so important, as they have been for so much of human history. We have a lot of archaeological evidence that even ancient Neolithic humans, people that predated the ancient Greeks, classical Greeks and Mesopotamians, were engaged in the spice trade.   [00:03:30.700] This has been with us in humanity for a really long time. And for us, it seems maybe even a little bit silly. Like, why do people make such a big deal about spice? Well, they might come if they could get in a time machine, come into our air, they would say, Why do you make such a big deal about coffee? It's kind of the same thing.   [00:03:44.130] All of these people that killed can't function if they don't have their coffee. It was the same thing back then, right? People say, I can't function without my spice. The other thing about spice is and by the way, coffee today is the number two, top two, top three most widely traded commodity in the world. So coffee is a huge deal in global trade.   [00:04:00.900] Spice were a big deal back then, but even more importantly, spices were also almost kind of a form of wealth, a bit of a store of value. No trader in the history of the world has ever said, man, how am I going to get rid of all these spices? Right? Nobody had a shipload of spice and couldn't figure out, who am I going to sell this to? Everybody.   [00:04:19.730] If you had a lot of spices, you always knew there was a vast market for it and you could probably fetch top dollar for it because they were always in such high demand. And so controlling spices was not only something that you wanted just in terms of just raw consumption, but also something you wanted just for the economic value. And so Asia was where the spices were at. Spain was playing ketchup. Portugal had already had a little bit of a toe hold in in what is today Singapore.   [00:04:45.140] And so, in 1541, the guy who's the Viceroy of New Spain, this is the basically the they're headquartered in Mexico City. This is how far away they were from the Pacific. And they went to the Spanish explorer guy named very Spanish name, ri Lopez de Villa Lobos. And they went to this guy, Villa Lobos, and they said, we want you to go to this island chain in the Pacific. And the island chain is what we know today as the Philippines.   [00:05:08.060] The reason it's called the Philippines is because Villa Lobos did find it. They knew it existed because the Portuguese were there. There were maps and sightings and things like that, so it wasn't like they had never heard of this before. But the reason it's actually called the Philippines is because Villalobos got there and named it after King Philip II of Spain. So they called the Philippines, but on the way, they set sail.   [00:05:28.560] They had this expedition at 1541. They said, you got to go to the Pacific. Said, all right. Took about a year to get the men and the ships and the money and everything, the supplies. Together they set sail from Mexico, from the Pacific shores of Mexico.   [00:05:41.620] On November 1, 1542, months went by. They passed through what is today the Marshall Islands and all those different atolls and so forth. And they finally got to, on January 26, 1543, not the Philippines, but a place they'd never seen before. It's an island chain, small island chain, a couple of islands. They said, oh, my God, this isn't on our maps.   [00:06:00.840] We've discovered something new. And they called it the Caroline Islands, after their former king, Charles I, or Carlos the first. They called it Caroline Islands, after Carlos I, king Charles, and of course, naturally said, oh, it's not on our map, therefore we've discovered it. Therefore it belongs to us. And so this little island chains Caroline Islands became Spanish territory, and it remained that way for hundreds of years.   [00:06:24.250] They realized very quickly, oh, my God, there's nothing here. There's nothing but coconut trees, and that's it. There's no economic resources. There's no spices, there's no gold, there's no silver. There's nothing here.   [00:06:34.140] Just some natives that don't really care for us very much, so we're just going to leave it alone. And essentially nothing happened there for a really long time. A couple of hundred years later, over time, it was very, very quiet. Eventually it transferred from the Spanish into German hens. The Germans didn't do anything with it, and it doesn't really come up on the international radar until an American guy in 1903 oh three, he shows up.   [00:06:58.940] And this is a guy named William Furness. Furnace was actually trained as a physician. Interesting guy. He was a medical doctor. And at a certain point, he said, I don't really like medicine anymore.   [00:07:07.950] I want to be an anthropologist. He was always sort of intrigued by cultures and civilizations and travel and all these things. A little bit of Indiana Jones, kind of, because he would travel to all these places and do really exotic things he was known as being, like, one of the most highly tattooed people in the world. You take pictures of his tattoos, and this guy had today people's sleeves and all sorts of things. Dragons and eagles.   [00:07:33.890] That was a big deal back then. Nobody had that stuff. But Furnace was all tatted out. And he would travel to places and go to these exotic places and take photos, which nobody did that at the time. This guy had a camera, and he would take photographs of his adventures in the jungles and Borneo, whatever.   [00:07:47.980] Remember, this is 19. Three people are like, man, far out. This is crazy stuff. This tattooed medical doctor going to Borneo taking these wild photos of topless women in grass skirts. People have never seen anything like that before, right?   [00:08:03.740] So this guy, 1903, William Furness. He's in Sydney, Australia and he meets up with his German steamship. And again, at the time, the Caroline Islands. They were technically under German control. Not that the Germans were in control of anything there.   [00:08:16.530] Didn't even matter. So he says, all right, I want to go to this place. I want to go to the Caroline. So he hops on this German steamship and they drop him off. And the captain says, well, we'll be back, like, in a couple of months.   [00:08:29.190] We stop by once every couple of months. We'll be back in a couple of months. If you survive, then we'll pick you up, we'll take you back home. He said, okay, great. So this guy goes, gets off the gets off the boat, goes into the wilderness to meet the natives and takes his life into his hands and has an incredible experience, an incredible adventure.   [00:08:46.240] And he wrote about it extensively. He spent the next several months living there integrating with the local culture, writing about it, learning all their customs, even learning some of the language. And while technically it's called the Caroline Islands the place that he went to was known then as is still known today as Yap some people call it Yap Island. It's technically, again, four islands, not just one, but it's really small. We're talking about, I think, 30 or 40, like, 100 km².   [00:09:14.200] It's really small now. This was a really fascinating culture to furness. He wrote about this extensively. All these things, what they did that were so different than what people were accustomed to in the United States and in the west. They engaged in polyamory.   [00:09:28.670] They engaged in polyandry. You have to look that one up. They engaged in kind of a very formalized, quasiforest quasi voluntary concubinage where they would steal women from other villages keep them in their village for a while as captives. But then at a certain point, they were free to go but the women would actually stay voluntarily. Just all these things that just made people's heads explode.   [00:09:51.380] When he wrote about this stuff, they viewed children as property of the community and not as wards of actual parents and couples. But it's like, oh, the whole village is that all our children, every children, every child belongs to everybody. Everybody's, everybody's child. And just things that Furnace thought were so interesting. But one of the things that he thought was really interesting was there he wrote about this.   [00:10:14.950] He said, the Yappies have such little hardship. This is an island where you think about Furnace, he was born, I think, in the 18th. I think he was born like the, at the, at the depths of the Civil War, right? So this is a guy, you know, born in the 18 hundreds who, who has sort of grown up imbued with the great American frontier mythology of the frontiersmen going on their covered wagons, braving all the dangers and risks and taking their lives in their hands. And if you build their log cabin, if you screw up, then you're going to freeze to death in the winter, you're going to starve to death.   [00:10:46.500] I mean, they didn't have any of that. And yet he said these people have no natural predators. There's no enemies, there's no snakes, there's no disasters, there's no natural forces, anything that's going to wipe him out. There's no major disease. Food grows everywhere.   [00:10:59.390] He writes this kind of joke, really, how motivated can a man be when all he's got to do is roll out of bed in the morning and shake his breakfast off the tree in the backyard, right? How about, I mean, there's nothing that you really have to do, there's nothing you really have to worry about. And because of this, he said that kind of it's, it's, it's like Garden of Eden stuff, really. It's just this sort of paradise that's so easy. And if you take that level of comfort, that ease of life, and you pair that with the fact that there's no natural resources at all, there's nothing to exploit, essentially, there's no economy here.   [00:11:32.120] And he said, this is the reason why there is no economy. There's no production, there's no industry, there's no technology, there's nothing going on here at all. And people are very happy. They're extremely happy people. They live their lives and everybody's great.   [00:11:46.400] But the thing that really he found, William Furnish found so remarkable is that in spite of having no economy whatsoever, the Yappies had potentially the most highly developed financial system in the world. And he devoted an entire chapter to his book about this. In fact, he was so taken by their system of money, he actually called his work, he called it the island of Stone money. And it got published in an economic journal, not an anthropology journal, an economic journal. Because people were so taken by this idea, because that is what they use, this money.   [00:12:19.610] They use stones, but not just any stones. They're not talking about rocks that you pick up off the ground. You've probably heard of these, these famous Yap island rises or Phi stones, depending on where you are, that these are giant, enormous stones, that it might be several meters in diameter, weigh up to several tons, literally thousands and thousands of pounds. They've got a hole in the middle that's big enough that you're supposed to be able to shove this wooden plank so that if you're strong enough and so inclined, you can actually tilt it on its side and roll it using this wooden plank. And not that most people really did that, but this is the way that they were built.   [00:12:55.190] And again, they were huge. And you're talking about Yap being in a place that is so devoid of natural resources, they didn't even have the material, the aggregate stone to make these giant rice stones. They had to go to another island. So they got in their canoes and they paddled quite a long way over to Palau, which I've been to Palau. Palau's got all sorts of very interesting natural resources and quarries and so forth.   [00:13:18.310] They have this very special limestone there. You can see it actually to this day. There's part of palau. I flew over this in a helicopter, and there's all these Japanese people that come down and bathe in the waters because of this limestone there, and they think it sort of purifies their skin or whatever. And the people from Yap that would go in their canoes, they would go to Palau quite a long distance to paddle.   [00:13:39.200] They would take all the rock they could find, the limestone from the quarry, and they would actually build these stones. They would craft them. And these giant stones, they put them back in their canoes and they paddle back, and they would bring them back and they say, AHA, we have money. And so they would create money that way. That was essentially their monetary system.   [00:13:57.100] And the thing that was, you could imagine any of these stones, all of them are different, right? So you've got some stones that are bigger, some are a little bit smaller, some are made of higher quality limestone, some are more polished. And so the value is sort of based primarily on size, but also on quality. You could think about it like gold, for example. You've got some giant gold bar that's 99.99% pure that's going to be worth more than some little tiny gold bar that's maybe only 90% pure, right?   [00:14:25.730] So it's the same thing. And they have a measuring system that they call span. It's three span, five span, ten span. So if you think about a span, if you make like an L shape with your thumb and your index finger, and you look at the distance between the tip of your thumb to the tip of your index finger, that distance between your thumb and your index finger is one span. And so they would think about their Rhystones in terms of span.   [00:14:49.750] So Furness writes in his book, he said, Well, I went around and said, well, how much are these things worth? And they said, well, a three span Rhystone is worth about 1000 coconuts or a small, roughly 100 pound pig. He said, okay, so these are the ways that they actually these are actual pricing that existed in Yap in 1903. Things that make these stones or the sort of monetary system so interesting because we could laugh and go, it's stones. It's silly, but it's actually not.   [00:15:17.380] There's so many things about this that make it extremely effective. Number one is it's a very secure monetary system. Nobody's going to steal these things. Nobody can steal these things. If you can steal these things, it's going to take a crew of guys, so many people that there's no way you're actually going to be able to get away with stealing somebody's rhythm because you got to have a crew of like twelve guys come and pick up these three tonne stones and try and take it somewhere.   [00:15:40.210] You're never going to be able to get away with that. So there's built in intrinsic security and furnace. Wright's mother said there's basically no theft on this island as a result of that. There are no intermediaries whatsoever. There's no banker, there's no banker of the rhy stones who's got to go and you got to go deposit your rhy stones with this guy.   [00:15:58.210] Everything is completely decentralized, totally disintermediated. There are no intermediaries whatsoever. There's also a very free market in that there's no central authority saying these are the stones and this is all the stones they're going to be. In theory, anybody that's willing to put in the work can go and create more rice tones. If you want to get in your canoe and go to Palau and mine the limestone and fasten it together and make the stone and then haul it back and row all the way back to Yap, then sure, you can do that.   [00:16:28.750] And there's actually this great story of another guy. His name was David O'Keefe. He was an Irish American guy and he's one of these old school from the 18 hundreds swashbuckling entrepreneurs. And he shows up to Yap. The story, it's almost unbelievable.   [00:16:45.250] It literally is hard to believe. This guy shipwrecked onto Yap Island and was kind of ingratiated himself into the locals, learned the culture, and he said, you know what? He grabbed a couple of guys. He said, let's go to Palau, let's get in your canoes. Let's go to Palau, let's make some stones.   [00:17:01.120] And people said, all right. So they go with this guy, David O'Keefe. They go to Palau, they mine some stones, they lay them out. They actually fashion these rhe stones. They bring them back.   [00:17:10.480] This is a foreigner. He's not Yappies, he's a foreigner. And he shows up with these rhythms and says, hey, I have money. And the people go, yeah, okay. So they accepted that.   [00:17:19.150] The community accepted it. It wasn't that. There was this fixed sum that said that some guy decided, this is all the money that's ever going to be until the end of time. It was a free market in money. As somebody showed up with some similar rhy stones, people actually accepted that.   [00:17:32.430] Ironically, they actually made a movie about this. You might want to check it out. The guy who plays David O'Keefe this is from the 1950s. So this is like old school Hollywood stuff. Burt Lancaster plays David O'Keefe.   [00:17:41.720] They get one of these Hollywood starlets back in the 1940s, 1950s to play his obviously, there's a love interest. He's got this beautiful woman who falls in love with him, and they go and they have these adventures trying to make rhystones I think it's called what's it called? His majesty O'Keefe for something like that, starring Burt Lancaster from, like, 1953, something like that. So if you feel like checking out an old movie this weekend, might check that one out. But so we have extremely secure, totally decentralized, free market.   [00:18:10.040] And it's a credit system, right? So a credit system, unlike a sort of cash and carry system where you've got to go around and back in the old days, when people had gold coins, they had to pay gold coins to one another for every transaction. This is a system where physical possession was not required. You could do a transaction with somebody and say, okay, I'll sell you 1000 coconuts for that three span Rhystone, or, I'll sell you 10,000 coconuts for a 30 span Rhystone. But you know what?   [00:18:36.180] That rhy stone sitting in front of your house. Just keep it there. I don't need to pick it up and move it. I'm too lazy to do that. I'm not interested.   [00:18:41.800] That sounds like a lot of work, and my back hurts, right? So just keep it there in front front of your house. But we'll all agree that even though it's in front of your house, it's my stone. People go, okay, yeah, that's fine. And so what they essentially had was this decentralized community balance sheet where people could go around, they knew, like, okay, that stone that belongs to this guy.   [00:18:59.440] That stone belongs to that family. These three stones that are in the middle of the jungle right here, they're not even in front of anybody's house. They belong to this other person. And everybody just sort of knew. And there was this essentially distributed decentralized ledger of who owns what and who has what money.   [00:19:15.440] And it was all a credit based system because they could do that. They could engage in transactions, and no actual money, no stones would change hands, only the concept of who owned it. And people would essentially update their mental balance sheets of who owned which stone. It was actually quite a very interesting system. The real interesting part and furnace was dumbfounded.   [00:19:35.740] He tells this story in his book. It's really, actually wonderful. It's a relatively short read, but he's got a whole chapter devoted to the rhystones. And in the chapter, he talks about how there was one family. And he says that everybody their wealth was undisputed by everybody in the community because everybody knew that they had these giant rhystones, but nobody had ever seen them because supposedly generations before it could have been 100 years prior, there were some guys coming back from palau with these giant rhystones that belonged to this family.   [00:20:05.910] And the canoe sunk and the rhinestones fell into the ocean, and they were at the bottom of the sea. And what happened was the people that were on that particular voyage, they came back to the island. They went to the village. They said, we had these rhystones. They were like 30 span and really, really great quality.   [00:20:22.500] But they fell into the bottom of the ocean, and everybody said, okay, good enough for us. That's fine. You had all these people sort of testify to the size and quality, and they said they belonged to this family. And so even though nobody ever set eyes on those particular rise stones, people just credited that family. And again, their community mental balance sheet, they credited that family with ownership of these giant, beautiful, high quality, huge rhythms.   [00:20:47.800] And furnace said, basically, at first, it seems almost crazy. Like, how could they do that? But he said, well, when you think about it, remember, he lived at a time. This is the early 19 hundreds. The US.   [00:20:59.480] Is still on a precious metal standard. The dollar is actually defined by gold and silver. And furnace says it seems crazy at first when you think about it. But honestly, we do us. Dollar transactions every day.   [00:21:12.870] But I've never seen the gold. I've never seen the silver. I assume that it's there, but I've personally never laid eyes on the silver that's supposedly in the mint. I just believe that it's there. And I go on about my life buying and selling things in US.   [00:21:25.290] Dollars as if I knew that the money, that the silver was there. That's basically how they do it with the rhystones. And so there are a lot of things, even though they didn't have the technology, they didn't have the know how, they'd never read Adam smith or any of these famous economists. They figured all this stuff out for themselves. And the thing that's actually quite interesting that I really want to point out here furnace says this, and I think this is a really profound statement, and this is a direct quote from his writing that, again, ended up in the journal of economics.   [00:21:52.460] And he said, quote, labor is the true medium of exchange, the true medium of exchange and the true standard of value. He writes this saying again, the yapees, they haven't read any of these. They haven't read Adam Smith. They don't know anything about economics, but they figured this out. They figured out that labor is the true medium of exchange and the true standard of value.   [00:22:14.350] What does that actually mean? Well, when you think about it, that's what rise stones actually are. Labor being the true medium of exchange, the true standard of value. Rise stones are essentially proof that there was labor. Labor took place.   [00:22:27.600] You don't get that. That stone isn't natural. It doesn't fall from the sky. It doesn't just fall off the mountain. Somebody had to do a lot of work.   [00:22:35.440] Somebody had to go and get in their canoe and paddle all the way to Palau and dig that stuff, dig the limestone up and shape it and form it and make these giant disks and poke the hole in the middle, haul it back onto the boat, rode all the way back to to to to Yap. That's a lot of work. And that's essentially what the rhe stone represents. It's proof that there is all this work. There was all this labor, the labor, and not only the labor, the know how, all those things to actually create something.   [00:22:59.980] And that something the product of that labor became the medium of exchange. And this is what he's saying. Labor is the true medium of exchange. And that's really what they're using as a medium exchange, is these rhystones is the product of their labor. The thing that is the result of this labor becomes the medium of exchange.   [00:23:17.670] Now, if you're into crypto at all, you might be thinking, well, that sounds a lot like proof of work. And it does, because it's really what it is. That's one of the underpinning philosophies behind Bitcoin, the original algorithm, this idea of proof of work, this is one of the they call this a consensus algorithm proof of work. This is why Bitcoin miners essentially perform all these complex calculations, do all these things, and people go, well, there's no point to doing that. There's no intrinsic value, et cetera.   [00:23:42.080] Well, there's no intrinsic value to most money. There's no intrinsic value to most currencies most medium of exchange, but it is, by definition, proof of work, because it is doing work regardless of there's actually any intrinsic value associated with it or not. People can debate whether or not the intrinsic value is important. But I just want to point out that this is really the hundreds of years, if not thousands of years. People believe that.   [00:24:07.260] Researchers think that Yap Island was originally inhabited as early as 1500 BC. So whenever they started with these ridestones, I could go back a really long way. They realized that proof of work was actually a really powerful way to translate value, to be a measure of value in a medium of exchange. Now, I have a slightly more nuanced view on this idea. Instead of instead of saying proof of work, I see it as proof of time.   [00:24:33.000] And the reason I think that's important is because time is the ultimate scarce resource. Time is the most valuable commodity in our existence. No one can make any more. Of it. There is no central banker that can say, let there be time.   [00:24:44.480] They can say, let there be money, let there be fiat, let there be interest rates, let there be all these things. They cannot make any more time. No politician, no king, no emperor, no president, no central banker can create any more time. And once it is used, it is gone forever. Once it is consumed, it is gone forever.   [00:24:59.060] In whatever way we choose to do that, whether it's through work or recreation or whatever, once it is used, it is gone forever. How it is used definitely has a major impact on our lives. And people use time for destructive purposes, wars and things like that. It has a pretty bad impact on humanity. But in aggregate, if you think about, let's say right now there's 8 billion people in the world.   [00:25:23.290] That's roughly true, according to what the demographics tells us, 8 billion people. So literally, over the next 60 seconds, the next 60 seconds, you could say there's 8 billion people minutes, right, or man minutes available. 8 billion people minutes, literally, as I say this right now, for the next 60 seconds, 8 billion people minutes available. And so those 8 billion people minutes will come and go. They will be used and consumed or not used or wasted or whatever it is, and they'll be gone forever until the end of time, whether people are at work or they're at sleep or they're at recreation or whatever it is.   [00:25:54.160] And sure, we have technology that's available to us that makes us more efficient with our time, makes us more productive. So we do have the ability to do more. We can do more work in an hour than we used to be able to do, but that 1 hour is still the only hour that we have. And once it's gone, it's gone forever. And this is one of the reasons why I think this concept of time time is really the valuable, scarce, universal, equal currency and everything else.   [00:26:21.690] And why it makes actually a lot of sense to view that through that lens. And why I personally find assets that essentially convey time proof of time in ways that are really durable. I think those do tend to make a lot of sense. And gold is really a great example. Gold is a great example because if you think about gold, let's think about a popular coin like Canadian maple leaf, right?   [00:26:46.790] So you have different coins of American eagles and buffalo coins and all these different things. Chinese panda coins. Well, in Canada they have these things called maple leaf coins. And so a maple leaf coin that's made from one troy ounce of gold, and that was a troy ounce of gold that was mined and refined and minted. This year, that coin is going to be worth exactly the same as a coin that is made from the same one troy ounce of gold.   [00:27:12.950] That was mined will be mined and refined and minted ten years from now, right? So you have a coin today, it's going to be worth exactly the same as a coin ten years from now. That's not really that common, right? You can take whatever, a microchip in your laptop not going to be worth the same as a microchip that's made ten years from now. There's so many things that are not going to be worth the same as something else that's made ten years from now.   [00:27:37.110] There's a lot of assets that even when they appreciate, like real estate, like homes, for example, homes do appreciate, but they also depreciate, right? Because you've got all the materials and so forth, that the roof needs to be replaced over time, and the siding needs to be, the deck needs to be redo, all these things that need to need to happen, it requires a lot of maintenance. And if that maintenance isn't being done, then the property itself loses value and it's not going to be as valuable as something that's made brands banking new. But gold is going to be where a gold coin today is going to be worth exactly the same as that similar gold coin ten years from now. That's very interesting.   [00:28:13.280] That's very, very interesting. Because when you think about through this lens of proof of time, gold does have natural scarcity through the lens of proof of time it took, and this again goes back to even ancient civilizations. You think about the Romans and the Greeks, it took a lot of labor, a lot of labor, a lot of man hours to explore and develop and mine and refine and mint a single coin took a lot of time. And so holding that gold coin was the equivalent of holding all of that labor in your hand. It's the same way that if you had bushels and bushels of grain, wheat and corn and so forth, well, that wheat and that corn was also the product of labor.   [00:28:54.430] It's a lot of labor. It's a lot of manhours that people have to plant and maintain and harvest and thresh and all these things. And you have all this grain as a result. The difference is, is that gold will last forever, right? The wheat doesn't, the wheat is eventually going to rot, it's going to be consumed, but the gold lasts forever.   [00:29:09.160] So it's like taking all the labor. Gold basically means you're taking all that labor, of all the labor that it took to again explore the mind, develop the mind, actually pull the gold out of the ground and mine it, refine it, turn it into something, mint it into a coin. All the labor, all the effort, the know how, the technical expertise, the investment in technology, all of that, all that time and effort goes into that gold coin and you've got it in the palm of your hand and it lasts forever. You're freezing in time essentially all of the time that it took to make that gold. And that's a very interesting concept.   [00:29:42.000] It's freezing all of that time and holding it in your hand, and that lasting forever. And I'm going to come back to why that matters and why that actually makes such a good inflation hedge. The other part about that and and the the lens through which I would encourage you to look at this is also it's freezing in time, a minor's gross profit, which is really interesting. And if you're not sure what that means, it's a fairly simple concept, gross profit. This is the case with anything.   [00:30:09.810] But I'm going to talk about with minors in particular, miners, obviously, like any business, gold miners, oil producer or legal business, you're a law firm, it doesn't matter. Everybody has cost. You've got labor, you've got energy costs. If you're some a lot of businesses that produce things have equipment cost. They have to get tractors and giant machines or whatever it is.   [00:30:31.710] They've got all these things that those are all costs. And all that, together with miners, they have a cost of production. How much does it actually cost them to produce an ounce of gold? Right? Well, every company generally kind of reports on that differently.   [00:30:47.300] The industry has tried to standardize that. They have something they called AISC. That's the all in sustained cost. It's basically how much does it cost you to produce an ounce of gold? Well, that cost has been going up some of the biggest ones in the world.   [00:31:00.050] So you've got Newmont, for example, huge mining company. They're all in. Sustained cost is now $1,271 per ounce, one $271 per ounce. That's up from $1,120 an ounce in the prior year. So that's about a 13% increase just in the prior year.   [00:31:17.660] That's their production cost. How much does it cost them to pull 1oz of gold out of the ground? One $271, up from one $120 last year. That's a 13% increase. Then you've got Barrick gold.   [00:31:29.910] Barrack Gold is at one $269 per ounce. So more or less the same as Newmont. That's up from $1,034 same time last year. That's a 22% increase. So that shows you these costs can and do increase.   [00:31:43.960] These guys are just as susceptible to inflation as any other business as any other person in the world, and these costs are going up. So I mentioned earlier profit margin. What does that actually mean, if you're not familiar? Profit margin. Gross profit margin specifically is essentially the difference between their revenue and their actual cost for that particular ounce.   [00:32:05.520] So, for example, Barrett Gold. I use Barrett Gold as an example. A year ago, remember, I said their cost was $1,034 an ounce? Well, the price of gold they were getting on average was $1,771 per ounce. So they're getting $1,771 per ounce in revenue.   [00:32:21.910] They were spending $1,034 per ounce to pull that individual ounce of gold out of the ground. So the difference between the two. Their gross profit was $737 an ounce. That's pretty good. Well, this year, the price of gold is actually for barrick what they've been getting.   [00:32:37.730] This goes back to, by the way, Q three of 2022. They haven't released their latest numbers yet, but then Q three of 2022. The gold price per ounce they were getting was pretty much the same as the year before. But remember, their cost went up by 22%. So their gross profit fell from $737 an ounce to just $453 an ounce.   [00:32:57.340] So you have their gross profit margins falling. Means they're making less money on every ounce of gold. Think about it like a pie, right? When you're spending $1,500 an ounce for gold, there's a portion of that that's basically there's the cost of producing that ounce of gold and then there's the profit for the producer, right? Because as a consumer, you're paying for all of that.   [00:33:24.450] You're paying for the cost and you're paying for the profit. So when you think about it, if you're going to buy something, it's sort of a better deal for you if you can buy something where the producer's profit is low, right, you're getting a better deal. You're getting a better deal if you can buy something at a time where basically there's more of the pie for you and less the pie for the producer. So the way you do that is when the gross profit margins are low. And right now we see gross profit margins are actually falling, which means essentially that consumers today, people that buy gold, are getting a larger slice of that pie than the gold miners.   [00:33:58.550] That's usually a pretty good time that you would want to buy. The other thing about that, that is important to know about gold in particular, I think a lot of commodities. This is really important thing to understand is that when profits fall, especially gross profits fall, margins fall, it has a longer term impact on supply. When profits are thin, gross profit margins are falling. Producers aren't really doing backflips about the market.   [00:34:25.410] They're not going to like, oh man, we're making so much money. Well, you're not making as much money because your gross profits are actually falling. Your costs are going up, but your commodity price isn't really going anywhere, so you're not making as much money. So they're not going to be especially excited about going out and doing new mines. They're not going to be excited about going out and creating a new mine, developing a new mine, spending all that.   [00:34:44.270] But it's like, why did we spend all this money on developing a new mine when we're just not going to get that much money for it? Our profit is too low. They get all excited about developing new minds when their profit is really high. When gross profit margins go up, they go, oh my God, we got to develop more mines, right? The thing is, developing mines takes a long time.   [00:35:02.020] It takes a long, long time, years in some cases, to develop a mine. And so actually, the smart ones will actually go out and do the mind development at a time when gross profits are actually low, because nobody's really interested in doing that. That means when a couple of years go by and gross profit margins have corrected, now gross profit margins are high because these things are all very cyclical. Now suddenly, hey, I got a new mine going, and you hit it at exactly the right time. So this is something that does have a longer term impact on supply.   [00:35:29.920] When they're not investing in new supply, when they're not investing in new mines. What that basically means is that a couple of years from now, the mines that they're mining today are going to be exhausted and they're not going to have any new supply to replace that. So now you've got in the future, less supply, right, which means what? Prices are going to go up. So when gross profit margins are low, it usually means it's going to be in the future, probably less supply is going to be a little bit of a squeeze on supply because there's not as much incentive for them to go out and develop these mines and do the exploration and basically create future supply.   [00:36:01.670] So that ends up creating an effect on that future supply, makes you supply lower and creates a situation where we can see gold prices go a lot higher. That's kind of where we are today. Now, all that said, I'm not here to talk about gold or you should buy gold or anything like that. In fact, I would think gold is not actually a screaming buy right now. I think it's okay.   [00:36:21.290] It's not below the cost of production. I think that's an important way to look at it. Gold to me would be a screaming buy if it were trading below $1,300 an ounce. If you look at these all in sustained cost, you look at Barrett Gold, for example, and they say, we're producing gold at $1,269 an ounce. Well, if I can buy gold for 1250, that means that Barrack is losing money.   [00:36:42.270] That's the case. You want to buy that all day long. That makes a lot of sense. That would make gold is screaming by. And I think it makes sense to consider that way of thinking about it for really any commodity, I think, and even different businesses in general that produce things.   [00:36:55.480] When prices in certain commodities get so low that a company begins losing money, their gross profit is low, they lose money on every sale. That's actually a pretty good opportunity as an investor to consider at least buying. There are a lot of other things to factor in. But looking at something in absolute terms, being below commodity price, being below the cost of production, makes a lot of sense. You could look at that as well.   [00:37:19.610] Even with things like real estate, real estate in different places around the world sometimes gets so cheap that literally, you've got a house that's selling for less than the cost of construction. You know, that's a great deal. If you can buy a, you know, whatever, four bedroom home for $200,000, and it turns out it would cost you $300,000 to build that house from scratch, and you can buy it for $200,000, that's a great deal, right? So when you buy something for less than it's essentially replacement cost less than its production cost, that's usually an indication that it's at least worth paying attention, doing a lot more research. It also kind of makes sense to consider buying things when margins are low, when those gross profit margins are low, because what you're essentially doing is freezing all of that in time.   [00:38:01.120] You're freezing all that in time. You're freezing in time and time now where margins are low, because these things are cyclical. They go down, and then they go back up. And when margins are low now, usually that means margins go up again in the future. It's very cyclical.   [00:38:13.850] It gives you an opportunity to make a lot more money. So I would encourage you to again, this is not certainly no recommendation, I think, to buy gold right now. I think, again, it's not a screaming deal. It's not below the cost of production. Margins are low, but they have been lower in the past.   [00:38:27.170] So these aren't like rock bottom, low gross profit margins. There is a lot of upside. I think, to be honest, one of the big factors that drives gold prices. There are a lot of factors that drive gold prices in the short term. It's always about supply and demand, and a lot of things about supply that a lot of people don't realize about gold.   [00:38:42.510] You may be surprised to learn, for example, that one of the major, a major factor in gold demand is actually from, from farmers in rural India. This is a traditional thing among farmers in rural India. They take their profits from the, from the agricultural harvest, and they buy gold because it's something they understand. They don't have access to most banking services and things like that. So they buy gold because it's a trustworthy store of value.   [00:39:08.910] There could be a bad monsoon, wipes out a lot of gold demand and all these sorts of things. That bizarre nuances. It's also central banks. If central banks dip in and they want to buy lots of gold, that's obviously going to have a major impact on price. If central banks are selling gold, that's going to have a major impact on price.   [00:39:26.100] And those things can vary significantly month to month, year to year. I think there is a lot of upside, frankly, in central bank demand. I think we're seeing conflict is usually very good for gold, global conflict. And you've got now all these sanctions and things like that. And so it makes sense for countries to consider central banks and their official reserve positions owning gold.   [00:39:47.380] And I think there's potentially a lot of upside there, but there's also downside, I think, in the gold price. And it's important to recognize if Vladimir Putin has a heart attack tomorrow morning, the war ends. That's probably not going to be great for the price of gold. I think a lot of traders will just reactively sell gold and we'll probably see the price go down and a lot of things like that. So there's upside, there's downside, there's all sorts of different factors.   [00:40:11.550] Margins are low, they have been lower. The price is reasonable, but it's not below the cost of production. So it's not a screaming buy to me if the goal is I want to buy for X and sell for higher than X at some point down the road. And all this is really to say it's not really about gold, but just a way that I would encourage you to think about things, especially when we're talking about commodities, especially good inflation hedges. Proof of time I think is a very powerful concept.   [00:40:39.000] And the idea being is there an asset that is durable, that is transferable, that's efficiently? securable something that I can actually transfer this time that went into something, whether or not it has intrinsic value this time and that time will freeze in time. All the labor and all the effort that went into that, that's something that actually that's the stuff of very good inflation. Hedges and Gold is just one example of that. And there's a lot of people say, oh, this is impossible to value gold because you can't do discounted future cash flow methods and you can't do all these complex mathematical models.   [00:41:15.520] Well, actually you can value gold. You can value gold because we know exactly what the production costs are, we know exactly what gross profit margins are, and so that makes it a lot easier. There are metrics to value that. And I think it's important if you look at these things in terms of being a long term inflation hedge, why it's a long term inflation hedge. If you think about that concept of freezing in time, like all the labor costs and so forth, if labor costs go up in the future and you've frozen in time labor costs from the past, well then naturally that frozen time cost is going to appreciate in value to be commensurate with the labor because the labor is going to be the same.   [00:41:50.450] So those labor costs are going to go up, so the value of the gold that you hold is going to go up. And those are sorts of things, I think, that make very good inflation hedges when you can freeze labor in time, you can actually freeze time itself. It makes a lot of sense. And if you could look at it through a lens of production costs, look at it through a lens of gross profit margins and so forth. You can see, oh, I can freeze this labor in time.   [00:42:14.520] I can freeze time itself. And I can do it at a point where I get the biggest slice of the pie. The producers are even losing money on it, and all the financial benefit from this commodity, it actually ends up in my pocket. As the investor, as the consumer, that makes a lot of sense. And I think it makes a lot of sense to view many other assets and commodities through that lens.   [00:42:34.380] You can look at real estate through that lens, you can even look at business through that lens. Cost production, gross margins, freezing in time, certain elements. And that's I think we can come up with some very, very good ideas for an inflation hedge. So speaking of time, I think that's probably it. I'm out of it for this week, so I want to thank you for giving me some of yours, and we'll speak to you again soon.   Close Podcast Transcription

As a member of the Boards of Directors of several companies, I regularly attend board meetings to help oversee and guide businesses. One company in our portfolio is run by some very sharp and talented young guys who have created one of the first metaverse advertising companies. It’s growing rapidly, and they’re even expanding into video games now. In a recent board meeting, the management team was telling me about their ‘KPIs’ for this year; KPI stands for ‘key performance indicator’, which is essentially a key metric that a company monitors to get an overall sense of the business. Apple, for example, probably monitors iPhone sales very closely as a major KPI. These guys at the metaverse business had a long list of KPIs. And as they were explaining the metrics to me, at a certain point I had to stop them. I told them that, first of all, you can only focus on so many things at once. You cannot prioritize everything. You have a certain amount of time, money, people, and energy, and leaders need to make deliberate decisions about how to allocate those resources. And second, you have to focus on things that you control. I told the guys that they cannot control the number of daily active users in the metaverse, or in the video games where they’re advertising. But they can absolutely control the number of advertisers they work with, the properties in their inventory, etc. I’m telling you this story because I think it’s a sensible way to think about a Plan B. Right now, it feels like the world is chain-smoking crisis after crisis. Consider inflation, for example, which has remained stubbornly high. I can’t do anything to bring down price levels; there are only a handful of policymakers who have that ability, and they clearly don’t get it. What I can do, however, is focus on the things that I can control in my own life. And I can absolutely control, for example, the impact that inflation has on me, because of the decisions that I make with my savings and income. I can’t control the solvency of Social Security either. But I can make sure that I have plenty of money stuffed away for my own retirement, regardless of what happens to the Social Security trust funds. But today I really wanted to discuss how the future is far from certain. We discuss regularly in these letters that the US, and the West in general, have set themselves on a very destructive trajectory. Too much debt, too much spending, too much money printing, too much conflict, etc. And based on this current, destructive trajectory, if we fast forward 10-20 years, it doesn’t look good. I also write a LOT about various historical examples of once great empires that fell from glory for many of the same reasons. But again, the future is not certain. If there’s anything we’ve learned over the past few years, it’s that ANYTHING can happen. The world can change overnight. And today I wanted to tell you a different story… not one of decline, but really more of a turn-around story. It’s the story of a country that was on the brink of disaster… heavily indebted up to its eyeballs and about to be invaded. And they also happened to have a head of state with hardcore dementia who reportedly went around shaking hands with trees. But they fixed it. They managed to right the ship, turn everything around, and usher in a period of unprecedented peace and prosperity. So it is possible. But in case this turnaround doesn’t happen… well, that’s why we have a Plan B. This is the topic of our podcast today; you can listen in here. Click here to listen in to this week’s episode. Download Transcription as PDF Open Podcast Transcription [00:00:01.050] Today we're going to go back in time to April 215 two, to a place called Ludlow Castle, located in the West Midlands region of England. It's about today, an hour and a half drive or so from Birmingham, and we find on that day in Ludlow Castle, lying on his deathbed, a young 15 year old kid. His name was Arthur. Now, Arthur just happened to be the Prince of Wales, which meant that he was the the heir apparent to his father, king Henry V of England. Henry the 7th is a pretty famous guy in English history.   [00:00:31.200] He was the one who won the War of the Roses at a time in the late 14 hundreds when Arthur was just an infant. Now, as a teenager, Arthur was by all accounts said to have been tall, bright, handsome, fit, intelligent, all these things. But he had fallen victim to a very strange pandemic that had been making its way across England at the time. They called it the sweating sickness. They didn't have very good names for these things they called the sweating sickness.   [00:00:54.310] Modern virologists think that this sweating sickness may have been some kind of hantavirus, possibly tuberculosis, possibly even the bubonic plague again. But young Arthur, he came down with this and it wasn't looking good. Also at his side, also ill, very ill, who had caught the same sweating sickness was his wife that he had just married seven months prior. Now, this is a pretty big deal because Arthur and his wife, this has been a very significant political marriage. Arthur, again, was a son of Henry the 7th and his wife.   [00:01:24.370] Arthur's wife was Catherine of Aragon. She was the daughter of the famous Catholic Monarchs, ferdinand and Isabella of Spain, who had financed Christopher Columbus's voyage in 1492. So you can see the power in that marriage, why they arranged that. So Catherine of Aragon, the sons of the, the daughter of the Catholic Monarchs, marrying the son of the King of England. Pretty big deal.   [00:01:43.360] And here's Arthur and Catherine, both of them sick with this terrible plague. Fortunately, Catherine recovered, but Arthur died that day, April 2, 15 two. Now, that put Arthur's younger brother, who became the the new heir apparent to become the King of England, who was next in line for the throne. And that younger brother, his younger brother was named Henry, known to history as Henry the 8th. Now, Henry the 8th, obviously, just like his father, pretty famous guy for winning the War of the Roses.   [00:02:09.680] Henry the 8th is even more famous. Probably one of the most famous kings ever in English history. He was famous for a lot of things and a lot of that that fame really stemmed from a central issue of him having so many wives, primarily because he didn't want to run into the same problem that had plagued his ancestors, his father. Having people having to go to war over succession issues. We could see this so many times in English history.   [00:02:31.300] Not just English history and French history, really, the history of so many monarchies, where there's some kind of succession issue and all these different claimants to the throne, have wars and civil war kind of outbreak. He didn't want to go through that. He said, no, I need to have a clear succession line. I need to have a son. And so he ended up having lots and lots of wives because it was very difficult for the people that he married to conceive.   [00:02:53.820] So this guy was like one of these Hollywood celebrities that are famous for getting married a million times. Elizabeth Taylor, Larry King, all these people, they were married eight times. Henry the 8th had six wives. Not at the same time. He wasn't a polygamist.   [00:03:05.540] He married one at a time, although he was actually also had quite a lot of mistresses. But the first of Henry the eighth's wives just happened to be his dead brother's widow. He married Catherine of Aragon. This was his poor Arthur, who died at the tender age of 15. He had just married Catherine seven months prior.   [00:03:23.720] Henry the 8th married Catherine. To be fair to Henry, it wasn't his idea. Again, his father had this big idea, we have to have this political marriage, this political dynasty. We need to somehow unify us in Spain. And so you got to marry Catherine at Erica hendrix the 8th felt actually pretty bad about that.   [00:03:40.550] He did not like the idea of marrying his dead brother's widow, and yet he did. They were married for quite some time, as a matter of fact. But years went by, and the marriage between Henry the 8th and Catherine of Aragon produced zero children, and Henry became really anxious about that. He became really anxious about having a male heir. They had no surviving children, and he felt that that was a curse of sorts.   [00:04:03.870] Henry the 8th felt that God was punishing him for marrying his brother's widow. It was a gut wrenching issue for him. He felt bad about marrying his dead brother's widow. He felt really anxious about not having any surviving children. And by the mid 1520s, he starts talking out loud, starts floating the idea with his counselors.   [00:04:25.550] And different politicians at the time, different nobles, started floating the idea and said, well, maybe I should just get an annulment. I got to have some options here. Like, either maybe she goes away, we retire her to a nunnery, and I can get remarried, or I can get an annulment, or maybe we can get a divorce, or who knows? Maybe she slips on a banana peel, all sorts of things. They started floating these ideas, and it was interesting because at the time, everybody had an opinion about what Henry the 8th should do, how he should deal with this situation.   [00:04:54.430] His court weighed in. Foreign rulers weighed in. I mean, you can imagine that in Spain, the monarch in Spain at the time had a pretty big opinion about this. Church officials had opinion, the Pope had an opinion, even Martin Luther had an opinion. Martin Luther of course famous for essentially launching the Reformation, this big movement.   [00:05:12.890] Martin Luther was in hiding at the time. He was hiding from the church. Even this guy made his opinion known and said well he had actually encouraged Martin Luther said well the Bible actually says that you could have a second wife, so why don't you just go ahead and do that? And everybody was like what? So everybody weighs in with an opinion about what Henry the Eight should do.   [00:05:29.840] And this was a really important time. Again, this is the beginning of this major movement in history known as the Reformation that really Martin Luther kind of gets the credit for. There were giants who came before him, but Martin Luther is generally the guy who gets the credit for this whole movement. In 1517 and this was again a really pivotal time in history. The Catholic church had dominated every aspect of social and political life, even economic life really to a degree at that point and had been entrenched in that position for more than 1000 years really ever since the fall of Rome in the fifth century.   [00:06:08.370] Through the 1005 hundreds, the Church was the dominant force across Europe. It was the one unifying thing. You had your kingdom in England and France and various kingdoms in Germany, the Holy Roman Empire and all these things in Spain, but the Church was the dominant force across Europe. They were the power. The Church was what filled the power vacuum after the fall of Rome.   [00:06:28.070] You can imagine 1000 years before you've got the Roman Empire that's sort of keeping everybody in check and is the major power. The 1000 years after that it was the Church and the Church, even though they had this grip on power, by the one 5000 hundred s things were starting to change. People didn't have the same level of trust, they didn't have the same level of faith. And Martin Luther again was one of the key people that came in and just blew a giant hole in the Church's grip on power. One of the big things at the time was that people really started to feel a pull away from the church's centralized authority.   [00:07:03.020] They didn't want a middleman anymore. And if you think about it the way the church was back then, the priest, they would deliver their sermons in Latin. Nobody is just an average peasant, some commoner, they didn't speak Latin. Nobody knew what these guys were saying. And you had these people that would they'd hold up this book that only they could read it's printed in Latin and they said here's what you're going to tell you exactly what you have to believe and you have to believe this, otherwise is you're going to go to hell forever and ever.   [00:07:31.280] Until the end of time. And after a while, people kind of got sick of that, and they said, you know what? I want to have my own belief system. I want to have my own direct spiritual relationship and all these things. And this is really a movement of decentralization.   [00:07:43.810] And I think regardless of where you personally stand on religion, if you're faith, if you're atheist, whatever it is, I think we can all appreciate this sense of wanting to decentralize, this movement of decentralization. Ultimately, that's what the Reformation really was. On top of that, there was obviously a lot of criticism for the Church and a lot of practices. Martin Luther was very clear on all the things. I mean, the way what he wrote in 1517 was essentially almost like a declaration of independence.   [00:08:14.520] It was saying, here's all the things we don't like about what you're doing. You're doing this, you're doing this, you're doing this, and you're selling indulgences. You're on the take. There were a lot of very corrupt practices, all these things that he didn't like. And there were people that just they wanted to just simplify everything.   [00:08:28.520] They wanted to decentralize and simplify and take out the middlemen. And he did a lot of things in that movement. He translated the Bible and began into the vernacular language, into German, and people were able to read it themselves and begin circulating it because they had this new technology called the printing press, which is still fairly new, fairly nascent technology. And it was the thing that really helped this movement get so much circulation, and it caught on very, very quickly. In fact, in a very short period of time, there were countless of these Protestant denominations that sprung up all over the place, all over Europe.   [00:09:03.080] And trust me, we can do a whole podcast about some really weird, creepy, bizarre Protestant denominations that you want to talk about. This really weird stuff that came down, like sex cults and the whole nine yards. Really weird stuff. But more and more people started to break away from the Catholic Church, from the Roman Catholic Church. And it was under these circumstances, you got to appreciate the backdrop of what's going on in Europe at the time that this movement is just getting started.   [00:09:31.700] People are really starting to push away, break away from the Catholic Church. And it's under these circumstances that Hendry Gate says, you know what? I'm going to go for an annulment. I'm going to go to the Pope. We're going to try and get this guy to grant me an annulment.   [00:09:45.070] And they try. They go to the Pope. They actually went multiple times. They tried in several ways to get the Pope to grant this. They even at one point tried to fool the Pope.   [00:09:53.300] They thought they would be clever. It was actually kind of hilarious. It didn't work out for them, but they put together a contract and brought it to the pope said, Here, please sign this. And it's like they got a bunch of lawyers to just come up with this just crazy language, trying to fool the Pope. They didn't think he would read it, they didn't think he would notice what it actually said.   [00:10:14.290] So they tried to fool the Pope with this bizarrely worded contract. The Pope wasn't fooled and he said, no, I'm not signing this. And so they were sort of left without any options. And Henry was desperate. He said, I got to have an air, I'm getting older, I got to have an air.   [00:10:28.300] Like, we can't go back to the War of the Roses. He knew the very recent history of his own family, of his own father, really said, we're not going to go back to that. So he ultimately broke away from the Catholic Church himself and he established a new church called the Church of England, of which, of course, he became the King. Henry VIII became head of his own church, which is a great gig, I guess, if you can get it, and used his own authority to basically dissolve the marriage with Catherine. They had been married for 24 years and he dissolved the marriage.   [00:10:59.750] It really it really weighed on him. Henry kind of, I think, gets a little bit of a bummer. People think he was just, you know, angry womanizer, and in fact, he wasn't. The historical account shows that he was actually quite kind, quite tender with his wives. He did have mistresses, so you've got to balance all of that.   [00:11:16.230] But he ended up having five more wives, a total of six wives, with whom he did have three legitimate children and then some illegitimate children, which were with his mistresses and so forth. Henry the 8th died January 28, 1547. He was 55 years old, so still a relatively young guy. And this essentially began a very tumultuous back and forth, almost. It's just accordion seesaw change in religion in England.   [00:11:46.750] And it wasn't just in England, it was again all over the continent, all over Europe. You had this literally wars breaking out, rebellions, riots, revolution. It was all over religion. You had the Catholics against the non Catholics and sometimes the non Catholics even against each other. And it's just a really tumultuous time.   [00:12:04.070] This was the dominant issue of the day across Europe in the 1005 hundreds and into the 16 hundreds. And you have fanatics on all sides. You've got some really hardcore fanatical Catholics, you had hardcore fanatical Protestants, you had different groups of Protestants, you had the Puritans that had really radical views, wanted to take people all the way to totally different direction. And so, again in England, you have this back and forth from Henry the 8th. You get Edward VI, who was a Protestant and may in fact actually been poisoned by you might as well just call them terrorists, literally Catholic terrorist, who may in fact ended up poisoning Edward II.   [00:12:40.120] Then he's followed by Queen Mary, who was a Catholic, hardcore Catholic, was known as Bloody Mary by her opponents, at least by her Protestant opponents. She was known for imprisoning and even executing a lot of Protestants. Mary was followed by Queen Elizabeth the first, very famous monarch ruled for a very long time. Elizabeth was a Protestant. She was pretty cool.   [00:12:59.430] She was fairly easy going. In fact, there are a number of people trying to figure out is she actually Protestant. She might be Catholics. She wore crucifix and all these things, so it wasn't really quite clear, but she was pretty chill about it. But there were still a number of plots.   [00:13:12.500] There were Catholic groups trying to retake the throne. She was followed by James I. James I was the guy that gave his name to the King James version of the Bible. That's this guy, early 16 hundreds. You might know of King James as well.   [00:13:25.350] He's the guy who was almost assassinated again by Catholic terrorists in the Gunpowder Plot. This is the remember remember the 5 November, that whole thing. These guys tried to blow up the whole government, including James the first, and they were sort of motivated by their Catholic faith to do that. They wanted to take out all these Protestants. And so you can see this was sort of the trend.   [00:13:43.600] There was this back and forth, back and forth. And then you've got the guy that follows James is Charles I. Charles the first was a guy that was supposedly he was outwardly Protestant, but he married a Catholic lady, so he was basically hated by everybody. The Protestants didn't like him because he married a Catholic. The Catholics didn't like him because he claimed he was Protestant, but nobody really knew for sure.   [00:14:05.860] This guy was hated by everybody. And on top of that, he was completely incompetent. And this whole reign of incompetence, trying to constantly bypass Parliament and the religious issues and all these things, essentially led to a series of civil wars in England starting in 1642. Lasted almost a decade. And what they ended up after that was Charles lost his head, literally.   [00:14:30.460] He was beheaded. They turned the government basically, for a while, had a period without a king, and they had a criminal dictator, as far as I'm concerned, a guy named Oliver Cromwell who waged genocide against Irish Catholics. Cromwell, in English history, is so despised, there's actually people today who consider him to be a great man and great leader. Obviously, there are a whole lot of people that still despise him at the time. That Cromwell was so despised, even when he died, that after he died, not long after he died, his body was actually dug up and beheaded.   [00:15:03.720] They literally beheaded the corpse of Oliver Cromwell. That's how much they hated this guy and ended up restoring the monarchy again under Charles II. Charles II, another guy who was claimed is oh, yeah, I'm protestant. But then it came out that he had secretly promised Louis the 14th of France that he would become Catholic at some point. I mean, it was just this ridiculous the details are so absurd, but you can kind of get the understanding this back and forth, back and forth, and the whole time is just this hysteria.   [00:15:34.430] The Anti Catholic hysteria. The Catholic hysteria. All this back and forth and the fighting and the violence, the beheadings and the instability and all this stuff. To us, it seems incomprehensible. How could they get so worked up over something so silly?   [00:15:48.130] But they did. They really, really did. This was a huge, huge deal for them. The crazy thing is, it wasn't even like in the Crusades, for example, where at least in theory, you've got different religions. You've got the Christians against the Muslims, even though they believe in the same God, and there are lots and lots of overlaps between those two religions.   [00:16:08.730] This is actually even just two different religions within just denominations of Christianity, and they're just at each other's throats. And the Civil War and the violence and killings, and it just goes on and on and on. After Charles II, his brother James II comes to power. James is actually a Catholic. Now you got a new Catholic king, everybody's freaking out, going, oh, my God.   [00:16:30.720] And then he has a son, his son, he's raising his son to be Catholic. And people said, no, this is nuts. And so you get the idea here. There's this constant back and forth between the Catholics and the Protestants. Again, to be fair, there are a lot of people just didn't care.   [00:16:44.900] There were plenty of people that said they don't care. Like, we can do business, we can hang out, we can have a pint at the pub, it doesn't matter. I don't care what religion you are, what denomination you are. But there were enough ideological fanatics on both sides to start the war, start the revolution, start the violence. And that is actually a key lesson from history that in many respects, it only takes a small number of kooks, a small number of fanatics to really, really move the needle.   [00:17:15.330] We do actually see this again in our own time. We see that most people, frankly, are pretty normal, pretty chill, pretty easy going. All it takes is a few well placed, loudmouth, outrageously loud ideological fanatics. You got the Twitter mob and these people that go on TV, on the network news anchors and the executives there that go on TV, and they shriek and howl about things you've got in this key institution. Very well placed people in media, education, health care, even big business that are able to really move the needle and do these very destructive things that we've seen over the last couple of years.   [00:17:58.180] Honestly, it's not that many of them. If you sort of go and grab all these ideological fanatics together, it's not that big of a number compared to the rest of the population. That's generally pretty easy going, fairly rational, not outrageous. People aren't that polarized. It's just a small, very small number of people that happen to be very, very well placed.   [00:18:19.490] We see this over and over again throughout history, and this is sort of the same thing during this we have right now, is this sort of ideological battle. In our modern times, this was a major ideological battle that lasted probably more than a century in the 1005 hundreds and the 1006 hundreds. And again, this was about this very specific these details about how we're going to practice our religion. And again, it seems silly to us, but honestly, future historians and people in the future are going to look back at our time and go, I can't believe they used to argue about Latino versus Latinx. It's going to seem silly to people in the future.   [00:18:56.480] People that say, I can't believe they got so bent out of shape over stuff like that. Why was everybody so fussed about this? Just in the same way they go that we can say, why were they so fussed about whether or not somebody was Lutheran or a Catholic? What difference does it make? But in many respects, I think we're we can feel really the answer to that question is nobody likes to have things forced on them.   [00:19:16.340] Nobody likes to have things thrust upon them. So you will do this. People don't like having choice taken away from them. And that's one of the things I think made the conflict so palpable. Even within England, when Henry the 8th broke away and they established the Church of England, there are a lot of people who were sympathizers with really proponents of the Reformation movement.   [00:19:38.780] They liked the idea of decentralization. And for them, this was actually where a lot of the Puritan movement came from because they felt like, well, hey, hold on, what is this Church of England thing? It's basically the Catholic Church by another name. Instead of the Pope, we have the King, and instead of this bishop, we've got that bishop. It's still too centralized.   [00:19:55.860] We want to have a decentralized movement. So there was even a lot of rebellion within the Protestant movements themselves. And so you can just see it's just conflict, conflict, conflict, conflict. So if we go back again to this era now, we've got just to sort of finish the history of this, we go back to King James the Second. He's Catholic, he's got a Catholic son and heir.   [00:20:17.270] Everybody's freaking out about this. There's just hysteria all over the place. People go, Here we go again. It's going to be another riot. It's going to be another civil war.   [00:20:24.640] We've up this. We ended up I don't know how we ended up with this Catholic guy, and now he's going to have his Catholic son and a Catholic heir. We're going to have this whole dynasty of catholics. It's going to be a civil war all over again. We got to put a stop to this.   [00:20:34.490] And so in 1688, parliament actually asked they went to william of orange and his wife mary. Mary was actually a daughter of king James and said, listen, we want you guys to be king and queen. We want you to come over here. We want you to become king and queen, co rulers of england, so long as you agreed to submit yourself to authority. Parliament, you can be king and queen.   [00:20:59.470] But parliament is really going to be in charge, and this is going to be a constitutional monarchy. And they said, yeah, sounds good to me. And so in 1688, they have this famously called the glorious revolution, the bloodless revolution, and James is out, william and mary are in. They become a king and queen of england. And everybody feels like, okay, we avoided a total disaster there.   [00:21:19.470] And just to be sure, parliament passed something called the act of settlement, which basically said, there will be no catholic kings and queens. There will be no catholic kings and queens, in fact. And they actually established a very clear rule that the next in line for the throne was the closest relative who was not catholic. So they were very, very clear. We don't want any catholics.   [00:21:40.200] We don't want anything to do. This is a protestant nation. We're Church of England. We're all in on the church of england, and this catholic stuff just needs to go away. And so William and mary died.   [00:21:50.220] They had no heirs. There was a little bit of a succession crisis again, but it ended up with queen anne. This was another issue. Queen anne, this is now in the early 17 hundreds, queen anne had 17 pregnancies, and yet out of all 17 pregnancies, she had zero surviving children, so she died without an heir. And here we go again.   [00:22:09.430] It's another succession crisis. This is the this is actually where I wanted to talk about today. All this stuff is just the backdrop to help you appreciate, because whenever I start these and I think about a historical story, I always have to think about, where do I start? And this is one of these things where I keep having to go farther and farther back in time. So remember, we started this whole thing with poor Arthur lying on his deathbed, and now here we've we are now in the 17 hundreds.   [00:22:31.750] So we go from the 1005 hundreds, early 1005 hundreds to the early 17 hundreds. Queen Anne 17 pregnancies dies without an air. Now we have another succession crisis. So remember, now we have this thing called the active of settlement. So they start looking around, saying, okay, parliament's kind of sniffing out who's the closest relatives and doesn't have any there's no more siblings we can reach out to.   [00:22:54.150] She doesn't have any kids. Everybody's either dead or they're catholic, or they're not related, or this is some issue. Again, they're looking all over Europe. They're looking all over Europe. And there were dozens of people who were potential candidates to become king or queen of England, but they were all disqualified because they were Catholic.   [00:23:14.230] They were Catholic. And so they had to go all the way. All the way. And this is really what I wanted to get to, actually, really, the whole point of this isn't really about the struggle of Catholics and Protestants, but I just wanted you to appreciate the backdrop of all this. And parliament had to go all the way to find who was going to be the next king of England.   [00:23:30.620] They had to go all the way to Germany, to a place called Hanover, the electorate of Hanover, which was technically part of the holy Roman Empire at the time. And there was a German nobleman there, his name was George Ludwig. And George Ludwig, he was technically in line for the throne. Technically, he was 57th in line for the throne. He was the great grandson of King James I, james I, who had ruled 100 years prior.   [00:23:55.360] So he was the great grandson. So you think about James I had sons and daughters who would have had sons and daughters who would have married and, you know, into different nobility across Europe. And at some point, some nobility ended up in Germany. And so here we have this guy, great grandson of the former king of England from 100 years prior. He's 57th in line for the throne.   [00:24:18.540] 56 people. 56 people were ahead of him, but they were all Catholic. They were all Catholic. So you can imagine just what are the odds, what are the odds of that happening, that this guy who's 57th in line for the throne, ends up becoming king? And they basically, parliament looked at this and said, well, jeez, this is bizarre.   [00:24:40.970] George Ludwig. He's not English. He didn't speak English, he'd never been to England. He was completely unqualified. He had nothing about this guy, nothing about George made any sense at all.   [00:24:53.580] But parliament looked at this and they said, and people in England even looked at this and they said, my God, there's after so many crises, so much turmoil, so much social conflict, the civil wars, all this hysteria, the succession crises, we got to put an end to this. We got to have some stability. We got to avoid conflict. George, they looked at George and said, nobody likes this guy. Nobody even wants this guy to be king, but he's the safe choice.   [00:25:19.070] He's the safe choice. Everybody kind of assumed he's just going to sit in the corner, he's not going to do anything. Nothing bad is going to happen. And even though absolutely nobody likes him, nobody cares about this guy. He's not popular at all.   [00:25:30.010] He's very unpopular, in fact, but he's safe. He's the safe choice. After this period of turmoil, they wanted to. Go with the safe choice. Maybe that sounds familiar, maybe that story sounds a little bit familiar about people after a period of turmoil and they decide to go with a safe choice.   [00:25:45.970] And there we have now the reign of the safe choice, the reign of George the first of England. And yet, despite their hopes, the guy who is the safe choice, actually, there are a lot of problems during his reign and you end up with actually one of the worst economic crises in English history had the South Sea bubble that just devastated their economy, wiped out entire fortunes. I mean, even various smart people. Isaac Newton lost a ton of money in the South Sea bubble. The and the subsequent bailout of the South Sea bubble, this is this is a this is a bubble from huge, just massive financial speculation and it required this big bailout.   [00:26:22.640] The bailout created an enormous national debt in England and Britain at the time as well. Like Britain, George the first monarchs at the time really did have quite a lot more power than today. I mean, today the King, or formerly Queen of England, now the king. They're just sort of figureheads what they say is they say the king reigns, but he does not rule. Well, back then, they actually had a lot of power still to rule, to pick ministers, they had administered foreign policy, the military, all these things.   [00:26:54.370] And so, sure enough, George the first not only did he manage to preside over the South Sea bubble, not necessarily his fault, but there are actually a lot of people that implicated him in the South Sea bubble. Historical record is a little bit mixed on that, but he definitely embroiled Britain into pointless alliances that ended up leading to war, actually worsened relationships with their main threats, worsened relationships with France and Spain. This is something that was a direct result of some of the things that he did. So the guy that was supposed to be the safe choice, the guy who was supposed to do nothing, the guy that was supposed to create a little bit of unity and just bring people together so everybody could just take a deep breath after all those years of turmoil and conflict, he ended up causing some serious problems. There major economic problems, diplomatic problems, military problems.   [00:27:39.250] So, again, that story may sound familiar, but so does this one, right? George I was followed by his son, George II. George II was another German guy, actually born and raised as well in Hanover. In fact, George II was 31 years old when his father became king. He knew nothing of England and history.   [00:27:59.160] There are really actually hilarious accounts of George II, some for modern day historians, but also even contemporary historians, as people wrote about him at the time, which I'll get to in a minute, just to let you understand how truly despised George II was. But he was viewed really as just a completely weak buffoon who couldn't manage to make a decision. And really his only motivation was obsessed with popular opinion. Was he popular? What did the people think about him?   [00:28:28.770] You know, what was you know, was something going to be viewed as as good or bad by the people? Just couldn't make a rational decision based on what he felt was right. It was all about what was popular. And on top of that, just did some honestly hilarious, really. He was a theatrical guy.   [00:28:46.460] He would do things again, you could see, just to boost his popularity. He went, this is a guy that had never been to England in his life, and he shows up to England and he goes in front of these crowds and he gives his speeches and he says, I'm 100% English. There's not a single drop of my blood that is not English. And the sort of thing that he would do just to try and boost his population, people said, this guy is completely full of it. What is this?   [00:29:07.740] And one actually almost ridiculous example, george II, who might have been very well meaning at the time, but he was actually known as he was the last king of England to actually personally lead troops in battle. Nobody could actually believe it. There was a battle during the War of Austrian Succession, and it was taking place in the Holy Roman Empire, and the battle is called the Battle of Denjin. And the guy happened to be in town. He was attending, I think somebody else's coronation might have been a funeral, something like that.   [00:29:39.710] The guy just happened to be in town. He said, oh, it's going to be battle. Okay? Yeah, I'll show up. I'll show up.   [00:29:43.550] That'll be a good photo op, basically. And so he shows up, goes to the head of the column, and these are eyewitness accounts. This is not hyperbole. This is an eyewitness account literally from Frederick the Great, who at the time said that I think it was Frederick the Great, actually. And he actually describes George Aiken, gets off his horse, goes to the front of the English troops, pulls out his saber and takes this wide stance with his left foot in front, his right hand up in the air, striking a pose like an Olympic fencer.   [00:30:18.870] Everybody's looking at this guy going, is this guy serious? This is the time like, people have rudimentary fire, recruit firearms and all these things. This guy's out twirling his sabre with his other hand up in the air. Oh, God, he's going to stab everybody to death. He's going to just poke everybody on the other side of the paddle.   [00:30:38.870] It was ridiculous. And they actually would have lost that battle had it not been for just sheer dumb luck and French incompetence. The French were not actually following their own orders. And anyways, the battle was was pure luck for the English and the ally side. They actually won that war.   [00:30:56.840] And so George got a lot of credibility. He made sure that everybody wrote about this. Handel actually composed a whole musical composition, sort of honoring George II and leading the troops into battle. The whole thing was quite ridiculous. But you can see this guy had just really a need to be loved, need to have his popularity.   [00:31:17.520] Soar and some just other very interesting things that George's second had a bizarre family life. He had a son named Frederick. Frederick was a hardcore, heavily indebted, boozer, womanizer, gambler, liar. He was a weird guy. Frederick shared a mistress with his best friend.   [00:31:40.510] It's just strange things going on. There were illegitimate children. Neither one of them claimed the children. So, I mean, talking that's a stand up guy. And Frederick was always an embarrassment.   [00:31:50.010] Everything he did, it was just always some scandal, always some kind of embarrassment to his father's court. Frederick actually ended up dying before his father. So Frederick died before George II. But Frederick had a son himself. So the line of succession, there was no crisis this time.   [00:32:06.230] Frederick died, and Frederick's son became next in line for the throne. And Frederick's son happened to be named George as well. And so George III became the next king. But just to give you an idea, again, I told you, to sum up the opinion, this was what a contemporary writer at the time really a satirist wrote when this was when Frederick died. Frederick died a little bit before his father and wrote a little satirical poem.   [00:32:31.730] And he said, here lies poor Fred, who was alive and is dead. Had it been his father, I had much rather had it been his sister, nobody would have missed her. Had it been his brother, still better than another, had it been the whole generation, so much better for the nation. But since it is Fred who was alive and is dead, there is no more to be said. Now, that gives you a pretty clear idea of how not only Frederick was viewed, but also his father.   [00:32:58.430] Nobody cared. Nobody liked this guy. Even though he was just obsessed with this popularity and all that. Nobody liked this guy. Nobody cared.   [00:33:05.520] They didn't like George the second. They didn't like his son Frederick. So now both these guys passed. Now we've got George III. George III.   [00:33:12.650] Wow. He was actually born and raised in Eagle. He actually spoke English as his native language. But George III, again, to be fair, he definitely especially in the US. George III was the king during the American Revolution.   [00:33:25.400] So especially in the US. He has a horrible reputation. People go back and forth on this. There was a recent book that was written about him that says, no, no, he was just misunderstood. But there are a lot of people, including contemporaries, that did not like George III.   [00:33:39.270] They thought he was a condescending asshole. They thought he was I mean, there were people that said that he was tyrannical, especially the colonial subjects in the US. And as a matter of fact, the Declaration of Independence lists a great number of grievances specifically against George III's tyranny. Now, again, today there are people saying, no, he wasn't tyrannical. But it's easy for historians today to say, no, he wasn't tyrannical, because you didn't live in the late 17 hundreds, you didn't live during the days, the Boston Tea Party and all that.   [00:34:08.930] So it's hard for us, for people today to say, no, he wasn't tyrannical. Well, Thomas Jefferson sure thought he was tyrannical and actually listed all these grievances. In fact, the Declaration of Independence. They say he George III. He obstructed the administration of justice.   [00:34:22.140] There were several lines in the Declaration of Independence criticizing George III for repeatedly bypassing the elected legislature, for protecting corrupt political insiders, for being prosecuted, for taking away their freedoms, for destroying international trade. They said, quote, he has erected a multitude of new offices and sent hither's swarms of officers to harass our people and eat out their substance. Maybe that sounds familiar, too. Maybe a guy that uses all this government power to do things, to bypass the legislature, to create a multitude of new offices, to send these government agencies to harass people simply because we don't like you, we don't like your business, we don't like your industry. So we're just going to create all these rules and regulations and use our offices and our agencies to go and harass private business.   [00:35:08.520] Maybe that sounds familiar, too. The other thing that might sound familiar is that George III quite famously had horrible, horrible, horrible dementia. And this was a mental condition that lasted really for decades, continued to deteriorate. Again, doesn't make him a bad person. People can't help mental health disorders anymore.   [00:35:31.060] They can help having type one diabetes or anything like that. They can't help their afflictions. But that does just because mental health is destigmatized doesn't mean that people who suffer from dementia should remain in power. Jeez, what a concept. And there are famous stories.   [00:35:46.370] It's hard to know some of these are true, but there are famous stories of George III literally shaking hands with a tree, thinking that the tree was the Kaiser of Germany.   [00:35:59.010] There's so many of these types of stories, and he had staffers so many stories. And this is in the documentation and correspondence that staffers were constantly covering from you. Oh. What His Royal Highness meant to say was so and so forth, because he would show up, george Third would show up, and they had to put this guy in a straitjacket, and then the staffer is recovering for him. So maybe that sounds familiar, too.   [00:36:18.810] What His Real Highness actually meant to we know he just said this yesterday, but what he actually meant to say was this. Maybe that sounds familiar, too. Now, if we step back and sort of summarize all this, it all fits together, right? We started this whole episode in 15 two with poor Arthur on his deathbed from the sweating sickness, right? Now we've made all the way through George III hundreds of years later.   [00:36:44.420] But the long line of this and if we were to summarize this, we started off basically with this years of just fanatical, fanatical ideological conflict, right? And and it started with really Henry the 8th and Henry the 8th again, we started with his younger, his older brother Arthur because Henry the 8th famously believed that it was because he married Arthur's, his dead brother's widow, Catherine of Aragon. That's why he couldn't produce a male heir. So who knows how this would have turned out if Henry VIII hadn't married Catherine of Aragon, maybe married somebody else and he would have had an heir. First shot at the title.   [00:37:22.640] He would have had an heir. And then who knows how things would have turned out. But they turned out the way they did because he married Catherine of Aragon. He felt that that relationship was cursed, couldn't produce a male heir and it just had to seek an out of that relationship and ended up creating his own church. And that creation of the church, along with a reformation and all these things that were swinging their way across Europe, created these just incredible ideological conflicts with people that's the constant, the violence and the beheadings and the civil.   [00:37:51.370] War and the instability and the chaos and the social conflict led them to eventually picking George the first because he was the safe choice. The safe choice. But the safe choice had zero popularity. There were numerous crises, ballooning national debt. His son completely incompetent the subsession with almost a theatrical ploys to boost public opinion.   [00:38:14.340] Couldn't make a decision. Was it was it just a total buffoon? His grandson, George the Third dementia tyrannical no adherence to the rule of law. I just think it's obvious, but I'll go ahead and point out it just it seems like the guy in charge right now, the guy in the White House is sort of a composite of all three of these Georges. He's sort of simultaneously talking about the guy who was the safe choice.   [00:38:37.500] Everybody thought like, oh, he's the safe choice. No popularity, yet still the guy who was supposed to be a safe choice. Numerous crises, the supply chain crisis, all these things. Ballooning national debt, just like George the first, just like George II, just this theatrical desire to boost public opinion. The most bizarre things has this weirdo son that's constantly a thorn in their side.   [00:38:58.460] Also George III with the let's be honest, the dementia, no adherence to the rule of law, all these sorts of things, he's sort of a composite of all three Georges at the same time. Now, I want to get to that where if you think about where England was sort of to the tail end of George III, now we're in the 18 hundreds, right? George the third. Now, they've lost the American colonies. Just a snapshot of this national humiliation.   [00:39:32.050] Having lost the American colonies and the War of 1812, as a matter of fact, but having lost I mean, what talk about a humiliation. We're talking about an Afghanistan level humiliation. The withdrawal of Afghanistan in 2021. Horrible, horrible, horrible humiliation. Similar.   [00:39:49.280] Now, people would have been just astonished, gobsmack, that how could you have possibly lost the American colonies? What were you thinking in the War of 1812? You got this outrageously high debt in England now, more than 200% of GDP. There was a huge drain on gold reserves. Treasury reserves, in fact, in a single year in the late 1790s, is absolutely within the reign of George III.   [00:40:13.470] In a single year, national gold reserves in England fell by 70%, to the point that they actually the Chancellor had to have to suspend the gold standard in the currency, which meant that they were on the verge of a major currency crisis. England's on the verge of a major financial crisis. They had terrible inflation. Inflation reached an all time high, literally the highest in all of English history, at 36% in the year 1800. So we have terrible inflation.   [00:40:36.420] We've got a drain of the gold reserves, verge of major currency crisis, massively high debt, 200% of GDP, national humiliation, rising taxes, which taxes had increased ten x since George I had taken over this inflation. And, oh, by the way, you've got France now in the early 18 hundreds. Napoleon, your mortal enemy, is about to invade. Is about to invade. I mean, they they were they were danger close to their literally not even being in England anymore, and everybody would be speaking French.   [00:41:05.190] Britain almost went away because Napoleon was on the verge of invading and the guy in charge is shaking hands with trees. So that was the situation in England in the early 18 hundreds. That must have seemed incredibly dark. Just imagine going through that, all of this stuff going on, and then these stories floating around of, the King is shaking hands with trees, right? So just imagine the darkness.   [00:41:29.920] And people just thought, oh, my God, could it possibly get worse? We're going, we're done. That's it, that's it, we're done. Napoleon is knocking on our door. We're done.   [00:41:39.470] And yet it got better. It got better. And that's really the point of the story today. It got better. It's it this could have easily just turned into something where Britain didn't even exist.   [00:41:50.300] Napoleon could have invaded, britain wouldn't even exist. And yet Britain would take a dose of medicine, they would go on to reestablish its power, and they would actually experience a period of unprecedented peace, prosperity and stability. And their history is actually known to history as the PAX Britannica, where it says a period of time in global history. There were relatively few wars, not to say it was no wars, but there were relatively few wars. There was no major global conflict.   [00:42:17.540] Private. You had the 30 Years War. You had the War of Spanish Succession, the War of Austrian Succession, the Seven Years War. The Seven Years War in particular. These were global conflicts that took place in multiple continents around the world.   [00:42:29.650] Very costly, very bloody. The weapons were getting more destructive. The death count, the body count was going up. I mean, you didn't have that really during the Pac spruta. You had instead a bonanza in global trade.   [00:42:43.670] Nobody rivaled Britain's Primacy. There was unprecedented economic growth and a meteoric rise in standard living. People's lives got better. GDP per capita increased so much, and it was 70% more than it was in France, more than it was in Germany, 30% more than it was in the United States. They had actually zero inflation technically during this period.   [00:43:03.220] In the 18 hundreds, britain actually had very minor deflation. They had prices on average were declining about a fraction of a percent per year. So we had very, very strong price stability. They had the dominant reserve currency that they had reclaimed that gold standard. So the British sovereigns and their currency became just very dominant, very stable.   [00:43:25.260] This was, again, just a period of incredible prosperity and stability. And they got there. If you think about if you think about Britain in the mid to late 18 hundreds versus in the early 18 hundreds again, guy shaking hands with trees, napoleon's on your doorstep, crazy inflation, currency crisis, all these things, and then you fast forward a couple of decades and it's unprecedented prosperity. People's lives are getting better. It's an incredible turnaround story, and it's worth talking about that.   [00:43:52.990] It's worth putting a spotlight on that. And we got to be honest, it definitely took some luck. It definitely took a lot of things. For example, thank goodness for Horatio Nelson, where this is a guy who went to battle against Napoleon's fleet in 1805, died in combat, died in service to his nation. He told all of his sailors that England expects that every man will do his duty in the Battle of Chafalgar.   [00:44:20.590] Basically saved. That was just an enormous, just from a military perspective, enormous turning point that made Napoleon really think twice about actually carrying out the rest of that invasion and so took a huge threat off the table. They still had land wars against Napoleon that would go on for years and years after that. But this sort of looming threat of the invasion of England, it really came down to one guy and really all the sailors who fought that day to take that risk off the table, they also happened to get very lucky with the Industrial Revolution. The Industrial Revolution had been already a thing in England.   [00:45:00.100] Remember James Watt? We did a whole podcast about that coming down. We had the steam engine, and that really gave way to so much growth and economic development at the same time, you have the advent of capitalism. Adam Smith, who also created that, and the same as James Watt, created the steam engine. Both of those happened in 1776, right?   [00:45:18.460] And one could actually make the argument that those might actually be some of the more important things that happened in 1776. Obviously. The American Revolution hugely important. But the invention of capitalism also really important. The invention of the steam engine that gave way to this abundance in energy and energy surplus, hugely important for the history of the global economy that would follow.   [00:45:41.070] England also benefited. Britain also benefited from its opponents being really vanquished and weakened. The French, the Ottoman Empire, et cetera. And so all these things sort of unfolded at the same time. And the English obviously benefited from that.   [00:45:53.090] Brits obviously benefited from that. And you obviously cannot skip over the stain of imperialism. That was clearly a significant growth factor of the British economy during that time as well. But there were a number of elements that they did had under their control that were really simple things. The simplest of all was that they just had a sensible government.   [00:46:16.230] They had a sensible government that adopted and embraced the basic principles of capitalism. They had an efficient and reasonable tax. Their tax policy was established. They didn't just do away with taxes, but they created their tax policy was intended to create incentives for investment and business formation. And it was funny because they did things they eliminated.   [00:46:38.630] They had taxes and tariffs and things on corn and grain. They said, no, we got to get rid of this stuff. We want to simplify, we want to make it as easy as possible. We want to incentivize certain things and even politicians from opposing parties, if you can possibly even imagine this. Benjamin Disraeli, for example, in William Gladstone, people were basically conservative and liberal, that even people from opposite parties agreed, opposite ends of the political spectrum said, you know what?   [00:47:01.060] We need to abolish the income tax. This is stupid. It's bad for the economy. We got to get rid of it. It just doesn't make any sense.   [00:47:07.210] They took a very light touch to regulation. They embraced free trade. They slashed government spending. In 1814, government spending in Britain was 30% of GDP. In 1840, it was 11% of GDP.   [00:47:20.500] So you can see a material crazy decline in government spending. They balanced their budgets. It's not rocket science. It's not rocket science. It's nothing terribly exotic here.   [00:47:32.340] They said. Oh, wow. Industrial Revolution. Great. Everybody's becoming more prosperous.   [00:47:36.680] Let's get out of the way, let's create some nice incentives, and sure, we can still take care of people. I think the British government gets also a lot of criticism. They said, oh, there are workers and this and that. Well, actually, no. There were a lot of laws that were passed to support workers and take care of workers.   [00:47:54.590] This wasn't some austere government. In fact, the liberal government was in charge and power for many, many years. So this wasn't some government of hardcore conservatives imposing austerity. You've got wig parties and liberal parties that were in power for many years. But the biggest thing is they just found the ability to compromise.   [00:48:13.220] They found the ability to make sound decisions and to think rationally about what's in the national interest. What do we really need to do to move the needle, to make things positive, to make people's lives better? What do we really need to do for that? And instead of just assuming that the government is the solution to everything, they realize the better we get out of the way, the better everybody else will be, because human beings are going to know what's in their self interest much more than the government does. This is clearly a thing that we cannot do today in the west in general, and obviously in the United States.   [00:48:45.360] It's one of these things that's sorely lacking, the ability to compromise, the ability to rely on doing air quotes, leaders to make pragmatic decisions. Instead, it's just this fighting. Everything is always you hear when politicians talk, they always say, we have to fight. We're fighting for this. Nobody ever says we're compromising on this.   [00:49:05.330] Nobody ever says we're having discussions about this. It's always fighting. It's always this constantly just melodramatic grandstanding on all sides, on all sides. And the whole thing stems from this bizarre ritual where people spend $10 million in campaign finance to win a political office that pays $174,000 a year. How does that make any sense at all?   [00:49:27.030] There's no way that makes any sense at all. And their only goal is to be reelected, to be reelected every election cycle after election cycle, to remain in power as long as possible. There's something very, very wrong with that picture. And that is hence the trend that we're on, because the people in charge who are making decisions are not making decisions with the national interest in mind. They're making decisions to be able to draw lines and blame opponents and all these things, but they just don't come together and do rational things to compromise and make sensible decisions.   [00:50:02.200] This is why we're on the trend that we're on, and we discuss this all the time, the trends that we're on, these big picture trends, again, you can't predict the future. Nobody can predict the future. But we can look at trends, and we can look at these trend lines, and we can see these forces decline. We talk about forces of decline, economic forces. The ballooning debts, the crazy debt ceiling fiasco right now.   [00:50:23.750] Trillion dollar, $2 trillion plus deficits, inflation, Social Security running out of money, and all the other things. The national humiliation from Afghanistan, that humiliating withdrawal from Afghanistan with people dangling from helicopters, passing babies over the razor wire. Just horrible, horrible, horrible stain on national reputation. All the censorship and the cancel culture and all these sorts of things and the quote, unquote leadership that continues to ferment those divisions and keep people divided and angry. And this is the thing, and I wrote about this, actually earlier this week, and I said, just look at that trend.   [00:51:00.170] And if you can kind of just plot the trend line and that's not really predicting the future. That's just saying, well, if we just keep doing what we're doing here, where does that lead to? And just imagine that ten years from now, the debt ceiling. Imagine this ten years from now. I mean, just based on the trend, what does the national debt look like ten years from now?   [00:51:18.010] I mean, we're talking about $50 trillion. We're talking about 200% of GDP, all these things. And, oh, by the way, Social Security is also going to run out of money within the next ten years. Don't take my word for it. Take the word of the Treasury Secretary of the United States, who literally writes in black and white, when Social Security is going to run out of money.   [00:51:36.350] It's going to happen within the next ten years. None of this stuff, it just doesn't look good, right? And that's not some statement of some bizarre conspiracy theory. This is literally just a very rational view of the facts and the trends and say, okay, here's where today. Here's the trend that we've been on for quite some time.   [00:51:58.160] How does this play over the next ten years? Well, here's kind of the direction that we're going. And you just follow that trend line, and on the current path, that's where we're headed. However, the future isn't set. And if there's anything that we've learned over the last few years is that anything and everything is on the table, the world could change in an instant, overnight.   [00:52:17.780] It happened with COVID It's happened actually in a couple of different ways over the past few years. The future is not set. Things could change without our slightest expectation, just like in Britain in the 18 hundreds, with a little bit of luck and a whole lot of responsibility and sensibility, there could be, in theory, a radical adjustment to that trajectory. Now, that doesn't mean that the problems go away. They're still going to be paying.   [00:52:43.160] Look, Social Security. Sorry, everybody. Social Security is going to run out of money. It's not a political issue. It's an arithmetic issue.   [00:52:50.000] Social Security is going to run out of money. There's going to have to be huge budget cuts. There's going to have to be, you know, probably some kind of rollback in military spending. There's going to have to be just different cuts. They're going to have to tell everybody, you know, with Social Security, for example, sorry, folks, we know we promised you you could retire it, whatever.   [00:53:07.240] 62, 63. 65. Well, guess what? Now it's 71. Now it's 73.   [00:53:12.860] You know, tough luck. Sorry about that. But that's that's the situation. So these are. The sorts of things that are going to have to happen, but again, with some actual, real, sensible, responsible leadership adjustments to this trajectory.   [00:53:26.920] People actually doing what's right for the country, not for themselves. And talking about the politicians. Who are just, you know, out for their own gain, out for their own reelection, out for their own power. Instead of saying, no, we actually need to do responsible things. It is actually possible.   [00:53:41.000] It is possible that the west, the United States and the west as a whole actually grows its way out. That's what happened in Britain in the 18 hundreds. They had this massive debt. They had this massive debt, and yet by the end of the century, they'd actually managed to grow their way out. Their debt was 200 per cent of GDP.   [00:53:57.520] By the end of the century, they had really gotten that down to a very reasonable level. And they didn't inflate their way out, they didn't just do it by printing money and printing money and creating massive inflation. Remember, inflation was basically nothing during that PAX Britannica it was almost nothing. It was actually slightly negative, right? They had very slight deflation.   [00:54:17.450] So they actually grew their way out, and they grew their way out in a number of different ways. They embraced capitalism. They stopped trying to thwart businesses, they stopped trying to regulate every aspect of the economy and said, you know what, people, businesses, private industry, private sector, they're going to be able to figure this out better than we can. All these things are possible if the lawmakers, legislatures, the politics, actually embrace capitalism, they embrace free trade, they embrace peace, they embrace rule of law, they embrace, oh, I don't know, rational discourse, compromise, these sorts of things. It's not rocket science.   [00:54:50.240] This is basic stuff. And again, they don't even have to look. History is full of all the examples. Almost everything that could have possibly have ever happened has happened. And so you don't have to reinvent the wheel, you don't have to figure it out from scratch.   [00:55:04.390] What do we do? Well, Jeez, there's already been a historic example in somewhat recent history of a country that was massively undead and, you know, had a guy shaking hands with trees and all this stuff, and they found their way out. They found their way out of that and they, they, you know, they had it, they had an incredible period of peace and prosperity. So it is possible. And there's a playbook, there is a playbook you don't have to figure out, jeez, how do they do that?   [00:55:28.060] It's all written down. They kept very good records, every law, every literally every word that was uttered in public and, and, you know, in front of, in, in Parliament and the House of Commons is all, it's all written down. They have minutes, they have all the record of everything. It's all there. You don't have to figure it out, just follow the playbook.   [00:55:46.070] Just follow the playbook, right? And if you do that, then in theory there is a chance and the future could look like Britain in the 18 hundreds, as opposed to, you know what, Rome in the four hundreds or the Ottoman Empire in the early 19th. I mean, there's there's a lot of there are so many we talk about these a lot like these negative cases in history where there's some there's some once great empire that just sort of falls, goes away, collapses, becomes weak. This is a case in Britain where you've got these guys that are really on the brink and they found their way out of it and this is possible now. I'm not holding my breath.   [00:56:20.450] That's certainly not the path they're on now. They're on this really negative trajectory. And of course, this is why we have a Plan B. This is why we have a Plan B, because really, regardless of what happens, we know at a minimum there's going to be some pain. Social Security's reform is going to be painful, right?   [00:56:36.480] But if they don't get on a positive trajectory, they continue on this current negative path. We can tell, like, a lot of things are going to happen. We have a pretty good sense because, again, we just look to history. This is not the first time this has happened. We go, Jeez, what happened in history?   [00:56:51.120] The last time somebody had a crazy level of debt, crazy deficits, crazy this, crazy all these things, and we can go, Maybe we ought to diversify a little bit. Maybe we ought to make sure we don't have all our eggs in one basket. Maybe we ought to make sure that we take completely normal, rational, legal steps to reduce the amount of taxes that we owe. Or to maybe not keep everything in a single currency. Or not keep everything, all of our assets and livelihood in a country that has the most litigious country to have ever existed in the history of the world, all these sorts of things.   [00:57:23.460] And there's no downside for doing that, right? This is the whole concept of a Plan B. We can certainly hope for the best. And I'm here to say, like, there is a possibility that things work out great, but that's not the path they're on right now. And that's why it makes so much sense to have a Plan B.   [00:57:39.810] You've got to focus on the things that you control. You can't change the politicians, you can't change the voting habits of tens of millions of your fellow citizens. I mean, sometimes you look at some of the people that win these elections and you got to look at some of these districts and people that are in Congress and go, how do you how do you vote for that person? The person's a criminal. They're a crook.   [00:57:59.710] It's it's they don't even try and hide it. Who votes for this person? Not only do you vote for this person again and again and again and again. You can't change them. You can't change the minds of the voters.   [00:58:12.990] You got to focus on the things that you can control. Right now, as you read this article the other day about these scientists, I'm doing air quotes that are screaming about nuclear war. They've got the Doomsday clock saying we're 90 seconds till midnight. We're the closest we've ever been to nuclear war. Yeah, I get it.   [00:58:32.450] I agree with that. I don't think it's imminent, but I think, sure, it's definitely closer to nuclear war today than it was, you know, in the 1990s or, you know, et cetera. Like. Sure, I get it. I can't control that.   [00:58:46.920] I don't have the nuclear launch codes. You know, there's there's there's basically three people in the world who control whether or not we're going to go to nuclear war. I'm not one of them. Chances are probably neither of you, right? So that's not something that's either under my control.   [00:58:59.840] I'm not going to lie awake at night worrying about it. I'm going to focus on the things that I can control. I can control the impact that inflation has in my life. I can control the impact that tax policy has in my life, or the impact of Social Security's, almost certain insolvency and what that would have in my life. I can control my health and fitness, I can control how my children are educated.   [00:59:20.680] I can control what information slash propaganda I consume. I can control how much of my personal information I give up to Mark Zuckerberg so he can go and use it against me, whatever. I control so many things, things that I actually do have control over that can move the needle in my life. And again, there's no downside in any of that. There's no downside in taking charge of the things that are under your control to reduce some obvious risk and make your life better.   [00:59:45.720] If things do stay on this current path, the debts and the deficits and the inflation and the social contract, the social conflict and the loss of reserve currency status and all these things, you will be much better insulated from those consequences with the right kind. Plan B. But if the west and America specifically turns into Britain in the 18 hundreds, which actually is a possibility, you certainly will not be worse off for doing these things, taking back control over things in your life that will actually move the needle for you. You will not be worse off in any way. That's why it makes all the sense in the world.   [01:00:19.490] I want to thank you so much for joining me. I hope you enjoyed this and we will speak to you again next week.   Close Podcast Transcription

On January 24, 1971, a Swiss-German university professor managed to raise money from the European Commission to fund his new idea— he wanted to start a business conference that would become a major global brand. He secured the funding and held the first conference the following month in the tiny Swiss town of Davos; it was a smashing success— more than 400 executives attended. The following year, the President of Luxembourg was a featured speaker. And for decades since, attending the annual conference at Davos has become a rite of passage among the world’s business and political elite. The professor turned conference organizer, of course, is Klaus Schwab. And the organization he started is now known as the World Economic Forum (which is meeting right now for its 2023 event). The WEF has turned into an overzealous, supranational, undemocratic organization with a dangerous amount of power; Schwab openly brags about the influence he has with world leaders. For example, in 2017 Klaus Schwab spoke about all the world leaders who had previously been involved with the World Economic Forum through its Young Global Leaders program. He named Russian President Vladimir Putin, former German Chancellor Angela Merkel, and Canadian Prime Minister Justin Trudeau, as examples to explain, “what we are very proud of… is that we penetrate the cabinets” of governments around the world. Schwab said that half of Trudeau’s cabinet were Young Global Leaders of the WEF. And Trudeau is a great example of the type of world the WEF wants to create; one where the government can, for example, form “public-private partnerships” to freeze your bank accounts for protesting against being required to take a vaccine in order to earn a living. And yes, representatives of the big banks and pharmaceutical companies are present in Davos this week. The WEF’s goals aren’t a theory. Schwab wrote a book about it. You can read exactly what his worldview is, and see how it has made its way into legislation and national policy. Just four months after Covid was declared a pandemic, Schwab published a book called Covid-19: The Great Reset, arguing that the pandemic presented a “unique window of opportunity” for global elites to reshape “the direction of national economies, the priorities of societies, the nature of business models and the management of a global commons.” The WEF was instrumental in promoting Covid lockdowns, vaccine mandates, and censorship of “misinformation.” In 2021 in a now deleted Tweet, the WEF wrote, “Lockdowns are quietly improving cities around the world.” Months before the outbreak of Covid, it hosted a “Global Pandemic Exercise” to simulate “an outbreak of a novel zoonotic coronavirus.”   One recommendation the conference put out was for governments “to partner with traditional and social media companies” to “combat mis- and disinformation” to ensure “that false messages are suppressed.” Naturally, an unelected group of global elites would have the final word on what constituted disinformation and needed to be suppressed. The WEF also sees combating climate change as the perfect crisis to exploit to push through its anti-capitalist agenda. For example, in a recent article, the WEF argued for “uneconomic growth” in order to prevent climate change. It linked GDP growth to the number of natural disasters that occur, and even the likelihood of war. Their lesson: humanity is better off if people are poorer. Well, most people. Certainly not the very important elites flying in on private jets to Davos, Switzerland this week for the WEF’s annual conference. They pretend to extol the virtues of representative democracy. But you’ll find absolutely none of that in the room. Instead it is a bunch of people who think they know better, and everyone else should live according to their will and dictates. For example, a close partner in Schwab’s “public-private partnerships” to promote “stakeholder capitalism” is Larry Fink, who is also in Davos this week, and sits on the WEF board of trustees. Fink is the CEO of BlackRock, a firm which controls $10 trillion worth of global corporations. Their vision is “woke” corporations working in tandem with governments to “force behaviors” for what they decide is the greater good. What might that look like? Well, the WEF has seriously suggested we’ll have to get used to eating bugs and weeds. And last year, the WEF published an article called, “Psychologists say a good life doesn’t have to be happy, or even meaningful.” “Living through war or a natural disaster might make it hard to feel as though you’re living a particularly happy or purposeful life, but you can still come out of the experience with psychological richness.” So don’t worry, the WEF says, if you experience hardships such as “infertility, chronic illness, [and] unemployment.” A 2016 article published by the WEF declares “Welcome to 2030. I own nothing, have no privacy, and life has never been better.” When it comes to personal choices, the author writes, “I just want the algorithm to do it for me. It knows my taste better than I do by now.” These ideas are comically stupid, and the organization has lost credibility. Most notably, Florida governor Ron DeSantis AND climate she-ro Greta Thunberg BOTH criticized the WEF as an irrelevant, destructive organization. Those two are about as far apart politically as it gets. And yet they agree that the WEF needs to shut up. This is the topic of our podcast today. We start off talking about (unsurprisingly) a historical example of a small group of non-government elites having major influence in government policy. This is nothing new; in fact it’s quite common for arrogant, narcissistic ‘experts’ to force their ideas on to a society. The WEF is only the latest modern incarnation. And even though it has lost much of its credibility, it’s important to remember there are always going to be ‘experts’ out there who want to tell you how to live your life. This is ultimately what ‘freedom’ means. The word by itself almost sounds corny or cheesy. But ultimately we’re talking about your right to make your own decisions and control your own life. If you don’t care about your freedom, you can’t expect anyone else to care about it. More appropriately, you can probably expect others (like the WEF) to try and take it away. And that’s why it makes so much sense to have a simple, sensible Plan B. Because there are just too many of those lunatics out there. Click here to listen in to this week’s episode. Download Transcription as PDF Open Podcast Transcription [00:00:01.210] Today, we're going to go back in time to the year 1618, to a place called the Hotel Pisani in the city of Paris. Now, if you know Paris very well, you probably know the Louvre. You might know the plastic carousel. This is basically where the Hotel Pisani was located, very close to the Louvre, where the Louvre is today. So this is prime real estate.   [00:00:19.580] But the Hotel Pisani wasn't a hotel, at least in the way that we it wasn't a Four Seasons or a JW. Marriott or something thing like that. As we think of it. Back then, the French word hotel, or hotel as they would say in French, actually referred to just really big stately mansions, grand houses that were large enough to entertain a multitude of guests. That was actually fairly unusual because most French homes, a sort of typical mazone.   [00:00:42.870] It's like what we would consider a town home today, a very small patio home, almost a condo, a place that you couldn't have huge parties and lots and lots of lavish lots of guests. If you were able to do that, that was considered a really, really big home. That was considered a really big deal. And they called that hotel or hotel from the Latin word hospitalis, which meant pertaining to guests, just like the term hospitality. And so this is what a hotel was.   [00:01:04.530] A hotel was just the name of a really big home. And the Hotel Pisani was owned by a guy, a French nobleman, an aristocrat named extremely French, named the Marquis de Remboyer, and his wife, a lady named Catherine Devivon. Now, Catherine was a very interesting historical figure. She was 30 years old at the time, in 1688. So she grew up in the late 15 hundreds in Rome is actually where she was born and kind of raised as a kid as the daughter of France's ambassador to the Vatican City.   [00:01:33.810] So she was French, but she was the daughter of the French ambassador to the Vatican City. And if you think about being the ambassador to the Vatican City, french ambassador to the Vatican City, that's got to be one of the cushiest jobs of all time, because it's not like anybody's going to have some diplomatic crisis with the Vatican City. It's all pomp and prestige and parades and parties and all these nice things. And think about it. At the time, Italy was the most refined society in Europe.   [00:02:00.030] I mean, remember, Italy is really what led Europe out of the Dark Ages. Hundreds of years before that, in the 11th century, it was the Italian city states. It was Venice, and then Florence and Pisa and Siena and these places that led Europe out of the Dark Ages. They embraced intellectual freedom. They embraced economic freedom.   [00:02:18.600] They rejected the feudal system. They built strong economies with sound currencies. They patronized art and culture and music, literature. I mean, even to this day, if you study music, a lot of musical terminology is Italian. Opera is still sung in Italian.   [00:02:36.200] Most of the great artists that, you know, people study their Italian. I mean, the the literature, all these things. I mean, Italy, we know this today. People that study, you know, European art, history and so forth, I mean, Italy is a huge factor in that. Imagine what it would have been like 500 years ago, right?   [00:02:51.670] Imagine what it would have been like in the 1005 hundreds growing up, and all these people are still there. It's contemporary scene. It was a big deal. And so, because of all this Italian nobles, aristocrats, the well to do, the merchants, wealthy business people, they maintained very, very high standards, high standards of fashion, high standards of etiquette, high standards of intellectual energy. They were incredibly sophisticated.   [00:03:18.020] They had a keen interest in patronized art. They had a keen interest in science. They had a keen interest in literature. These people were extremely sophisticated. They had the ability to intelligently discuss anything, had real conversations.   [00:03:30.090] And this is the environment in Rome, where Catherine's, growing up in the late 15 hundreds as the daughter of the French ambassador to the Vatican City. Now she gets older. She gets married off to this French nobleman, the Marquis de Rambour, and she goes back, she gets shipped back off to France, and now she's in Paris, and as the wife of the Marquis, she's in these all these high society parties and things like that. But the French, by comparison, were very, very they were not Italians. They were crude.   [00:03:58.560] The French were boring. They were unsophisticated. Catherine, having grown up in Italy around this again, this tremendous intellectual energy and refined culture, I mean, it was really quite a peak. Must have been an incredible experience for a kid. And rather than just sort of roll her eyes and go, oh, my God, these people are so boring, this takes us back to 1618.   [00:04:19.850] She does something very entrepreneurial. She said, I'm going to do something about this. And so now she's 30 years old. At 1618. She goes to her husband, and she says, I want to completely redesign our house.   [00:04:30.810] And he says, okay, yeah, that's fine. So she did it with her own hand. She made a lot of drawings, and she set aside a room, a particular room that was extremely lavish and luxurious, and it was very famous. A lot of descriptions about the walls of blue velvet and panels bordered with silver and gold and all these things. I mean, really, really nice.   [00:04:51.490] You can imagine in your mind this just this very stately kind of French room with gold and velvet all over the walls. Very, very nice place. And then started hosting parties. And her parties were unlike the parties that she would usually go to with all these sort of boring aristocrats that couldn't talk about anything but the weather, basically just idle chit chat that was super boring. Instead, she invited this very wide range of people.   [00:05:15.990] And when I'm talking wide range, she would invite generals and she would invite bishops, and she would invite poets and scholars and writers and thinkers and scientists and everybody that she could find that seemed like, this is an intelligent person. This person brings something to the table from an intellectual basis, that's really what it was all about. It was who's got the brains to actually be interesting and can talk about something. And people would show up and they would read their works, perform their plays, or even, again, she had bishops and cardinals. People would show up and deliver sermons and things like that because all ideas were on the table.   [00:05:48.470] But Katherine became kind of an etiquette coach because, remember, she grew up in Rome. She grew up in this place that was the pinnacle of high society and civilization. So she helped. Her French guests said, no, no, this is how we should be with each other. Let's dress a little bit better, let's address each other with a little bit more courtesy and dignity, but let's debate each other's ideas, but do so politely and let's have good manners and meaningful conversation.   [00:06:12.830] This is a no chitchat room. And eventually, her guest did develop a much higher level. Sophistication and rule number one in Catherine De Vivon's sitting room was you have to check your ego at the door. Nobody's allowed to come in here and say, I'm the best, I'm the baddest, I'm the coolest. You're not allowed to do that.   [00:06:30.250] If you are that way, then you can't come in and everybody's got to treat each other basically as equals. And we all engage politely and with dignity and respect, but do so at a very high intellectual standard. And all this took place basically in this room that she designed, this sitting room that she designed in her home. Now, the French word for sitting room, especially back then, is called the salon. And so people would gather in Catherine's salon and that word stuck and the concept stuck.   [00:07:00.720] The concept actually grew over time. More and more, this concept of meeting in salons popped up all over Paris. And, you know, time went by, and I'm talking decades, not just months or years, but decades went by. An entire generation of people passed through Catherine de Vivon's salon and other salons that have been set up in Paris. And this idea of exchanging ideas and building up refining sophistication, I mean, people were literally being trained almost like an athletic competition to just be better socially and intellectually.   [00:07:34.250] It's an interesting concept. And at the time when Catherine started this in 1618, france was obviously a major kingdom, but it wasn't the dominant power. Decades later, France was clearly the dominant superpower in Europe. And now it's after the 30 Years War, which ended with the Peace of Westphalia in 1648. It's actually a series of treaties in 1648, coinciding with the rain at the start of the reign of Louis XIV, it really left no doubt at that point that France was the leading military power, political power, and economic power.   [00:08:07.950] And as time continues to pass, it becomes clear that, again, france is not just a military, political, and economic power, but also Europe's leading cultural power. And Louis XIV left no doubt about that. This is a guy at the height of his power. He was in his sort of from his mid 40s through his 60s, this guy. He was the absolute monarch.   [00:08:30.910] He spent whatever he wanted to spend on, anything he wanted to spend it on. It was luxury, luxury, luxury, splendor, splendor, splendor, fancy, fancy, fancy art, architecture, palaces, monuments, everything. And it was an absurd amount of royal spending. I mean, really an absurd amount of royal spending. But it was one of the things that really turned France into this cultural superpower.   [00:08:53.840] In addition to being the dominant military and political and economic superpowers, really became this cultural superpower. And that lasted even through his heir. Louis XIV reigned. He was one of the longest reigning monarchs in history. He outlived his son.   [00:09:08.590] He outlived his son's son, actually, the heir. The guy who became king after him became Louis the 15th was actually Louis the 14th great grandson. And so Louis the 15th also ruled for a very, very long time. So basically, over a period of well over a century, you basically only had these two guys governing Louis the 14th and then Louis the 15th. Louis the 15th continued that it was just spending, sometimes for the sake of spending on every possible thing under the sun.   [00:09:36.380] And France was really just an incredible place to be. People came from all over Europe, all over the world. There was an Italian playwright who traveled to France, to Paris in particular. Now we're in the 17 hundreds, a guy named Carlo Goldoni. He was the very famous Italian playwright back then.   [00:09:53.300] And Goldoni said in 1762, when he traveled to Paris, he said there was, quote, nothing comparable to it in the universe. France had the best paved streets, the best shops, the nicest palaces, the most ornate churches, the most delicious cuisine, and the tastiest cafes, the highest fashion, the highest standards of even hygiene. I mean, you got to remember the time period that we're in right now where just even normal hygiene, different cultures, have a lot different standards, and the French took their hygiene to an extremely high level with their bathing and their their perfumes and so forth. I mean, there's a reason why all these things are French. French cosmetics actually became a really, really big deal during this period, during the 17 hundreds in particular, that actually became such a rage that years later, there was one woman who was very famous for her cosmetics.   [00:10:41.460] She was known as the Madame de Monaco, and she was so famous for her cosmetics and her penchant to constantly be putting makeup on herself off that, even years later. She was actually one of the people that got sent to the guillotine during the french revolution. And even on the way to the guillotine, she was seen roughing her cheeks to make sure that she had her makeup on properly, even though she was about to get her head cut off. So that's what a big deal all this stuff was. If you go back to the, you know, the mid 17 hundreds, france was the place to be, especially from a cultural perspective.   [00:11:12.210] This was a full blown what's known as the age of enlightenment, and paris was the capital. And throughout all this, this concept of the salon, this became really an institution. The salon the salons were huge in shaping the intellectual culture. And we can see this even there's a lot of data about this, that, for example, the market for the market size for books, just the book trade, book fairs, people buying and selling books and book shops and all these things, it was four times french was paris in particular. It was a large in the world, four times the size of london.   [00:11:45.110] Right? And london was also, at the time, a very intellectual place. The book trade in paris was four times the size of that in london. So it was a pretty big deal. And you have, of course, some of the biggest names in the history of philosophy.   [00:11:57.520] In particular, you've got helvetius and montescue and diderot, and so many of these people who were collectively kind of known as the philosophs and the king among all the philosophs, I don't mean king louis xi. I mean the king of the philosophs. Really. The guy that sort of stood head and shoulders of all the rest was voltaire. Now, this voltaire was the nom de plume.   [00:12:20.200] A guy's name was francois marie RWE, but most people just knew him as voltaire. Even today, most people probably heard the name voltaire. But you got to appreciate that at the time, in the 17 hundreds, voltaire was the most famous person alive. He was the most famous person in the world. Everybody knew voltaire.   [00:12:39.800] You got to think about voltaire in the same way. If you you take, you know, more famous. You take michael jordan, barack obama, and the rock and put them all together, they're not as famous as voltaire was in the 17 hundreds. I mean, and this is a guy everybody knew voltaire. Most people loved him.   [00:12:55.580] Definitely. Some people hated him. Really, really hated him. And one of the things that was so interesting about him is that voltaire, I mean, he had a tremendous amount of intellectual courage. He wasn't afraid of anyone.   [00:13:09.710] He wasn't afraid of getting canceled. He did get canceled, actually, for a while, to the point that it wasn't just canceled like today. People get canceled on twitter. And don't get me wrong, that sucks to be canceled, be canceled by Google and canceled by YouTube. This is a guy that had to flee France, had to run for his life.   [00:13:26.050] He was exiled from Paris. He had to he had to go and live in London for a while. He moved to Berlin, Switzerland. He was finally able later on in life to go back to France because he was critical of institutions, critical of the church, critical of the of of the, of royalty and the aristocracy and of the government and so forth. And for a while they actually tried to exile this guy.   [00:13:45.160] So it was a really big deal. But he was not afraid. He spent his whole life he was this very rail thin, just skin and bones, but quite famously, everybody thought always he was going to die every day. But he lived to a very, very old age, and he's just again, skin and bones, but had such tremendous intellectual courage in the way that a lot of people you could think of as, for example, Martin Luther. Who?   [00:14:08.540] Was the guy that basically started the entire Reformation when took on the Catholic Church or later on Martin Luther King, people that really took on huge institutions that had tremendous amount of courage. But you combine that with the wit and humor of somebody like Mark Twain with a celebrity of Leonardo DiCaprio, basically, that's what you have with Voltaire. So this is a very, very interesting and unique human being. He loved he loved the individual, he hated the collective. He had a very strong distaste for government.   [00:14:40.990] He didn't like politicians. I mean, he's a very interesting guy, but because of his fame and notoriety, he could get an audience with anyone. He was close, very close. Very, very close. Pen pals, basically, with Frederick the Great of Prussia.   [00:14:56.020] He was a mentor to Catherine the Great of Russia. He had been personally decorated by King George the first of Britain. I mean, the list just goes on and on and on. This was a guy that just had all the accolades, the connections, the access, the influence, and he really helped open the door for the other philosophs, these people who again, they crowded the Salons with all their ideas and so forth, to have access to the halls of power. Now, the idea of the Salon had come a really long way since Katherine de Vivon in 1618.   [00:15:26.320] The Salons had grown dramatically and there was this big movement of intellectuals. Again, remember, this is the Age of Enlightenment. So you had people in science and philosophy and people debating everything politics, economics, ethics and morality. The fundamental premise, though, because now, in the early days, in the early 16 hundreds, it was a little bit more controversial to have an idea that was outside the mainstream. Voltaire was one of the people that really paved the way it said, no, I'm going to say whatever I want.   [00:15:58.120] I don't give a shit what anybody else thinks. If you don't agree with me, that's your problem, not my problem. And he really paved the way for a much greater level of intellectual freedom. And a lot of people wrote Voltaire's Coattails and said, okay, well, I'm going to start saying stuff too. And so these intellectuals are out there and they were either criticizing the government, said, no, I've got a better way.   [00:16:20.570] In the Age of Enlightenment, as it became to be known, that was sort of their fundamental premise. These people in the Salons, all these intellectuals, everybody's got an idea about what's the ideal society, what's the ideal life, how we should all live our lives, how we should structure our society, how we should structure our economy. And of course, this is the Age of Enlightenment. When you think about the Age of Light, of the fundamental premises that they're enlightened, when you think about it, that's why they literally call it the Age of Enlightenment, because these intellectuals, they're enlightened intellectuals. And, and so these are people, we are enlightened and we have these great ideas about how everybody should live.   [00:16:56.290] Now these, you know, quote unquote enlightened intellectuals. You know, again, it's you get to a point where this is a huge departure from the early days in the Salon of Catherine de Vivone in 1618. Now, by the mid to late 17 hundreds. Now this, there's, there's a healthy dose of arrogance that has been injected with these, these intellectuals, you know, that think that they've got it all figured out and they were, you know, fairly diverse, intellectually at least. But they did congregate in various schools of thought.   [00:17:26.270] You actually had, among these enlightened intellectuals, you actually had a large group of communists, people like Morelli and linguist, who advocated for total government control of the economy, strict quotas for a number of people to control who should be working and which industry and which thing, and how much people should be consuming. One of the things that they advocated for this is actually a real thing from these enlightened intellectuals. They said all children should be taken from their parents at the age of six and raised by the state. They decided that all products should be collected in public storehouses and distributed to citizens based on their needs. Everybody should work on a farm between the ages of 21 and 25 and all these things, this is the ideal society, this is how everybody should live their lives and so forth.   [00:18:14.650] And they're enlightened. And if you don't agree with them, then you're just not enlightened. You don't have the mind of an enlightened person. At the same time, there's another group of people who call themselves the Physiocrats. Physiocrats were sort of proto economists, right?   [00:18:28.950] Economics didn't really exist yet at that time. Most economists were just philosophers. They were people that thought about the economy, but they were really just philosophers. And these sort of proto economists who call themselves the Physiocrats physio from the from the word for the Greek word for nature and kratos for rule. Physiocrat.   [00:18:46.870] Physiocratos let nature rule. Right? In a way it's sort of a nod to the idea of sort of the motto of capitalism which is les fair which is another French term which is basically just leave us alone, let us do it. Les a fair. That concept of les fair actually goes back the physiocrats didn't invent that.   [00:19:08.210] That goes back to actually an encounter in the late 16 hundreds where the story is that I think in the 1660s there was a minister of government who went to a prominent French businessman and he basically said well, what can the government do for you? And the French businessman replied nucle, let us do it. Don't do anything. We'll handle it. Just do nothing will handle it.   [00:19:31.860] And that's sort of the motto of capitalism. And the Physiocrats kind of had that idea physiocratos let nature rule. They had a number of ideas basically to let just keep the government out of the economy. But they had this very peculiar idea that all government revenue should be derived from exactly one source and that one source was a very high tax on land. The physiocrats believed that land was sort of all wealth and all economic activity was derived from the land, whatever it is you were doing.   [00:20:03.890] If you were in agriculture then you were growing from the land. If you were manufacturing then you were getting your raw materials from the land. If you were trading something then you were getting your goods from somebody that manufactured something that was grown from the land. And so they said that everything starts from the land. Now to me that premise is patently false because if you're a lawyer or a doctor or somebody in some service industry it doesn't really start with the land.   [00:20:28.760] It's a service industry. So to me the entire premise is wrong. But that was their idea was that government revenue should come from this very high land tax and then nothing else and then stay out of it. But they were very adamant about this, that they were right. They had no data to back it up.   [00:20:43.790] They just assumed that they were right because they were enlightened and nobody else was. And this is actually quite interesting because at a certain point David Hume from the UK came down. Hume is again one of the most renowned philosophers in history. David Hume thought that he actually wrote about them that these physicists were, quote the most chimeral and arrogant set of men to be found. And so this really gives you a sense of the people that congregated in these salons.   [00:21:10.090] They really thought that they were hot shit. They had all the great ideas, they had all the keys to life. They knew exactly how everybody else should live and we should all just listen to them because they're enlightened. And how do we know they're enlightened? Because they say they are.   [00:21:24.890] And it wasn't just sitting in the salons at that point. By the mid 17 hundreds, these people did have substantial access to rulers and royals. There was a guy, one physiocratic guy named Kazneh. At one point, he had an audience with Louis XVI, the king of France. And the king of France said, what would you do if you were king?   [00:21:44.230] And Kaznay says nothing. And basically was an advocate for the government should get out of the way. Now, obviously, I quite like that idea that the government should do as little as possible and just stay out of the way. And it actually worked. And in Louis the 15th, he slashed taxes, he slashed tolls and tariffs, et cetera.   [00:22:00.880] They tried this with an experiment on grain, and this actually happened on September 17, 1754. Louis XV said, all right, we're not going to have any more tolls on the transit of weed. We're not going to have any more specific tariffs on whether they eventually got to this with exports and grain commerce and so forth following this meeting with this physiocrat. And so you have this essentially closed society of experts that gets together. They have these formal and informal meetings, and they're salons, and they're intellectuals who have a very high opinion of themselves.   [00:22:35.120] They get together and they're formal meetings and their salons that have access to the corridors of power that go to governments to say, here's this idea that you should try. And then the government goes and tries it and does it. This is nothing new, right? These people are not in government, and yet they have tremendous influence over government, but this is nothing new. We've seen many examples of this throughout history, people that existed outside of government.   [00:22:56.490] They met formally, informally, but they have tremendous access to the halls of power to advance a very specific agenda. We've seen this so many times among various clans of bankers, the Fughers, the Demetaches, et cetera, the Rothschilds, over and over and over again. The philosophy are just another example. These people that met in their salons had a very high opinion of themselves, said, we're the ones who are enlightened. We're coming up with ideas of how everybody else should live their lives.   [00:23:21.740] And ultimately, over time, it kind of became an echo chamber, right? It was just sort of the same guy, people with very similar ideas about how everybody else should live their lives. And of course, they're right, because they're enlightened, and you're just a peasant, so you should listen to us. Now, some of these ideas are actually quite good. They came up I mean, they have a lot of the ideas of Rousseau who were advocates for individual freedom and so forth.   [00:23:46.590] And some of these are obviously very good ideas. But even good ideas do not justify an autocracy of experts that are force feeding basically their PhD dissertations down everyone's throat. There are supposed to be systems in place and representative democracies and all these things that keep those things in check. And yet we still have, even to this day, despite how we praise our own democratic institutions and republican democracy, we actually still have several of these today. We've got think tanks and all these different societies, many of which have tremendous influence over government, their entire institutions, let's be honest, I hate to say mainstream media is a buzzword, but media does have this is a formal institution.   [00:24:31.440] These guys actually do meet, create, they copy each other's agendas. There's a reason why, when you look at the news, most top stories are almost always the same. They have an incredible amount of influence over government. But the one I want to talk about today, obviously, is the World Economic Forum, the WEF. I think these guys are really kind of towards the top of this food chain the WEF is meeting right now.   [00:24:53.600] They're having their annual conference in Davos, Switzerland. Very posh kind of place, but in a way sort of like the Salons of Catherine Devivon. It started basically as a conference. I mean, this goes back now decades to the 1970s, and it just started as a conference. This Swiss guy is kind of an economist and engineer, just, okay, we're going to start having a conference and start inviting people.   [00:25:16.170] And it took a while. It really took a while, but eventually it became a very prestigious thing attended by the big bosses and heads of state, et cetera. And it got to the point where by the early 2000s, being invited and going to Davos on your private jet was the ultimate symbol that you'd really made it. You were the boss of bosses, that you were on CNBC giving a speech at Davos or Gladhanding with some world leader flying in on your jet landing in Davos. That was the ultimate symbol of success.   [00:25:53.070] But over the last, let's say, ten to 15 years, it's really become quite a bit more. The World Economic Forum is quite a bit more. It's become an institution in and of itself. And I say this like, I'm not a conspiracy guy. This is not some conspiracy theory.   [00:26:10.890] I don't trade in that stuff. I trade in actual facts and reality and data. This is not some wild conspiracy theory. To talk about this, the guy that founded this, the guy that runs the WF, Klaus Schwab, brags about it. He brags about his influence with government.   [00:26:24.480] He brags about how half of Justin Trudeau's cabinet in Canada are alumni of the World Economic Forum Young Leaders program, and brags about how many world leaders came out of the Young Leaders Program, the World Economic Forum. He brags about how much access he has. He brags about how he can ring up anyone he wants an influence policy. This is all on YouTube again. This isn't some conspiracy.   [00:26:48.830] It's literally the guy who founded the program, who still runs. It is all over the internet himself in his own voice there saying like I've got this and I've got that, and I know this guy and I can do that guy, and this guy is our alumni and that guy's, our alumni and really their reach and their influence and their ideas and the WF as an institution really became obvious during COVID during the pandemic. This guy seized on this. These are the guys who the guy literally wrote a book called The Great Reset, and he spelled out his view. Again, not a conspiracy theory.   [00:27:26.710] He wrote it all in the book. Actually. I don't want to encourage anybody to buy his book, but in a way, if you can find it, it makes sense to at least browse and see. He spells out his view about how we should all live, how economies should function, how governments should function, who should be in charge. Obviously, this whole point, it's the expert ruling class, and we all listen to the experts and the expert ruling class because they're never wrong and they're the smart ones, they're the enlightened ones, and we're just dumb peasants, and so they should be able to tell us how to live our lives.   [00:27:56.740] And some of this is really extreme stuff, guys. I mean, he's talking about and again, not a conspiracy theory. This is Claus Schwab, in his own words, pushing for brain implants and transhumanism and individual carbon footprint trackers that everything we do gets uploaded to the cloud, where everybody can see, we can track. Every time you do anything, you take a flight, you get in your car, you do whatever. It's like, oh, well, you're adding that's your carbon footprint, your carbon footprint is increasing.   [00:28:24.280] And so this should be tracked and everybody should be able to see your individual carbon footprint to decide whether or not you're a good human being or a bad human being. This is all WEF stuff. And they actually put this stuff out there. They show up to their own conferences and say, well, this is what we're working on, this is what we think it should be. They say things like, you know, we wouldn't have any of these problems if the world's population was the size of where it was 500 years ago, which is, by the way, like 90% reduction in world population.   [00:28:51.300] That's what they say would solve the problems. This is what they actually say. They don't even try and hide it. This isn't some closed door session with filled with cigar smoke and evil villains twirling their mustaches. This is stuff they put in the light of day.   [00:29:07.780] They broadcast it live on the Internet to anybody that actually wants to see this. They publish this in writing and say, this is what we think makes sense. And again, ultimately, their view is an autocracy by the expert class, where Schwab himself is king of kings and we're just all dumb peasants and they're enlightened and if you don't see it, then obviously you just don't have the mind of an enlightened person. And again, they literally publish this stuff they wrote during the pandemic early on. You probably remember all the articles and videos and tweets about how great the Lockdowns were and you know, it's so beneficial for the environment and all these things and that we should all eat bugs and weeds and that we'll own nothing and be happy.   [00:29:48.320] And they have this just fanaticism for everything, environmental justice and social justice and all these things that they've essentially rebooted capitalism, right? They've taken this system that is responsible for creating more multiples more wealth and prosperity in the last, let's say 250 years than in the previous 5000 years combined. But they've figured out a better way. They can do it better, they've got a better idea of what it should be and they use this far reaching influence they have to actually drive that agenda. And they've been actually fairly successful.   [00:30:23.470] And it's not just governments because they have a ridiculous amount of access and influence in media, banking, business, entertainment. I mean it's got to the point as a business you can't just make a product, you can't just innovate and create a nice product and sell a great product to enthusiastic consumers anymore. Oh no. You have to take a stand on Twitter about legislation that you haven't even read and don't know anything about. You have to express fake outrage about things.   [00:30:51.020] You got to go and say, oh we're going to hire all pensexual eskimos for our board of directors and train employees. We're going to stand down. We're going to train employees to speak a bunch of woke newspeak. We got to teach them the newspeak language about what you can and cannot say. You can't say manhole cover anymore because that's insensitive.   [00:31:10.370] So we got to change all of our language of vocabulary. Businesses are actually adopting these things. They actually call it now stakeholder capitalism because it's not about, well we're not going to run the business for the sake of the owners anymore. Forget about the owners. Who cares about the owners of the business?   [00:31:25.450] We got to do it for the Twitter mob. That's who we got to run this business for. It's the same with entertainment. God help you if you turn on an NBA game without having just all this stuff thrust in your face. You turn on a Disney movie, you turn on whatever, it's just all these things thrust in your face.   [00:31:39.860] This is very, very far reaching influence to shape a lot of things in culture. And I kind of view this as sort of the anti philosophy. At least a lot of the Philosophs generally had reasonable ideas. Some of them were totally stupid. A lot of communists come out of the Philosoph movement, come out of these salons in France and the 1007 hundreds.   [00:32:00.590] But again, just because I think somebody's idea is reasonable doesn't mean that I think it should be force fed to an entire society. It's supposed to be a system through which great ideas trickle down and meritable ideas are actually met and adopted because they're actually debated vigorously and whether it's a representative system and people adopt. You don't just have one guy who's not been elected by a grand total of zero people, who goes, this is how the world should be, and just jams that down everybody's throat across the world. That's not a system. That's completely and totally ridiculous.   [00:32:35.480] Honestly, it's criminal. And you look at these things, the WF again, this is all just silly stuff. They're eating weeds and bugs, owning nothing, never going anywhere, tracking everybody's, individual carbon footprint being tracked, everybody getting brain implants, all this stuff. And they debate all this stuff, even it's like right now, one of the big things in this one is supposed to be whether or not people should be able to use gas stoves anymore. And so they because it's damaging the environment.   [00:33:01.860] And they all fly to Davos. There's over 1000 private jets. 1040. I saw it last council. They all fly to Davos in their private jets to decide whether or not everybody, all the peasants are allowed to use stoves, gas burning stoves and heavens anymore.   [00:33:15.890] All these things are just such stupid ideas. And it's so obviously, it's so hypocritical. There's so much corruption. And again, they just keep churning out horrible, stupid ideas. Again, this is why I consider them the anti philosophy, because they still have the same access and power.   [00:33:33.010] At least the philosophy had pretty reasonable ideas. On the balance, these guys, I mean, these are the ones that think that this progressive prosecutor movement is a great idea. Catch and release, decriminalization. You know, it's all these things that we've seen over and over again. They've done this and they've, they've gone.   [00:33:49.370] You know, this idea in San Francisco, oh, let's decriminalize shoplifting. Oh, what a surprise. Shoplifting went through the roof. Now people are closing their stores because shoplifting has been decriminalized. Who could have possibly seen that coming?   [00:34:01.090] Who could have possibly thought there would be negative consequences to decriminalizing shoplifting? In a place where the crime rates are already high? They come up with these. They love their lockdowns, they love health passports, stakeholder capitalism, all these anti competitive, anticapitalist policies and legislation. And some of the recent examples of all this, I got to actually talk about a couple of these.   [00:34:23.860] One was again, also very recently, this is the city of Washington DC. Which is one of the most dangerous cities in the world. You look at violent crime, murder rates, all the stuff. Washington DC. Ironically, obviously the capital of the United States of America, one of the most dangerous cities in the world, basically.   [00:34:42.600] The Council in Washington, DC. They get together and they decide they pass this overhaul to their criminal code. And it's all this ridiculous stuff sentence reduction, divert disposition, basically probation, taking major crimes and now shifting them to minor crimes and making them eligible for sentence reduction and making them eligible for probation. But just to give you an idea of some of the some of the really silly things that they put in this criminal code, they've got one provision, for example, where they redefine burglary. So you got third degree, second degree, and first degree burglary.   [00:35:18.620] So third degree is the lowest level of burglary. So they say, well, if somebody breaks into your home and start stealing a bunch of stuff, but you're asleep at night in your bed and you don't actually see them steal it, well, that's only third degree burglary. It's not second degree burglary unless you actually wake up in your home because somebody broke in. So if you're still asleep and you sleep through the whole incident, then it's only third degree burglary doesn't rise to the incident of second degree. And it's like, what does that have to do with anything?   [00:35:47.120] Whether somebody's asleep or not, somebody still broke into your home. Like, what does one thing have to do with the other? It is so outrageously stupid. But my favorite example of this is actually just from a couple of days ago. The Federal Trade Commission you've never heard of this in the United States is a very powerful US.   [00:36:04.550] Federal agency. Obviously, this is headed by somebody who has no executive experience whatsoever, nothing new. This has been an administration that basically they don't care if somebody knows what they're doing. They don't care about somebody's competence. They don't care about somebody's experience or whether or not they have the ability to actually run an agency.   [00:36:21.840] What do you think about running an agency? Jeez? Wouldn't you actually want somebody who has some experience running an agency? Is this really you want some, like, rookie to come in? The first time they've ever run anything is going to be this very powerful government agency?   [00:36:34.180] But no, of course not. No, we got to take somebody they basically just took some woke activist who in the WEF model, has all these ridiculous ideas and gave her an incredible amount of power to disrupt American business. That's what the FTC is able to do. And so a couple of days ago, on Wednesday, January 18, 2023, if you listen to this in the future, we'll see how this plays out. But the FTC proposed a rule to ban non compete clauses.   [00:37:03.520] Now, I got to explain to you how this works, because this actually tells you so much, I think, about the United States, how this actually works. What do you mean by rules, a rule? What does that mean? Well, the idea is that Congress passes legislation. All these Congressmen and Congress people get together and they pass legislation, and in the legislation, they authorize certain things.   [00:37:24.610] They say, okay, well, the Federal Trade Commission is allowed to do X, Y and Z. But what happens is that these executive agencies, they look at that, they take some obscure passage because you look at legislation that's like 600 pages, and they go and they find like ten words in that 600 pages, they do a very creative read of that language. And they go, oh, well, this this phrase right here authorizes me to do whatever crazy stuff. And we've seen that over and over again. The CDC did this.   [00:37:54.920] The CDC is, oh, this law that was passed 50 years ago, in the 1970s, because this couple of words in this language that says that I have the authority to take over the entire housing market. And you're like what? No, you don't. There's nothing in the law that says that you can take over the housing market. But this is what the CDC tried to do.   [00:38:14.370] If you remember this, in 2021, the head of the CDC said, oh, I'm common, I'm taking control of the entire US. Housing market. Then they had to go and get sued, and the Supreme Court had to come in and say, no, you can't do that. That's not what the law says. Supreme Court has said over and over again that Congress should speak clearly about what an executive agency has the authority to do.   [00:38:34.440] But of course, Congress generally fails to do that. They don't speak very clearly in their legislation, and the agencies take plenty of creative license. All these federal agencies, they go and they read some obscure passage of a law that was passed decades ago, and they said, oh, because of this phrase, I can do this, right? And so when they do that, they go, okay, this is my authority to do whatever. And then they go and they publish something and they say, we're going to create a rule.   [00:38:58.770] We're going to create a rule. And the rule, because it has this interpretation they have of the legislation, the rules they create basically have the same weight and effect as the law. It totally bypasses congress. And I like, Congress says, this is what you can do. These agencies just create their own rules, and the rules have the same weight and effect as the law.   [00:39:17.910] And again, CDC taking over the housing market, nationwide, vaccine mandates, all these things were basically the same process where some executive agency or even up to the President of the United States said, oh, this legislation was passed, therefore I can do this. No, actually you can't. But they often take lawsuits. People have to go and sue the government in order to get the Supreme Court to come and say, no, you can't do that. And so now what's happened is the FTC has said, oh, well, there's this law that was passed a long time ago, and because of this, like, little tiny phrase in this law, I have the authority to do this.   [00:39:54.180] And so this new rule that they're creating is saying, we think non competes are bad, and so we want to ban them. And it's actually crazy when you think about it. Non competes are actually a very normal thing in business. You got a company that hires an employee, then obviously they're going to invest quite a lot in the employee to train the employee, get the employee up to speed, give the employee access to all kinds of things in the business. And it's only fair that the company said, look, we're going to invest a lot in you.   [00:40:21.660] And so in exchange for that, if you want to quit, you can quit. But you can't take that investment that we're making in you and go and shop it to the highest bidder in the labor market. That's not really fair for us. And so let's both of us give up something. We will give up the investment in you, and you give up the ability to go out and shop yourself around to our competitors using what you learned from us.   [00:40:43.460] That's the whole point of a non compete. It's two willing counterparties. A willing employee signs it, a willing employer signs it. Both of them agree to give something up. That's how deals are made.   [00:40:52.430] And you've got two willing counterparties signing a non compete. But according to the FTC, this is hurting the economy. It's crazy because these are the same people who, months ago, last year, really, when gas prices really started going up, the FTC said, they came out and said, oh, the reason that gas prices are going up is because of greed, right? And they decided and this is you know, the President of the United States was doubling down on this, and he was giving these ridiculous speeches saying, oh, the reason the gas price is going up is because these big companies are buying up small mom and pop gas stations. There's no more mom and pop gas stations.   [00:41:30.580] That's why gaspers. Go, oh, okay. So the last line of defense in rising gas prices was Joe and Rita's corner gas station on the side of the highway. That's what was keeping inflation at bay. And now these guys are getting bought up and now that gas price is going it's completely ridiculous.   [00:41:46.460] They have no concept of how their own policies are completely destroying the economy and the energy market and so forth. They have absolutely no idea. And so now, once again, they decided, they actually put this in their rule and they've given speeches about it. They said the economy is weakening because of non compete clauses. Non compete clauses.   [00:42:07.530] Clearly, the US. Economy is not weakening. It has nothing to do with terrible bureaucracy, has nothing to do with energy killing legislation or all their anti competitive rulemaking, or their constant threats against critical industries, especially the energy industry. Massive deficit spending, all their monetary policy, the inflation they've created, the complete and total incompetence at governing has nothing to do with it. They've cracked the code.   [00:42:29.790] They've cracked the code. The reason why the US economy is slowing down is because of non compete clauses. They nailed it. They nailed it and now they're going to create a rule. They're going to create a rule even though they don't have the authority to do so.   [00:42:45.200] They believe they have the authority. They read this obscure passage in some legislation and said oh because of this we have the authority. So now we're going to basically just get rid of non competes which when you think about it, there's so many non competes that already exist. And so that what are you doing? You're just undoing contracts.   [00:43:01.700] You have a contract that exists and this single executive agency saying oh those contracts don't exist anymore. What happened to the rule of law? You can't do that. If the contract is going to be voided at least it has to go to court. I mean, who do these people think they are?   [00:43:16.660] But this is literally their thinking is that the economy is weak because of non competes. Therefore we're just going to do away with the entire rule of law in the United States and get rid of non competes. This is insanity but it's WEF thinking at its highest, right? This is the kind of stuff that comes out of these organizations, the influence they have in government. Again with this just forget about the rule of law, forget about economic growth, forget about any of these things.   [00:43:46.790] Like we're just going to do whatever we want. We're going to have this fanaticism. And again this is the kind of thing it's very pervasive at the WF and all that sort of related satellite institutions. This is an organization. Again it started as a conference.   [00:44:01.590] Now it's a virus. It's a virus of incompetence power control, corruption, narcissism and just pure fantasy. Fantasy. All these just academic fantasy. People come up with these crazy ideas and go oh I'm right.   [00:44:16.290] And again the idea that it's non competes that are hurting the US economy which is an idea that has no rational basis whatsoever, but they inject this virus into the world, into national governments and again these ideas fail over and over and over again. What a surprise. What a surprise. Oh what a surprise that you locked everybody down and now all of a sudden we've got this crazy inflation and economy is faltering. What a surprise.   [00:44:44.800] You decriminalize shoplifting. Who could have predicted what a bad idea that would have been? And now you got all these people at Davos in Switzerland at their annual meeting and they're all howling and whining and crying about the sorry state of the world which is pretty ironic but it's like well wait a minute. You're the people that came up with all these ideas and now everything is a crisis. It's actually hilarious.   [00:45:07.180] You see these guys on stage and they're crying about the climate crisis and the planet crisis but no, it's a justice crisis. But it's also a safety crisis. And I'm actually going to play you a little clip here just so you can see it for yourself. It's absolutely hilarious. I'm going to give you a little clip here right now.   [00:45:24.970] We couldn't meet at a more challenging time. We are confronted with so many crisis simultaneously. This is a planetary crisis. This is a safety crisis. But above all, it is also a justice crisis.   [00:45:44.580] And also our faith leaders, they know that this crisis is much more than physical. And sometimes we are faced with these kind of challenges. It is better to take today decisions that will eventually be not popular, but it will be essential to be able to shape the public opinion itself. And when you stop and think about it, it's pretty extraordinary that we select group of human beings because of whatever touched us at some point in our lives, are able to sit in a room and come together and actually talk about saving the planet. That last voice, of course, was John Kerry.   [00:46:30.830] You might have recognized that. John Kerry US Climate Envoy former Presidential Candidate back in I think it was about 2004, former US senator I think he expresses that sentiment better. We select people. We're all touched by something and now we're in this room saving the world. I mean, the arrogance and the narcissism to come together.   [00:46:52.840] I mean, we're special people or the special abilities saving the world. Who do you think you are?   [00:47:02.870] It really is comically arrogant. And it's the kind of thing before that you had the UN Secretary General talk about, oh, we got it. We're going to do things that are unpopular. So we just got to influence public opinion. So forget about the people.   [00:47:15.210] Forget about what the people want. We're going to do it anyways because we know better and they're just a bunch of stupid peasants. Then you had this lady that was dressed up like she was auditioning for Harry Potter movie and it's just crisis, crisis, this crisis. It's that crisis. I mean, they make it so hard to take them seriously.   [00:47:33.540] And I guess that's really the good news is that nobody is taking them seriously. Not anymore. They're talking, but nobody's listening because the World Economic Forum and all these similar good idea type agencies, they've just burned through their credibility. There's an old saying most people probably heard of. The idea is that you can fool some of the people all the time and all the people some of the time, but you can't fool all the people all the time.   [00:47:57.740] This is often misattributed to Abraham Lincoln. Ironically, it was actually first expressed in a similar way, not exactly word for word, but in a similar way by an early philosoph, one of the early philosophy. Before that, they got crazy egos and decided that they should be able to tell everybody how to live their lives. This is a guy in the late 1600s name was Jacques Abadi. It was later republished by Denise Diderot in 1754.   [00:48:18.910] But that's kind of the origin of it and I think it's true. I think really you can absolutely fool a lot of people for a long time, but you can't keep that up. You can't continue fooling even a majority of people indefinitely until the end of time. And we're already seeing this. We see this in a lot of the just the numbers that the historic levels of mistrust.   [00:48:40.930] Nobody trusts the media, nobody trusts the government, nobody trusts the banks, nobody trusts the big corporations and nobody trusts the WEF either. They're not fooling anyone. People are really starting to get it. They're really starting to get it. And we can see this.   [00:48:52.730] I mean, last summer in the city of San Francisco, they had a recall election because crime in San Francisco was skyrocketing. And one of the big contributors of that was this local prosecutor, one of these guys who was installed by one of the kingpins of the W. EF. George Soros, who installed this game, going around funding all these progressive prosecutors. Again, not a conspiracy theory.   [00:49:15.240] Soros is the guy, he fully admits to spending a ton of money to fund these progressive prosecutors who are the people that will refuse to prosecute a lot of crime because they think it's wrong and it's not in line with their woke doctrine. So here's this guy and crime is skyrocketing and he's not doing anything about it. And people got fed up. And this is in San Francisco. This is one of the wokeest places in the country and people threw this guy out on his ass and by a wide margin of victory they threw this guy out and they put in another prosecutor, somebody that was actually willing to prosecute crime, right?   [00:49:49.740] So these are the sorts of things we're seeing this over and over and over again. People even in the wokeest places are waking up going, no. These results, nice idea, nice thought in theory, but the results don't match. And as much as I hate to say it with full pun intended, COVID was a real shot in the arm that at first they had a lot of people convinced that the world was coming to an end and we were all going to die and all this sort of stuff. And little by little people believe that.   [00:50:21.290] And little by little even the most diehard people started to realize that they had the wool pulled over their eyes, that oh, wait a minute, a lot of things that the experts are saying isn't true. They keep moving the goalpost that, oh, two more weeks and one more this and two more that and where this? Oh, now it's three masks, two mass. And eventually everybody started realizing, wait a minute, this is just getting ridiculous. This is getting ridiculous.   [00:50:40.190] And little by little the trust and confidence and a lot of this expert advice really started to fade. People aren't fooled anymore, and that's really good news, honestly. And I think that we're going to continue to see more and more of that. That loss of credibility is so obvious. And one of the things that I think is actually hilarious about the World Economic Forum, there's so many people calling them out now saying, like, would you guys just stop already?   [00:51:02.320] Would you just shut up already? But two of the people that are saying this actually come from talking about opposite ends of the spectrum. On one hand, you've got Ron DeSantis, governor of Florida and probably presidential contender coming up, saying the WEF, they just need to shut up already. I mean, they think that there are lords and masters and that we're all just medieval serfs, and they just need to stop. And on the other end of the spectrum, if you got Greta Thunberg saying the WF is dangerous and destructive, they pretend that they care about the climate and then they go and they fly in on their private jets and they do all these terrible things for the climate.   [00:51:37.480] And so they're worthless and they shouldn't be listened to. Rhonda Santos and Greta Thunberg apparently agree on at least exactly one thing, and that is the WEF is absolutely stupid and nobody should listen to them. So that pretty much tells you everything you need to know about the WEF and how much credibility they're losing from all ends of the political spectrum. Now, having said all that, I think it would be silly to suppose there aren't any kind of threats to the individual freedom. Of course there are.   [00:52:03.660] There are always going to be people. There always have been and there always will be people who think just like John Kerry, we've all been touched by something. We're the select people always going to be people like that, who want to control how you live your life, how you earn a living, how you put food on the table for your kids, how you can educate your kids, even the basics of whether or not you're able to use a stove in your own house, and whether or not that's okay. And there are always going to be people like that who think it's their honorable burden to be able to tell everybody else what to do and that they and they alone can solve the problems, even though that they refuse to acknowledge that they had a hand in creating and they're just waiting for the opportunity to strike. And we saw this during COVID and all of a sudden you had this crazy emergency, and these crusaders came in and took control of everybody's lives.   [00:52:49.720] And of course, there are things like that that happen. And that old daughter saying, you never want to waste a good crisis. One of the guys who said that was Rahm Emanuel, who ended up coming there, Chicago, and was at the time President Obama's chief of. Staff is you never want to waste a good crisis because it's a great opportunity to get your agenda passed and all these things. And of course, there are a lot of people just waiting for that opportunity.   [00:53:12.190] And so, of course, it makes sense to take steps to safeguard your freedom. I believe that if you don't care about your freedom, nobody else will. Nobody else is going to take care of it for you, right? You can occasionally count on maybe somebody in the Supreme Court dismantling some idiotic government decree, some stupid rule that gets struck down by a court or something like that. But for the most part, you've got to take care of your freedom because nobody else is either.   [00:53:38.070] And it's not just some silly idea freedom, this sort of intangible, lofty idea. It's a real thing we're talking about really. Instead of freedom, which almost sounds hokey, we're talking about just your ability to decide for yourself, to have control over the things that you do in your life. Really important, almost sacred things again, how you're able to educate your kids, how you're able to earn a living, what you're allowed to do and not do, and what you can and cannot put in your body, or what you have to do. These things.   [00:54:07.680] If nobody cares, nobody else is going to care about that more than you. And there's not going to be most people not standing up for you and your personal freedom. And so it certainly makes sense to take certain steps to safeguard that because we've had way too many closed calls and really crossed the line too many times over the last several years. One of the things that I would say is that even when it seems the whole world is moving in a certain trend, whatever, it's actually not true. The whole world does not move together in a single direction, a single trend.   [00:54:35.420] Every country is different. Cities are different states, provinces are different. People move differently at different speeds, different directions. And it's important to remember that. And this is sort of the reason why I advocate for geographical diversification.   [00:54:49.830] It's this old concept of just not having all of your eggs in one basket. If you live in a place and everything in your life is in this one place, this one, literally, this one city in this one state, in this one country, it's where you bank. It's where you do business, it's where you generate your income. It's where everything in your entire life and livelihood, et cetera, is located. You've really put all your eggs in one basket?   [00:55:11.010] Since different cities, states, provinces, countries don't all move in the same direction at the same pace at the same time, it's easy. It's a great idea to diversify geographically because you can go and do things in different places. And just little examples in my case, I've talked about this a lot, but this is the reason why, you know, for my first child. She was born last year. My wife and I decided we were going to have the baby in Mexico.   [00:55:36.180] And the reason why we went to Cancun is because at the time, it was still kind of a lot of COVID hysteria all over the world. And we wanted to be at a place we wanted to give birth in a place where COVID didn't matter, where COVID wasn't going to factor in to our daily lives or the birth of our kid. And we went to Cancun and it was great. It was great. And that was an example of in a way, geographical diversification.   [00:55:58.220] We went to a different place because not every place in the world had the same kind of hysteria and there was really very little hysteria where we were in Mexico. We saw this not too long ago, if you remember, the WEF Youth Leadership alumni alumnus Justin Trudeau, prime Minister of Canada started closing bank accounts for all these people that supported the protesters, the Freedom convoy. If you remember that, you start closing people's bank accounts if you dared be part of the convoy, if you dared give money to the convoy. They were closing people's bank accounts. Now isn't that a reason enough to say, well jeez, maybe we shouldn't have bank accounts and put all of our money, maybe we should have some emergency cash stashed away somewhere else in another place, maybe in another country, maybe outside the financial system.   [00:56:40.740] I mean it's a huge argument, frankly, in favor of crypto, in favor of distributed ledger technology, just to be able to have some money in a place that these people can't control. It's a kind of geographical diversification, taking steps to reduce your taxes, completely legal steps to reduce your taxes. Why, if these people are so destructive, why would you voluntarily give them the maximum amount of money? It certainly makes a lot more sense to minimize that. I'll pay you what I'm supposed to pay you, but it's going to be the minimum amount that I'm supposed to pay you no more.   [00:57:14.360] And hey, look, if you have a change of heart, you can always just send them a donation later. You can always cut them a check. The US treasury Department actually does accept donations. Ironically, if you want, the treasury department accepts donations and you can actually say, I want this specific donation to go to pay down the national debt. So if you think the debt is a problem, you can donate money to pay down the national debt and you can do that while minimizing your taxes.   [00:57:36.200] And anything else you can choose to give specifically to the cause, to that specific cause of your choice and you're the one that's in control. So all these are just things like I said you can do to safeguard your freedom. There's so many different options. I mean really so many different options, so many different permutations. If you want to learn more about that.   [00:57:54.170] We talk about this stuff all the time, so you can visit our website@sovereignman.com. But this is really, I think, the concept in general, the WEF and all these sort of related organizations, this is nothing new. We've seen this over and over again throughout history where you get these incredibly arrogant, incredibly narcissistic people who think they've got it all figured out and everybody else is just a stupid peasant. And they're the enlightened ones who know, and they should have the responsibility to tell us all how we should live. And they have a lot of access to government, and they can get a lot of their policies passed through.   [00:58:23.120] Now, the WF is one of those. Today they've made a complete and total clown of themselves. Nobody takes them seriously anymore because a lot of people really are starting to wake up. But it certainly makes sense to take some of these threats seriously, because we've had too many closed calls over the years. And if you're not looking out for your freedom, you can't expect anybody else to either.   [00:58:41.100] And we're talking about really the ability for you to make your own decisions, about how to live your own life, how to raise your kids, how to earn your own income, what to do, what you can and cannot put in your body. You should be in control over those decisions, certainly not some government. And even though the WEF has made a clown of itself, it certainly makes sense to at least use some tactics, like geographical or international diversification to enhance your ability to make your own decisions, to enhance your freedom. It really makes a lot of sense. There's very, very little downside to doing that.   [01:01:45.890] So I think we'll go ahead and stop there. I want to really thank you again for your time and attention, and we'll speak again next week.   Close Podcast Transcription

By the third century AD, it was hard to imagine Rome being in worse condition. Historians literally refer to this period in Roman history as the Crisis of the Third Century. And it was brutal. Roman citizens couldn’t believe what they were experiencing… it was incomprehensible to them that their fatherland had become so weakened. Inflation was running rampant. The Empire was stuck in a quagmire of foreign wars and had suffered some humiliating defeats. Rome experienced multiple bad pandemics, coupled with even worse government response. Foreign invaders were flooding across their borders on a daily basis. Trade broke down, causing shortages in many vital goods. And terrible social strife dominated people’s daily lives. Ordinary Roman citizens were at each other’s throats, and it was a time of disunity and outrage. One contemporary writer of the era named Cyprian described the situation as follows: “The World itself… testifies to its own declines by giving manifold concrete evidence of the process of decay… There is a decrease and deficiency in the field, of sailors on the sea, of soldiers in the barracks, of honesty in the marketplace, of justice in court, of concord in friendship, of skill in technique…” Cyprian wasn’t just describing Rome’s obvious decline. Rather, his summary is an indictment of Rome’s inability to stop it’s decline. Everyone in the imperial government knew what was happening in Rome. They simply lacked the ability to do anything about it. Historian Arnold Toynbee called this the “Challenge and Response” effect… and it’s an interesting idea. The concept is that every society has to deal with certain challenges; if the challenges are too great, the society will not survive… i.e. the desert is too harsh, the tundra is too frozen, etc. But sometimes a society becomes so decadent, so prosperous, that it loses its ability to address challenges. It no longer has the social capital necessary— unity of purpose, the ability to compromise, the capacity to engage in rational debate. That is the position where Rome found itself in the 3rd century AD. And I believe the West is quickly heading in this direction. This is the subject of today’s podcast. We start out talking about Rome’s mortal enemy… and how, after more than a century, Rome emerged victorious as the lone superpower in the Mediterannean. Everything was great, and peace and prosperity reigned for more than 200 years. But over that time, the decadence set in. Wheras once Romans had valued hard work, freedom, and unity of purpose, their entire value system changed. People expected, then demanded, to be taken care of by the state. Corruption became commonplace.The bureaucracy multiplied. Social conflict soared. And eventually Rome lost the ability to meet its challenges. I make a lot of historical parallels to our modern world, including some specific examples of absurdities which occurred just in the last couple of days. But I also discuss why, in the end, these conditions actually create unique opportunity for creative, hard working, talented people. You can listen to the podcast here. Download Transcription as PDF Open Podcast Transcription [00:00:01.290] Today we're going to go back in time nearly 3000 years ago to the year 821 BC. To a city called Tyre, which is located in modern day Lebanon. Now, I want to give you an appreciation for just how old Tyre is, because if we go back to 821 BC, tire had already existed for nearly 2000 years prior to that. That's basically the the difference between us and Julius Caesar, right? So that's how old Tyre is.   [00:00:29.050] That even nearly 3000 years ago, it was already nearly 2000 years old. So that's an old, old city. And again, it still exists today. It's got a population of around 200,000 people. This is a real city today, located again on the Mediterranean and modern day Lebanon thousands of years ago.   [00:00:46.110] It was a city state, a major city state, probably the most dominant city stated part of a civilization back then known as the Phoenicians. A lot of people know the name Phoenicians. Some people don't know really all that much about them. The Phoenicians were a really important ancient culture. They predate the classical Greeks and a lot of the more famous ancient civilizations that people know about and have heard of, the Romans, et cetera.   [00:01:09.360] But the Phoenicians were a really important ancient culture. They were organized similarly really to how the Greeks would be organized later on. The Greeks hundreds and hundreds of years later would come around. They would organize themselves as city states, right? You had Athens and you had Sparta and all these different citystates across Greece.   [00:01:26.900] And there was no real imperial center, so to speak, around these independent city states with a common language and certain cultural traits. They were all Greek, they spoke the same language. And it was similar with the Phoenicians. There were different Phoenician city states, but there wasn't like an imperial government that lord it over all the rest. But certainly some that were more powerful than others entire was a really powerful city state.   [00:01:49.830] Among all these other Phoenician city states that were in and around the Mediterranean at the time. The Phoenicians were known to be incredible traders. In addition to being great traders, they were actually seafaring traders. They were great shipbuilders. They had a very powerful fleets and would go around and establish trading posts and even colonies all over the Mediterranean.   [00:02:11.300] And they were legendary for this. And there were ancient historians who wrote again later, again, just to give you context of how old the civilization is, there was an ancient Roman historian, his name is Straybo. And Straybo came a thousand years after the Phoenicians. And he wrote that the Phoenicians had established hundreds of colonies and trading posts. Now that was probably an exaggeration, but the point is that the Phoenicians, they were pretty big deal.   [00:02:35.140] They were among the first real seafaring explorers and they did put colonies and trading posts all over the place. And Tire was one of the most prominent city states of all the Phoenician city states. So much so, that for a while the Mediterranean was actually known as the Tyrann Sea, after the city state of Tyre in this Phoenician civilization. So they were a pretty big deal. And in the year 821 BC, the king of Tyra's name was Baton, the first baton I died.   [00:03:05.300] He had ruled for nine years and he died. He passed away. And before his death, he had named his two children. There was his son named Pygmalion, and his daughter, who was called Alisa. And Alisa and Pygmalion were determined to co rule together according to their father's wishes.   [00:03:22.220] And the king passed away. But of course, his son cheated his sister. Pygmalion cheated Alisa out of control. And basically Pygmalion, the brother, took control of the city state. He even killed her husband.   [00:03:34.920] And so here's now Alisa, who's left with no power, no husband, no inheritance, nothing, and her brother's, murderous thug, who's on the rampage. And so she flees, she leaves Phoenicia and she gets on a boat, takes some people with her and goes to this far flung trading outpost. And it takes her quite some time, but over a period of several years, she's sailing away to North Africa. Basically, she lands in modern day Tunisia eventually, where a few years later, in 814 BC, she founds one of the most famous cities that would become in the ancient world. They needed a name for their new city and so they literally called it New City, which you probably never heard of, like New City.   [00:04:20.610] I've never heard of that. Well, actually you have, because the words in their native Phoenician language were Cart for new and Hodge for city. So Cart hajj. Or as we call it, Carthage. So Carthage was founded in 814 BC by this Phoenician princess, basically, who had to flee her murderous brother.   [00:04:41.200] And there were so many legends about the founding, this according to Roman mythology, and again, this came around centuries and centuries later, that the Trojan hero Aneus, who fled Troy with some of the survivors, and he at some point arrives to Carthage. This is sort of like an odyssey type adventure, if you've never read Virgil's the Anea. He arrives to Carthage where he and Elisa fall in love. But then the Roman god, the messenger god Mercury, sends a message to Ana and he says, no, you have to leave. You can't stay here in Carthage.   [00:05:14.620] You have to leave, you've got to go and found Rome. This is your destiny. You can't stay here with this woman. And so he leaves and at least it becomes inconsolable. She's depressed and despondent.   [00:05:24.800] She lost her true love and so she kills herself, but not before threatening that her people, the Carthaginians and Anais's people who would become the Romans, would eventually go to war and have this big conflict, which of course ended up happening over time, Carthage really became a major power, an empire really in its own right? And by a couple hundred years later, really by the 500s BC, carthage was, was really one of the dominant powers in the in when I say the known world, I'm I'm talking about really the Mediterranean. There's a lot of civilization going on in, in India and China and Japan and all sorts of different places around the world. But we're talking really about European western civilization right now. They are really, really dominant power.   [00:06:05.240] And you had basically the 500, you had the Greeks that were in the eastern Mediterranean and you had the Carthaginians in the western Mediterranean. And this was actually at a time that Carthage had become a far greater power than its original Phoenicia, which is again sort of near modern day Lebanon Phoenicia. At that point it sort of encountered and subordinated itself to the growing Persian empire. Carthage was a pretty safe distance away. They said, well, we don't really have to worry about the Persians so we can continue to grow because we're way out here to the west and the Persians are way out to the east and so we're just going to keep doing our thing.   [00:06:40.110] And they had a lot of wealth, they had the ability to do that, they had significant agricultural wealth. We talked about that before in the ancient world, how agriculture was really everything. It was so important and it wasn't just they were growing food and sure, growing food was important. They figured out how to grow food and they grew so much food that they could use the surplus to trade with other tribes and kingdoms and civilizations. But agriculture wasn't just about food.   [00:07:05.420] It was also the ways that they grew industrial commodities. They could grow papyrus for paper, to write things, all these different commodities that they would use to actually make and produce things reeds, which were they make baskets to transport things, different tools and equipment, all these things they literally grew out of the ground. So agriculture was not just for food, but it was a major industrial part of their economy. And on top of that, in the area where Carthage is located, they also had significant mineral wealth as well, because mining was something that was very well known to the ancients. And at this time, the Bronze Age, the Iron Age was well upon them and people were experimenting with all sorts of metallurgy and different technologies and so the Carthaginians had all of that at their fingertips.   [00:07:51.680] So even to this day actually that still exists, that North Africa actually has really tremendous, and to be honest, largely untapped agricultural and mineral riches. Morocco, which is really in the same area right next to Tunisia, very near ancient Carthage, is home to the largest phosphate reserves in the world, which is actually one of the most important elements in agricultural fertilizer. There's incredible land and the weather and the water and so forth. So this is actually an area with quite a lot of potential as it was in the ancient world as well. Carthage continued to grow.   [00:08:23.570] It developed its own culture, developed its own language. They ended up calling it Punic. And this is kind of an interesting thing. I always find it fascinating, the development of languages and how languages really grow and take off on their own. It starts off everybody speaking their native Phoenician, but over time, because now, if you think about it, everybody sailed away from Phoenicia.   [00:08:43.900] Now you got a handful of people, and they're all basically, as far as they're concerned, they're on the other side of the planet from Phoenicia, because now they're in Tunisia versus modern day Tunisia versus modern day Lebanon. To them, that might as well have been another galaxy. And so they didn't have the same contact with the Phoenicians. And so when you have these people, now they're isolated together. They're isolated together.   [00:09:06.100] And so over time, people start speaking differently, their accent changes a little bit, and because they don't have the constant reinforcement of, oh, that's how the Phoenicians talk, right? Because now they're isolated, so they don't actually know. They don't have native Phoenicians coming, saying, no, this is how you pronounce this word, and that's how you pronounce that word. And this is the word that we use for that. Basically, a language sort of takes off and evolves on its own because it doesn't have the same native influence.   [00:09:30.490] And so it becomes different. On top of that, you have the influx of other cultures and other languages, because now the Carthaginians, they're way out in the eastern Mediterranean, they're in North Africa, they're trading with all these different African tribes. They're trading in Hispania, they're trading in Italy, they're trading in all these places. And they're picking up different parts of language, they're picking up different pronunciations, so forth. All those things fuse together and essentially create a new language.   [00:09:55.540] It's certainly at least a new dialect. This is something that's actually very, very common throughout history, even the English language. It's actually fascinating when you think about the development of the English language. It started with kind of a Germanic frizzian that meshed together with old Celtic and Norse and so forth, as the Angles and the Saxons moved into Britannia after Rome. And then the Vikings came in, and then the French came in in 1066 with Will and the Conquer.   [00:10:21.530] And so English. So you have Celtic and Frizzian and old Norse and French all sort of mixing together with different pronunciations, so forth. Then eventually you have English, you have this completely separate and distinct language. And it's fascinating. And this is actually what ended up happening in Carthage as well.   [00:10:38.270] They developed their own very strong, distinct culture and language and so forth. And that made a lot of sense given how much exposure they had to other cultures and peoples at the time. And again, they were very advanced. They had their own technology advances in agriculture, advances in shipbuilding. And the Carthaginians were an interesting bunch, like the Phoenicians, they were far more interested in trade than in warfare.   [00:11:02.280] And they were actually quite accomplished diplomats. They would go around and sign treaties with people. They say, Why do we want to go to war? War is expensive. Let's trade.   [00:11:09.340] That's a lot better deal for everybody. Let's just create value, and I'll give you what we have in surplus, you give us what you have in surplus, and we'll all become wealthier. And isn't that better than trying to kill each other? Yeah, it actually does seem like it's a pretty good idea. And they would actually go around and sign agreements and trade treaties and so forth.   [00:11:26.080] Again, this is thousands of years ago, in fact, in 509 BC. And it's incredible that we know a lot of these dates. In 509 BC. They actually signed one very particular commercial agreement with a fairly small kingdom on the Italian peninsula that had actually just overthrown its kings and had started an experiment with a new form of government called republicanism. And of course, this kingdom was called Rome.   [00:11:51.320] And they signed a treaty with Rome. They said, hey, okay, you guys will trade over there, we'll trade over here. We can do some things together from time to time, and we'll have a nice relationship with each other that goes back to 509 BC. Carthage and Rome actually kind of being a little bit friendly with each other. And this is the way of the world.   [00:12:10.250] At the time, you had in the, in the eastern Mediterranean, you had the Greeks, and they were fighting the Persians again. Decades later, we had the Battle of Thermopoly and the Greeks and Persians going to war with each other. But in the west, you've got the western Mediterranean, tunisia, Morocco, Hispania, Italy, you've got Carthage. In Rome, they just kept growing. They just kept growing.   [00:12:31.080] And of course, we know what happens here, that you've got two powers that are growing, that are wealthy, and eventually it's not going to take a rocket scientist to figure out that eventually these two are going to come into conflict with one another. And it happened. It happened. They called them the Punic Wars, and there were multiple conflicts. The first major conflict, the first Punic War, started in 264 BC.   [00:12:52.210] So this is now hundreds of years after the founding of Carthage, hundreds of years after the founding of Rome, after Rome becomes a republic, this is still in the republican era of Rome, when Rome is a republic, before the empire. And when the war started, like a lot of wars, especially wars between two great powers, it started for completely idiotic reasons. There were basically a couple of knuckleheads who went around stirring up trouble and both sides sort of got hought into it and say, oh, well, if we don't do something then the other guy is going to think we're weak. And then the other guys go, oh well, if we don't do something then they're going to think we're weak. And so they end up something that starts off as a nothing.   [00:13:30.800] And it just escalated and escalated and escalated until they finally said, all right, we're going to war. And again, they had no real reason to go to war. And they were trading and everything was fine, but it's just a couple of knuckleheads did some stupid stuff and it just cooler heads did not prevail. And these two major powers went to war, 264 BC. Probably at the time.   [00:13:51.500] Nobody thought, well, this is going to last a really long time, this is going to be a terrible war, this is going to be really costly. They thought, oh, we'll get in and out and it'll be quick, we'll bloody their nose and then we'll stop the war. But no, this lasted a long time. Lasted a really, really long time. The first Punic war lasted decades.   [00:14:06.870] Both sides suffered major losses. Ultimately the Romans won and that was one of the clear signs that Rome was an ascendance and can't be trifled with. But it was a very costly victory. It was a costly victory for both sides and they had a period of peace. But again, a few decades later, they went to war yet again.   [00:14:23.810] It was sort of like World War I and then there was some period of peace and then they had World War II, same Germany in the US and the UK. They all go to war again for the second time. Same thing. This is what happened with Rome and Carthage. And it was the Second Punic War that was the one that was really terrifying.   [00:14:39.920] That's the really famous Hannibal comes over the Alps with the elephants and he crushed the Romans. Hannibal was probably one of the greatest generals in all of human history. There is one battle in particular which I've written about before, the Battle of Cannae, which is one of the most stunning military victories in all of world military history. Just a stunning military victory for Hannibal. And at the time, the Romans were so vanquished they thought, this is it, we're done.   [00:15:10.130] It was that close to Rome, basically just becoming a client state of Carthage at that point. I mean, the Romans were danger close to losing it all. And you can imagine what would have happened, I mean, if, if the Romans hadn't finally been able to defeat the Carthaginians and defeat Hannibal. Most people probably at this point in time in history, would not have even ever heard of Rome. You know, Carthage would be the thing on everybody's minds.   [00:15:33.940] When we think about ancient history, we talk about the Carthaginian Empire and not the Roman Empire. So it came really, really close to that. But the Romans pulled out a victory in the Second Puny corps. Took them 17 years, but they finally pulled out a victory. But they all knew.   [00:15:47.310] The Senate got together and said, that was way too close, we almost lost it. We almost lost it. And at that point, nobody even remembered. Wait a minute, what was this stupid conflict over to begin with? Nobody even remembered.   [00:16:01.770] But it didn't matter because at that point, oh, did they hate the Carthaginians. Carthage was their mortal enemy and they wanted it destroyed. There was a famous senator or Roman statesman, his name was Cato the Elder, and this was a guy who used to go he would deliver these fiery speeches on the floor of the Senate in ancient Rome and used to end all of his speeches. It didn't really matter what he was saying, it was like this joke. And he would end everything he was saying, all of his speeches by saying, and Carthage must be destroyed.   [00:16:27.530] It became a known statement in Latin. And this was basically the sentiment of the politicians, of the people. Everybody said, Carthage is our moral enemy. Nobody even remembered why. But it didn't matter.   [00:16:40.240] We just have to destroy them because we came way too close to being destroyed ourselves. And so it finally happened. It took until 146 BC. Now that we have now we're in the third and final of the so called Punic Wars between Rome and Carthage. And again, it went in Rome's favor.   [00:16:57.510] But at that point, Rome wasn't messing around anymore. They said, you know what, we're going and we're just going to burn it to the ground. And Rome at that point was the clear power and the defeat over Carthage was total. So they completely destroyed the city, they burned everything. And again, in tradition of great empires, they rebuilt it from scratch, they burned it down and then they rebuilt it, which is sort of like how the US goes and bombs countries to smithereens and then spends a bunch of money rebuilding them.   [00:17:25.150] So the Romans basically did the same thing. That whole approach to international diplomacy and geopolitics is nothing new. The Romans did the same thing and they built actually a very nice prominent city on exactly the same site as ancient Carthage. So now we're in 146 BC. And just imagine, if you will imagine the joy, imagine the excitement on the streets of Rome.   [00:17:50.850] It must have been like you've seen those victory photos from World War II, like in Manhattan, they're in Times Square and people just women randomly kissing soldiers and sailors and all of that. Everybody's just so happy. Ticker tape parades everywhere, all this.   [00:18:09.050] If you're old enough to remember the fall of the Berlin Wall, pink Floyd shows up, they do a concert there. Roger Waters doing a concert on Where the Wall Fell. It's just excitement, people uncorking champagne and all this stuff. It's just happiness. It's happiness.   [00:18:26.090] Your mortal enemy has been defeated and everybody's just jumps on the peace train and is super happy and excited and life gets pretty good and life gets a lot easier, right? There's no more conflict, no more enemy, no more competition, no more antagonism, no more fear, no more any of these things that we can just live our lives and be happy and we don't have to worry about. I'm going to have to go to war, which obviously has a lot of personal implications for people. When you think about back then, some guy living on the farm who's tending to his farm, and he's got to go and fight for 17 years, I mean, that's going to have a lot of implications on you and your family and all of that, and you don't have to do that anymore, right? And so it's like a big party now.   [00:19:06.910] Everybody's happy. And so what happens? Well, the inevitable happens. This is where Rome sort of enters it's sort of fat and lazy stage, right? Everybody's happy, everybody's excited.   [00:19:19.020] And suddenly life just became really, really easy. Life became so much easier. Rome was the undisputed dominant superpower in the known world at this point. Again, Greece is finished. The Persians are finished.   [00:19:33.660] The carthaginians are finished. It is 100% Rome and nothing else.   [00:19:41.290] You could imagine probably a really great time to be part of the Roman Empire because things were really easy, but at the same time, their standards and morals and work ethic and everything started to shift because for really centuries prior to that, you've got a place that was founded on these ideals of republicanism. When everybody's contributing, there's this unity of purpose. We have a common enemy. We have this common threat that we've all got to chip in, and there's a sense of shared sacrifice, and everybody's working towards a common goal, and everybody's got to be everybody's got to be on their A game. Everybody's got to be contributing.   [00:20:17.980] Everybody's got to be giving the best in order for the society to thrive and the civilization to flourish. And suddenly all that's taken away, right? And so suddenly it's just a sense of wealth and decadence and do whatever you want, and it doesn't matter, and it's all fine, and we're rich and we're wealthy and we're Romans and everything's great. And this is really where the decline starts to set in. It takes a very long time, but this is where the decline really starts.   [00:20:45.320] And there were contemporary writers at the time who who did actually they wrote about this extensively. There was a Roman historian. His name was Titus Livius. He's known as as Livi. He lived about 100 years after the burning and the destruction of Carthage.   [00:21:00.860] He lived during the time he was he was a teenager when Julius Caesar was assassinated. He was an adult when Augustus became emperor, who's actually quite close with Augustus, with the emperor, the first emperor of Rome. And Livi wrote constantly about the degeneration of society, the loosening of social values and morals. He wrote about, quote, the gradual relaxation of discipline. He wrote about morals that, quote, sank lower and lower.   [00:21:26.650] He wrote about the downward plunge and complained about everything from excessive sexual license infidelity people turning away from their gods and all these things. Even that just changed fashion, hairstyles, excessive jewelry and makeup. There was a great deal of narcissism people dressing up, showing off wealth, wanting to make sure everybody else could see how great their life was. You could just imagine what it would have been like if the ancient Romans had had instagram. I mean, it would have basically been honestly very similar to a lot of things that we see today.   [00:22:01.800] This constant showiness which was honestly really different than the old traditional conservative values that the Republic of Rome had been founded on, where everybody's working hard. It's not about you. It's not about, oh, look at me, I'm so great. Look, it's about all of us. It's about the republic as a whole, and all of us benefiting all of us.   [00:22:24.530] And this is just a major, major shift in values. And there are a lot of people, including Livi, including even the emperor himself, that realized this. Augustus, actually, as emperor, tried to sort of decree his way back to Roman morality. He passed all these laws and said, well, women can't wear as much jewelry anymore, and all these sorts of sumptuary laws and so forth, but it didn't really matter. Social values continued to shift, and all these things continued, honestly, for hundreds of years.   [00:22:53.140] And we're sort of encapsulating centuries and center. We start off in the eight hundreds BC. Now we're talking about what is famously known in Roman history, is the crisis of the third century. This is the third century. Eighty s of the two hundreds.   [00:23:09.050] There was a writer who was one of the first real Christian writers. Now, Christianity is about 200 years old at this point, and there was a guy still wasn't the official religion of Rome. Christians had been persecuted in Rome, so it was kind of a dangerous time to be a Christian. There was a guy, his name was Saint Cyprian. He became a saint later on, and he was a bishop who actually was, ironically, from Carthage.   [00:23:31.690] And so maybe he had a little bit of an axe to grind and maybe didn't quite like Rome as much, but he was Carthaginian. He was actually a Berber descent, and he was a bishop. Writing in the third century Ad. In the third century. This is known as the crisis of the third century in Rome, where everything just went down.   [00:23:50.220] It was a terrible, terrible time. They had inflation and they had rebellions and civil war and famines and all sorts. It was a terrible, terrible time. I mean, if you compare it to that fat and happy period after the fall of Carthage excuse me. In the first century BC.   [00:24:07.230] And in the first century Ad. By the time you get to the third century Ad. Rome is a horrible place to be. It's a terrible, terrible place to be. And St.   [00:24:15.730] Cyprian, he writes, quote, there is a decrease in deficiency of farmers in the field, of sailors on the sea, of soldiers in the barracks, of honesty in the marketplace, of justice in the court of concord, in friendship, of skill, in technique, of strictness and morals. So he's basically summing up what he sees as here's what's going on. Right? And everything that he can see in Rome, whether it's people doing business with each other in the marketplace instead of honest people doing business with each other in good faith. Obviously, everybody's trying to make money but doing business with each other in good faith.   [00:24:51.840] Everybody's just ripping each other off. Everybody's lying and stealing and ripping each other off. Instead of actual justice in the court, there's no rule of law. It's bribery and corruption instead of skill and technique. People really giving it their all and working hard.   [00:25:04.660] There's no more work ethic. Nobody cares. People just they want to be lazy. They want to sit on the on the dole anymore. And this is actually something that happened very famously in Rome.   [00:25:15.100] I mean, so many things that happen, including people just coming in from the countryside, realizing that, well, hey, that you know, this is in the early first century. People realize, well, you know, there's so much money, and the and the government starts handing out free bread and circuses and all these things, but, well, who who wants to go and work hard in the fields when they're going to give me free money? They're going to give me free food if I move into the capital city? And so what happens? Well, jeez, what a surprise.   [00:25:40.030] Suddenly there's no more labor, you know, working in the you know, working in the fields, no more people working on the farms. So you have a decline in production, all these things. And this is essentially what St. Cyprian was summing up when he said, no more skill and technique, there's no more justice in the courts. There's no more honesty in the marketplace.   [00:25:55.880] And he basically sums up what's happening in Rome and how far they had fallen. Again, this is a common theme in history. We've seen over time, numerous societies that their civilization saw significant decline after they sort of reached this peak wealth stage. They got to their fat and happy stage. They have no more mortal enemy.   [00:26:14.830] Everything's great. They're the dominant superpower. They're the dominant economy. They're wealthy. They don't have to work too hard because basically, they're just cashing checks from all the work that the previous generations put into it.   [00:26:27.280] The previous generations came in and they built this civilization, and then you got newer generations to come in and just reap all the benefits, but without making the investments to keep it going. The analogy is sort of like Venezuelan oil fields, right? You've got one of the wealthiest I mean. Really, there's more oil reserves in Venezuela than anywhere else in the world, way more than Saudi Arabia. And you've got people that came in decades ago and did the hard work to make the investments and the exploration and so forth in that.   [00:26:56.950] And then what's happened? Over time, you've got these governments that have come in and just sucked all the oil wealth out. They've taken all that oil revenue and they just dumped it on socialist programs, basically, instead of reinvesting back into the infrastructure, back into the exploration, back into the equipment and everything to keep that wealth going. No, instead they just cashed in. They just took all that money and they spent it on stuff that would keep them in powers.   [00:27:22.630] This is a common theme in history. Life becomes too easy. The wealth makes life too easy. The lack of competition, generations that fail to pass on and instill the values to the new generations. There's no more unity of purpose.   [00:27:35.240] You've got social strife because now, because you don't have that mortal enemy, you don't have the problems, you don't have to worry about, how am I going to put food on the table? How are we going to feed this civilization? How are we going to deal with these? How are we going to get water from the desert? How are we going to all these things?   [00:27:49.750] You don't have to worry about that anymore. And so basically, people start creating new problems. They start whining and complaining about every the last little thing because they don't have the same problems that they used to have. Now I got to kind of pause and say that there's often in a study of history and anthropology, people talk about a decline in morals. And I mentioned this a little bit when I was talking about, for example, some things that Livi used to write about, and he was far from alone and we didn't even see this in more recent works.   [00:28:20.350] I'd say more recent compared to we're talking about thousands of years. But Edward Gibbon, who wrote quite famously, the decline in fall of the Roman Empire, this goes back to the late 17 hundreds, but obviously it's more recent than Livy, and he wrote extensively about Roman moral decay. In fact, Gibbon sort of points to Roman moral decay as one of the critical reasons for the decline of the Roman Empire. Now, it's easy to say that. It's easy to go, oh, the morals declined, et cetera.   [00:28:47.540] But if you really look at it from a position of intellectual honesty, it's hard to put too much stock into that because across a culture, ethical standards do change over time. And this is normal. And it's not to say that one's better or worse. It's easy for us to judge and say, oh, that shift in morals was bad or good or whatever it was. But let's be honest, I mean, there have been a lot of things in Western civilization that have changed over time.   [00:29:14.360] Things that used to be completely fine, culturally, ethically fine, and today are absolutely appalling. There was a time that there's an entire scientific field where experts got together, they called it phrenology. And they used to they used to take measurements of people's cranium and and and the distance of the the ratio of the width of their forehead to the width of their nose and make certain prognostications about somebody's value as a human being. This was an actual field of science. And from a moral perspective, yeah, that's totally fine.   [00:29:46.480] There was a time that children as young as nine, five, six were getting married. There's nothing for a couple of eleven and twelve year old kids to be married today. That would be again, absolutely appalling. And so all these things do tend to change over time. So I tend to look at more, aside from morality, the more objective indications about social decline.   [00:30:08.940] And we can see this obviously in Rome very easily. We can see for example, the decline in unity. They used to have unity of purpose. They had a common enemy, a mortal threat, an existential threat to their own civilization. I mean, Hannibal was danger close to wiping Rome off the map.   [00:30:27.050] I mean, if that doesn't unite people and it kept them united for a very long time until finally said, we're going to get rid of these people once and for all. And they destroyed Carthage, burned it to the ground and from there we saw a decline in unity before they sacked Carthage and burned it to the ground. Revolts and civil wars and all these things in Rome were almost nonexistent really. Almost nonexistent. And then afterwards it became commonplace.   [00:30:54.140] It happened all the time. People were always people constantly whining, complaining about stuff and sometimes that ended up as armed rebellion or riots or revolutions, civil wars along the way. There were always politicians who were ready to capitalize on that. They went and they tapped into that. People that were complaining about stuff, people that were angry about stuff.   [00:31:15.850] There's always some politician ready to stoke those flames of rage just basically to get elected and hold on to power. There was also a decline in a willingness to serve. And with Rome, obviously we can see that most easily with the legionnaires that originally were units of very high morale, highly trained citizens who it was considered an honor to serve, it was considered a very noble profession. And then later on, obviously the legionnaires, they had to be bribed into service, they had to be attracted by the power and the money and so forth, rather than the actual service itself. And of course, late in the empire you couldn't even find a Roman.   [00:31:55.290] All the legionnaires, they were paid mercenaries. They were just giving out citizenship to everybody because they just couldn't find anybody to do it. And again, I already mentioned the decline in the work ethic. They had after the fall of Carthage in the final defeat of the Carthaginians, they had so much red there. Rome was swimming in money.   [00:32:11.930] They had so much money. It led to the Dole, where they could just say, oh, here everybody, come have free bread, have free games, circuses, gladiator events, all these things. And it pushed more and more people to say, hey, that sounds great. I'm not going to work in the field. That's for suckers.   [00:32:27.400] I'm going to move to the city where I can get all this free stuff. And so it pushed people to move from the countryside into the city, and what a surprise. Again, it resulted in severe labor shortages because the government is just essentially, basically paying people to not work, right? So we're leading to severe labor shortages in critical industries, productions declining, all that, because who wouldn't want to who wouldn't want to get free bread and gladiator games and circuses and all that stuff rather than working out in the field? And so all this basically points to these are all just small examples of decay.   [00:32:58.380] I mean, there have been literally volumes and volumes and volumes of books written on the decline and fall of the Roman Empire. We're certainly not going to deal with it all right here, right now, today. We all know that there was a decline. It's hard to say really, exactly here's the date that it started, but we all know that there was decline. We all know.   [00:33:16.480] It's obvious. There is a clear social decay. We can see these issues about lack of unity, lack of work ethic, lack of service, all of these things. And it happened to also coincide with a very lengthy period of time where everything was great peace, prosperity, leading to the PAX Romana in the first century Ad. With Augustus.   [00:33:34.670] And again, it's not a one way street. There were plenty of things got better, things got worse, things got better, things got worse. Augustus came in, he tried to implement certain rules, certain changes, get their house in order, et cetera, but the trend was starting to go in a very, very clear direction, and that was social decay, and that led to a lot of problems. Now, there's a 20th century historian guy, you might have heard the name, his name was Arnold Toynbee. He wrote a book.   [00:34:05.550] Probably his biggest work was called the Study of History. It's it's quite an interesting word. It's controversial for some of the things that he, that he wrote, things that were acceptable to say in the 19, you know, early 19 hundreds that, you know, you just wouldn't say today. And a lot of things, obviously, that have been just totally debunked is silly. But one of the things that Toynbee wrote, there's actually a very interesting idea, is something that he called the Challenge and Response Effect, or challenge and response theory.   [00:34:32.000] And the idea behind the challenge and Response effect is that if a civilization experiences challenges that are simply too great, it's just not going to survive. A civilization in the harshest conditions. The desert is too barren, the tundra is too frozen, the challenge is simply too great. It's just not going to survive. And that makes sense, right?   [00:34:54.100] But similarly, and this is the interesting point is that if a civilization is too successful, if it goes unchallenged, a society often falls into this excessive decadence period. It reduces unity, reduces productivity, reduces efficiency, reduces service. And because of that, they essentially get to that fat and happy lazy stage where they suddenly lose the skills to be able to deal with challenges. There's a certain sweet spot in the middle where as a society, you still have the eye of the tiger. You still have a little bit of hunger to grow and produce and earn and become better.   [00:35:35.280] And because of that, you have the ability still to deal with challenges. But eventually you get so consumed with your own wealth, the decadence and so forth, that you lose the ability to actually meet challenges head on. You just sort of assume that, well, we're so great. We're going to be able to deal with whatever comes. It doesn't even matter.   [00:35:52.450] We're not even going to think about it. There's another anthropologist, a guy named Joseph Tainter, wrote a really wonderful book back in the late 80s called The Collapse of Complex Civilizations. Tainter is a very great thinker, and he borrowed a concept from economics known as diminishing returns. The idea behind diminishing returns in economics is that eventually, as you kind of say, you invest more and more and more into something. Well, eventually the return that you get from that, every new dollar that you invest, you're going to get less and less and less out of it.   [00:36:26.380] And if you think about that from a cultural, governance, social perspective, the idea is that as new challenges arise, a wealthy, decadent, successful society just says, we're, we're so rich, we're just going to keep throwing money at this problem. We're going to keep throwing more and more resources at this problem because we have so much money and we have so much, so many resources, we're just going to keep throwing money at this problem. But there's no efficiency left in it, right? Because nobody's paying attention. Nobody really cares.   [00:36:55.800] They lost the ability to focus. They lost the ability to intelligently and rationally solve problems. And so the more and more money they throw at it, they get less and less return on that money they're throwing at the problem. In order to solve problems, they balloon the size of government because they can afford to do so. But then making the government bigger, creating this vast bureaucracy, it doesn't actually solve the problem.   [00:37:17.290] So then they go and solve the other problem by say, oh, now we need to make government even bigger and bigger and bigger. And so this is the concept really, of diminishing returns is that the more they try and solve the problem, the more effort and resources they put into it, the less solution, really they get out of it. And in a way, it also represents diminishing returns when you reach that point. It also represents a fundamental shift away from the values on which the society was founded. And again, this is normal.   [00:37:48.240] We could see it everywhere. We can see it in, you know, even perhaps in our personal lives. We can see it in business. You know, there's a certain set of values, for example, for a startup, that once they become this huge multibillion dollar enterprise, they turn into this big, giant bureaucracy, right? And so these are the sorts of things that do happen, and it happens in societies and governance as well.   [00:38:08.500] But Rome obviously became its most successful era, became successful. All the stuff that it needed to be successful and be wealthy happened and was built during its Republican era, right? And then it was only after the Republican era, they invanquished Carthage, they built all this wealth, and then all of a sudden they say, oh, then they became an empire, and they built this huge bureaucracy. And it was the corruption and the decline of the rule of law and the decline in social cohesion and all these things. And obviously, at that point, they had reached a point of diminishing returns where now they go, oh, jeez, we got real problems now.   [00:38:42.730] We got to just keep throwing money at it. Let's keep expanding the size of government, let's keep expanding the bureaucracy. But they're not actually getting anything out of all of that. They're not actually solving any problems. They'd reached a point where they were simply incapable of rising to the challenge and fixing their problems.   [00:38:58.170] So I think it's you can probably tell where I'm going with this. I think it's pretty obvious that the west is becoming this way. And look, it's easy if we're talking about moral decay, again, I don't put a lot of stock on that. It's easy to use some of those words. It's easy to say moral decay or soft and weak and all these sorts of things.   [00:39:16.290] And to be honest, I think everybody probably has. We see stuff on a regular basis. You look just casual glance at the headlines, and you can just see stuff that goes, oh, my God. It just makes you scratch your head, shake your head, and go, just for real, just personally, I saw one just the other day I saw in the Wall Street Journal, we see, we already know. I mean, for example, just record high childhood obesity rates.   [00:39:44.090] The CDC's numbers say the average, you know, among children's, 20% of children are obese, and then another 20 some odd percent above that are overweight. And now the American Academy of Pediatrics is recommending quite an aggressive stance, an aggressive protocol to start medicating overweight children. So basically, if children are overweight, if children are obese, even on the way to being obese, they say, Give them a pill. Start giving this medication. And I'm thinking, well, that just doesn't sum up the US healthcare system.   [00:40:20.260] God forbid we say, well, let's actually just encourage healthy eating and go out and get some freaking exercise. No, instead, let's take a pill. Let's take a pill. Let's pump them full of drugs. And I mean all this like, well, what a surprise.   [00:40:33.600] Again, you have a whole generation of kids, we told, stay home, cower in fear. There's a virus on the loose. Don't go outside. Don't play with your friends. Don't do any of these things because there's a virus.   [00:40:43.560] Now you got a bunch of fat kids, and what's the solution? Give them drugs, give them a pill. This is a real thing. And you got to look at them and go, are you serious? Talk about a crazy departure of values.   [00:40:58.910] Would this have been the case decades ago? No way. Would this have been the case decades ago? But this is what it is now. And of course, it just doesn't end.   [00:41:08.870] I mean, everybody's got their own anecdotes. Again, the things that make you shake your head, but we've got to be intellectually honest and separate ourselves from that and say, all right, let's divorce ourselves, and saying it's weak and it's soft and all of that, because you always got to say, relative to what? If it's relative to our own past experiences. Again, this is always a funny one because it's almost like every new generation is considered weak and soft by the previous generations. I went to West Point, the military academy in the United States, and it was always kind of a joke is that every new class that comes in, when you're the freshman class, they call you plebes.   [00:41:45.720] It actually is derived from the Roman term plebian, which is what they call their peasant class in ancient Rome. And so this made its way to the military academy in the US. And so the freshman class comes in, they're called the pleebs because you're nothing. You're just nothing, and you're lower than ponds gum. And everybody always complains to go, oh, you have it so easy compared to how I had it.   [00:42:05.770] But again, when those guys were plebes, their upper class were complaining that you had it so easy. And basically every successive class is always thinking that they had it harder than everybody else, and the new guys coming in have it easier than everybody else, and it's all rather silly. And we can kind of point to certain things, go, oh, this generation is weak. But previous generations probably thought the same of our generation. And in fact, if we think about even the generation that's literally called the greatest generation was seen as soft and weak.   [00:42:35.080] The greatest generation. These are people that came of age during the Great Depression I mean, they had horrible economic circumstances. They had to go to war against the Nazis, then go back and rebuild the entire country. I mean, this is why they're called the Greatest generation. They were considered, as they were coming up as children in the 1930s, 1920s, 1930s.   [00:42:54.570] They were considered soft and weak, and everybody thought, oh my God, they're going to ruin the world. And they ended up doing pretty okay. So we have to divorce ourselves from the headlines and the anecdotes and the things that we see, and I think really focus on a little bit more objective data. But let's be honest, there's a lot of that as well. And I think some of the objective data that we can see if we think about through the lens of history and some of the things that I just explained about Rome and where they were at after the destruction of Carthage and the fat and happy and lazy stage where they were at.   [00:43:29.170] And we could see they had problems with recruiting, they had problems with labor shortages, they had problems with work ethic, they had problems with all these things. We go. Well, Jeez, today us. Military recruiting is invisible. It's horrible.   [00:43:39.260] It's basically as bad, if not worse than it was in the Vietnam post Vietnam era, where nobody wanted to be in the military, and people would go and spit on soldiers, said, you're a baby killer, and all these things. I mean, nobody wanted to be in the military. And this is basically where things are right now. And you got a huge percentage of the potential population of people who might be able to serve, not even fit for service, again, because they're obese. This childhood obesity is such a problem.   [00:44:06.100] It's actually taking people out of the potential to even serve the military, even if they want to. But of course, most people don't. And this is pretty alarming considering this is also the time that the Defense Department is pulling out all the stops. I mean, they are rolling out the red carpet. They're saying, we'll pay for college.   [00:44:23.510] They raised everybody's pay. So now you're talking about you could be a 19 year old spec four in the army making good money, good money, and have all of your college paid for and get like $40,000 in bonus money upfront to serve for a couple of years. And even then, they still can't get people to sign up because it's just obviously nobody wants to serve. And that's a problem that the Defense Department has really never actually been confronted with. They had pretty bad recruiting again, like in the early 80s, but they didn't have to bribe everybody with pull out all the stops to bribe everybody to do it.   [00:45:05.410] This is the point. They are bribing everybody and saying, please come and join the military. And they're going out on social media, they're developing video games and all this stuff, trying to go after these younger generations and they just can't get anybody to serve. We've also got similar to what we're talking about with Rome again through that lens, labor shortages in critical industries. Nobody wants to be a truck driver.   [00:45:27.170] Nobody wants to be a forklift operator. Nobody wants to be a farmer. People want to be twitch gamers. They want to post selfies of them sitting in a bikini by some body of water somewhere with some pithy idiotic one liner just showed that they're like philosophical or something like that. It's just so silly.   [00:45:47.250] And on top of that, you've got these terms now that are sort of made their way around corporate America and HR circles. These things like quiet quitting, for example. Quiet quitting, if you haven't heard that term, basically refers to somebody saying, I'm going to do the bare minimum that's just going to make sure I don't get fired. I'm not going to try, I'm not going to do anything above and beyond what's going to make sure that I don't get fired in my job. And I mean you talk about just a clear and distinct lack of motivation, lack of productivity, lack of efficiency, and this is this major movement that younger people are just saying, yeah, this is what we want to do.   [00:46:24.990] And I'll have something to say about that a little bit later because a lot of people go, I don't get paid to do this and say, well hold your horses, let's talk about that for a minute because I have a different perspective. But all this kind of takes me back to and I've quoted this a couple of times john Adams, the second president, the United States at what point in a letter to his wife Abigail. And I'm just paraphrasing here but he wrote, I must study politics and war so that my sons may study science and mathematics so that their sons have the liberty to study art and literature. And of course now we've taken that too so that their great great grandchildren can major in gender studies, rack up $100,000 in student debt only to have it forgiven by the federal government, live in your parent's basement and play video games on Twitch. That's pretty much where things have gone to and you sort of look back and go, well, there were a lot of sacrifices and investments and hard work that was made by previous generations that have come.   [00:47:19.890] And you're in a position where as the dominant superpower, you're not really reinvesting in that the dominant superpower, the society is really just sort of reaping the benefits of all that hard work and eventually that's a finite amount of value that you can extract from your tradition and eventually you just run out. We can see these as well in legislative and policy priorities. We see, oh, let's decriminalize shoplifting in California. Let's go into these catch and release, no bail. Let's take some violent criminal and just turn them right back out on the street because what could possibly go wrong?   [00:47:58.700] Let's cower in fear from a virus and shut down the economy and pay people to not work, and let's just turn a blind eye to a border where anybody can walk across and go live under a bridge in San Antonio. Meanwhile, unvaccinated foreigners cannot legally enter the United States because they're terrible people, but everybody else can come in illegally, and that's totally fine. Universal basic income is like a real thing, and it has a lot of legs where we just again, let's pay people to not work and just do whatever they want in life and just enjoy life and have free money. But even despite all of that, and that's just a tiny snapshot of real things that are indicative of trends that are unfolding, I think that the one that's the most concerning is the disunity. The lack of unity is so concerning.   [00:48:48.980] And we can see this again. Objective data trust is at such lows that even congress nobody's ever liked congress, and presidential approval ratings ebb and flow. But even in once esteemed and venerated institutions like the supreme court used to be, people said, oh, I hate congress, but I still have confidence in the supreme court. I still trust the department of justice. I still have confidence in the military.   [00:49:12.570] Even these once esteemed institutions have seen their trust levels plummet, and that's a big concern. Corporations, big tech, the government itself, the united nations, the media, et cetera. I mean, all this stuff. People just don't have trust and confidence in their institutions. This is a big deal.   [00:49:30.790] We can also see the social divisions that are just palpable. I mean, you can feel it, whether it's online, it's in the streets, it's the fistfights at the airport. I mean, people just something goes wrong and people become unglued. This snafu with the airline technology system, which, what a surprise, it's crappy technology. They're using outdated technology and these airlines and causing all these delays and cancellations, and people went nuts, went nuts.   [00:50:00.280] And we've just seen this. It's become commonplace. People just getting in brawls at an airport terminal, on an airplane itself. It's just these sorts of things. You go, this is not a cohesive society.   [00:50:12.510] And all along the way, you've got these politicians that stand ready to capitalize on the divisions rather than say, whoa, chill out, everybody, come on, this is silly. Let's not do this. Let's be grown ups. Let's talk about our differences. No, they stand ready to capitalize, continue to widen those lines, to widen those chasms.   [00:50:32.750] You notice when they talk, everything's always a fight. Everything's always a fight. We have to fight for this. We're going to fight for that. We're going to discuss this.   [00:50:41.470] We're going to compromise. We're going to respectfully listen to people's opinions, and we're going to come up with a sensible solution that we think works for everybody, that's in the best interest of the nation. It's never that. It's always, we're going to fight and we're going to capitalize on these divisions and so forth. And honestly, it is disgusting.   [00:50:57.670] It is so disgusting to see. But again, there is plenty of historical precedent for this. This is nothing new.   [00:51:09.030] Again, predictions are hard, especially about the future. But I think from what I see from a historical perspective, we may potentially be past the point where it's possible it can be healed. It's just a question over what period of time. I say that objectively. I'm not betting on it.   [00:51:28.270] I'm not certainly advocating for it. It's not what I prefer. I prefer a completely different scenario where people are happy and a lot more unified and people get along and can actually discuss things rationally. But COVID was a prime example. Maybe I'll start from the historical perspective.   [00:51:46.670] It got to the point in Rome where the disunity, again, was so palpable that when the barbarians invaded, they were greeted as liberated if people were happy, said, thank God the barbarians are here so they can deliver us from these idiots who are governing us. I'm not saying we're there yet, but I'm saying that historically, there's a lot of precedent for that. And I think COVID was a very interesting example because usually it's the time of crisis that does tend to unify, because now suddenly you have this common enemy and you have this thing that everybody's dealing with and suffering with, and everybody's got to chip in and share, and you set aside your differences in times like that. And COVID in theory should have been that, but it wasn't. And we won't even get into the ridiculousness of a lot of the decisions that were made and the policies, et cetera.   [00:52:33.880] But the point is that from a social perspective, there was an opportunity there to for unity to really form, and it wasn't. And maybe there's something else down the road that creates unity. But honestly, at that point, you're you're talking about a catastrophe that nobody would probably want. And so it's really a double edged sword. You have this disunity that needs a catalyst in order to heal.   [00:52:58.530] But the thing the catalyst that would heal it would probably be some major catastrophe that nobody actually wants. So it's not really a great outcome either way if you think about it from that perspective. If we go back to Toynbee and we think about all of this from, let's say we view it through the challenge and response lens, right? This all demonstrates this social dysfunction, the anger, the tirades, the politicians that are focused on, I got to tap into this chaos to get myself reelected. I got to tap into it and even strengthen, widen these social divisions because that's going to keep me in power, I'm going to get my agenda passed.   [00:53:37.250] We think about this from a challenge and response effect. It all just demonstrates a complete inability to. Be able to rise to the challenges and rationally solve problems because there is no rational problem solving. Not only is there no rational problem solving, there's no rational discussion. Somebody brings up says, I don't think we should be sending $50 billion to Ukraine without any oversight whatsoever.   [00:53:57.750] That person is shut down as a Putin lover. There are so many examples of this, you can't even have a discussion, let alone a solution. And it's funny because Toynbee wrote about this. Toybe wrote that it was a clear indication that a civilization has essentially broken down beyond all repair. And the sign is when it's the independent thinkers, the value creators, the problem solvers are silenced and marginalized by a dominant minority.   [00:54:28.320] And of course, we've seen this so many times. As one tiny example, this just happened. I bring this up because it happened a couple of days ago. There was a congressman who went on MSNBC. Obviously, MSNBC is incredibly left leaning, and he just was of the wrong ideology to go on MSNBC.   [00:54:48.690] And he said that Social Security is going to run out of money within the next decade, which is 100% true. Statement. How do we know it's true? Because the Treasury Secretary of the United States says so. The Secretary of Health and Human Services, the Secretary of labor, all these people sign their name to an annual report that says that Social Security is going to run out of money.   [00:55:09.650] The trust funds will be fully depleted basically within a decade. And it's a little bit of a moving target. Their projections change a little bit from year to year, but we're talking about pretty much a decade, maybe eight years, maybe eleven or twelve years. But somewhere in there, around a decade, Social Security is going to run out of money. And they're telling you you could pretty much circle this date on your calendar.   [00:55:30.230] And he just repeats this and says, Social Security is going to run on money. The trust funds are going to be fully depleted. The host of the show cuts him off and just this guy's trying to talk, and she just cuts him off and talks over. And so that's not true. That's not true.   [00:55:43.460] That's not true. That's not true. It is true. It is true. It's 100% true.   [00:55:49.380] It's just it's literally something that the Treasury Secretary of the United States signs her name to, puts in a written report that anybody can read. Anybody could read. This is not a conspiracy theory. It's 100% true. It's not even a political issue.   [00:56:04.500] It's an arithmetic problem. And they just put it out there for everybody to see. She said that's not true. That's not true. And so this is somebody that's just literally trying to raise a problem, trying to identify a problem for discussion, is being silenced, let alone talk about a solution, let alone actually implement a solution.   [00:56:21.250] You can't even talk about a problem without getting silenced. And again, we've seen that is one tiny example. We've seen censorship cancel culture, all this stuff. And again, it's just an indication of the inability to solve problems. We talked about these.   [00:56:41.020] I've kind of cast all of these something from a big picture I call The Forces of Decline and I say there's four forces of decline. This isn't in some anthropology book. This is just my own view on things. The way I categorize them. And I call one is the Forces of energy.   [00:56:58.950] I did a whole podcast about this where we talk about the energy return on energy invested is declining. Basically, we're not getting enough. We used to have where we would, whether drill for oil or gas or whatever, we would have to put in just a little bit of energy to get a whole lot of oil out of the ground. And that oil could provide so much energy for us. Now we've got to invest a lot of energy to get a little bit of energy out.   [00:57:21.740] And so that math, that calculus just totally upside down. It's the wrong trend. And that's actually a major force in future inflation and all sorts of things. Prosperity, you have human prosperity. Where you have cheap, inexpensive energy.   [00:57:36.070] Where you have expensive energy, you have problems. And our energy is getting more expensive. So forces of energy is a major force in decline. We also have forces of economy, debts, deficits, inflation, money printing, all these things. We talk about these things regularly.   [00:57:49.440] We also have forces of society. This is where a society eats itself from within the decay, the disunity, all these things that I've been talking about today, as well as forces of I just call them forces of history. These are the inevitable, the inevitable cyclicality, the rise, the peak, the declines of societies, of civilizations, of empires, of economies, financial markets. So many things are cyclical. We go through seasons, we go through cycles.   [00:58:17.730] And what we're really talking about today is mostly, again, forces of society, some forces of history. There's some cyclicality to this. But really talk about forces of society, again, leading to an inability to solve problems. This is not anything that anybody can really do about you. And I can't go out and suddenly get hundreds of millions of people to just chill out and say, dude, just relax.   [00:58:40.770] Let's have a rational conversation about things. And I could see some things your way and you could see some things my way. And we clearly have a problem. Let's identify we have a problem. Let's at least agree we have a problem.   [00:58:50.430] Let's talk about solutions, et cetera. But you can't really do that. Nobody can really do that. And honestly, it'll probably take decades, years at least, if not decades, to really repair and restore the trust and confidence and reinstall certain social values. Again, it's not even about morality.   [00:59:16.760] I'm not even talking about morality here. Again, I ignore that entirely. People do what they do. I don't care. It's really about some of these basic things about is there rule of law, is there the work ethic, all these things.   [00:59:28.140] You just go back to certain tradition and go, well, you don't have to be a genius to see like, well, what made the country, the society, the civilization wealthy and prosperous to begin with? Well, let's go back to that. Let's do that where people, you know, people worked hard and there wasn't a giant bloated government bureaucracy. Again, I know there's a lot of I mean, to be honest, most people probably do work really, really hard. Labor, however, is an economic resource and the more of it you have, the better off your economy is going to be.   [00:59:58.990] And when government policy is paying people to stay home and you've got a large movement of people that doesn't actually want to be in the workforce and so forth, that's going to create economic problems. Even though there are if 90% of everybody else is working their asses off and 10% of the people are being dragged along, that's going to create problems. And that's kind of where things are right now. But all of this does create really interesting and unique opportunity. This is really what I want to leave you with today.   [01:00:27.370] And I told you earlier and I talked about quiet quitting and I said I'm going to come back to this. And this is something I think that's worth mentioning. Again, the concept of quiet quitting is it's this growing movement where people say, I'm going to do the bare minimum because I don't want to do this and I'm going to do the bare minimum, make sure I don't get fired. People say things like, well, they want me to work more, they want me to work harder, but they don't pay me enough for that. They don't pay me to do this and that.   [01:00:52.370] And that may actually very well be a valid argument. Everybody's got individual circumstances and people might be in a job that they hate for a boss that they despise and get terrible pay and all these things. And sure, everybody's got to make a decision about that. But jobs are kind of interesting in that you do actually get paid in multiple ways. There's normal compensation, salary, benefits, et cetera.   [01:01:14.800] Maybe healthcare or not. You get the social benefits. You got people that you like at work and friendships that you develop and other relationships. But one of the most important things I think that's often discounted, especially among younger people, is you get paid in the learning and the knowledge and the experience. Because when you come out of school, especially even after university, you spent four years learning whatever, and then it's like you get on the job and you got to relearn everything from scratch.   [01:01:40.920] And this is really where some of the most valuable skills you learn really important things. You learn sales, you learn marketing, you learn finance, you learn whatever it is. You learn whatever a valuable skill. You learn welding, you learn how to be an electrician, you learn all these different things, really, really valuable skills. These are really valuable skills and you learn that stuff and it's interesting is because now you're getting paid to learn versus people go to people go to university and they'll go and spend they'll go and take on $100,000 in debt to end up learning almost nothing.   [01:02:12.200] And now you get a job where you're getting paid to learn something that's actually valuable. And so that dynamic, I think, is something that is really, really interesting. Now, some people might not be in a job where they're learning anything which is terrible, in which case you should absolutely consider your options and go find something where you can learn as much as you possibly can because that knowledge is so important. I've often said, and this is almost a cliche, the best investment you can ever make is the investment you make in yourself. And the way that you spend your time is so critical.   [01:02:46.600] And if you have a job, you're spending whatever 8 hours a day or more on whatever work you're doing, it should really be worth it. And you should be learning that's an investment in your time, you should be getting a significant, not diminishing returns. You should really be getting growing ample returns on that investment in your time. And if you're not, then sure, go find something else. Don't quiet quit.   [01:03:08.470] Just quit. Just quit. Don't beat around the bush, don't mess around. Just go quit and go find something that's actually going to do really well for your growth and your experience. We can learn the skills that are necessary to actually do better, to do more, or to go out and start your own damn company and do a better job than the other guys because you've learned how to do that now.   [01:03:27.720] And now your earning potential is so significant but because you actually made a conscious decision to go out and spend your time learning instead of this quiet quitting, what is that quiet quitting. You're basically making a conscious decision to go and take a third of your life and just set it on fire for an amount of pay that you even acknowledge isn't even that great. That's a horrible decision. That's a terrible, terrible, terrible decision. It pains me that this is actually becoming a popular thing among an entire generation to go, I don't quiet quitting.   [01:03:58.630] It's a terrible idea. If you're not happy with what you're doing, then stop. Life is too short. Don't mess around with it and go find something else where you can actually learn and become a better human being and use that as a springboard to set your life in the direction that you actually want to go. Instead of just being a passenger and going, well, this sucks, but I'm just going to keep doing it and spend 8 hours, a third of my life doing something that I don't like.   [01:04:20.840] It's terrible. And the larger thing behind all of this and all this is that all these things that we're talking about, you can't go and change any of these things, right? But certainly a strong work ethic is a personal choice. How we choose to spend our time, that's a personal choice. The way we invest our money, that's a personal choice in all of this because there are these problems, there are huge problems to solve.   [01:04:43.300] And again, we see labor shortages and supply chain dysfunction, all these things. It's clear and obvious, enormous problems that need to be solved. And because now there are shortages, it means that hardworking people, talented entrepreneurs, the investors who fund them have a ton of opportunity because there's very little competition. There's very little competition. If you think about, there's less competition now for hard work, for somebody that actually is willing to work hard, there's a whole lot less competition out there than there has been in decades.   [01:05:16.150] And that actually creates a lot of opportunity. It opens a lot of doors that weren't open before. If you want to start a business, there's a lot of doors that are open that weren't there before because there are so many problems and so many people go, I'm just not really going to do anything. I'm going to quiet quit instead of go out and start a business to tackle this problem. And, and it's, it's, this is, I think, a point to really look at because you can't, you cannot solve, you know, the nation's problems.   [01:05:42.240] Nobody's going to be able to go out and get hundreds of millions of people in the US. And look, these problems are similar in the UK and all places all over Europe. I mean, this is not something that is particular to any single country. These are things that are happening all over the world and nobody you can't go and just change the entire culture of your country and certainly not do it overnight, but you can absolutely make personal decisions and really just turn it upside down and realize this means that there are a lot of opportunities because there are fewer people that are willing to do the hard work. There are few people that are willing to go after these opportunities and solve these problems.   [01:06:16.810] And you know, it's, it means it's wide open. These opportunities are wide open. There is a ton of opportunity. Again, whether it's just somebody that's an employee that's just willing to work hard, there's a lot of opportunity for entrepreneurs that are willing to go and solve those problems. There are opportunities, again, investors who want to fund them, there's opportunities and I think that's really a better way to look at it.   [01:06:36.440] You can't solve these things. This train is long ago left the station. We can certainly hope for the best, but I think it's always, always, always critical to keep in mind the opportunities that are always in front of us. And there are a whole lot right now. Thanks very much for listening, and we'll speak to you again next week.   Close Podcast Transcription

By the turn of the 18th century, Great Britain was well on its way to becoming the dominant naval power of Europe. Brits had come to understand that a strong navy and merchant fleet were necessary to grow powerful and prosperous as a nation. And a mythology was already building around the Royal Navy. However all was not rainbows and buttercups. In 1796, the Royal Navy lost control of the Mediterranean. And in 1797, despite several victories, including repelling a French invasion of the British Isles, the navy also suffered two mutinies. And the threat of French invasion persisted. It was amid this backdrop that a young poet named Samuel Taylor Coleridge wrote The Rime of the Ancient Mariner. In it, a mariner is cursed to wander the earth telling his story about his grave error of killing an albatross which had led his ship out of icy, mist-shrouded seas. One of the most famous lines occurs as the ship is stuck in a silent and motionless sea, with stagnant air which refuses to fill the sails: “Water, water, every where, And all the boards did shrink; Water, water, every where, Nor any drop to drink.” The ship had drifted into what is known as the doldrums. This is the area between the distinct trade winds systems of the northern and southern hemispheres. Trade winds easily carry ships across the ocean; you can just sit back and let nature do the work. In the doldrums, conversely, the sea is silent and winds still. You can’t move forward, and you can’t go back. It’s not immediately dangerous, like a storm. But it is extremely dangerous to be stuck, with dwindling supplies, just waiting for a catalyst. (In Coleridge’s poem, the men were despondent, depressed, and constantly expecting disaster.) As we enter 2023, this is essentially the psychological condition of most of the world. In the US, for example, there’s no major cataclysm; the job market still seems to be fine, and inflation has ticked down ever so slightly. But everyone seems to be braced for something much worse to come; businesses have started to freeze hiring, and some are laying off workers. They are conserving cash, and not being very aggressive with innovation or investment. Economic activity has declined, as everyone holds their breath waiting for a recession. And these conditions can actually cause a recession, because it is expectation driven. This behavior is also driven by the endless chorus of “experts” predicting the future. Of course, no one can predict the future. And it is doubly absurd to take the word of “experts” who have been so extremely wrong about everything… For example, central banks and Treasury officials who failed to predict the dot-com bubble, sub-prime loan housing bust, 2008 Global Financial Crisis, sovereign debt crises, inflation, and supply chain problems… are among the leading voices making economic predictions for 2023. Does anyone actually still take these people seriously??? It’s more important than ever to decide for yourself how to react to the current conditions. This is the subject of today’s podcast— having the independence of mind to reject the experts and take back control, in light of the abundance of opportunity that truly exists today. You can listen to the podcast here. Download Transcription as PDF Open Podcast Transcription [00:00:01.370] Today we're going to go back in time to Sunday, March 30 in the year 1519. It was Easter Sunday, and on that day, a group of imperial emissaries from the Aztec empire arrived to what is today the modern day Mexico and the city of Veracruz on the Caribbean coast. And they arrived there. They traveled a great distance from their capital city of Tenochtan and arrived arrived to meet foreign visitors that had arrived. They'd heard that these foreigners were there and arrived to the shore.   [00:00:30.110] And of course, we know that the visitors were in fact Spanish invaders led by Ernan Cortez. Now the emissaries, the head emissary was a guy named tendel. He was relatively high ranking official in the Aztec imperial government. And the first approach to the emissaries was to greet the Spanish with kindness and generosity. They came bearing gifts.   [00:00:50.340] And according to the account, there was a Spanish soldier who was part of that mission. His name was Bernal Diaz de Castillo. And de Castillo's account that he wrote down later on was that the Aztecs arrived with fowl and mice cakes and plums, which happened to be in season at the time, baked fish, jewels. He said, quote, many articles of gold, beautifully and richly worked, ten loads of white cloth made of cotton and feathers. I mean, they really rolled out the red carpet for the Spaniards and they came with these lavish gifts.   [00:01:20.180] And the Spanish obviously took the gifts and were very grateful and thankful. And in exchange, Cortez gave them some beads. The Aztecs, you can imagine, got these beads. They just given them gold and jewels and food and all these fine cloths that they got some beads. And the Aztecs were probably these are diplomats, so they probably accept them gracefully and politely, but we're rather unimpressed.   [00:01:43.560] They said, jeez, we really roll out the red carpet for these guys. This is all they have to offer. Now, Ten Deal, again the head of the emissary, of the Aztec emissary, you also had with him scribes and painters and so forth. And their job was to catalog everything they saw. They obviously didn't have photographers at the time.   [00:02:01.210] They couldn't take pictures, but they had painters. And so the Aztec painters sat there and they set up their equipment and they drew, they painted images so that they could take back to the emperor and show the emperor, these are the people that are here. This is what they have. It wasn't art, it was military intelligence. And they were painting the ships and the armor and the weapons.   [00:02:24.840] And as Ten Deal was communicating back and forth with Cortez, you might be wondering, how do these people even communicate? It's not like Cortez would speak to navel or these people spoke Spanish. How they even communicate? It actually turned out to be a stroke of luck. The Spanish had been in the region for for quite some time.   [00:02:42.340] Obviously, we know Columbus sailed in 1492, the Spanish had set up a base in in the island of Hispaniola, which is part of basically comprises the Dominican Republic and Haiti today. They'd set up a base in Hispaniola back in 1493, big island in the Caribbean. And since then, so that had been 26 years prior. And over that period, they'd established bases of operations and outposts in the region. They'd establish outposts in Cuba and Panama, Puerto Rico, all sorts of places in the region.   [00:03:13.640] So by 1519, the Spanish definitely had a pretty good foothold in the region, and they were conducting trade missions and exploration missions all throughout basically the Caribbean coast and northern Latin America. And the Caribbean coast of Latin America. There was one expedition that had taken place years before, and there was a guy that basically was shipwreck, and most of the Spanish that were on board perished in the wreck, or they were taken as prisoners and sacrificed by the local Mayans. And there was a guy named Haranimo de Aguilar, and Aguilar had been shipwrecked with this group, but he was captured, and his life was spared. He escaped and was recaptured and escaped, recaptured.   [00:03:59.380] And anyways, he ended up spending eight years in captivity with the local Mayans. At the time, the Mayans were on the Caribbean coast of Mexico, and he spent eight years in captivity, and he learned the Mayan, the Yucatec language at the same time. But he was obviously he was a native Spanish speaker as well. So he was a Spanish guy that spoke the Yucatec language. Well, the Aztecs were a different group.   [00:04:22.710] Their native language wasn't the Yucatec language. They spoke something called Nawato, and Cortez just happened to have also in his vast entourage, he had been given a slave girl who was actually a native Nawato, native Aztec, basically, and her name was Maladzin, and Malanzin had been enslaved. She was Aztec. She spoke Nawatl, but she had been enslaved by the Mayan, so she also spoke Yuatec. So basically, the way that they would communicate is the Aztecs would speak Nawato to Malanzin, and Malanzin would speak Mayan, Yukate to Aguilar, and Aguilar would then translate that into Spanish to Cortez.   [00:05:02.260] So Cortez to Aguilar to Malin, zinn to the Aztecs, and then back through that chain, you can imagine, perhaps there was quite a bit that was lost in translation, but again, they were able to communicate enough. And Cortez, they received the gifts, gave the beads, all these things, and he told the envoys, he told the emissary, he said, Look, I want to meet the emperor. And the reason why is he said, look, he told one of the most ridiculous lies in history. He said, My men and I suffer from a disease. We have a disease, a very special particular disease of the heart, in fact.   [00:05:37.960] And we we need we need our cure. And the only thing that can cure us is gold. We have to have gold. Gold is our medicine, and if we get more gold and we'll be able to cure ourselves with this particular disease of the heart. And so he asked them, because they had already received as part of the gifts, they received this very nice gold.   [00:05:56.140] The Aztecs had a lot of gold. And in addition to that, they were excellent gold goldsmiths. They were gold workers. They could take the gold and turn in very fine jewelry and statuettes and so forth. And he basically said, look, is there more gold?   [00:06:07.240] We need this gold for our medical we have a medical condition, right? So we need more gold for our medical condition. And is there more gold? They said, yeah, there's more gold. And Cortez says, Great.   [00:06:15.830] I really want to see the emperor then. And they said, Hold your horses, hold your horses. To them, Cortez was coming from Spain. And at the time, the emperor, the king of Spain was Charles. At the time.   [00:06:29.970] This was Charles V of the Holy Roman Empire. Basically, this was probably the most powerful European ruler in history. Certainly ruled over more of Europe than any other quasi modern medieval Renaissance European rule. He came from the Habsburg family. He had holdings in Spain and Austria and the Netherlands, almost everything you could imagine in Western Europe, except for France.   [00:06:52.090] They had this big, gaping hole in France, and everything else was Charles V. So this guy was to Cortez, Charles the Fifth might as well have been his king, might as well have been emperor of the universe. But the Aztecs had never heard of him. Charles the fifth. Who is Charles the Fifth?   [00:07:07.360] For them, like, all they know is their emperor, and they thought that their emperor was basically a god. And so for Cortez to ask, I want to see the Aztec emperor. No, you can talk to us. You can talk to us. You're not going to see the emperor just yet.   [00:07:23.390] But we'll take your beads. Thanks very much for your beads. You enjoy all these gifts, all this food that we brought, all these 9th claws, all the gold, all that stuff, and we'll go and we'll take back your request about your heart condition, okay? And we're going to go back to the emperor and we'll see. And on the way out the door, cortez decided he really wanted to make an impression.   [00:07:43.980] So he put on a big show. He went to his guy and said, I want to load all the gunpowder we have. I want to fire all the cannons. I want to make a huge noise. I want to have the horses.   [00:07:54.860] They brought horses with them. And of course, the Aztecs never seen horses before. I want to bring the horses onto the beach. I want them galloping all over the place. They put little bells on the horses so they could see the thundering hooves of the horses and bells ringing and cannons firing and all these things to put on this big spectacle so that the painters would be painting all this furiously, and they'd all take it back to the Emperor and show the Emperor, look at what these people are.   [00:08:17.620] These people are serious. They've got technology that we've never seen. They look like people we've never seen. They've got armor, they've got swords that are made of this substance we've never seen. The Aztecs, they used wood for most things.   [00:08:30.210] They weren't really great with iron and steel and these sorts of things, but the Spanish had mastered all of that and Cortez knew it, and he wanted to put on this big show and so they did. And the Aztecs went back to the Emperor, all the way back to what is today to Narcticlon, which is today Mexico City, to see their emperor. And of course, this is the famous Makda Zuma, which Mactazuma, this is why it's usually pronounced that the Mexicans referred as Makda zuma in the US. And the English speaking world is often called Montezuma. Same person.   [00:09:05.820] Anyways, he was in his early fifty s at the time. He'd been on the throne for about two decades and was an interesting guy. He gets a bum rap in history. A lot of historians, especially over the last previously to now, and modern historians have given him a little bit of a kinder and gentler view. If you go back and look at what 19th century, 18th century historians had to say about Mactazuma, they said he was weak, he was a dope, he was indecisive, he was a total idiot.   [00:09:34.350] Modern historians have been a little bit kinder to his tenure, but even at that point, by 1519, mactazuma had been on the throne for quite some time, roughly nearly two decades. But he'd had a difficult rain. He'd had to deal with drought and famine and other kind of natural disasters. There was flooding, all sorts of things that had taken place. And he had also engaged in a lot of really unpopular policies.   [00:09:58.200] And to sort of cap it all off, he decided he wanted to build this vast palace, obviously funded by all the people, I mean, bigger than anybody he had ever seen. When you're already kind of unpopular, doing things that are unpopular, and you're going to go and spend everybody's money on this huge palace for yourself, it's not exactly going to ingratiate you to the people. And on top of that, he was waging war with his neighbors. And sure, the Aztec empire was expanding, but they were expanding to other tribes and other people who didn't even speak the same language. So these people were getting, you know, they were under the thumb of the Aztecs.   [00:10:33.300] They didn't particularly like the Aztecs. Some of them actually hated the Aztecs. And he had to suppress rebellions from all these different territories. So it was not this sort of Augustine PAX, Romana warm and fuzzy rain for Maktezuma. He had a pretty difficult time.   [00:10:49.940] It wasn't all bad, but it wasn't rainbows and buttercups. And by the time Cortez arrived in 1519, again, he'd been on the throne for, you know, 1520 years. And within the Aztec empire, there were deep seeds of of conflict, internal conflict, and the empire was kind of starting to come apart from within. In a way, it was kind of like the barbarians coming into Italy. And you talk about in the four hundreds of Rome, when Rome was such a disaster at that point that people, the peasants in the countryside were welcoming the barbarians, said, yes, please, just get rid of these idiots in Rome.   [00:11:27.780] Were we're so tired of. Even at that point, the the capital of the Roman empire wasn't even in the city of Rome anymore. That's how much Rome had disintegrated. It wasn't that bad in the Aztec empire, but there were a lot of internal seeds of conflict and people that were just honestly, there were people that looked at the Spaniards as saying, hey, these people can save us from these Aztecs who we hate so much. And there was actually cortez was able to find a great deal of cooperation with some of the enemies of the Aztec across Mexico as they march across the countryside.   [00:11:57.900] And so this was sort of the snapshot of what was going on in 1519 when Cortez arrived to get these emissaries that show up. They give you gold, they give you food, they give you all these nice things. You give them beads, you tell them this lie and say, oh, we're suffering, we have a disease, and we need gold in order to cure our disease. They say, okay, yeah, okay, fine, we'll go back, but you're not going to see the emperor. We'll go back, we'll have a talk, and we'll come back to you and we'll figure it out.   [00:12:23.280] And so, at a certain point now mockedazuma, he's not stupid. He knows his grip on power. He's had a fairly difficult time. He had to deal with all these issues over the past 1520 years. He knew his grip on power was somewhat tenuous, at least.   [00:12:39.380] And as a result, he had relied quite heavily on his advisors to steer his administration and make decisions for him and advise him on all these things. He just couldn't make a decision by himself. He had all these people to kind of tell him what to do. He had all these high ranking nobles. They were his official advisors.   [00:12:55.710] And, of course, the high priests, the seers, the diviners, the soothsayers that were there, and Aztec rituals. There were a lot of things, quite sadly, about the Aztec culture that were destroyed. The Spanish cortez himself ordered the wanton, devastating destruction of the entire Aztec culture and civilization. But there are some things, quite a lot of information that has been passed down to us. And we know a lot of the things they did, the different rituals that they had again the high priests and the soothsayerse that would do things like they would cast grains of corn into the air or cast them onto their holy almanacs and various books in order to foretell the future.   [00:13:38.050] They took mushroom. A lot of mushrooms grew around the region. They took mushrooms, which were psychotropic hallucinogenic substances, and they would have visions and tell the future. They would gaze into mirrors, different rock mirrors, often made of obsidian. They would do sometimes we would look and go, really?   [00:13:53.130] That's ridiculous. They would take a mirror. They would strap it to the head of a bird and have the bird fly around with this mirror on its head, and they would gaze into the mirror that strap to the head of a bird and then say, oh, this is what's going to happen in the future. They would interpret the movements of animals as a sign of things to come. Sometimes they would just literally roll some ice.   [00:14:10.830] And of course, there was always the ritual of blood sacrifice, and based on the way the blood fell and now it's splattered and so forth, they would say, this is going to happen, or that's going to happen. But with all these rituals, which for them was science, they totally failed, completely failed to predict the arrival of the Spanish. And Maktuzuma was furious. And according to later on, this was a Spanish priest who wrote all this down and kind of went and interviewed people and so forth. So according to this guy, later on, what everybody said, mactuzuma said he grabbed all these sous there's together and really just ripped them a new one in public, in front of the whole court.   [00:14:47.920] And he said, this is the quote. Now, this is the quote from the Spanish priest that published this a couple of decades later. So you got to take it with a grain of salt. But it's a great quote. It's a great quote.   [00:14:58.040] This is MACTA Zuma chewing out his south sares. He says, quote, It is your position to be deceivers tricksters, to pretend to be men of science, and to forecast that which will take place in the future. Deceiving everyone by saying that you know what will happen in the world, but everything is a lie. It is all pretense. He was furious.   [00:15:20.530] He was furious because he looked at this and he said, God, this could be. Look at these people. He's looking at these images of guns and cannons and horses with their little bells. You could just imagine horses with their little bells running on the beach with cannons going off. And they didn't predict any of this.   [00:15:38.060] And Maktazuma is furious, and he said, you're all full of it. You pretend to be men of science, and you pretend that you have this knowledge of the future, but it's all a lie. It's all a lie. And he called bullshit on his high priests and his experts, who are supposed to be able to predict the future. And of course, this is nothing that's unique to the Aztec culture and civilization.   [00:16:03.160] This has been the case throughout human history. We can go back thousands of years in human history. We can go back to the Babylonians and the Sumerians and the Judaeans and the Greeks oracles, and this has been a common, common thing throughout human history. The sears, the experts, the people that proclaim to have a special knowledge and the ability to foretell the future. And even obviously to this day, we have our Soothsayer classes, the expert class that claims in some degree to be able to predict the future.   [00:16:34.820] Now, of course, it's not blood sacrifice and psychotropic drugs. Instead, they're using complex mathematical models and they call them forecasts. But in both cases it is really quite an extraordinary hubris because even though they call them forecasts and it's all based on math and science and so forth, they claim they're right because they're the experts. They have the fancy degrees and all that. And by comparison, you're nothing.   [00:17:04.470] You're just an intellectual peasant by comparison.   [00:17:10.310] It was that same mentality back then, just again as mock to Zuma. He was chewing everybody out. He was saying, you pretend to be men of science that you know, and you deceive everyone, saying that you know what will happen, but it's all a lie. It's all pretense. Now, obviously, I'm not talking about Isaac Newton, Albert Einstein, and the real scientists.   [00:17:27.910] I'm talking about in people that are actually coming up with the laws and the theories and determining how the universe actually works. They're not making predictions about the future. Real science isn't necessarily about making predictions about the future. I'm talking about the quote unquote science, really pseudoscience that seems to claim to make predictions about the future and tongue, cheek examples, not science. But I mean, anybody watches Sports, you see these guys on the weekends of the pregame show and they all make their predictions about who's going to win the game and all of a sudden they're like hilariously wrong.   [00:17:58.090] These are the guys that are hall of Fame coaches and players that know the game better than everybody else, and they're all hilariously wrong. I mean, they just get it wrong over and over and over again. It's all in good fun. But they're experts, clearly. Experts that are trying to predict the future and they're hilariously wrong week after week after week.   [00:18:15.380] But in terms of again, that's all a joke. It's all in good fun. But there's real stuff out there and we know obvious examples. The science of climate change is a big example. And I always have to caveat this before anybody wants to jump down my throat.   [00:18:30.620] Feel free to jump down my throat anyways, but just to have the information. I'm very pro environment. I like clean air, I like clean water, I like taking care of the environment. I think these things make a lot of sense. Also, even from an economic and financial perspective, I think it makes sense, if you can, to use fewer resources.   [00:18:51.090] I think that makes a lot of sense just because it costs less money, keeps your costs down. Right as I'm recording this, I took my whole family down to South America, where right now I'm for the holidays. We've been here for the last couple of weeks and I'm on a nearly 100% sustainable farm down here with the solar panels and the well water, all these things. I mean the whole nine yards, the carbon footprint here, if anybody even cares, it's basically negative. And again, it's, it's a wise use of resources, all these things.   [00:19:22.680] And I also want to acknowledge there's plenty of very intelligent, dedicated, honest people working in climate science and it's an important thing to study. My point is that this has been the case for decades, that there have been apocalyptic doomsday models, one after another after another after another after another, that ended up being completely and totally worthless. But this is the stuff that drives political decisions. It drives investment decisions. In 1972, the top UN climate policy maker, the guy who's basically the head of the UN Climate Committee agency at the time, he said we have ten years.   [00:20:03.590] Ten years. It's like the world was going to explode in ten years by 1982 if we didn't do all these things on his little wish list. And even to this day, a couple of years ago. It was four years ago now. AOC Alexandria Casio Cortez, the congresswoman who will may certainly be president in the United States, scary as it is to say one of these days, four years ago, she said the world, you know, the world is going to, the world is, this is a quote.   [00:20:29.700] The world is going to end in twelve years. This is four years ago. And so this is the sort of constant hyperbole, the apocalyptic doomsday end the world predictions that come from the experts. And again, I like clean air, I like clean water. I like taking care of the environment.   [00:20:51.050] I would like that everybody takes probably better care of the environment, fewer resources. It makes sense. Across the board, even from a financial perspective, it makes sense. But these apocalyptic predictions, honestly, at this point, it's like just the bully who cried wolf over and over and over again. It's hard to take this seriously, especially when the policy makers, they look at the stuff, they get together and they ignore the completely obvious solutions.   [00:21:14.640] I did a whole podcast about nuclear power with the obvious solution. If you actually care about the environment, you actually care about CO2 emissions, you actually care about methane emissions, you actually care about these things, and you ignore nuclear power. I'm not willing to take anything you say seriously because at that point you're proving that you're a complete moron. And they do these things I mean, they have their I wrote about this, I don't know, probably about a month or two ago with the big UN climate conference, Cop 27, and I guess it was in Egypt. And they devote an entire day solving the climate crisis, and they devote an entire day to gender identity.   [00:21:50.600] Again, you look at these things and go, you make it so hard to take you seriously. You ignore the real solution, and then you spend a whole day talking about gender identity. You've got all these world leaders. You got the President of the United States, you got the European Commission, you got all these people that are there, everybody's in attendance, and you want to talk about gender identity instead of nuclear power. Sorry, I'm just not willing to take you seriously at that point.   [00:22:13.760] But these are the sorts of things we see apocalyptic predictions and forecasts, and they're right, and everybody else is just an intellectual peasant, and it's this kind of bullying and intimidation, and if you don't get on board, then you just get canceled. Speaking of getting canceled, we also saw this same sort of mentality during the COVID pandemic, these predictions. Remember the early predictions? They came out, and they said they terrified everybody. Very, very early predictions.   [00:22:40.620] They said, everybody's going to die if we've got to lock it up. We got to go home. We got to sit in our houses and cower in fear and watch the fear pouring on CNN and shut down the economy. And if we don't do that, then everybody's going to die. And they came out with these predictions that were just wrong, and they consistently over and over again with these predictions.   [00:22:59.020] And a lot of people may remember, March of 2021, the state of Texas, the governor of the state of Texas said, you know what? We're not going to do this. I'm outlawing. These mandates were done. And Tony Fauci blasted that decision.   [00:23:14.550] He said, oh, he was outraged. And he took to Twitter, because that's what the experts do. They go to Twitter. And he called outrage about the decision. He said, this is inexplicable, and you're inviting all the death and the predictions of the body counts in Texas.   [00:23:32.060] We're going to be piling up in the streets. And then it never happened. In fact, the COVID numbers went down, and then they asked Fauci about it later. So you just shrugged it not quite sure. And of course, shortly after that, this is when Fauci came out with this whole an attack on me is an attack on science.   [00:23:51.300] The quote is, attacks on me, quite frankly, are attacks on science. He anointed himself as science. And this is what we kept constantly hearing about science. Our science says this and the science says that. I'm going to come back to that in just a moment.   [00:24:06.110] Now, you've probably heard of Richard Feynman. If you haven't, richard Feynman was one of the most intelligent people one of the most decorated, successful scientists. He was a theoretical physicist to have ever lived by his own peers and contemporaries, modern day scientists, scientists who were peers and contemporaries of his time. People ranked him in the same breath as Isaac Newton and Albert Einstein. He was ranked in the top 100 physicists of all time, not in the top hundred.   [00:24:34.620] He was ranked, like, seven. I mean, this is a guy whose scientific achievements are virtually unparalleled. He was a Nobel Prize winner. He was participant in the Manhattan Project, who was manhattan Project was atomic research, and a lot of death and destruction came from that. But that was really the who's who.   [00:24:50.680] I mean, it was Oppenheimer and all these guys back then. He was part of that. He pioneered quantum computing, nanotechnology back in the 1950s, when vacuum tubes were still a thing. I mean, really, really smart guy. And probably the great thing about Feynman was he did not give a shit.   [00:25:08.330] He was one of the most intellectually independent people ever. And the the beautiful thing about it is that he lived until the late 1980s. And so there's actually quite a bit you can see interviews with Feynman. They're low quality video and not great quality audio, but you can see interviews with Feynman, and there's a lot of his work. We can't go back in time and see, like, YouTube videos of Isaac Newton.   [00:25:32.340] But Feynman you can. You absolutely can. And the things that he would say, it's really inspiring. And there were a lot of texts and transcripts of speeches, and he gave one speech in remarks to the National Academy of Sciences. This is a big deal.   [00:25:48.270] The National Academy of Sciences probably knows a pretty big deal in the United States in 1955. And he was talking about this, and he says he said, we found it of paramount importance that in order to progress, we must recognize our ignorance and leave room for doubt. He went on to say that scientific knowledge is a body of statements, some most unsure, some nearly sure, but none absolutely certain. Nothing is certain. This from one of the most decorated, one of the most knowledgeable, one of the most praised scientists to have ever lived in all of human history, basically saying nothing is certain.   [00:26:23.840] Later on, in another interview, this wonderful interview, I think this one's probably on YouTube, and he talks about this concept of how hard it is to know something. And in this interview, he's kind of blasting pseudosciences, and he said, I have the advantage of having found out how hard it is to get to really know to get to really know something, how careful you have to be about checking the experiment, how easy it is to make mistakes, to fool yourself. I know what it means to know something, and therefore I see how they get their information. He's talking about pseudoscience and soft sciences and people the expert class. Making all their predictions.   [00:27:08.450] He's saying, I know how they get there. I see how they get their information, and I can't believe that they know it. I have a great suspicion that they don't know and that this stuff is wrong and they're intimidating people. This is what Richard Feynman said, and the last one I'll share with you comes from a speech that he gave at the National Science Teachers Association. This is from 1966.   [00:27:30.780] And this is probably one of the most beautiful, I think, an inspiring speeches about academia and just that culture in general. And it's entitled what is science? And he gets really, really great remarks, and he says this is probably midway through the speech, and he says, when somebody says science teaches such and such, science teaches such and such, science says this science he says he's using the word incorrectly. Science doesn't teach anything. Science in quotes, science doesn't teach anything.   [00:28:02.220] If they say to you, science has shown such and such, you might ask, how does science show it? How does scientists find out? He goes on to say, he says, it should not be, quote, science has shown, but this experiment, this effect has shown, this research, this study, this specific experiment that has shown not science, but this specific research, this specific experiment is what he's saying. And he closes by saying, you have as much right as anyone else upon hearing about the experience or the research, whatever. Be patient.   [00:28:36.440] Listen, all the evidence. You have as much right as anyone else to judge whether a sensible conclusion has been arrived at. You have as much right as anyone else to judge whether a sensible conclusion has been arrived at. He would be canceled today for saying that because we're supposed to bow down to the soothsayers, bow down to the expert class. They've cast their they've cast their beans in the air.   [00:28:58.200] They've made their blood sacrifice, and they said, this is what the future is going to be. Billions of people. We're all going to die if we don't shut down the economy or all these things that they say. You're supposed to just take it all in and go, okay. Oh, I'm so sorry for trying to render an opinion.   [00:29:14.790] No, you're not allowed to have an opinion because they're the experts and you are not. And you pale in comparison to their awesome intellectual abilities, and you won't understand their mathematical models. You don't understand anything. And so you just have to listen. Feynman said no.   [00:29:30.300] No. You have as much right as anyone else to judge whether a sensible conclusion has been made that most of the stuff it's about nothing is absolutely certain. Absolutely nothing is absolutely certain. And I know how hard it is to actually really know something. It's all about ignorance and uncertainty.   [00:29:48.610] Nobody knows. Nobody really knows for sure. There is no certainty. And everybody, even people who are really informed or really smart, they're just not going to get it right all the time. And everybody, at least people who are informed, has an equally valid view.   [00:30:03.380] And this is especially true when it comes to making predictions about the future as we see time and time and time again. If you want to go back to ancient Greek oracles or mock de zuma's Sue Sears in 1519, sometimes the expert class just doesn't get it right now. I bring all this up because specifically right now, this is early January, January 6, 2023. I bring all this up because all the chatter and headlines about we see recession, recession, recession, we'll kind of talk about that later, but the debates about will there be a recession and will there be a soft landing and all these sorts of things and the constant commentary about recession. And honestly, I think a lot of that is a bit of a selffulfilling prophecy in a way that everybody keeps talking about there's a recession coming, there's a recession, there's a session.   [00:30:44.870] It affects business investment, affects consumer spending. People will invariably pull back. Businesses will invest less, they won't hire people, they'll even lay people off. All these things because it creates, in a way, potentially a self fulfilling prophecy. It creates the thing that you expect ends up happening.   [00:31:00.290] But my favorite in this whole group are the experts, the central bank, soothsayers, the economic forecasters. They look in their crystal balls and they say the economy is going to grow x percent this year and Y percent next year and Z percent the year after that. And this stuff, to me, this is hilarious. This is hilarious. And there have been some couple of conferences already just in the last several days that they roll out these central bankers and economic forecasters.   [00:31:35.000] They say, where's the economy going to be next year and where's inflation going to be and where is interest rates going to be and all these things. And these people just go, oh it's this, it's this. We're forecasting X percent growth, whatever it is. To me it's hilarious because you remember, these are the people who are consistently wrong. And again, non intended to point a finger at any single individual.   [00:31:56.000] But just as an institution, the central bank, they completely failed to predict the housing decline back in 2006 2007. They completely failed to predict the subprime meltdown. They completely failed to predict the global financial crisis. They failed to predict the supply chain challenges with COVID They totally failed to predict inflation. They pretty much missed every major economic event of the last several decades.   [00:32:18.430] How does anybody take these people seriously? Why would anybody even ask them a question unless it's part of some comedy routine going, we're going to ask these central bankers what they think. Ha ha. It's just part of a big joke. How does anybody take them seriously?   [00:32:33.910] Why would anybody even ask them a question? Because they've just been so wrong about everything and even when they're wrong, they double down and insist, no. You remember the whole inflation fiasco? They said inflation. There's no inflation.   [00:32:46.570] And then they say, oh, it's transitory. It's transitory. I mean they were wrong about inflation multiple times. Multiple times. And one of the most hilarious parts about that was I mentioned this before is Janet Yellen, who's the treasury secretary and she was part of the deficit spending the big bailout packages.   [00:33:08.770] Let's just borrow money from the Fed, prints money, the government will borrow money from the Fed and we'll sprinkle all this money around the economy. And there was a reporter who published an account and said janet Yellen, the treasury secretary, she was the one in the Biden administration who warned everybody about inflation. She was the one who knew that inflation was going to be a problem. She tried to warn everybody. And Yellen was so furious that somebody claimed that she knew what was going to happen, that she actually was the voice of reasons.   [00:33:40.410] She was so furious about that. She called a press conference on a Saturday to debunk and said, no, I had no idea. I had absolutely no idea. I didn't know anything about inflation. I failed to predict inflation.   [00:33:50.720] I think she was furious that somebody actually had the gall to suggest that she knew what she was talking about and had to call a press conference on a session. She couldn't even wait till Monday. On Saturday had to call a press conference just to debunk this horrible rumor that she was competent and knew that inflation was coming. And again, you got to look at this and go, how does anybody take these people seriously? Why would anybody ask them a question and then they go, oh, the economy is going to grow X percent and they just believe it.   [00:34:16.450] Why would anybody take them seriously? And again, I'm not trying to beat up on anybody. I'm sure they're all very nice people. I'm sure they're all very maybe very honest people, very hardworking people. They're only human.   [00:34:28.180] All of us. We're all of us just human. We've all been horribly wrong about so many things. But for most of us, aren't guiding global policy decisions about what's going to happen to the economy and interest rates and all these things? And of course, again, everybody's only human.   [00:34:46.810] The old quote, predictions are hard, especially about the future which is a quote that's often attributed to Mark Twain, just like a lot of great quotes are always attributed to Mark Twain. And yet you do the digging and find out that there's no evidence that Mark Twain ever said this. That the idea, the concept. Predictions are hard, especially about the future. This actually comes it's borrowed from an old Danish proverb, but it's absolutely true.   [00:35:08.200] Predictions are hard. Trying to tell the future is basically impossible and anybody that tries to do it is just going to end up wrong. And there's no sense in bothering to try and listen to all these expert classes to say, here's what's going to happen in the future. Because in many respects, this stuff is just hilariously wrong. Trying to predict the future is just impossible.   [00:35:29.830] And me, my approach has always been, rather than trying to predict the future, to really just understand the past, because the past is full of lessons. The past is full of knowledge and wisdom about trends that have repeated over and over and over and over again. And if you'll notice, it's why I always start these things. Let's go back in time. And when I write, if you're on our website and you read the things that I write, I'm constantly talking about history and looking at historical parallels because history does tend to repeat itself.   [00:35:59.880] Another one that's attributed to Mark Twain is that history doesn't repeat, but it certainly rhymes. I don't know that Twain said that either, but it certainly seems true that history does tend to have different shades of the same events over and over and over again. And we see, for example, that economies go through cycles and history has shown pretty much every possible economic scenario that's happened in the past. We've seen great inflationary episodes going back in the 1005 hundreds. We've seen inflationary episodes during the Roman Empire.   [00:36:30.710] We've seen what happens when people impose wage and price controls. Diocletian tried that in the early three hundreds in the Roman Empire. It didn't work. It didn't work. We've seen this over and over and over again.   [00:36:40.270] Hamarabi going back thousands of years in the Babylonians Hammer. Robbie tried wage and price controls. It didn't work. It never works. We could see this over and over and over again.   [00:36:49.220] We could see depression and stagflation. We've seen these things over and over again, literally in thousands of years of human history. We've seen pretty much every possible economic scenario. It's happened. We can see why it happened, what happened after what happened in the aftermath, how people tried to deal with it, the decisions that they made.   [00:37:08.890] We've seen financial panics and bank failures. We've seen what happens from currency manipulation and excess debt and wild speculation, government interference, central planning. We've seen all of this so many times. So many times. There's just ample historic evidence about these events and these economic cycles going through boom and bust cycles, et cetera.   [00:37:31.410] We've seen this all before. We've seen financial markets in the same way. We've seen bubbles, the Tulip mania, the South Sea bubble and all these things over and over and over again. There's so many instances of this. We've seen market history, markets get really hot, they get really cold and entire cycles and what happens?   [00:37:48.780] We can see people make a lot of money in the down part of the cycle. The people that have the courage to buy really great businesses, really great investments in the down part of the cycle. And then the cycles turn we can see these things over and over and over again. We can see that there are fly by night businesses that have a time in the sun. They soar like icarus and they go all the way up to the sun and they say, look at me, I'm so great.   [00:38:10.670] And then they crash and burn because it turns out there wasn't really anything there. And we can also see that businesses that are led by talented, honest, innovative people of integrity, that have healthy balance sheets, that are managed conservatively, these businesses that create real value, they create cost effective goods or services that are loved and adored by a growing market of consumers. And somebody can acquire these businesses available at a discount to intrinsic value. These are things that generally tend to work. And we see this over and over and over again throughout history.   [00:38:42.060] What you can't predict though, is the future. You can't say here's where the stock price is going to be in twelve months, right? Here's how much the, here's how much the financial rewards going to be, here's exactly what the yield is going to be, all this stuff. Because that's a prediction of the future. That's impossible, that's impossible.   [00:38:58.340] But we can look at trends and we can look at the countless stories of history go, well, this tends to do pretty well, this tends to not do, this tends to be a terrible idea. Wage of price controls, that tends to be a horrible idea. But great businesses, great management, solid balance sheets, conservative management, real value, all these things, that tends to be a pretty good formula. And we can see these things over and over again. But you can't say here's where the stock price is going to be in twelve months, here's where the tenure is going to be in 2025.   [00:39:26.050] All these things, that's impossible. And again, history is full of these examples. It's also full of big picture examples. And I write about this all the time we talk about in our podcast. Empires, nation, states, these go through cycles.   [00:39:39.860] They rise, they peak, they decline, they're overtaken by other empires that are going to rise and peak and decline. And we can see the same elements over and over again. You start off with a hungry, talented group of people that comes together, they're unified by singular purpose, and they grow and they expand. And eventually you end up with all these ridiculous things. Terrible leadership, reckless decisions, irresponsible spending, massive overextension of the debt, debasing the currency, social conflict, decadence laziness even where people just invent problems because their society has become so wealthy and so decadent.   [00:40:16.540] They got to create problems that aren't even real problems. They don't have to worry about how they're going to put food on the table anymore. And so they just come up with ridiculous issues. They go, this is a crisis. And they come up with silly things that aren't actually real national issues.   [00:40:31.530] And they make it like it's the number one social issue of the day. These are the sorts of things that we've seen this over and over and over and over again throughout human history. We see that a heavily indebted country led by a bunch of clowns that constantly shoots itself in the foot generally doesn't perform very well over the long term. History is very clear about this. You don't need to create a model, and you can't create a model, any complex mathematical model to predict some certain event or time frame the Romans.   [00:41:00.350] You can't go back in time to the Roman Empire and try and create some complex mathematical model and say, here's when the Roman Empire is going to fall. You can't create a complex mathematical model and say, here's when the French Bourbon monarchy, here's when Louis loses his head. You can't predict these things. You can't create a model and try and predict the future. And there's so many examples of this.   [00:41:22.170] Even as recently as the Soviet Union and the Berlin Wall fell in 1989, the end of 1989, even in the early mid 80s, very few people would have actually been able to predict that even a few years before it happened. Very suddenly, everybody knew the Soviet Union was on the way down. It was pretty obvious. Ronald Reagan used to tell all these hilarious jokes about the Soviet Union and worker productivity and all these things. And there was one of my favorite ones he used to tell, and he would say something along the lines of a guy from the Soviet Union, he goes to buy a car.   [00:41:58.130] He has to save all of his money, whatever, and he goes to buy the car, and he goes to buy the car, and the car dealer says, well, okay, we'll take your money now and we'll deliver the car in ten years. And and the guy says, okay, are you going to come in the morning or in the afternoon? I guess. What are you talking about? It's ten years from now.   [00:42:14.910] What does it matter if it's morning or afternoon? And the Russian guy says, well, the, the cable guy is coming in the morning. So these are types of things. And everybody knew that it was just this completely inefficient civilization, this is a completely inefficient union, and it was definitely heading down, but nobody would have said, oh, the Berlin Wall is going to come down in 1989. That was a very, very difficult prediction, even a few years before it happened.   [00:42:39.410] And it's this way of thinking that I want to just convey and suggest to you, this is the way I sort of think about solutions. Risk mitigation often write about this and call it the Plan B thing. I've been writing about this for years and years, this concept of the plan B, because ultimately nobody can predict anything. Nobody's ever going to be able to predict exactly what's going to happen. And when it's going to happen, all this sort of stuff.   [00:43:04.090] And so the idea about Mitigating risks, the plan B, it doesn't focus on, for example, the dollar plummeting in value by December 2023, or the Treasury Department defaulting on its debt in 2025, or China is going to invade Taiwan next year, any of these specific events, because it's impossible to predict, right? We cannot focus on a singular event. If you have that view, certainly you can take a speculative position. You can form a view and take a speculative position. You can say, well, I think the dollar is going to decline by 2023, and so great, you can short the dollar.   [00:43:37.480] You can short the dollar index. There's plenty that you think the Treasury Department is going to default on its debt in 2025. You can form that view, and you can take a speculative position. There are a lot of things that you're going to be able to do in that event. But it's generally a fairly dangerous idea to focus the entirety of your energy or your finances, your portfolio, your livelihood.   [00:44:01.710] It's just in general, like your life's, energy and dedication to this very narrow thesis. And there are a number of reasons why that's the case, of why it's a dangerous idea to focus so much of your energy and your motivation, et cetera, to a very, very narrow this thing is going to happen, therefore I need to do X-Y-Z. That's a dangerous way of doing things. And there are a couple of reasons. Number one is because timing on things is just so difficult to predict.   [00:44:32.300] Even when you're right, you can be wrong on the timing, and that could be devastating. There are a few examples of when people are successful at this, and finance, for example, he's a financial example. A lot of you might know the name Michael Berry from The Big Short. He's the guy that short of the housing market in the early two thousand s and made an enormous amount of money. He had a very specific thesis about large banks that own mortgage backed securities and collateralized debt obligations.   [00:44:57.290] And he did a ton of analysis and came to a very specific conclusion. And his conclusion was, right, the housing market was overvalued in the early two thousands, but he almost went broke because he made very specific bets based on this very specific thesis and really bet everything on this very narrowly tailored specific thesis. And the thing is that the housing bubble actually lasted way longer than he anticipated. So he was right about what would happen, but he was wrong on the timing because he was wrong on the timing. He almost went broke.   [00:45:28.790] You probably seen the movie, might have read the book. I mean, he had to suspend redemptions and his fund and people were threatening lawsuits and all these things, and he took a huge risk, huge risk, with other people's money and really bet the farm on his prediction of this singular event. And he turned out, again, being right on the event, wrong on timing, and just barely squeaked by when they were, they were running out of money. He was threatening with lawsuits and all these things. And then finally the housing market crashed.   [00:45:53.830] He almost lost everything, and then everything crashed. And because of that, he made an enormous amount of money, not only for himself, but for his investors. But it almost went down in flames. There are a lot of other people who didn't have such a happy story. There are people that really do bet the farm on one specific thesis.   [00:46:12.050] They get it wrong and they go down in flames. They lose everything. And that's why, again, it's really a dangerous idea because you can be right about the prediction, but wrong about the timing. And so if you think, oh, this is going to happen next year, and it happens, but it happens ten years from now, well, jeez, you've got nine years of sort of wasted opportunity, cost, that's a big deal. That's a big deal.   [00:46:36.380] Time is the most valuable asset we have and to sort of waste it, squander it, lose different things, because it's a really big deal. I would point out something else as well, another reason why I think it's a bad idea to sort of put all of your focus and energy and attention on trying to mitigate this one specific thing, to make a prediction and focus all of your energy on one specific thing. And I'll give you an example. Some people are worried, and there's been a lot of chatter about this too, about some kind of food scarcity and it's very apocalyptic predictions about the end of global food production, famine, starvation, et cetera. Again, this is a very specific risk that by the end of 2022, which has already come and gone, everybody's going to be starving and all these sorts of things.   [00:47:26.940] And again, that's a very specific risk and it's a scary one, and that compels a lot of people to sort of throw all of their energy into, I got to, I got to fix this issue, I got to mitigate this risk. I got to take all this action. And a lot of people, again, they just, they jump into this, throwing 100% of themselves into trying to solve this. And so they just have this bunker mentality and they move to the bunker and they spend their days working the land and kind of fencing off the rest of the world and cleaning their guns and basically living underground. Now, again, everything is about ignorance and uncertainty and pretty much everything is a possibility.   [00:48:04.880] There's nothing I mean, with the past couple of years, we should have learned that anything and everything absolutely can happen. There's nothing that's off the table. Anybody says, oh, that's impossible, it's never going to happen, has no idea what they're talking about. Everything absolutely could happen. And so the idea of, you know, something happening, global food production and all that sort of stuff, it's a non zero risk, you know, and it's certainly a high impact risk, but you know, somebody that actually really goes and studies land cultivation and agriculture and all these different things, it's a relatively low probability event.   [00:48:38.780] Now, if you focus all of your time and energy and saying I'm going to have this bunker mentality and fence off the world and work the land and all these things, if you're right, then you win. If you're right and global food production grinds to a halt and everybody else is starving to death, well you're doing great, you won. But again, that percentage is so low that chances are you just end up with this big opportunity cause you spent your entire life invested in mitigating a risk that ends up not happening. And the reason that's dangerous, again, there's that cost. In this case, it's sort of an opportunity cost and an opportunity cost of your time.   [00:49:16.080] But the second reason why that's so dangerous is because it really starts messing with your head, it starts messing with your psyche. When you get so wrapped up in this, one terrible thing might happen and you do, you put all of your energy into sort of mitigating that and fixing that. Honestly, it's like you start hoping that it's going to happen. You start hoping for the bad thing to happen because otherwise what else was the last couple of years of your life about? Since you spent the last five years trying to mitigate this one specific risk, you start hoping for that to happen just to justify the way that you spent your time.   [00:49:54.830] That's a terrible position to be in because there's so many other ways to deal with it. And rather than say I'm going to upend my entire life and pick up my family and pick up my kids and pick up everything that I'm doing, walk away from my career and do all of this so that I can mitigate this one risk and just put everything in my life 100% focused on this one specific thing that I'm predicting is going to happen in the next twelve months. There are other alternatives. And they say, well jeez, instead maybe let's start by having a garden around the house and stocking up on non perishables and maybe even having some land in a foreign country in a place that we really like, that's whatever that we can go to if we feel like we really need. There are other ways to do that.   [00:50:37.710] You can baby step your way in and do things that don't have such a high cost. They don't have the same mental emotional cost just on your own psyche. They don't have the same opportunity cost, they don't have the same financial cost. And so there's just better ways to deal with it. And that's the way I kind of want to get across to thinking about these things.   [00:50:58.290] This is ultimately the concept of a plan B is to find ways to mitigate these big picture trends. Don't try to pinpoint a specific event and time and so forth because it's just impossible to predict. But instead, like we talked about, focus on trends. They're much easier to see and understand. Is this country, is this society, is this government is going up or is it going down?   [00:51:21.850] Is this on the way up? Is it on the way down? This is a positive trajectory or a negative trajectory that's a lot easier to figure out than trying to determine where is the ten year treasury yield going to be in 2030? That's pretty much impossible, right? But we can we can kind of step back from a big picture perspective and go, is this good or is this not good?   [00:51:39.650] Are we going in the right direction or are we going in the wrong direction? Have we been going in the right or wrong direction for a number of years? And what does that kind of ultimately mean? That's a lot easier to figure out and from there to take sort of mitigating actions in ways that make sense regardless of what might or might not happen next. And we talk about these a lot.   [00:52:01.270] We write about these a lot. These are the sorts of things there's just limitless examples. When you really put your mind to it, you think of so many different examples. We write about these a lot. There's no downside.   [00:52:12.550] Again, we talk about doing things that make sense no matter what might happen or not happen next. It's like there's no downside. There's no downside in taking advantage of completely legal aspects of the tax code to reduce the amount that you owe the government every year. The tax code is thousands and thousands and thousands of lines and sections. I guarantee you there's at least one in there that you can take advantage of and reduce the amount that you owe.   [00:52:37.030] Out of all the thousands of lines in the tax code, there's probably one in there somewhere, at least that you can take advantage of to reduce the amount that you owe. There's no downside in doing that. There's no downside in becoming a welcomed resident or even a citizen of another country that gives you an additional place to call home, maybe in a place where your money goes a lot farther, possibly in a way that you can pass that benefit down to your children and grandchildren. There's really no downside in doing that. There's no downside in, for example, taking steps, again, completely legitimate steps to protect yourself from outrageously, ridiculously, frivolous lawsuits.   [00:53:13.640] And a lot of people might be in more litigious industries than others, and that's a real risk. And there's no downside in doing that. There's no downside in going and seeking out cheaper, high quality, inexpensive medical care in a. Different country abroad or diversifying certain business and investment interests so that you're not 100%, you don't have all your eggs in one basket. You're not totally exposed to a single country, especially if that country happens to be heavily in debt and on a downward trend.   [00:53:43.190] I mean, you know, we mentioned before, if you're thinking about food shortages, whatever, I mean, some people are very concerned about that. There's no downside. And maybe having a little bit of extra non perishables or having a garden in your home or planting a fruit tree in your yard that's probably going to make your home value increase. As a matter of fact, there's no downside in that. Or owning some land in a place that you enjoy visiting.   [00:54:02.980] All these things. This is a way that I encourage you to think about it big picture trends. This is going up as it's going down. What are the ways, the things that I think I can mitigate some of that in ways that make sense no matter what, as opposed to trying to predict the future, because trying to predict the future is pretty much impossible. We're always going to have experts in their expert opinions who try and tell us what the future is going to be.   [00:54:31.690] And frankly, it's very easy to be influenced and even manipulated by these expert opinions. And I think that's where we are right now almost as an entire species. I think if you look across the globe, sailors have this term, they learned a long time ago, sailors who went on the seas in the age of exploration, they learned that there are areas of the seas, they were propelled by wind and they learned the winds really well. And they eventually learned that there are parts of the sea, parts of the ocean where the winds converge and they could basically get stuck. You got the southeast and the northwest winds and they converge together.   [00:55:09.780] You can basically get stuck and end up not going anywhere. And meteorologists, they have a fancy term for this. They call this intertropical convergence zones, but more commonly these areas referred to as the doldrums'and. Doldrums. If you've read Sama Taylor Coldridge's Rhyme of the Ancient Mariner, this is the mariner, this is the albatross flying around.   [00:55:29.660] You've got these men that are going nowhere and they're stuck in the sun. They're running out of supplies. They have no motivation. The morale is almost nothing, and they're just having a terrible, terrible time. This is really what it is to be stuck in the doldrums.   [00:55:41.400] And it almost feels like as an entire species, that's kind of where we are right now. We're just not moving. We're not going forward. But at the same time, we're also not really going backward. 2022 was an okay gear.   [00:55:57.660] It was weird. All these terrible things happened in inflation and war and so forth, but for the most part, like, economies are still doing okay. It wasn't some insane financial catastrophe, so forth. Obviously, it depends on everybody's individual situation. If you're somebody that's had to flee Ukraine, 2022 was a terrible year.   [00:56:15.420] But if we kind of average that out across the globe, it's nothing comparison to 20 18, 20, 19, 20 22 was not a great year, but it wasn't a complete and total disaster. But at the same time, everybody sort of braced for this terrible catastrophe because we keep seeing this in the media, you know, this is going to happen. There's recession, recession, this and that, all these different things. And everybody's kind of braced for something we're not going forward because there's nothing, this thing, you know, you got the war, you got the inflation and all of this and all the morales just been sucked out, but at the same time, not really going backwards either. Everybody just sort of braced for this catastrophe, waiting for the shoe to drop.   [00:56:58.320] And it's exasperating. Honestly, it's exasperating. When you think about it, this is really stuck in the doldrums. When things are going well and you've got the wind in your sails and you're moving forward, it's great. It's easy.   [00:57:10.810] Everybody's happy. Positive people are making money. Everybody's got a job, wages are going up, companies are making money, markets are going up, governments are raking in tax revenue, all this stuff. Everything's great. That's easy.   [00:57:22.450] It's easy to have a positive outlook. And ironically, even sort of negative events are almost easier to deal with because at least you know what's happening, right? At least you know what you're dealing with. But if you think about human psychology, we crave certainty as human beings. It's uncertainty that kills us.   [00:57:40.230] It's like you go to the doctor for some kind of medical test cancer screening, and we're on pins and needles waiting for the results. It's the it's it's the uncertainty that's the most difficult part. You know, we that certainty is what we crave. And it's right now we feel, I think, a tremendous amount of uncertainty because, like, we're we're waiting for something that might happen. Everybody's telling us this might happen, that might happen.   [00:58:04.010] Frankly, we're talking about recession. Like recession might have already come. I mean, the economic soothsayers, they say, oh, no, we haven't had recession yet, because they're the experts and they know you don't get an opinion. You don't get to decide whether or not we've already been in recession. The recession is already here.   [00:58:21.500] Your opinion doesn't count. It's only the experts that get to make that decision at the National Bureau of Economic Research. So it's all rather silly, but this is kind of what everybody's in right now, this state of waiting for some catastrophe. We're not going forward, we're not really going back. But there's just not really a whole lot of motivation.   [00:58:37.520] There's not a lot of optimism, and the whole world just sort of stuck in the doldrums. And what a terrible reflection that is, frankly, on a lot of institutions on the media for just constantly chirping away the global leadership. They say so many countries are being run by completely idiotic clowns. And the media just goes, you have, again, these things that are being universally predicted by the experts. Now.   [00:59:00.030] The media goes and amplifies all of those things, and it does make an impact. It does cause people to change their decisions, change their behavior. It causes businesses to change their behavior. I talked about self fulfilling prophecies earlier. I was watching something, a Wall Street Journal, and they had an expert on they were talking to a guy that doesn't really matter who, but he's an expert.   [00:59:23.820] And they were doing these rapid fire questions and is stock market going to be higher or lower a year from now? And he said lower. Just one word answer.   [00:59:37.350] So let it be written. The expert has said the stock market is going lower. And so now if you're somebody that pays attention to that and you're thinking, oh, you're thinking, oh, jeez, I was thinking about investing in the stock market, but now the expert says it's going lower, so I guess I better not make the investment. It's crazy.   [00:59:54.830] If you want to invest in a great company, you found a wonderful business that's managed by, again, talented, innovative, honest people of integrity. It's got a great product and great prospects. Who cares what this guy says? Who cares what anybody says? Because at the end of the day, all these guys could be wrong.   [01:00:13.000] Everything could change tomorrow. And again, we learned that lesson over the past few years with COVID Everything changed practically in a day. Vladimir Putin could drop dead literally right now, and everything's going to change. There could be any number of things. A major oil discovery, major gas deposit, new technology invented.   [01:00:33.280] So many things that could happen in an instant. Peace in the Middle East. Venezuela decides to embrace representative democracy and all the idiots step down. There's so many things that could happen literally in an instant. And again, every single thing is a possibility.   [01:00:52.850] Everything is possible. And so it could turn out that everybody's wrong. There's certainly reasons why people have well reasoned arguments. I'm not saying like, oh, everybody's a moron. No, there's very smart people, and there are reasons why they may be right.   [01:01:03.840] There are reasons why may they be wrong. But just because they're smart people and experts in their field, nobody knows. Nobody can predict the future. And also, the reality is that right or wrong, there are still a lot of great things happening in the world. There's an abundance of really great opportunities, technological advances, all sorts of things that are happening in the world.   [01:01:23.770] And so somebody says a one word answer lower. Stock market is going higher. Lower. And that's going to dictate somebody else's decision making. No, that's ridiculous.   [01:01:35.310] Mock de Zuma found out the hard way sometimes the experts are completely and totally wrong. He paid dearly for it. I think a better approach is to remember Richard Feynman. Don't let the high priests, don't let the expert class intimidate you and control your thinking, control your mood. It's, I think, really important right now to have the mental toughness and the intellectual independence, to make your own decisions and realize that you're in control.   [01:02:01.170] You are 100% in charge of you. You are completely and totally in control. I want to thank you very much for listening. It's great to be back. I hope you had a really wonderful holidays and we'll speak again next week.   Close Podcast Transcription

On December 10, 1896, in the picturesque seaside town of San Remo, Italy, the famed Swedish chemist breathed his last breath after suffering a devastating stroke, and died. Nobel was an incredibly wealthy man at the time of his death, and most of his wealth had been placed in a trust. (In doing this, Nobel managed to sidestep Sweden’s gargantuan inheritance tax that had been in place since 1884, AND the Kingdom of Italy’s estate tax.) Nobel’s death is commemorated every year on December 10th, at the annual banquet which honors the newest recipients of the Nobel Prize. That’s tomorrow. And among the honorees at this year’s banquet is the former head of the US central bank, Mr. Ben Bernanke. I’m sure Bernanke is a wonderful human being who certainly tried his best. But, as you may recall, he was the “expert” who established the precedent of slashing interest rates to zero and conjuring trillions of dollars out of thin air. When Bernanke first became Fed Chairman in 2006, the central bank’s balance sheet was about $850 billion. And as the housing market began to decline, he continually insisted that there wouldn’t be a housing crash… nor a recession… nor certainly a major economic crisis. He was completely wrong on all three accounts. Within a couple of years, the entire global economy had nearly collapsed. Bernanke responded by printing so much money that the Fed’s balance sheet ballooned to $4.5 trillion (from $850 billion). And he cut rates to zero. Bernanke had this power because the nature of our financial system awards dictatorial control of the money supply to a tiny group of unelected central bankers. And Bernanke was the chief of that unelected committee. Bernanke faced some criticism for his actions, most vocally by then Congressman Ron Paul. But similar to the incorrect predictions he made about the economy and housing, Bernanke insisted that there would be no consequences… that the Federal Reserve could continue to keep rates low and print money, and nothing bad would happen. Once again, this view proved to be totally wrong. And we’re seeing the consequences now with record high inflation. It’s not Bernanke’s fault. He’s human. He made mistakes. All of us have. The real problem is having a system that gives supreme control to a tiny group of imperfect, mistake-prone human beings. The Fed has virtually zero oversight, zero accountability. They do whatever they want, and hundreds of millions of people have to suffer the consequences of their actions. More perversely, though, they’re held up as “experts”. And even though they’re just as human as the rest of us, these “experts” are somehow seen as infallible. We experienced the same thing during the pandemic; a tiny, unelected group of public health “experts” were given near totalitarian control over how hundreds of millions of people were allowed to live their lives. And we were expected to suspend all doubt and scrutiny, and to believe everything they say without question… because they were the experts. The most absurd part of all, though, is that even when they’re proven to be completely and totally wrong… these “experts” are awarded our society’s most esteemed prizes for achievement. Again, Bernanke may be a wonderful guy who tried his best. But his approach had devastating consequences. He created one of the biggest financial bubbles in human history. And tomorrow he’s won the Nobel Prize. This makes about as much sense as giving the Nobel Peace Prize to Henry Kissinger or Barack Obama. Or the special 2020 Emmy award to New York’s governor Andrew Cuomo. Or when Will Smith received a STANDING OVATION when he won the 2022 Academy Award for Best Actor, literally minutes after assaulting Chris Rock on stage. Or Vladimir Putin receiving the French Legion of Honor. Or Kamala Harris winning Time Magazine’s Person of the Year. Or the New York Times and Washington Post winning the 2018 Pulitzer Prize (for ‘excellence’ in journalism) for their “deeply sourced. . . coverage of Russian interference in the 2016 presidential election”, which turned out to be a complete hoax. Or Tony Fauci winning the US government’s “Employee of the Year” in 2020, after having already won the US Presidential Medal of Freedom. It’s hard to take any of this seriously when these organizations bestow their awards to “experts” who are so consistently wrong. This is the topic of our podcast today, which I call “Another win for the expert class”. It’s a bizarre cycle where ‘experts’, who sit on these award committees, bestow their prizes to other ‘experts’, thus inflating the credibility of the expert class far beyond where it should be. Again, we’re all human, and we all make mistakes. And that’s precisely the reason why no one… no matter how much of an expert he or she may be… should have unchecked power over hundreds of millions of people. Not to completely miss out on the fun, though, and given that this will be my last podcast until January, I also decided to resurrect an old favorite of mine– the annual Tommy Franks award. Tommy Franks is a retired four star general who was the first commander during the early days of the War on Terror after 9/11. Franks is a no-nonsense guy from Texas who didn’t pull any punches. And one day when a reporter asked Franks what he thought about a senior Pentagon bureaucrat, Franks didn’t miss a beat and quipped “he’s the dumbest fucking guy on the planet.” So, since the “experts” have been showered with so many awards already, I would be remiss if I didn’t add one more to the mix, and once again roll out the annual Tommy Franks “expert” award for 2022. Obviously the competition was pretty stiff. German Chancellor Olaf Shulz seems bent on freezing his people to death. Chinese President Xi has single-handedly been destroying his country’s social and economic prospects in the name of a virus. Teacher’s Union head Randi Weingarten is on the list for waging jihad against America’s children. Kamala Harris makes the list for her endless incompetence and word salads. Press Secretary Karin Jean-Pierre is also a nominee for maintaining an incredibly impressive level of general cluelessness. Pelosi makes the list for her keen grasp of arithmetic (“It costs nothing”) and for nearly causing World War III over Taiwan. The list goes on and on. But there is one who stands head and shoulders above all the rest. You can listen in to the podcast, and cheer on this year’s winner, by clicking here– “Another Win for the Expert Class”. Open Podcast Transcription [00:00:00.890] Today, we're going to go back in time to the 20 May in the year 325 Ad, to an ornate, luxurious palace of the Roman Empire, but located in an area that today would be considered part of northwestern Turkey. Now, the guy at the time who was the Roman Emperor's, name was Constantine the Great. He was present that day and his job was to essentially preside over over the opening ceremonies of what would be one of the most important conferences to have ever taken place in the history of the world. Seems like a weird concept, but it's absolutely true. This was a conference to which nearly 2000 people were invited. [00:00:39.140] It's not exactly known exactly how many of them showed up, but historians estimate that at least a few hundred made the very long journey. In ancient times, it was a big deal to have to travel, to go such a long way and made the long journey to Turkey to attend the event again. This was part of the Roman Empire, and Constantine, who was the Emperor, was there. Constantine was a Pragmatic guy. He didn't become known as Constantine the Great because he was stupid. [00:01:02.140] He was actually a very intelligent guy. He was a highly skilled politician, and he had spent really almost two decades trying to reunify Rome. And this is actually an important part of Roman history, because in around 293, the guy who was emperor at that time, in 293, his name was Diocletian. Diocletian may sound familiar to you, especially if you understand and know economic history relatively well. Diocletian is the guy that had this famous edict on wages and prices. [00:01:26.400] He tried to set price controls in the same way that price controls have been tried by many kings and emperors and rulers throughout history. They never work. They're always a terrible idea. They were a terrible idea when Diocletian tried them in the early fourth century. And so this is the same guy who also decided, you know what, I'm going to split up the empire. [00:01:44.510] That was another one of his brilliant ideas. In addition to wage and price controls, diocletian decided he was going to carve up the Roman Empire and then award the power and ruling of all these sort of smaller regional empires to a bunch of different people, all of whom had their own agendas. And as you can imagine, it didn't take long for these regional rulers and these mini Roman empires to go to war with each other. And so, essentially, by splitting up the Empire, all Diocletian did was he created four times the mess of the original empire. Terrible idea. [00:02:13.210] And eventually, Constantine was the guy that managed to reunite that empire. He did it in 324 Ad, after nearly two decades of really trying to unify this, defeating all the other rulers. And he did so because he had a great deal of help from Rome's Christian population prior to Constantine under Diocletian in particular. And before diocletian. To be fair, christians in Rome had been heavily persecuted. [00:02:39.180] Diocletian was particularly brutal to them. Christians had been deprived of their property. They were arrested, tortured, executed. They were thrown into the colosseum and eaten by exotic animals for everybody else's entertainment. Constantine was the guy that put an end to all of that. [00:02:52.310] He knew that Christians were committed, there was a lot of them, and that he would probably be better off in his political career and the campaigns that he was about to wage militarily if he had the Christians on his side. So he made it clear to the Christians, made certain promises that he would liberate them from their persecution, and this ended up being a very good gamble. Constantine was an educated guy. He was brought up to be able to easily socialize and had friends. They were pagans and Christians and could sort of mix in and out of all these different circles. [00:03:22.950] And he knew that promising religious freedom to the Christians would be enough to mobilize them towards his side in this war to sort of retake the Roman empire. And that's exactly what he did. Now, unlike most politicians, constantine actually made good on his commitments. And so in 313, this was before he had finalized reunifying the entire empire, but by 313, it was clear that he was the top dog. He was clearly the dominant leader of all the remaining rulers that were trying to control the empire. [00:03:48.130] It was obvious that Constantine was the dominant guy at that point. And so in 313, he announced full religious freedom, not just for the Christians, but for everybody in the empire. He said, you know what? You can believe whatever you want to believe. I don't really care. [00:03:59.930] You do you, and it's fine. And he ended up actually, later on, restoring property to the Christians, the property that had been confiscated from them by the Roman government. And so the Christians liked this guy a lot. In theory, Constantine himself actually converted to Christianity. He was baptized on his deathbed and all these things. [00:04:17.330] And so they liked him, they appreciated him, and they definitely supported him. And so it was after, in 324, he defeated the last competing ruler. And so Constantine became the emperor of the kind of reconstituted Roman empire. But at that point, he decided to move the capital to the east, because at that point, the east was the future of Rome. And he knew it. [00:04:38.390] A lot of people knew it. Rome, the city, rather. The Roman empire deteriorated, really, at that point, so much that the city of Rome, the legendary city of Rome, where it all started, rome wasn't even the imperial capital anymore. It wasn't even the provincial capital, the regional capital in the west, in fact, the western capital of the Roman empire. And the western Roman empire actually moved to what is today Milan in northern Italy. [00:04:59.370] So Rome, the city of Rome, wasn't even the capital anymore. And he said, you know what? We need to move on from this. Let's turn the page. We'll have a new start, new empire, just reconstituted. [00:05:08.140] We're going to have a brand new start. I'm making a new capital. And so he decided to make his capital in modern day Turkey. This was this was in the east, and that's where the future was. So they got to work on a city, the capital city that bore his name for 16 centuries. [00:05:23.120] It was known as Constantinople for 16 centuries. Today it's known as Istanbul, obviously in Turkey, but it takes a while to build capital. So in the meantime, he had a vast palace nearby in a city called Nica. And it was in Nica that he called this great conference the following year in 325 Ad. And the reason why he did that was because he was concerned. [00:05:44.680] Again, Constantine was a pragmatic guy, and Christianity was still relatively nascent. It was only three centuries after the death of Christ, and it took him two decades of winning the peace. He had fought war and battle after battle, and he just he didn't want conflict anymore. And he knew that there were internal divisions within Christianity. Again, it was still pretty nascent. [00:06:06.450] And these internal divisions could cause an all out civil war, at least serious social strife. And he said, you know what? After two decades of trying to win a peace and reconstitute the empire, I'm not interested in this. I don't want to have this anymore. And he was far too pragmatic to allow any kind of social conflict to take place. [00:06:22.410] So he convened this grand event, this big conferencing. He invited bishops and people of high religious standing from all over the empire to come and once and for all settle their religious disputes. And you might be thinking, well, what kind of religious disputes are we talking about? Because if you're somebody who's Christian today, it might seem like all that stuff is water under the bridge. But really, in the early days of Christianity, there were a lot of disputes. [00:06:47.710] There were a lot of unresolved questions. I mean, honestly, some things that we might think of today is really people really had a fit about that. Yeah, they did. Things like, did Jesus Christ own his own clothes? This is a guy that was going around healing the sick and taking care of the poor and so forth. [00:07:07.610] Did he actually own his clothes? Did he have any personal property to have any possessions at all? People really vigorously debated those things, and the questions, particularly in front of the Council of Nica, they had an agenda, and the agenda were things like, if Jesus was the Son of God, did that make Jesus lesser than God or more than God, or equal to God? And was he born or was he created? And all these different things. [00:07:30.590] And then some of these were administrative issues as opposed to purely philosophical and religious issues. How do you deal with there are a lot of Christians that were called lapsed Christians, people that literally, at the point of a sword, soldiers come in and basically shove a sword in their face and say, are you Christian or not? And if you are, I'm going to kill you. And some people renounce their faith on the spot and said, no, I'm not a Christian. And these were called lapsed Christians because basically they renounced their faith in order to avoid persecution, to avoid torture, to avoid execution. [00:08:00.080] And so would those people be welcomed back into the Church? And how easily could they be welcomed back in the Church? And so these are sort of administrative issues that need to be sorted out. One of the actually almost silly administrative issues was when exactly Easter, the Easter holiday, would be celebrated. And this was this shockingly caused tremendous controversy in the early days of Christianity, because it was a time when the holiday was a lunar calendar, Jewish calendar, the Hebrew calendar and the Roman calendar, the Julian calendar, all these different things. [00:08:27.800] And it was really difficult to determine when exactly the Christian holiday would be celebrated, when Easter would be celebrated. And again, these disputes might seem quite petty to a lot of people today, but this back then, it was really enough to cause extreme social turmoil. And you had factions developed, and you had people that say, this is what we believe, and if nobody else believes us, when we're going to fight each other, all these things. And it was a lot of internal strife within the community of Christians. And so Constantine, always the diplomat, always the Pragmatist, convened this conference. [00:09:00.400] It's now known to history as the Council of Nicaea. And to his credit, even though he was the emperor of the Roman Empire, had a lot of power, he pretty much stayed out of it. And he let all these hundreds of people argue with each other and sorted out among themselves the bishops and the clergy that were in attendance and had people from all these different factions. He basically let them battle it out. And in the end, the Council made its final resolutions, and they literally defined what was the belief system that still actually exists today for most denominations of Christianity. [00:09:33.280] They defined essentially, this is the truth. This is the truth. And they defined every last detail about what the followers were supposed to believe. And they came up, even with a formal statement, this is called the Nicene Creed to summarize the key points of this truth, they said, this is the truth. This is what we've decided is the truth. [00:09:51.700] And anybody that doesn't accept this will be excommunicated from our system. And after they decided that all these are the religious authorities. Now, Constantine as the civil authority, the Emperor of Rome, who was in charge of the government, he didn't get really involved in the religious issues and the religious decision making. But as the head of the government, he played along and he said, okay, the religious people have decided, and the government now is going to support you. So you're saying you're going to threaten people with religious punishment and excommunication if they don't believe your truth? [00:10:21.610] Well, I'll go along with that. And I'll essentially impose civil and criminal penalties, including exile on the people who the council majority had decided to excommunicate. And there were people at the Council of Nica that stormed out of the council angry and bitter because their faction didn't win the philosophical battle and they were excommunicated. And some people went off stuttered their own church and so forth. But Constantine actually ended up exiling these people because it was what the religious majority decided that they wanted. [00:10:51.220] The powerful bishops that defined the truth, this is what they wanted, and he went along with it. Now, I'm not saying all this to dump on any religion or anybody's beliefs, but I do, as you can imagine, believe in freedom. I believe absolutely in all sorts of freedom, including the freedom of religion, which is really, in my opinion, a form of intellectual freedom. I think that people should be free to believe in whatever they want to believe and not have it dictated to them by a council of, frankly, people that are generally proven to be self interested bureaucrats. We've seen this ourselves many, many times. [00:11:26.000] Obviously, one very recent example of this was COVID, the Pandemic Debacle. We all remember it. Not only is it very recent, but it will forever be burned into our memories. The virus came along. It's been three years ago now, recording this, December 9, 2022. [00:11:40.290] It's been basically almost three years exactly at the end of 2019. By March 2020, it had taken over the world. And also having taken over the world, were the public health dictators. Now, let's be fair. Like a lot of us may remember things a little bit differently, but most people were really shit scared at first because based on the available information at the time, the stuff we heard in the media, the stuff we heard on social media and all this stuff was that it was like this flesh eating virus that if you got it, your brain would explode and you would die instantly. [00:12:14.980] And that's sort of the thing that everybody thought. We saw the videos of people getting welded into their homes in mainland China and all these sorts of things. You think, well, jeez, that's probably not good. That sounds like a really nasty virus. We had images of a lot of people that are a bit older probably remember the Ebola outbreak in the 1990s and the hot zones and all that stuff. [00:12:36.710] That just I mean, that was really terrifying stuff because it was like you were just bleeding from all these orifices in your body and just have this horrible, convulsive death. And I think that's what a lot of people thought, you know, COVID-19 was at first. And if I'm really fair, I have a very difficult time faulting anybody for their initial reactions to COVID-19, including politicians and policymakers and the public health people. But you're supposed to be leaders, are leaders for a reason. And after several months of this highly reactionary, super emotional response, several months of that, there was more than enough time and more than enough data, more than enough information for these leaders. [00:13:15.210] I'm doing air quotes, of course, to summon their courage and to analyze the information and to look at the data and weigh the costs and benefits to make pragmatic and rational decisions. But that didn't happen. Instead, basically, we got a new council of Nica where you had a handful of bureaucrats, self interested bureaucrats, defined the truth that everybody else was told to believe, and anybody that didn't believe it, anybody that had different opinion, anybody that had different data, anybody that had different analysis was punished. They were censored, discredited, and basically exiled. Now, we know the stories. [00:13:51.210] This is nothing new. We've talked about this. I've written about this a lot. These are very familiar stories. You might remember the Great Barrington Declaration early on in the pandemic. [00:14:00.670] This is a bunch of eminent scientists who got together and said the cost of the lockdown is not worth it. The lockdowns will cause far more harm than good. And you have these people at the top of the pyramid. Francis Collins, Tony Fauci sought to use their influence and all their connections in the media and big tech to discredit these people who wrote the Great Barrington Declaration, who had a different opinion and thought that the lockdowns weren't worth it and they should try a different approach, and tried to discredit them as fringe scientists. And of course, the quote from the email, a very famous email, was, we need a quote, quick and devastating takedown of its premises. [00:14:37.120] So these are fringe scientists and this wacko idea that we shouldn't lock down the whole world, this was considered controversial and these people had to be censored and discredited. And it's crazy when you think about the extent to which this happened, because that one example only scratches the surface of the censorship that took place during all the peak pandemic insanity. And I don't want to spend this episode today rehashing all of that because we all remember it so well. But a few of these examples that you'll recall I mean, remember when the vaccines first came out and anyone who said at the time that a vaccinated person can still get COVID. Oh, if you said that, you were erased off the Internet in an instant, and it was these key members in the government that ensured that the censorship would take place. [00:15:29.450] And of course, now we know that that's obviously true, that of course, if you're vaccinated, you're triple vaccinated and quintupley boosted that you can still get that people still get COVID. They absolutely get COVID. But if you had said that back when the vaccines first came out in 2021, late 20, early 21, you would have been erased off the internet for your misinformation. And again, anybody that suggested that COVID was leaked from the wuhan institute of virology, you were canceled, you were raced off the internet, you were decried, you were discredited and said, oh, this denounced. Everything about this person is evil, terrible misinformation. [00:16:04.990] Now, of course, this is a mainstream, widely accepted idea, and there's a lot of evidence to support it, and certainly a lot of evidence to show that all these official investigations discrediting that theory were highly biased. And we didn't even get into that whole rabbit hole. And yet again, the entire time, I'll just call it church and state, because by church, I mean the holy warriors and the COVID fanatics who teamed up in public health to define truth, jam it down everybody's throat, shut down intellectual descent, do a devastating takedown of any intellectual descent, and excommunicate all the non believers. These were the holy COVID fanatics that had serious positions of power. This is what they were doing over and over and over again. [00:16:52.340] And of course, now it turns out that many of their key policies, these major ideas, the entire concept of lockdown, lockdown, lockdown, let's just shut everything down and just sit and wait for a virus to just disappear. It turns out that there's a mountain of data showing that many of these ideas and concepts may in fact have been horrifically wrong, that the lockdowns were totally destructive. And we've seen a lot of data behind this. I've written about this and reprinted a lot of reports about this showing in the United States. For example, a recent report showing that just really the devastating impact on young people their educational, developmental, and social progress. [00:17:33.390] A lot of this stuff actually comes from the government itself, from the education department that shows how far behind young people have fallen. We can see all the data on suicides, drug abuse, spousal abuse, child abuse. It's absolutely disgusting. And then the mountains of data on things like mask mandates, and we could see this country versus country, state versus state. If you remember when the state of Texas said in 2021, they said, you know what, we're done with mass mandates. [00:17:58.300] We're not going to do mask mandates anymore. And of course, fauci came in and predicted this giant wave of death in the state of Texas. There's going to be bodies piled up in the streets because Texas is saying, no more mass mandates. And it didn't happen. It didn't happen. [00:18:11.690] And when you compare, you know, the death rates and the infectious rates and so forth in these states that had looser mandates versus stricter mandates and so forth, there was no clear consensus. And in fact, in many respects the looser states, the easier going states fared better off. If you look at especially on an age adjusted, population adjusted basis, you compare places like Florida and California, it was pretty clear that there was an advantage to places that had looser restrictions, that didn't have the same mandates. And yet all the bishops and the high priests and the media just let them get away with it. When they said, hey, what happened with Texas? [00:18:47.200] You said it was going to be bodies stacked up in the streets. You just shrugged it up and said, oh, I don't know, and they just let him get away with it. So everything that this guy said, the media just repeated and said this is the gospel. He went to Zuckerberg and all the social media guys and they said anything that Fauci says is true and anybody that disagrees with it is not true. And even when he was totally wrong, they never really came out and said, okay, well, sorry, we were wrong about that, we were wrong about this and we were wrong about that, and we're changing our policies and so forth, they just gave him a pass. [00:19:17.300] Every time he was proven to be completely wrong, they gave him a pass. When he was caught telling a bold faced lie, they gave him a pass. They completely ignored. He never apologized, never admitted he was wrong, never admitted he might possibly be wrong. And his ego was so massive that even aligned himself to the very concept of science itself as if he is the second coming of Isaac Newton and Stephen Hawking and all these things completely ridiculous and even to this day still seems to be a believer in these policies. [00:19:46.070] In the lockdowns you might have seen, there was a recent interview did with CBS News and you have to use some of these words very loosely. Interview you have to do very loosely the journalist you have to put in error quotes because to describe it as a softball interview would be a horrific insult to the sport of softball. The quote unquote journalist was basically asking and answering the questions for Fauci, so he didn't even really have to say very much because she was just putting the words in his mouth and essentially asking whether or not he agreed. It was so ridiculous. And then when asked about there's COVID outbreaks, so there's RSV, there's all these things do we need to close the schools again? [00:20:25.930] And of course, Fuchsi pipes up and demonstrates that he's completely open to the idea of closing schools again, even though the science very clearly proves that to be wrong, that the consequences just are not worth it. The benefits are marginal, the consequences on the lives and the development of young people have been enormous. And he's just still stuck in this mode of, well, we've got to consider that and maybe we should close the schools and again, living in the past. He's telling the reporter, oh, we've got a long way to go and we're not there yet. And he's still insisting on the wet market theory that, oh, it must have been a bad must have been, et cetera, can't bring himself to acknowledge the idea of a lab leak. [00:21:09.070] And probably the most hilarious part is that when asked if China is covering up the truth about COVID's origins, he he actually said this in reference to the term covering it up. If it's a cover up, he said, quote, I don't know what that means. Literally, direct quote, I don't know what that means. I don't know what a cover up means. His delicate babe virgin ears can't possibly comprehend what a cover up is. [00:21:35.070] This is from a guy who is the highest paid federal employee who's been in his position for decades. Been in his position since 1984. Was put in his position when Ronald Reagan was president. Put in his position by Ronald Reagan, whose net worth just happened to soar during the pandemic, thanks to his vast stock portfolio, which is almost 100% invested in the pharmaceuticals companies he was promoting and in funds who were invested in these pharmaceuticals companies. This is not some wild conspiracy theory. [00:22:00.860] This is all publicly available information because as a government employee, anthony Vouches had to file public disclosures about his financial status. And so to see the benefit couldn't happen to a nicer guy. I mean, it is really a financial success story. Good for him. So let's put a bookmark in this for now, and we come back in a little bit to our friend Dr. [00:22:22.420] Fauci because I want to move on to another expert. And this is another expert that's actually in Sweden right now as we have this conversation as record this again. This is December 9, 2022, because he's about to be honored at the Nobel Prize banquet tomorrow, every year on December 10, to coincide with the death of Alfred Nobel, which took place on December 10, there's this Nobel Prize banquet. And one of the guys who's receiving Nobel Prizes here, there's the Nobel Prize in economics is Ben Bernacki. Ben Bernacki used to be the chairman of the US. [00:23:01.850] Federal Reserve, the central bank of the United States, from 2006 to 2014. So he was the head of the largest central bank in the world, which meant that he had an incredible amount of influence and authority in setting US. Monetary policy. Now, that might sound relatively boring unless you actually really understand what US. Monetary policy is, what monetary policy is in general. [00:23:22.110] And to give you a little bit of a snapshot, Bernanke Bernanke once bragged in a televised interview I think it was on 60 Minutes, this was some years ago and he claimed, quote, that he could raise interest rates in 15 minutes because people would say oh, well, you're printing a lot of money and you're expanding the money supply. And isn't this going to cause inflation? You said inflation. You don't have to worry about inflation. I could raise interest rates in 15 minutes. [00:23:44.310] And he kind of bragged about it, because when you think about it, that's an incredible amount of power for a single human being to have, or even a small group of human beings. Because what he's saying is he has the ability to change interest rates on a dime at the drop of a hat, to create infinite quantities of money at the drop of a hat, and do so without any congressional approval, without any presidential approval, without really any oversight whatsoever. Him and a couple of other people on this committee, they go, let's create trillions of dollars out of thin air. Let's slash interest rates. And they could do all these things without, again, any approval mechanism. [00:24:18.830] And the impact of these actions is incredibly profound. Raising and lowering interest rates, printing money, they have really profound impacts on the economy. The easiest way to think about this is that interest rates are essentially the price of money, right? Interest rates are the price of money. When you think about it, it makes sense. [00:24:35.030] When you're borrowing money, you pay interest. So that's the price you pay for money. When you're saving money, you're essentially loaning it to your bank. When you're saving money, that's the price of money. The interest is the price you get paid or that you pay for money that you might borrow or lend or anything else. [00:24:50.330] And so when you have the ability to set interest rates, you're essentially setting the price of money. And when you have the ability, the price of money is the most important price in the entire economy, followed probably fairly closely by the price of energy. But when you have the ability to set the price of money, it really gives you the power to control the price of just about anything. Real estate, stocks, sovereign debt, literally just about everything is derived from the price of money. And this isn't really hard to understand. [00:25:22.070] Let's think about real estate, for example. If interest rates right now drop to 0.1%, the 30 year mortgage is 0.1%. Just imagine how much money you could borrow if the interest rate is 0.1%. I mean, with $1,000, you could borrow $12 million. If interest rates are 0.1%, it would be utterly ridiculous. [00:25:46.180] And because of this, home prices would probably rise, right? If it's that cheap to borrow, that means the average home buyer could afford to borrow more money. And if the average home buyer could borrow more money, that means they could bid more money for a home. So all home prices end up rising because interest rates are so low. But if interest rates rise to 99.9%, right, home prices are going to plumb, it because it's so much more expensive to borrow money, right? [00:26:09.670] It's because you're paying so much more interest, buyers won't be able to afford to. Borrow or pay as much for a home. And so home prices are going to fall. So because interest rates rise and fall, that affects the price, the value of homes. It's the same thing with stocks. [00:26:24.340] It's the same thing with business equipment, the same thing with all this stuff. And you think about over the last several years, businesses, big corporations, they have borrowed so much money because it's been so cheap. They've been able to go to the bond market and borrow money at 3-2-1 percent. I mean, nothing, right? And they use that money. [00:26:42.050] They borrow 1%, and they use it to buy back their stock. So their stock ends up going up 10%. They borrow money at 1%, they use it to buy back their stock so the stock price goes up. And these are the sorts of things that happen when interest rates are low. And so by cutting rates, it creates this extra stimulus, this big monetary stimulus. [00:27:01.900] All this money sloshing around the system, and it affects the prices of all these assets, which impact the price of everything, means that it's easier to do big projects, which has impacts on the prices of oil and gas and gold and everything else. And it all comes down to this handful of people, this unelected committee that has the supreme power to change interest rates in their sole discretion whenever they want to. Again, like Bernacki said, I could raise interest rates in 15 minutes. No human being should have that kind of power because it gives them extraordinary control over virtually everything in the economy. Now, Bernacki, when he was a Fed chairman, he was the first guy really, in modern history to use that power unabashedly to slash interest rates down to zero. [00:27:50.570] Nobody had really ever seen that before. They kept using the word unprecedented. Unprecedented. But he made unprecedented normal. He made unprecedented kind of commonplace because Bernacki was if you remember, during this time, Bernacki was the Fed chairman right before he came in, right before the last financial crisis, the big financial crisis in 2008. [00:28:09.370] A lot of you probably remember that. You know, I mean, this was this was where everything, the banks crashed, housing crashed, the entire economy, the entire old global economy almost went off the rails. You had entire countries that went bust overnight. Iceland famously went bust literally overnight because they had so much economic exposure to all these different things. It was a really, really terrible financial crisis. [00:28:33.260] So Bernacki dealt with it by slashing interest rates to zero and printing trillions of dollars. [00:28:40.230] Right before this happened, he was completely unaware that there was anything wrong, that there are any problems. And there was a certain point he went and testified before Congress. This was prior to when the crisis really kicked off in 2008. I don't remember exactly when it was, but it wasn't that long before. And he insisted that there would not be a nationwide decline in home prices. [00:29:01.440] And even if it did happen, that even if there was a nationwide decline in home prices would not cause any broader economic problems. He kind of kept saying this over and over again, everything's going to be fine. Everything's going to be fine. And of course, he was proven hilariously wrong. It didn't seem hilarious at the time, but it was completely and totally wrong because the entire global economy nearly collapsed and he totally didn't see it coming. [00:29:24.610] Again, this is a guy that's about to get the Nobel Prize, be honored for winning the Nobel Prize literally tomorrow in Sweden. So as he again reacted to all that slash interest rates to zero, he kept them at zero for pretty much his entire tenure as head of the Central Bank. And when you think about that, zero interest rates are kind of a funny thing. Again, if you go back to the concept of what are interest rates? Interest rates represent the price of money. [00:29:51.280] And if you're talking about the zero interest rates, what you're saying is the price of money is zero means money is free, right? Or more appropriately, if the price of money is zero, you're saying that money has no value. And that's a very dangerous concept. It's a very dangerous incentive. Capital should always be treated as a precious and scarce resource. [00:30:13.260] Because if it's a precious and scarce resource, then that means that the allocation of that capital, where it's invested and how it's invested, should be determined by rational, prudent people. And instead what we're saying is capital has no value. We shouldn't treat it as a precious and scarce resource. We should treat it as something that has literally no value. And so when money is free, it has no value. [00:30:31.980] You can just borrow and borrow and borrow and borrow for nothing. You just get money for nothing. You go to the bank, you borrow 0% and people end up making terrible capital allocation systems. Now, of course, the average guy isn't borrowing money at zero, but if you're a bank and you're able to borrow money at zero, they open up the discount window and big institutional people come in and borrowing money at almost nothing and they end up making really terrible capital allocation decisions. This is how bubbles form. [00:30:58.840] This is how, again, companies who have no hope of ever turning a profit end up being worth $50 billion and they're able to borrow lots of money and buy back their stock. And they don't even generate enough revenue to pay the tiny little bit of interest that they have to pay, but they're able to continue borrowing money. They have no hope of ever turning a profit, but they're just able to keep borrowing money. And all the different things that we've seen in the Art Basel Art Festival, some guy duct tapes a banana to a wall, calls it art and then sells it for $120,000. Who would pay $120,000 for a banana duct tape to a wall. [00:31:36.110] But you do that when capital has no value, or you get $91 million for an NFT of a picture of I think it's a white sphere on a black background, becomes valued at $91 million. I mean, this is the sort of stuff that takes place when capital has absolutely no value, and capital has no value when interest rates are zero. And this is something that comes officially from the central bank. And again, at zero interest rates, money literally has no value. These are the sorts of things that we see over and over again. [00:32:09.850] This policy was continued. It wasn't just Bernanke. The policy was continued through most of his successor's tenure. His successor was Janet Yellen, who is now the Secretary of the treasury. Janet Yellen was actually a very interesting case because Yellen was, you know, she, she admitted, quite surprisingly, she actually admitted that she was caught flat footed on inflation. [00:32:30.040] She gave a speech, she said, oh, and some interview saying, I didn't see it coming. I should have seen inflation, but I didn't see it coming. This is actually really interesting because several months ago there was a reporter who wrote a story actually, I think wrote a book, talking about inside the Biden administration, inside the Biden White House, saying actually Yellen did, though, and she alone was the only voice of reason in the entire administration that was cautioning them about inflation and saying, look, we really shouldn't spend so much money. We really shouldn't have these build back better, huge multi trillion dollar stimulus. Things like this is going to be very inflationary and you shouldn't do this. [00:33:03.480] And Yellen was the only one that knew that this was going to happen, and the reporter published the story saying Yellen was the voice of reason. Yellen knew that inflation was coming, and so there was at least one reporter to say, no, she was competent. She knew there would be consequences, and she said something about it. But apparently just somebody insinuating that she was competent infuriated her so much that she called a press conference. Now, bear in mind that this report, this story came out on a Friday afternoon. [00:33:32.280] She couldn't even wait until Monday morning to denounce the report. She called a press conference on Saturday to denounce the story and insist, no, I was not competent. I had no idea. I was just as clueless as everybody else about inflation. You have to look at this and go, this is the treasury secretary used to run the central bank. [00:33:50.160] That just has to leave absolutely no doubt that she had no idea what she was doing, had no idea about that there would possibly be any consequences. And of course, now we have another guy, Jerome Powell, as Fed chairman. This is the guy that famously rejected the notion of inflation in early 2021 when people said, hey, there looks to be some inflation said, no. What do you talk about? You're crazy. [00:34:12.240] There's no inflation. Then later on, by the summer, they rolled out that transitory. They said, oh, it's transitory. Inflation is transitory, which basically is Fed speak. It's code for prices are going to go prices are higher, but they're going to go back to their original levels later, so it's going to be a little bit of a plateau and then come back down later. [00:34:29.190] Finally, they acknowledge, okay, fine, it's not transitory, but we're going to do something about it. We're going to raise interest rates. We're going to do something about it. I swear to God we're going to do something about it. And then months and months and months went by, and they finally started with this tiny little 25 basis .0.25% interest rate increase. [00:34:46.180] I guess that was in March 2022, and of course, nothing happened. Wow. Inflation didn't suddenly plummet back down to 2%. And so then by the middle of the summer, a couple of months later, they their whole monetary policy had transitioned from this you know, there's no inflation to its transitory to we'll get to it when we get to it. So now it's this hair on fire, ultraemotional panicky. [00:35:09.400] Oh, my God, we've got to do whatever it takes, no matter what the cost, to get rid of inflation. We're going to raise interest rates. We don't care. It's this really panicky signal they keep sending in their monetary policy. It really does make somebody scratch their head and go, these are really the experts who have dictatorial control the money supply. [00:35:30.350] They completely missed it. I mean, not only did they miss it in the case of the Treasury Secretary, who had to go out of her way to make sure everybody knows that she completely missed it, she wanted to make sure she held a press conference to make sure that everybody knows that she had no idea that there could possibly be any inflation. And I mentioned them by name because it's impossible not to. And I'm not trying to disparage. I'm sure they're all perfectly nice people and maybe perfectly honest people and perfectly intelligent, rational people, but it seems pretty clear that they're not the infallible experts that they've been made out to be. [00:36:07.610] And that's the problem when you're dealing with these sorts of things, these experts, is that they're often made out to be infallible. These experts can never be wrong, and of course, they often are. And we've seen this now over and over and over again. To be fair to Powell and Yellen, this whole policy idea of let's slash interest rates to zero and conjured trillions of dollars out of thin air, this started with Bernacki back in 2008. Again, this is a guy he slashed interest rates to zero. [00:36:37.380] He expanded the Federal Reserve balance sheet from $850,000,000,000 to four and a half trillion in a very short period of time. So, I mean, do the math on that. That's trillions of dollars that he conjured out of thin air on the Fed's balance sheet to a level that was considered unprecedented. And then it remained unprecedented for so long, it just became the norm. And they kept insisting that, you know what? [00:36:57.720] Our economic theories suggest that we can print all this money and we could slash interest rates, and there's never going to be any consequences forever and ever until the end of time. And just in case there are any consequences, just in case there might be inflation, I can raise interest rates in 15 minutes, and everything's going to be fine. It was Ben Bernanke who set that example, and his successors continue to follow that. So it is kind of ironic that Mr. Bernacki is in Stockholm right now, where tomorrow morning he will be honored with this Nobel Prize Award. [00:37:26.840] I actually have to pause and say, just technically, people talk about the Nobel Prize in economics. Technically, the Nobel Prize is awarded in, I guess it's five things. It's physics, chemistry, medicine used to be called physiology, I guess. Now it's medicine, literature, and peace. I always have to throw up a little bit in my mouth whenever I said, talk about the Nobel Peace Prize, but we'll get to that. [00:37:46.250] But technically, what's known as the Nobel Prize in economics is actually what's known as technically called the Nobel Memorial Prize, and it's endowed by the Swedish Central Bank, but it's awarded alongside the other five. So it's sort of regarded as the same thing. People call it the Nobel Prize in economics, but it's technically the Nobel Memorial Prize. It's a little bit different, but it's pretty much the same. And they're honored in the same banquet and all of that. [00:38:08.510] So Ben Bernardi is one of the recipients this year. So he's in Stockholm right now getting ready for that big Nobel banquet that's going to take place tomorrow, December 10, which is again coincides with the day that Alfred Nobel died on December 10, 1893. [00:38:23.970] This is the guy who totally missed it, who started this trend of zero interest rates and conjuring money out of thin air and so forth. What's interesting is there's another guy again, if you know economics well, you know the name Friedrich Hayek, who is a very famous guy in what's known as the Austrian School of Economics. The Austrian School does not care for printing money. They don't care for conjuring money out of thin air. They don't really care for central banking either. [00:38:49.660] And the Nobel Prize, the Nobel Memorial Prize and economics, to be technical, in 1974, went to Friedrich Hayek of this very famous Austrian economist, and there was a great quote. He was talking about the Nobel Prize, and he said the great quote, he says, The Nobel Prize, this is Hayek. The Nobel Prize confirms on an individual an authority which in economics no man ought to possess. An authority which no man ought to possess. And he says he goes on to explain because the influence of an economist and he's talking about economists in particular, it didn't apply to physicists and chemists and so forth is particularly for an economist because he said the influence of the economist is an influence over politicians, journalists, civil servants and the public. [00:39:35.450] And this is true, right? Because the Nobel Prize does confer a certain level of authority and it's really true in all things. But Hayek pointed this out. He said it's not the same in physics, right, where a recipient, a Nobel Prize winner's authority is really only as good as his or her work. And you see this this has happened actually in the past. [00:39:54.500] And Rico Ferrema won the Nobel Prize in physics and later actually found out, oh, actually, that thing I won the Nobel Prize for wasn't even right. But I did discover something else, kind of discovered nuclear fission in the process, but I've been wrong. And he admitted that he was wrong. And people respect that when you actually admit that you're wrong. And this is a guy that won the Nobel Prize. [00:40:14.330] And a lot of people come back to Nobel Prize winners and challenge their work and so forth. And this is what happens a lot of times in the hard sciences because the hard sciences, it has to be based on the quality of the work, the ideas. Researchers and academics are constantly proving and disproving each other's ideas. And the fact that somebody's won a Nobel Prize doesn't necessarily insulate their ideas from scrutiny. But in economics, because economics touches everybody's lives. [00:40:40.210] Economists who are Nobel laureates are deified by the media, especially if they're advocating the things that the media likes. The media is generally a leftist institution, a left leaning institution. So you've got some Nobel Laureate in economics and some economist who's advocating for these leftist principles like wealth redistribution, tax the rich and all these sorts of things. They deify these guys and the media will generally believe, hey, this guy won a Nobel Prize. So everything he says is right. [00:41:09.510] And the public just goes along with that because they're being thrust in our faces all the time saying this is what the truth is. And everybody just believes it because it's a Nobel Prize winner. He's an expert and again, not trying to disparage the Nobel Prize or any of its recipients. Plenty of very fine people, plenty of very intelligent people, plenty of really worthy people that have won these prizes. But it's definitely one of these I call it an expert award. [00:41:32.740] And it would be ludicrous if we didn't point out that many, many times that these expert awards, let's say, politely leave us scratching our heads, considering to whom they were or in many cases were not given. The Nobel has a long list of controversies and not just obviously there's the Peace Prize, which is a total joke, but complete and total joke, but even some of the harder sciences. In the early 20th century, there was a chemist. If you study chemistry or medicine, you know the name Gilbert Lewis. Lewis structures, et cetera. [00:42:04.490] This is a guy that's made so many contributions of field of chemistry to literally fill entire textbooks. He was nominated by his peers, who really know what they're talking about, 41 times for the Nobel Prize, but he never received it because he had his arch rival and good buddy, close buddy of his arch rival was on the selection committee. And so Lewis was blocked 41 times from the Nobel Prize. He's like the Susan Lucci of the Nobel Prize. You know, you you won't know that name unless you're like Gen X or or baby boomer, but he's the Susan Lucci of the Nobel Prize. [00:42:36.680] Or, like, almost like a DiCaprio who kept getting nominated for the Academy Award. Finally actually won after he ate, like, some cow intestine or something and then puked. But for a long time, you get these people that just keep getting nominated. Nominated, never win. That was Gilbert Lewis. [00:42:50.530] Never won his entire life. 41 times nominated by his peers. But he kept getting blocked because he had this arch rival who made sure that Lewis never won the prize. Amazingly enough, actually, the Nobel Prize in Literature has a very long and controversial history, again, given who it has and has not been awarded to. So you got a guy like Bob Dylan. [00:43:12.890] I get. No offense to Bob Dylan. I like Bob Dylan. But Bob Dylan won the Nobel Prize in literature a couple of years ago. Kind of a joke, considering that other people that didn't, leo Tolstoy, who's considered one of the greatest writers in the history of the world, who was nominated also by his peers many, many times, never won. [00:43:30.290] And obviously that's owing to if you've read Tolstoy, you know his political views. Tolstoy was an anarchist. Tolstoy believed, if you haven't read Tolstoy, it's great stuff. Tolstoy believed that the government was a force of violence, corruption, intimidation, was not afraid to say it was not liked by the Nobel Committee. It was presided over by the king. [00:43:50.870] And all this, they didn't care for Tolstoy. So never won the prize. The Nobel Prize. Let's see the 2008 Nobel Prize in Medicine. This was partly awarded to a scientist who discovered the link between the human papilloma virus this is HPV and cervical cancer. [00:44:08.200] A lot of people have heard about this. This is the original guy that made the link between cervical cancer and the HPV virus. It turns out, though, that AstraZeneca, which actually had a big stake in a bunch of HPV vaccines, the ones that you probably remember, they were trying to force 14 year old girls to go and get this vaccine. And a lot of parents freaked out about that. No, AstraZeneca owned those vaccines, or at least the biggest stake in those vaccines. [00:44:34.090] AstraZeneca was really like fermenting. They were, they were there. They were linked to key members of the selection committee. They were sponsoring stuff and really heavily influencing the award outcome. So there's a lot of controversy, things like that. [00:44:47.690] The Nobel Prize in economics. Paul Krugman won the Nobel Prize in economics some years ago. Later on, he went on TV during the 2008 financial crisis, talking about the way out of the financial crisis were for the government to just print money. And, and invent actually what he said in this interview, I think he was on CNBC or Bloomberg, and he was talking about the government should invent a hoax threat, a phony threat of an alien space invasion. He said if the government just threatened, just pretended that there was the space aliens were about to invade and we had to go and spend a trillion dollars to defend against this fake space alien invasion, then this, this recession would be over, you know, in a month. [00:45:23.140] And, you know, obviously said that somewhat tongue in cheek, but these are the sorts of ideas you just got to look at it go, really? This guy won our society's most esteemed prize for intellectual achievement. And the ideas are and this is again, a person that usually goes out in the New York Times and writes his editorials about we need to print more money, we need to go into more debt and all this stuff, and it doesn't matter, and it's all fine. These are, these are bizarre notions. And again, we haven't even scratched the surface of these. [00:45:50.260] Again, you get into the, you get into the Nobel Peace Prize, and again, you kind of have to vomit in your mouth a little bit. Barack Obama cousin Barry awarded the Nobel Peace Prize early on in his administration after having done absolutely nothing, and then, of course, his administration was quite noteworthy for going and dropping remote control bombs on children's hospitals in countries full of brown people for his entire eight years of office, he escalated the wars in Afghanistan and Iraq. He destabilized the region, making conditions for ISIS to thrive, made things worse with North Korea, worse with Russia, and yet the Nobel Committee actually doubled down a few years later and insisted that Obama did in fact deserve the award, even though basically nothing he did was in the name of peace. Absolutely ridiculous. Henry Kissinger won the Nobel Peace Prize in 1073, which is just stupefying if you look at all the different, you know, the people that have been awarded the Nobel Peace Prize. [00:46:42.260] Absolutely ridiculous. But, you know, it's not, it's not just the again, not really singling out Nobel Prize or saying that it's a silly award or anything like that. There are some incredibly intelligent people that made incredible breakthroughs. But it's one of these expert awards that confers, just like Hayek said, it confers a certain level of authority that in some cases, just simply not deserved. And there are a lot of these expert awards, and I think, quite famously, we saw when New York state's sexual harasser in chief Andrew Cuomo. [00:47:13.700] You remember that guy? And they gave this guy an Emmy award in 2020 for his courageous leadership on television during COVID And then they went the following year, they took it away from him because he turned out to be sexually harassing all these people and the whole thing, you got to look at it and say, how do you expect to be taken seriously? What a joke. Just these awards, you got a you got a bunch of overpaid pampered celebrities standing around showering themselves with awards. They go and bring this idiot politician to show up and give him this special leadership award. [00:47:44.040] But it's the same sort of thing when Will Smith received a standing ovation when he won the 2022 Academy Award for best actor. This is just earlier this year, literally minutes after he assaulted Chris Rock on live television and then went on and got took his award and gave this very rambling, nonsensical self serving speech about universal applause and hugs and kisses from Bradley Cooper and Denzel Washington. Whatever farce. The whole thing is such a farce. The 2018 Pulitzer prize, which is awarded for excellence in journalism, was given to the New York Times and the Washington Post for, quote, deeply sourced coverage of Russian interference in the 2016 presidential election and its connections, obviously, to the Trump campaign. [00:48:28.040] And of course, this all turned out to be a complete and total hoax. And yes, these people won these dire institutions won the most esteemed prize for excellence in journalism. Nobody ever went back and said, wait a minute, that actually turned out to be complete bullshit. But it just goes on and on and on. Vladimir Putin was a word of the French legion of honor. [00:48:46.810] Kamala Harris was the name time magazine's person of the Year, which puts her in the same category as Gandhi, nelson Mandela, and the Apollo Eight astronaut crew. So it's again, not trying to take anything away from people that have received these honors or even the honors themselves. But again, it's just clear that sometimes these expert awards end up on the mantles of very questionable individuals. That brings me back to Dr. Fauci, who, along with his colleague Francis Collins, who's the head of the National Institutes of health, both of these guys were awarded the Presidential Medal of Freedom, and Fauci himself actually won the I think they call it federal employee of the year in 2020. [00:49:30.060] So let that sink in for a moment. The Presidential Medal of Freedom. The Medal of Freedom, these are to went to a couple of guys who advocated for lockdowns and censorship. They were decidedly anti freedom. They worked with their friends in media and big tech to destroy any and all intellectual dissent. [00:49:45.510] And like Constantine and his Council of Nicaea in 325 Ad. They and they alone determined what the truth was. They tried to force it down everybody's throat. They tried to force everybody to believe it. They threatened to excommunicate anybody who didn't believe it. [00:49:59.500] They discredited and disparaged anybody that didn't believe it. And yet they won the nation's highest civilian award for freedom. Now, tomorrow morning, another expert is going to win our society's most esteemed prize for intellectual achievement, being the person that started the trend of zero interest rates and making money literally worthless with zero interest rates, which has been a major contributing factor to the inflation that we're facing today. I've written about this a lot. There are a lot of factors about inflation, including the Lockdowns. [00:50:31.380] I mean, frankly, the lockdown policies, the guys who won the Presidential Medal of Freedom were very much in favor of that has a lot to do with inflation. The demand side has a lot to do with inflation. Supply side has a lot to do with inflation. Zero interest rate policy a lot. It really has to do a lot with demand. [00:50:47.520] And they just really spiked overall consumer demand that contributed to supply chain shortages and so forth. Too much demand, not enough supply. And that's been a big reason why we've had so much inflation and this concept of zero interest rates making money worthless, printing money, giving it to the government, letting the government go and redistribute it, literally putting money in people's bank accounts. That's been a major factor, major contribution to the inflation that we're facing today. And it's interesting because these are the people, they win their prizes, and yet they rarely seem to notice their shortcomings. [00:51:21.620] I mentioned Yellen earlier, actually acknowledges that no, in fact, she called a press conference to make sure that everybody knew that she had no idea what was going on. She completely failed to see inflation. But most of the time, people generally tend to. I mean, Fauci quite famously, just refuses to acknowledge mistakes, refuses to consider the destruction that was waged on people's mental health, on their finances, on their businesses, on the school, on education development, on all these things. All the consequences. [00:51:49.570] Just rejects it, just refuses to accept it. Bernacki famously predicted no consequences when the housing market softened, predicted no consequences, failed to see that the 2008 financial crisis would would play out. In fact, actually had the Fed put out a paper a couple of years later, I think it was in the summer of 2010, after the, after the dust settled in the financial crisis. And the paper, the, the paper that that they wrote basically was it was a complete denial of rejection of the notion that the Fed was was culpable in any way or that they could have seen it coming. And then they actually there's a great quote from the paper that came out in 2010. [00:52:28.050] It said, quote, nothing in the field of economics or finance could have predicted what happened with regards. To the housing bust and subsequent economic fallout. In a speech actually, Bernacki said that standard economic models, quote, did not predict the crisis, nor do they incorporate the effects of financial instability. And he went on to muse. He said, do these failures of our macroeconomic models mean that they are irrelevant or at least significantly flawed? [00:52:56.770] I think the answer is no. So even after it's clear that he's even saying that they did not predict the crisis. But you know what? They're not flawed. They're not irrelevant. [00:53:09.380] They're still absolutely useful. We should continue to rely on these models. These are the models that led to the conclusion that they could expand the money supply without limitation, that there would never be any consequences to zero interest rates. They could make money literally worthless and everything would be fine forever and ever until the end of time. Well, guess what? [00:53:24.710] It turns out there have been a lot of consequences. Record high inflation is just one indicator of that. And the models were wrong again. Now, this is going to be my last podcast for the year. I'll obviously be back in early January, but for the next couple of weeks it's just typical holiday family stuff, etc. [00:53:40.880] But before I sign off for 2022 and in light of all these awards, etc. E. And, and by the way, you know, it's nothing personal, congratulations to Ben Bernacki. It must feel incredible to win the Nobel Prize. But let's be honest, in the midst of all this to say, okay, here's the guy who came up with this unprecedented idea of slashing interest rates to zero, making capital worthless, conjuring trillions of dollars out of thin air, assuming there would never be any consequences from that, forever and ever until the end of time. [00:54:10.160] And just in case there were consequences that he'd be able to, quote, raise interest rates in 15 minutes and all the consequences would go away. This is the same guy that totally missed the housing crisis, totally missed the global financial crisis, and now in the midst of record high inflation, we're going to say here's a Nobel Prize. At a certain point, you got to step back and go, seriously guys, honestly, it's really just absurd. But nevertheless, congratulations. And hey, congratulations to Tony Fauci. [00:54:36.320] After 40 years in the same position, after being put in your job by Ronald Reagan, you're finally stepping down. You're letting it go from your clenches and finally relinquishing control and perhaps we never have to hear that name ever again. Congratulations. And in light of all these awards and big wins for the expert class, I've decided to blow the dust off of a little tradition I started some years ago. I wrote about this a couple of times, what I called the Tommy Franks Award. [00:55:07.740] Now, if you don't know the name, Tommy Franks is a retired four star general. Tommy Franks was the guy who was the head of US central Command in 2000, 2001, I think, to 2003, which basically made him the commanding general in the early days. Right after 911, he oversaw the invasion of Afghanistan, the early days of that war, the invasion of Iraq, all of this. So he's a really prominent guy back in the early two thousands, and his guy from Texas was kind of straight shooter, no nonsense sort of guy. And there's an author named, I think, Thomas Ricks, who wrote a book, and he reveals a story about how one day Tommy Franks, general Franks, was asked about some reporter asked him about one of the senior bureaucrats at the Pentagon. [00:55:51.060] And Franks didn't miss a beat. And he referred to this guy in the Pentagon. He said the guy was, quote, the dumbest fucking guy on the planet. So in tribute to Tommy Franks, this is what I call the Tommy Frank's Award. Everybody else is getting an award. [00:56:04.510] We have all these expert awards. So I would like to award another expert award. I have the Tommy Frank's Expert award for 2022. It's a tough decision, as you can imagine, because if you're thinking about the dumbest fucking god on the planet, there's a lot of stupid, a lot of people to choose from. Vladimir Putin, frankly, is a nominee. [00:56:22.880] But I look at him and go, I don't know if that's stupidity. It's more diabolical insanity than anything. I would also put the German chancellor Olaf Schultz on that list. This is a guy who's really a contender. He's seemingly trying to freeze his entire country to death this winter through completely incomprehensible energy policy. [00:56:40.340] I mean, you think about the Germans. They claim to love the environment, but they're going out and they're buying the dirtiest coal they can possibly get their hands on from every country they can in Africa. They're going and chopping down all their trees, and yet they're turning off their nuclear power plants. So this is the thing. Nuclear is the clean, cheap, efficient fuel source that's environmentally friendly, low CO2 emissions, all that. [00:57:01.130] Instead, they're shutting that stuff off and they're saying, let's chop down the trees and get the dirty coal. It makes absolutely no sense. And there's a huge imbalance here. That was a close call, but unsurprisingly, the person I've chosen this year is Joe Biden. Now, this is actually a tough decision because I feel a little bit bad about it. [00:57:20.280] The guy doesn't know where he is half the time. He goes around shaking hands with thin air, and he finishes his speech. He starts wandering aimlessly around a room until one of his handlers goes, picks him up like a puppy dog and turns him around. I feel a little bit bad about this, but you got to be honest about it. And just this is about results and performance, really, more than anything. [00:57:38.440] And it's like, oh, my God. It's just from a geopolitical perspective, you got the debacle of just you start with the withdrawal from Afghanistan last year, where the locals passing babies over razor wire and people hanging onto an airplanes landing gear, only to plummet to their death trying to escape the invasion of Kabul, which the guy said literally weeks before wasn't going to happen. No way was that going to happen. Then it happened. They said, oh, we're not going to escape like we did in Vietnam, then have helicopters flying away. [00:58:03.310] And that's exactly what you ended up doing. And then leaving behind $100 billion worth of military equipment to your sworn enemy, the Taliban, who you just insisted was not going to come in and take over the country. You've got worsening relations with the Chinese. Watching Pelosi go gallivanting over to Taiwan and supporting all the blank checks to Ukraine, completely mismanaging the Russian sanctions so that Russia benefited substantially from higher energy prices, while US. Consumers saw their gasoline prices double. [00:58:31.250] That then actually went and blamed that on corporate greed. And this is this guy that from day one of his administration had an energy policy that was anti fossil fuel, anti energy company. They said we're canceling pipelines. We're not going to lease you federal property, which they're actually required to do by law. The Interior Department is required by federal law to lease land, federal land that has energy assets, to have a bidding process with energy companies. [00:58:54.160] These guys just refuse to do that. Just in the same way they've over and over again just decided to not follow the law. They just completely make up the laws as they see fit. His CDC director just decided to commandeer the entire US. Housing market. [00:59:07.950] They got constantly just doing things that are in total and complete violation of the law, and they do this over and over and over again. Now you have gas prices. You got energy prices where they are because they've been waging war on energy companies from day one of their administration. And then, wow, what a surprise. Energy prices are high, supply is low. [00:59:25.680] And he's beating up the energy company saying, it's your fault. It's your fault that I haven't been following the law. It's your fault that all these policies are actually the energy policies are actually achieving their intended outcome, which is to screw the energy companies and make it more difficult for them to supply. And now it's more difficult for them to supply. So energy prices are higher, and he's blaming the energy companies. [00:59:44.800] It's completely insane. It's so crazy. It's so stupid. And the stuff that comes out of his mouth about this, he loves beating up on ExxonMobil, and one of my favorite ones is beating up on ExxonMobil and saying, like, oh, look at how profitable they are. They make billions and billions of dollars, and this is so wrong. [01:00:03.070] I'm going to make sure that everybody knows how much money they make, and you just got to go, oh, my God, it's a public company. They're supposed to tell everybody how much they make. It's not a secret. It's not a secret. It's not like you're leaking their profits. [01:00:17.320] They have to report every quarter. They have audited financial statements. They're a public company. They tell the whole world how much money they make, and they like to tell the whole world how much money they make because it makes their stock price go up, but just cannot connect the dots. There's not even any dots. [01:00:31.140] It's like a dot. It's like you've tried to destroy these companies from day one, and now energy prices are higher. Wow, what a surprise. There's not really a whole lot of heavy intellectual lifting that's required there, but that just seems to be out of the completely beyond his grasp. So, look, we could go on and on and on. [01:00:48.590] I know that was kind of an easy target. I got to feel a little bit bad because, again, the guy doesn't know where he is half the time. But we came down, made a decision. It's Joe biden. So congratulations to President Biden for winning this year's Tommy Frank's Expert Award. [01:01:01.770] And congratulations to all the other experts that have won their award. Great year for the expert class as always. And again, would like to thank you, every one of you for listening to this, and we'll come back to you again in a couple of weeks. Thanks very much for listening. Close Podcast Transcription

On the 21st of February, 1978, workers for the state-owned electrical company in Mexico City, Mexico were digging in a neighborhood near city center to bury some cables. After digging about two meters below the street’s surface, they hit a large rock that their equipment could not penetrate. As they dug further, around the rock, they discovered it wasn’t natural… but instead a large stone disk that was at least hundreds of years old. Archaeologists uncovered the rest. And it turned out that site had once been the location of the main Mexica/Aztec temple, known as Hueyi Teocalli in the native language. Over the past several decades, the temple has been a treasure trove of Aztec cultural artifacts, providing incredible insight into how this civilization lived. And among other things, archaeologists have found the remains of more than 600 skulls on the temple grounds– most likely victims of the Aztec’s human sacrifice rituals. Human sacrifice has been a common practice throughout the history of many civilizations, from the Aztec and Maya, to the Celts and Babylonians. And there always tended to be some High Priest or ruler who decided in his sole discretion that a blood offering to their gods was necessary… for the ‘greater good’ of their society. (Naturally the rulers rarely offered their own blood; it was always some peasant who had to be sacrificed.) This decree was rarely questioned. After all, the High Priest was an expert. And anyone who dared question his authority would most likely end up being the one sacrificed. So people had an incentive to keep their mouth’s shut and go along with the ritual. Though we’re not quite as barbaric today, you can still see evidence of human sacrifice in our modern world. And COVID was a clear example. The High Priests of Public Health decided that if anyone died for lack of cancer screenings, a drug overdose, or suicide, that was OK. As long as you didn’t die of COVID. If your kids lost two years on their social and educational development, if your business closed, if your entire life was turned upside down, that was fine too. Everyone was expected to sacrifice for the greater good. Everyone, of course, except for the politicians. Nancy Pelosi was infamously caught going to the hairdresser during home district of San Franciso’s lockdown… and then blamed the hairdresser for the transgression. Clearly Ms. Pelosi cares about the working class. Chicago Mayor Lori Lightfoot was also caught going to the hairdresser after locking her constituents down, but she then justified her behavior saying “I take my personal hygiene very seriously.” Then California’s governor Gavin Newsom was caught breaking bread with friends at a fancy restaurant in Napa Valley during his state’s lockdowns. The list goes on and on. We’re starting to see this same attitude applied towards Climate Change. Most recently, the ruling class had its big climate summit in Egypt called COP27; they flew in on their private jets and ate expensive steak, while their ideas for the rest of us include travel restrictions, taxes on cow farts, and eating bugs and weeds. You just can’t make up this level of incompetence and hypocrisy. The trend, though, is very real. Momentum towards climate regulation is only picking up speed. And it doesn’t look like there’s anything on the horizon to stop it. It would at least be somewhat digestible if their ideas were actually sensible. But instead their ‘solutions’ are borderline insane. They spent an entire day at COP27 talking about gender identity, as if that has something to do with the climate. They obsessed over incredibly inefficient sources of energy (like corn-based ethanol, which has soundly been proven to be one of the WORST and most INEFFICIENT forms of energy). But was there any discussion at COP27 about nuclear power? None. And that makes it really difficult to take these people seriously. They reject good ideas. And they keep coming up with bad ideas… which ultimately means less efficiency, more taxes, and more regulations. I think it’s only a matter of time, for example, before many developed countries require airline passengers to buy carbon offsets when they travel… which will eventually be built into ticket prices. And we could easily see carbon taxes on gasoline, heating, and electricity. This is one of the reasons why it’s so important to have a Plan B. COVID proved that, even in the most extreme situations, there are always some countries and cities that buck the trend and still act rationally. That’s how I ended up in Cancun, Mexico to have my first child last year; it was one of the few places in the world where COVID didn’t really matter… where my wife and I could have a normal life and normal birth experience. Most places in the world went nuts. But Cancun was an example of the handful of places that didn’t. Similarly, there will be places that buck the climate regulation trend as well, and reject the taxes and insanity that most developed countries will inflict on their citizens. So, rather than despair about what the future might look like, it’s far more productive to create new options for yourself… because more options means more freedom. But in addition to these risks (which can be mitigated), climate fanaticism also creates a lot of opportunities. Governments are literally pumping tens of billions of dollars into the sector, and that number is bound to grow in the future. So there are going to be a lot of ways to capitalize on their insanity. This is the topic of our podcast today, and I walk you through the fundamentals of a few key examples, including the market for carbon credits. I explain why the demand for carbon credits is most likely going to soar in the coming years… and why supply is heavily constrained. After all, it takes years. And years. And years… for forests to grow. And for bureaucratic organizations to issue carbon credits. And there is significant opportunity in this demand/supply mismatch. Click here to listen in to today’s episode. Open Podcast Transcription [00:00:00.990] Today we're going to go back in time to March 20, 858 BC, to the Roman province of Galia Sicilipina, which is basically modern day Switzerland. Now on that day, there is a large group of people, a Celtic tribe known as the Helveteans. They've been living in the area, but for the last three years they've been planning a migration south into Roman territory. It's not really entirely clear why. There were a lot of speculations about this. [00:00:28.930] They may have lost some territory to some other Celtic tribes that have been pushing them further and further south. There was one story that came more than a century later from a Roman author named Plenty the Elder. He wrote that there was a Helvetean man named Helico. And this guy, helico went down to Rome and he came back with this vast treasure trove, riches and oils and spices and foods and things that were enough to really excite all the rest of the health veggies and said, oh my God, we got to go to Rome. That place looks amazing. [00:00:56.590] And so for the last several years, they've been planning this move. They were going to go south. And when they committed, they really committed, they said, we're going south and we're going to literally burn all of our villages here in this province, galileo Sicilipina, we're going to burn all of our villages to make sure we are not turning back. We are not coming back here. We are going south. [00:01:15.420] It's Rome or bust. So this was a pretty big deal. And the governor of the province, the Roman governor of Galileo Szel. Pina, he knew he needed to spring into action. He knew that he needed to secure the border. [00:01:30.010] But more than that, he knew, the governor knew that this would be a pretty incredible opportunity for him to raise his political standing in Rome. And the reason for that is that Rome had for a long time felt a threat from the north, from these northern tribes, these barbarians that were located in the region that they called Gaul. Now Gaul is sort of basically modern day France and Switzerland and parts of Germany. And there had been a conflict with these various Gallic tribes going back at least a century, including military conflict. There have been very one in 107 BC. [00:02:02.680] There have been one very humiliating Roman defeat. It was shocking. People couldn't believe it. There was a Roman defeat by a Gallic tribe in 107 BC. And that really stuck with the Romans. [00:02:14.530] This is now decades and decades later, but they still remember that defeat. They read about it in their history books. Their parents and grandparents told them about it. And so people really fretted about their border security from north. They were concerned about these people coming in and that's why they actually had people at the border. [00:02:31.510] They didn't just say, we've been to the border. They actually put a lot of resources into it and that's why they had a provincial governor there and so forth, and the provincial governor there in this province, he knew it. He knew that Romans were going to be terrified, these barbarians crossing into their territory. And he knew that he could harness that fear to justify a military campaign. Rome was a place of laws. [00:02:54.040] You couldn't just go and gather up a bunch of troops and go and wage war and have a military campaign against whoever you wanted, whenever you wanted. You couldn't just do that. You had to have a reason, you had to have a just cause in order to do that. But he knew that this fear would be enough to justify essentially waging war, and not only on the Helvetians, the Helveti tribe, but really on all of Gaul altogether. And that this war of going and conquering and subjugating Gaul, this vast territory, he knew that would really cement his standing among the Roman elite. [00:03:25.480] And that's what the governor decided to do. His name, of course, was Julius Caesar. At the time, Caesar was essentially the governor of this province. And so when the Helveti attempted their mass migration south in late March and early April, caesar decided, I got to stop this. And so he pulled together in 58 BC, a few legions and basically engaged the Helvetia as they were coming down into Italy. [00:03:51.580] He engaged them, he defeated them. A lot of the survivors were taken as slaves. Others were sent back to their home territory, this place that they had just burned their villages and said, there's no way we're coming back here. Well, Caesar sent them back and he even gave them supplies, a little bit of money to rebuild all their burnt villages. He says, you guys aren't coming into Italy, you staying right here, but here's a little bit of money for your troubles and go and rebuild. [00:04:11.760] And God's beat. But he didn't stop there. He didn't stop there. Caesar continued to basically campaign to take over all of Gaul and subjugate the entire all these various Celtic tribes as far away as Britannia. Modern day Britain and the UK sailed across the British Isles to a certain point across the English Channel and tried to subjugate Britain, all of Gaul, and pulled us all basically into Roman territory, at least Rome's sphere of influence. [00:04:36.870] And he knew that what he was doing would be supported because, again, people were afraid. They never forgot the lessons from that defeat in 107 BC. And they were terrified of these people that were going to come into their territory. So he knew what he was doing would be supported by the people. And he also knew that what he was doing was historic. [00:04:53.080] It hadn't really been done before. And Caesar being Caesar, he actually wrote a book as he was doing it, chronicling, basically his military campaign. And this is a very famous book still exists today. It's called commentaries of the Gallic War. You can download it for free all over the internet. [00:05:09.010] There's no copyright on it. Obviously. It's a book that's over 2000 years old. And Julius Caesar wrote a book. And you can read Julius Caesar's book. [00:05:16.780] Commentaries on the Gallic war. Now, if you've ever read memoirs, anybody's memoirs, especially political memoirs, they're so obviously onesided, this takes that to a whole new level. Caesar's account of his own actions in the Gallic War are so ridiculously one sided. He has this massive ego that would make Napoleon blush. It would make Napoleon look like the Dalai Lama by comparison. [00:05:42.640] And to make matters even worse, to make it even more pretentious, caesar, throughout his own book, wrote about himself. He referred to himself in the third person caesar did this, Caesar did that. It's completely ridiculous. And of course, he makes himself out to be Superman. He's so smart and he's so handsome and he's so daring and he's so bold. [00:06:02.320] And of course, in the third person, Caesar was so courageous and Caesar brilliantly did this. And so it's really ridiculous. And historians have kind of discounted most of us, and so there's very little value here, but there is some marginal historic value to the text. And some of that is from Caesar's firsthand experiences. Firsthand information, sometimes secondhand information about the various Celtic tribes that they came across. [00:06:25.920] And remember, the Celts were sort of almost like an ethnicity of all these people in this diaspora all across Gaul and modern day Switzerland and into modern day UK and Britannia, all these various different tribes. And there were some commonalities, some cultural commonality. And Caesar wrote rather extensively about Celtic tribes and Celtic culture and their various cultural practices. And among them, among the more curious ones, at least to the Romans, was the Celtic practice of human sacrifice. So you probably heard of a group of people called the Druids. [00:07:02.340] The Druids were sort of the religious leaders, the high priests in Celtic culture. And human sacrifice was a normal thing for them. It was completely normal. One of the ways, for example, the Druids were charged with trying to foretell the future. And one of the ways they would do that is they would sacrifice people. [00:07:19.020] And as they would sacrifice people, they would watch the sacrificed humans sort of final death throws as they're twitching and twerking their way into death. And based on the person's gyrations, the Druid would then try and foretell the future based on the way a dying person would be gyrating in pain. Obviously, we sort of look at and say that's kind of ridiculous. But those were their beliefs. Caesar thought it was ridiculous as well, and he makes them out to be. [00:07:49.610] I mean, obviously most of the book is ridiculous. Referring to himself in the third person about how brilliant and handsome and courageous he is and all this, but he does make the drugs out to be in the Celt out to be quite an uncivilized group, the Druids and the Celts. Also, they would take criminals and they would enclose and they would construct like, a giant statue made of wicker and reed. This is kind of known as the Wicker Man, a big statue. And they would stop a very, very large statue, and they would stuff people inside of this enclosed in, like, a wicker cage that's made out to look like a giant human being, and then they would set the whole thing on fire. [00:08:25.140] And of course, they were being sacrificed to their gods and so forth. It's not just Caesar. These sorts of stories and cultural practices were corroborated by a lot of other ancient historians. Plutarch actually wrote quite a bit about this, and we heard about this sort of over and over again. But again, this isn't really unusual. [00:08:46.830] In history, we see concepts of human sacrifice even in plenty of religious texts. Frankly, there's a story of Abraham being ordered to sacrifice one of his own sons. This is a well told story in Christian judaic and Islamic texts. So this sort of thing has existed for a very, very long time. It's very common, especially in the ancient world, on the opposite side of the world, in the Americas, in precolumbian America, the Mayan culture, and later the Aztecs frequently performed ritualistic sacrifice. [00:09:19.140] They viewed human blood as almost a delicate sin for their gods. And if they wanted to please their gods, then blood offerings needed to be made. In Tenochtitlan, which is basically the Aztec capital, where today Mexico City is the main Aztec temple there. Archaeologists archaeologists have found 600, more than 600 skulls in that temple there. And the Conquistador, Hernan Cortez wrote extensively about this quite harshly, just like Caesar, about, look at these uncivilized people and their human sacrifice. [00:09:50.500] This is so disgusting to me. And, of course, that was commonplace. Invaders usually took a dim view of the natives that were there. Caesar was very harsh about the Celts. And Hernandez Cortez was disgusted by human sacrifices in Mexico among the Aztecs. [00:10:05.760] But of course, the Spanish burned thousands of people, the stake during the Inquisition. And the Romans, they vanquished native tribes across Latin America, all over Latin America, all the way down to the tip of Chile and Argentina. And the Romans, of course, used to murder people in the Coliseum simply for the amusement of their peasants, the class known as the Plebeians. So this is kind of a little bit of a cultural elitist, believing that their respect for human life is somehow better than everybody else, but it's really not. In fact, you could probably make an argument that the Spanish in particular murdered a whole lot more people than the Aztecs and the Mayans. [00:10:41.380] But in general, this theme of human sacrifice and killing people for whatever reason, this has been a very common theme throughout history. And it usually comes down to one guy, an emperor or some kind of leader or a high priest who makes a decision about what the gods require, that there's some sort of greater good. And we need to appease the gods. We need to placate somebody somewhere. And in order to do that, we need to sacrifice a large number of people for the greater good. [00:11:10.390] Sometimes that greater good is actually not even a greater good. Sometimes it's a very narrow good. In fact, Swedish mythology has a story of a king who had ten sons and shortest story as he ended up sacrificing nine of his sons because he was told that if he sacrificed his sons that he would have a longer life. And eventually people sort of convinced me that, wait a minute, if you sacrifice all of your sons, then the line ends and there's no more king and we're going to descend into chaos and anarchy and all these things. And so they finally convince them, don't sacrifice your 10th son. [00:11:41.110] But again, this is a story, this is a concept that is very, very old, as old as human civilization, where there's usually, again, very seldom do you find a whole lot of people getting together and say, hey, let's just pick each other and, you know, kill some of our own. That's not really as common. What is a lot more common is usually some kind of high priest that asserts a certain amount of authority onto themselves saying, well, I know more than everybody else. I'm the expert. And as the expert, I'm going to make a decision in my sole discretion about what the greater good is. [00:12:13.990] And some of you people are just going to have to die. And people go, OK, that's fine. That's what we're going to do. And sometimes, again, that was a very narrowly defined good. In the case of this mythological Swedish king, sometimes the greater good might even have been a civilization ending existential threat. [00:12:30.790] And there are many instances of this throughout history. There were times where maybe a volcano erupted and it led to a really bad harvest. And again, people looked at back then, they look at things like a volcano erupting and they go, the gods are angry with us. And so the local high priest says that, well, we've got to appease the angry god and so somebody's got to die. And there are many historical instances of this, really of climate disasters, including even periods of climate change throughout history. [00:12:59.400] Thousands of years ago during the Bronze Age in the Minoan civilization, which is really kind of ancient Greece before the classical age, what we think of as ancient Greece I mean, this was more than a thousand years before that, the minimum civilization where during this time in the Bronze Age, many parts of Europe really became actually significantly warmer. And this undoubtedly led to many tribes desperately attempting to placate their gods and say, we've got to do something about this. Sacrifices must be made. And that led to some people dying. If we're really honest, if we're intellectually honest, I think you could make an argument that we just have a more refined version of this today. [00:13:41.370] At its core, there's still some kind of ruling class. Back then, it was an emperor or high priest or something like that, but we still have a ruling class today that's not some kind of conspiracy theory. I don't necessarily think that there's mustache twirling supervillain sitting in the cigar filled room or anything like that, but there are people that sort of think that it's their lot in life to tell everybody else what to do. Many of those people are unelected. Many of those people you know, you've got some of these organizations like the World Economic Forum and so forth that just crank out white papers demanding that they should be able to tell everybody what to do and how to live their lives and so forth. [00:14:19.410] So there are people you know, let's call them global policymakers or the policymaking elite. It's not a conspiratorial statement. It's just there are people that are in a position to have enormous amount of influence in setting these policies. That includes even in the media, that includes in certain businesses, even in the financial sector we've talked about this a lot with companies like BlackRock that have basically weaponized $10 trillion of other people's money in order to put forward an agenda, including, frankly, including a climate change agenda. And there are people that make certain decisions about policy, and those decisions often involve everybody else sacrificing. [00:15:02.950] Now, we're not necessarily talking about let's go on an altar and plunge a dagger into somebody's heart to make a blood offering to our gods. That's not really what we're talking about. But as an example, we saw this extensively during COVID And in respect we still do in places like China, where the leaders, the ruling class make decisions to sacrifice the needs and in some cases, yes, the lives of certain people for what they deem in their sole discretion to be the greater good. And this has happened. And this did happen. [00:15:35.280] Even in some of the most I'm doing error quotes most advanced democracies in the world. We have supposedly a representative democracy, a republic in the United States and in many other countries as well in Western Europe, where there was never any debate about the merits of this strategy. There's never any debate or discussion about defining the greater good. What does this mean? What are the priorities here? [00:15:55.720] Do we actually want to do this? There was no vote. There was only dictatorship. There was propaganda, and there was intellectual suppression, and they simply decided that if you died for other reasons, if somebody died during the pandemic, during the Lockdown era, because they didn't get you know, they didn't have the opportunity. To get a cancer screen because everything was closed or they died because of drug abuse or suicide or any number of reasons. [00:16:21.090] That was OK as long as you didn't die. Of COVID if your children lost years on their social and educational development, if your business closed, if your entire life was turned upside down, that was fine with them, right? You were just simply expected to sacrifice for what they deemed to be the greater good. Now, everyone, of course, didn't sacrifice. The politicians didn't sacrifice. [00:16:43.620] The ruling class themselves. They didn't sacrifice. There are many famous instances of this, and not just politicians, to be fair, there were instances a member in the UK, one of the first guys who wrote he was an academic, and one of the guys who wrote was the key author in this study saying everybody needs to be locked down or everybody's going to die. We got to do this right now. Sound the alarm bells. [00:17:05.380] You know, this is a guy that was going out and sleeping with his mistress when everybody else is supposed to be locked down. And of course, some of the other examples were just hilarious. You had Nancy Pelosi caught on video going to her hairdresser during the lockdown, and then she blamed the hairdresser not to be outdone. Then Chicago Mayor Lori Lightfoot was also caught going to the hairdresser after locking down people of Chicago. And then when she was caught, she justified it. [00:17:28.500] She stared cold into the cameras and said that she takes her personal hygiene very seriously. Not making this up, this is almost verbatim, direct quote, that she takes her personal hygiene very seriously. Therefore it was okay for her to violate her own lockdown rules because she takes her personal hygiene very seriously. Then you had Gavin Newsom, the governor of California, who was caught gladhanding slapping everybody on the back at a fancy restaurant with rich political donors after locking down his state. And the list goes on and on and on and on and on. [00:17:57.970] Completely and totally ridiculous. Because of course, the sacrifices never come from the high priest. Rarely at all. In human history, when we have cultures that engage and practice ritualistic human sacrifice, does the high priest step up and say, let my blood be the first to spill? It just doesn't happen, right? [00:18:15.550] The king, the emperor, or whatever. It's always somebody in the lower classes who gets tossed into the Wicker Man. It's never the high priest, it's never the druid. And we can see this again with the trends that are taking place. I already referred to it with climate change and the recent this top 27 climate change summit. [00:18:37.030] I wrote about this a couple of weeks ago that was taking place in Egypt. Frankly, it was another hilarious example. We've got dozens of world leaders, corporate CEOs, NGO presidents, guys like Klaus Schwab who run the World Economic Forum. Everybody flies in on their private jets to wag their finger at all the little people in the world to tell everybody else what we can and cannot do what we should and should not be able to do. And they do it all in a host country. [00:19:02.680] Egypt, which has a pitiful, absolutely pitiful track record on human rights, has been sanctioned by the United Nations. And all these guys show up and they go shaking hands and slapping each other on the back and basically just to come up with ideas about how the peasants should all sacrifice for the greater good. They're not going to sacrifice for the greater good. They fly in and out on their private jets and their security, and they tell us we shouldn't eat meat, and then they've got filet mignon on the menu. Again, it's hilariously. [00:19:31.570] Bad tone deaf policymaking at its worst. But this is the way it always is to them. Everything that everybody else does is bad. Meat is bad. Travel is bad. [00:19:42.280] Any economic activity is bad. God forbid somebody has a factory and produces something. Any of these things, it's all bad, bad, bad. Basically, these guys want us to simply consume less and go back to being neanderthals where we're just eating weeds and bugs and we never travel far from home. That's to them, kind of the goal of what everybody wants is just a way of consuming less. [00:20:03.510] They want to have a pastoral lifestyle. And again, I'm not making this up. [00:20:09.860] You go to the World Economic Forum and you can read the white papers where they put out things like, we need to eat. We need to start eating weeds. Human beings can be conditioned to eat and to like weeds, to eat and to like eating bugs. We can be absolutely conditioned to do so. They want to train us to eat weeds and bugs while they fly in and out of their summits on their private jets and have fancy steak and all these things. [00:20:35.510] Honestly, it would be hilarious. If it's not so disgusting. I kind of have a glasses half full approach to life, so I do find it hilarious also because there are ways around this, and that's really kind of what I want to talk about. Before that, anytime there's any discussion about climate change, I'm not making any statement on climate change. In fact, I will be even more direct and say, just in case anybody's wondering, yeah, of course the climate is changing. [00:21:03.180] I don't think that's a controversial statement to say, yes, the climate is changing. For me, I have a background, a lot of different businesses. I started an agriculture business some time ago, and I focused a lot on agriculture. And so from an agricultural perspective, you can grow corn in North Dakota now, and you used to not be able to do that, but now you can, and you can. You can grow corn in North Dakota because the climate has changed sufficiently to make that possible. [00:21:29.290] And so to me, it's not really a question of whether or not the climate change of course the climate is changing and the climate frankly, has changed so many times throughout human history because the climate constantly changes, just like the universe constantly changes. And I don't know, when did anybody promise any of us that from the day that we're born, nothing at all in our lives is going to stay the same forever? I don't know. Anybody that came out of the womb and got a contract that said nothing in the universe will change. Everything will stay exactly as it is right now today. [00:22:03.910] Like, of course, not everything changes. And when things change, there are advantages and disadvantages. There are costs and benefits and sometimes crises and sometimes incredible opportunities and problems that just need to be solved. And there's, of course, a certain amount of really over the top alarmist fanaticism. Again, I'm not suggesting that the climate's not changing or anything said I like clean air. [00:22:29.470] I like clean water. I like clean soil. I think it makes I like organic food. I think it makes sense to consume resources efficiently. I think it makes sense, especially considering that fossil fuels are finite and once we run out, we run out. [00:22:40.870] So of course it makes sense to consume things efficiently and look at better technologies and so forth. But it's difficult to take these people seriously when they're constantly screaming. They have this ultra alarmist, endoftheworld is nigh scenario and yet A, they refuse to lead by example. You know, again, they fly in on their private jets. They can talk about how everybody else should not be doing any of this sort of stuff and we should all be vegans, eating bugs and weeds and so forth. [00:23:08.890] And then they go and have a fancy steak on their menu, and B, they refuse to engage the most obvious solutions that exist that are already on the table. If they were actually serious, for example, about reducing CO2 emissions and slashing fossil fuel consumption and so forth, then they would be all in, all in on nuclear power. Nuclear power exists. It's a technology that has existed for decades. And if the world actually went nuclear, then CO2 emissions would fall by at least half. [00:23:35.290] They would easily surpass their carbon neutrality goals and all these things. But instead they get together at Cop 27 in Egypt and they dedicate an entire day to solving climate change through gender identity. And if you think I'm making that up, I encourage you to go to the top 27 website and you can see the agenda and you'll see there is literally an entire day devoted to gender identity. Somebody could possibly explain to me, what does gender identity have to do with climate change? And yet these people screaming, the end of the world, the end of the world. [00:24:06.190] And it's just really hard to take these people seriously. Of course it makes sense to who wouldn't want to have nobody's just say, I like dirty air and I don't want to drink clean water. It's ridiculous. Of course these sorts of things make sense, but they're ultra alarmist, end of the world's nigh, complete lack of leadership, going and putting resources and manpower and research and everything into terrible, terrible ideas is just completely and totally ludicrous. But that's the standard. [00:24:37.540] The thing that's obvious out of all this is that the momentum is not slowing down. They're down this war path and they're just going to continue and continue, continue. The momentum is not slowing down. It's building. It's growing. [00:24:49.830] And it's going to continue to do so and most likely become a much more dominant part of our lives. The rules and the regulations and the taxes and the fees and the scowling and the finger wagging and all these things is only going to increase. And we can see a lot of examples of this. In the United States, for example, there's a big push from government regulators. And so for companies to have to put their climate liabilities, their CO2 emissions on their corporate balance sheets. [00:25:15.250] And if that weren't I'll just be polite and say difficult enough, the rules that have been proposed are completely absurd where they are essentially impossible to deal with. Where a company is supposed to put on its balance sheet essentially what the potential climate impact would be to what the climate impact would be as a result of its customers and contractors, potentially employees and suppliers and so forth. It's not even sort of what one company does and say, okay, well, we have a factory and here's what we think we might be. You know, our greenhouse gas emissions, what they might be. It's like, well, somebody's buying our products, so now we have to know what their greenhouse gas emissions are going to be. [00:25:57.960] How would anybody even know that? And you end up basically double, triple, quadruple, counting every single thing. It's so completely ridiculous. They take something and they make such an absurdity out of it. Again, it's very, very difficult to take these people seriously because you just look at this and go, really? [00:26:13.020] That's your solution? It's so completely ludicrous. But it's a trend that's not slowing down. And we see these pushes. We see activist investors, the tiny little hedge fund that puts a couple million dollars into ExxonMobil and ends up taking over, basically taking over the board of directors and forcing huge oil companies to invest, to divest some of their fossil fuel assets, divest their refining assets, and invest in hugely inefficient wasteful projects. [00:26:42.570] Say, oh, let's get into Coronethanol, because every single study about corn ethanol shows that it has negative energy return on energy invest. It's one of the worst things you could possibly do. But you know, it ticks certain boxes in their, you know, their little green circles that they really like these sorts of things. Even though it makes absolutely no economic sense, it makes no environmental sense. It's actually a terrible idea. [00:27:05.140] For the environment, but they do it anyways because it's not oil and that's all that matters. So this is a trend that is not going away, and it's not going away. It's getting bigger and bigger. It's already so big and it's just getting bigger. And because of that, it's really important to understand. [00:27:19.930] And I want to walk through one aspect of it today because again, change is constant. The universe itself is constantly changing. The universe is not stationary. The universe is expanding. We have expanding galaxies, we have contracting galaxies, we have solar systems. [00:27:34.740] Everything is just constantly changing and including human beings, we're constantly changing. Our relationships are constantly changing, our businesses are changing, our children are changing. Everything is constantly changing and change. Economies change and political trends change. All these things change. [00:27:50.370] And whenever we have change, there are sometimes crises and sometimes opportunities. There's costs and benefits, advantages and disadvantages, risks and rewards. And it's important to understand those. And one of the things that I want to talk about today, one trend in particular, all this really big trend of climate change and really not just climate change so much as people's reaction to climate change policymaker's reaction to climate change, this human sacrifice element of it. One trend that's really growing, one sub trend is carbon credits. [00:28:20.440] Now, carbon credits, you most likely have absolutely heard of carbon credits. Most people have because they've been around for a while, but they kind of back in the algorith days when he was going around giving his climate change presentation, people started talking about carbon credits and then it sort of died for a while. It got really quiet and there are a lot of reasons for that, but they're starting to really make a big comeback, especially among global policymakers. Global policymakers are really starting to get behind carbon credits. And if you think about carbon credits, the basic idea boils down to carbon neutrality, to treat the environment as a zero sum game, an asset that needs to be maintained. [00:28:58.380] So polluting it as a negative, emitting CO2 or some kind of greenhouse gas is a negative. So if you're emitting some kind of greenhouse gas, then the first step is to reduce that negative as much as possible. And the next step is whatever negative you have remaining is to offset that remaining balance in some way so that it balances out. That offset basically means buying carbon credits. So one carbon credit generally represents one metric ton of CO2 or what time would you say, a CO2 equivalent that has been captured or sequestered, etc. [00:29:33.810] So, for example, if you have a company, you have a factory, and your total gross carbon emission is whatever, one metric ton, then you buy one carbon credit to offset that so that you become carbon neutral. So you have minus one from your emissions, plus one from your carbon credit to offset that. So minus one and plus one offset. So you are now zero. You are carbon neutral. [00:29:54.330] And you've got all these companies that are already pledged to be carbon neutral. And I'll get to that in a minute. But the way this sort of market works is you have on one hand, you've got companies, factories and big Fortune 500 companies, and everybody saying we need to reduce our carbon emissions and we need to become net zero, we need to become carbon neutral. And so they're buyers of carbon credits. On the other hand, you've got people that are suppliers of carbon credits. [00:30:20.070] These are people that plant trees and conserve trees and so forth. Because of that, they have there's some math behind this that shows, okay, depending on this species of peak or pine trees or whatever, this many trees on this many acres will sequester x number of tons of carbon. So basically they say, okay, we'll give you x number of carbon credits per acre of this kind of species of tree you have. And so you have people that are going to plant those trees or conserve those trees that already exist, then they get a certain number of carbon credits. So you have the producers of the trees, basically people that are managing the trees and the forestry projects that are supplying carbon credits, and they're selling them to the companies need to buy the carbon credits to offset their CO2 emissions. [00:31:07.630] And so because of this, there's this creates a marketplace where you've got the suppliers of carbon credits and the buyers of carbon credits. And so the price of carbon credits goes up and down based on that supply and demand. There's more suppliers, there's more demand, et cetera. So that price goes up and down. And then, of course, there's interest. [00:31:23.340] What really drives a lot of the price of carbon credits is interest from speculators. So you have speculators that come in, and they think the price of carbon credits going to go up, and so they buy a bunch of carbon credits, or they think the price of carbon credits might go down, and so they start selling carbon credits. But ultimately, in the long run, it comes down to speculators get into everything. They get into stocks and get into forex, and they get into options. They get into every gold and commodities, everything for which you can speculate, real estate, etc, etc. [00:31:50.160] But at the end of the day, longer term market prices are determined by supply and demand. There's either there's more demand for carbon credits or there's less demand for carbon credits. That's what ultimately drives supply and demand of just about everything in the long term, supply and demand. [00:32:07.540] The other thing I think to understand about this, and I want to talk about supply and demand of carbon credits, is that it's not enough. The marketplace is really quite broken. There's no marketplace. There's a lot of different individual marketplaces. I won't say it's decentralized, it's just really fractured. [00:32:24.900] It's very disparate. A farmer doesn't really sit with a factory owner in exchange credit. It's not like a guy who runs a forestry project shows up to the local factory and says, hey, I got 1000 acres of peak here and so it's this many tons of CO2 and you're admitting this many tons, so let's do a deal and you're going to pay me for this. That's not really how it works. How it works is there's some bureaucratic organization that stands in the middle of that. [00:32:47.700] And they go with their clipboards and their studies and their surveys and they go to a farm or forestry project and they say, OK. Well, you've got this many acres and this many or hectares in the metric system and this type of tree and blah, blah blah, carry the one, etc. And so we're going to award you this many credits. But it's kind of you lick your finger and stick it up in the air and figure out which way the wind is blowing. It's really not an exact science. [00:33:13.110] As much as these guys love to brag and praise about their science and science people and following the science, whatever, it's actually not really a terribly precise or scientific process. It's also incredibly bureaucratic. Sometimes these projects, in order to be certified by one of these kind of bureaucracies, these nongovernmental organizations that stand in the middle there, it could take a really long time, sometimes even a couple of years. And so then you've got the exchanges themselves where people go onto an exchange to try and buy and sell carbon credits. There's no global market for carbon credits, no standardized contract like there is for something like gold or oil or coffee or Apple stock or whatever. [00:33:53.800] I mean, you can sell Apple stock in exchanges all over stock exchanges all over the world. And a share of Apple is a share of Apple. But with carbon credits, every place is different. But more importantly, the rules and the regulations are different everywhere. So it creates a really confusing and highly bureaucratic process. [00:34:10.090] That's kind of one of the reasons why it sort of got quiet for many, many years and people didn't really hear very much about carbon credits because it became a little bit too difficult for it to take off. Now again, if these policymakers were actually serious, then they would come up with a simplified standardized process for carbon credits at this. But of course, they're not interested in real solutions. They're interested in the appearance, the optics. They're interested in giving the appearance that they care about the climate as opposed to actually doing something and coming up with real solutions. [00:34:38.820] Now my view is that there are challenges in, in this, this fractured and disparate marketplace. But long term, and again, long term is really the long term. Supply and demand is what sets prices and really drives prices. And I believe wholeheartedly that demand for carbon credits will soar based on the trend that we see right now, there's almost an unstoppable momentum in this sort of climate fanaticism from policymakers, where it's every month, every year, it's more and more and more. It's more regulations. [00:35:11.350] In New Zealand now they want to tax Cal Farts and all these things no joke. These are real policy ideas and solutions that people are coming up with. Again, it's ludicrous. It's hilarious to see some of the stuff that they come up with. And so every day it's just more and more and more. [00:35:29.010] And I think that that drives long term demand for carbon credits. We already see this right now that a bunch of companies, for example, if you look in the United States and the SP 500, whole lot of companies have made some sort of climate pledge. But honestly, right now it's a relatively small number, which is well under half of the SP 500 companies. And way below that, if you look at a broader index like the Russell 2000, it's just a fraction of what it's going to be in the future because I think probably within a decade. Again, I could be wrong on the timing, but we're going to get to a point, I believe, where pretty much, I mean, not only every company in the SP 500, but probably nearly every medium to large sized business. [00:36:12.180] At least in the developed world, will have to be moving not only towards some kind of pledge, but hardcore carbon neutrality, whether they like it or not. They'll either have to do it because they're being forced to by the government, or they're going to have to do it because their consumers aren't going to forgive them otherwise. And again, it's all about the optics. We don't really care. We just have to look like we care. [00:36:31.260] And so we're going to come up with this pledge, but it's got to be a big pledge like carbon neutrality. And carbon neutrality again, means A, I got to cut my carbon emissions as much as possible and B, I have to offset whatever negative emissions remain with some kind of positive offset. That means carbon credit. So the demand you can sort of see already that if you're looking at the longer term trend here, demand is absolutely going to soar. And on top of this, that's just corporations, right? [00:36:59.310] On top of that, you've got pretty much nearly every country in the world has pledged carbon neutrality by different timelines. 20, 30, 20, 40, 20, 50. China says 2060. Who knows if they'll actually get there? And again, this is very long term, but there's a whole lot of this even by 2030. [00:37:15.540] And by 2030 we're going to have this much of our carbon emissions last, or this percentage that's carbon neutral. And for governments that are signing up for this stuff, this means they have to do it that's state, provincial, local, federal, national governments, schools, hospitals, port facilities, etc. Are all these different entities, governmental, governmental related, that are having to purchase carbon credits to offset their carbon emissions. So that's a really big increase in demand for carbon credits. At the same time, the ramp up period, if you think about supply, has significant lag. [00:37:50.350] It takes years and years for trees to grow to the point that you can actually say they're really sequestering or capturing a lot of carbon. Years, not to mention the bureaucratic process to approve those credits can also take years. But that aside, if you just think about nature itself, it takes a long time for trees to grow. So if all of a sudden there's this really big increase of all these countries that want to go, and corporations and all these different facilities and institutions that are trying to reduce their carbon footprint and go to carbon neutrality, et cetera, and you have this really long lag period because it takes such a long time for trees to grow. There's a massive gulf between the demand for carbon credits, which could go to the moon, and supply, which will certainly increase, but will do so at a much slower pace. [00:38:36.930] And so that gulf of the difference between demand and supply, I think you can make a case, as a case to be made, that the price of carbon credits could really take off. I would say. Speaking of taking off, actually, we could also see incredible man from consumers as well. Take off, I say a little bit tongue in cheek, but if you've ever bought an airline ticket from some airlines I know British Airways does this, for example. It always gives you the option to there's an option right now where they offer you carbon offsets when you purchase your airline tickets. [00:39:06.640] So you get to the end, you go to your shopping cart, and of course, they always offer you that travel insurance, which is a total scam, and everybody knows that they offer you travel insurance. By the way, if you're traveling and you're thinking, geez, I need travel insurance, never buy it directly from the airline. That's crazy. If you want travel insurance, just go and search for specifically travel insurance and you'll get a much, much better deal. Travel insurance in and of itself is not a terrible idea because if you get sick and you have to go to the hospital or something like that, it's not a bad idea to have some insurance. [00:39:34.210] Just don't buy it from the airline because you'll pay three, four, five times the price easily. But in that sort of shopping cart part in the end, and you say, okay, would you like to buy a carbon offset? This could easily become mandatory, right, so you won't see it in the price. There'll be some law passed or they say every airline has got to charge carbon offsets. And when they do that, you're not going to see it. [00:39:54.150] It's going to be invisible, but your fare is going to go up to include the cost of the carbon offset, or they might add it to the fare. So they'll do like with rental cars, when you reserve a rental car and they say, oh, it's $75 a day, and then by the time they add all the taxes and fees, it's like $180 a day, you go, whoa, what happened to $75 a day? It will be the same thing where they go, okay, your fare is $249. And they go, oh, there's this fee, this fee, this fee, this fee, this fee, the 911 security fee, blah, blah, blah. And then, oh, there's a carbon offset fee. [00:40:23.290] So instead of $249, you're actually paying $486 or whatever. So it'll be something like that. And that is really inflationary. And I think we could easily see the same thing for gasoline and electricity and all sorts of things. I mean, ad valorem taxes, carbon taxes on automobiles in general. [00:40:43.080] If you have an automobile, they don't like that, so they create certain disincentives and taxes, and there's a carbon tax on vehicles, all sorts of things that we could see, all in an effort to offset individual CO2 emissions. This could be one of the most inflationary events of our lives if we all start having to offset individual carbon emissions on all these things travel and transportation, energy consumption, etc. And that could be an incredibly inflationary event. But again, these are people who are all about human sacrifice for the greater good. They've unilaterally decided in their sole discretion what the greater good is. [00:41:22.380] There's been no discussion about it. There's been no national debate. If you have a different opinion, they shut you down. They say you're a conspiracy theorist and you're anti science and all those things, and then they'll just force you to sacrifice whether you're willing to or not. Again, they want everybody to go back to this almost neanderthal pastoral lifestyle, eating bugs and weeds. [00:41:42.340] And that, to them is this ideal situation. And I say a little bit tongue in cheek, and I don't know really how serious they are about that. But again, you look at this cop, 27. You go, really? You devoted an entire day to gender identity, but there was no discussion of nuclear. [00:41:58.920] Zero discussion of nuclear. And you just how do these people expect anyone to take them seriously? That's why you can hear me almost laughing as I talk about this, because it's comical. Their incompetence is just so comical. It's hilarious. [00:42:15.860] And it would be I think there's probably a reason to be afraid if you don't have a plan B, if you're not thinking about this stuff. Big picture. And I think that's the important thing is to think about this really, really big picture, look at the trends, step back and take a much larger view of some of these trends. And you'll see here, sure, there's risk and there's also opportunity. So part of the risk needs to be mitigated is them trying to force feed things, no pun intended, really jam things down, whether it's carbon offsets or taxes or just different rules and regulations and things like that. [00:42:53.190] Because again, they've decided what's the greater good and they want you to sacrifice. And there is a lot of precedent for this. If we look at COVID, et cetera, lots and lots of precedent for them just forcing everybody to sacrifice, whether it makes sense or not, where it's economically rational, where it's environmentally rational or not, they don't really care. It's all about the optics. But there will always be countries that don't participate. [00:43:14.430] And COVID, again, was another great example of that. Whereas most of the world certainly was hardcore, hardcore locked down and keeping people in their homes, like where Felons locked up in a maximum security penitentiary. There were countries that didn't participate. There were places even within countries that didn't participate. And I've told this story a lot, but it's why I ended up my wife and I ended up in Cancun, Mexico, to have our first child last year. [00:43:40.120] It's because we wanted to be in a place where COVID didn't matter. And the Riviera Maya region, coastal Mexico, near Cancun, this was a great place to be. And I remember the first time I walked into the gym in Cancun and nobody was wearing a mask. And this was like peak insanity during COVID nobody wore masks, nobody cared. Because there are always going to be places that buck the trend. [00:44:03.700] Everybody else might be going along with it, but there will never be 100% compliance. Even with something as crazy as COVID, there was not 100% universal compliance across the world. And it would be the same with this. There will be people to go, no, we're not going along with this nonsense. We're not going along with this gender identity solutions to solving climate change. [00:44:22.170] We're not going to play by those rules. That's silly. And those countries will make themselves known. And this is why we talk about things like residencies and passports and so forth, because you will have options. And when you have options, when you exercise those options, more options means more freedom. [00:44:38.220] And this is why it's something that we can look at it and see all this sort of insanity. We can see the wokeness and the incompetence and all these things that we can be afraid of it, or we can say, you know what, I'm just going to make sure that I have some options. And if you have options, you're going to be okay. You're going to be okay. And this is a really big risk mitigating factor. [00:44:58.840] Again, with change, there's risk and there's reward. There's consequences, an opportunity, and it makes a lot of sense. The whole concept behind having a plan B is making sure that you're in a position of strength regardless of what happens or doesn't happen next. And so some country, a whole bunch of countries go down a very destructive road and say, we're going to regulate this. We're going to make this happen, we're going to increase this tax, and so forth. [00:45:21.220] If you have some other options, you're going to be okay. And if that stuff doesn't happen and things turn out to be just fine and the risk never materializes, then big deal. You're not going to be worse off because you have a second passport that still allows you more freedom and rights to live in other places and you can pass that down to your children and your grandchildren and so forth, that you have the ability to go and live in a nice place. At least go on vacation on the beach somewhere or whatever. There's no downside to that, right? [00:45:51.580] There's no downside whatsoever. But if the worst does happen or even anywhere near that adverse scenario takes place, then you have options. And those options mean that you're going to be okay. That's the whole point of the Plan B. It's not to go and spend crazy amounts of time and money and energy and stress on things that don't make sense or they only make sense in some cataclysmic scenario. [00:46:13.930] That's not really, in my view, a sensible approach or a sensible plan B. If your Plan B only makes sense if the world comes to an end, then it doesn't work, right? Because there's going to be 99.9% that like this one specific scenario that you're planning on doesn't come to pass, it's going to be something else, right? And so the idea is to do things that are sensible no matter what happens. If everything turns out to be fine and the unicorns and the rainbows and the buttercups and everything's great, then your Plan B should make sense in that scenario as well. [00:46:46.260] And that's why I said having a residency or a couple of residencies and other places that you actually like to go and visit that might even end up later on down the road after a few years awarding you a passport that your children also end up getting and their children can end up getting. And great. There's no downside there. There's no downside. Oh, well, I take a vacation every couple of years and I go to some nice place on the beach that I enjoy. [00:47:10.710] There's no real downside there. And that's the way to think about it. And again, in a scenario like this where they get really draconian on climate regulations and so forth, it does make sense to have some other options. We can talk about some of that other time. We talk about that sort of thing a lot. [00:47:26.850] I don't want to get too deep into that today. But the flip side of that is once you've mitigated the risk, again, these changes and trends and so forth, they come with risk. They come with rewards that come with consequences, that come with crises. Sometimes they come with opportunity and the opportunity here is these guys are creating a massive industry, really, really massive industry, and there's going to be a lot of money to be made. [00:47:50.590] It's undeniable because they are putting so much money behind it. They're putting just hundreds and hundreds of billions of dollars. I mean, you see these estimates about stopping climate change. You know, it's going to cost hundreds of trillions of dollars. Oh, my god. [00:48:04.080] I mean, if they even put if they even put 1% of that money towards this, I mean, it's trillions of dollars. So there's a lot of money to be made in that trillions of dollars. And it's important, I think, to look at all this with a very long term view. I have to say here as well. Like, this is not me giving anybody any investment advice. [00:48:27.930] This is a guy I'm recording this on December 2, 2022, a time when the first amendment in the United states still exists. So this is a guy who's just exercising his first amendment right to have an opinion. But in my opinion, one, again, hedging your sovereign. Risk, as we talked about before, does lead to more freedom. Having a plan b makes a lot of sense. [00:48:46.720] And number two, you can make money from this insanity. And one of the ways to do that is through carbon credits. I think it's definitely sensible to look at if you have a long term view. There is potential, as we talked about, for the price of carbon credits to grow substantially simply because there's a mismatch between demand and supply. You got all these companies, all these governments, potentially individuals and so forth, that are going to demand more and more and more. [00:49:12.670] We can see easily an exponential increase in demand for carbon credits for supply. There's not a whole lot in the marketplace. And the growth process, just the cycle of nature, takes years. The approval process for that bureaucratic issuance of carbon credits, that takes a long time. So there's a lot of constraint on supply, but a lot of momentum for demand. [00:49:36.270] And so you look at something like that and go, well, geez, that makes a lot of sense. And in a way, in a weird way, it's actually a little bit like bitcoin. If you think about bitcoin, ten years ago, there was very little penetration. Most people never heard of bitcoin. There were people that knew about bitcoin. [00:49:51.730] They were studying it. They were looking at it, and they were buying it, and they said, okay, there's going to be a time where demand is going to increase a whole lot for bitcoin. So I'm going to buy right now. Supply of bitcoin, as we know, is fixed. So there's clearly constraints on supply and probably going to be a lot more demand. [00:50:05.760] I mean, we were writing about it long, long time ago and thinking like, yeah, demand is probably going to increase. And so in many respects, carbon credits are a bit like that, where it's like bitcoin in 20 13, 20 14, where there's very little penetration, really disjointed, disparate fragmented markets. There's not a whole lot of standardization in the marketplace. And so, yeah, at some point, just as we saw the price of bitcoin suddenly spike, we could see the price of carbon spike. And because it becomes the thing that everybody wants to invest in here, one of these days in the future, people sitting around the Thanksgiving table talking about investing in carbon credits, it becomes a hot trend. [00:50:46.180] The chart, the price chart for carbon credits goes parabolic all of a sudden, and I think that's a possibility. Again, there are no guarantees about financial outcomes. There are very few guarantees in life at all. But I think this view is on fairly solid ground, just given the supply and demand fundamentals and where this momentum is going. There are other ways to do that, though. [00:51:11.620] There are other ways to invest. And personally, I'm not much of a speculator. I'm more of a business guy. I view businesses as real assets. I think it's businesses a great business is the realness of real assets. [00:51:24.430] And I've talked about this before. I think that real assets in general, real assets always make sense. They especially make sense in an environment where governments and central banks have proven their incompetence. They're rapidly losing the confidence of the world. And in a very inflationary environment, stagflationary environment, real assets tend to make a lot of sense. [00:51:44.170] If you think back to the 1970s, real assets did very well. Gold did incredibly well. Agriculture did incredibly well. Farmland specifically did very well. Energy did very well. [00:51:55.690] The stock market, on the other hand, was pretty dismal. The stock market was not a good place to be in the 1970s. And so in an environment like this I've said this before, I think real assets do make a lot of sense. And I view businesses as a fantastic real asset, a productive business that's managed by talented people of integrity, that produce a valuable product or service that's in demand. This is a great real asset. [00:52:23.520] And I'm a business guide. I think about business. Businesses, unlike other asset classes, like real estate, for example, real estate generally has a fairly fixed upside. If you buy a single family home or an apartment complex or something like that, you can only do so much to raise the rents right. You can fix up the kitchen and spruce up the bathrooms and these sorts of things. [00:52:45.580] But you can't take a place, can't take a house that's running for $2,000 a month and all of a sudden charge $20,000 a month. But at business, revenues can grow really limitless boundless. It's really a function of, as opposed to market constraints. It's a function of human ingenuity, creativity, talent. And that's one of the reasons why I like business so much, is because the potential is literally unlimited. [00:53:09.270] And there. Are already and will continue to be businesses that look at this trend, look at this momentum, and capitalize on some of those opportunities. And so businesses that are really related to whether it's carbon credits or different technology, whatever. I'll give you a few examples. I mean, I help manage personally an investment fund that has invested pretty heavily in some of this. [00:53:31.270] And one of the things that the fund got into was a forestry provider. Often it's in Africa where land is literally dirt cheap. And the fund came in and bought thousands and thousands and thousands of acres to produce carbon credits. And there are going to be a lot of businesses that focus on this. And I look at something like this and go, okay, if I think that demand is going to soar in the future, I want to be a supplier of that. [00:53:55.240] I want to be a supplier of that thing, and I want to get in early so that as demand really starts to skyrocket, now, suddenly my trees are coming online, my permits are coming online, my credit is coming online, and we can start selling those things and make a lot of money. And there's going to be funds, there's going to be businesses and so forth that do that. Technology is always in. These sorts of things can be a really great idea. We invested as well alongside with many of our Total Access members in our group here, in a company that has developed just, again, another example here, really incredible satellite AI technology. [00:54:28.860] So this is so that companies can determine exactly how much CO2 is being sequestered. So this way they really streamline and even bypass that insane NGO bureaucracy. So if you've got a big company that says, you know what, I don't even care. We're not going to buy carbon credits. We're just going to go and get our own land and offset stuff ourselves. [00:54:48.630] We're going to go get our own teak plantations. We're going to outsource and contract with some teak providers. But I want to know exactly how much CO2 is being captured here so we can look at our balance sheet and get some really precise determinations. Well, these guys have created technology to be able to do that. And I think that's going to be really, really valuable technology, looking at the trends and the momentums and so forth. [00:55:08.380] Again, nothing is risk free, nothing is 100% certain, but it's just an idea of a couple of ideas of ways to sort of get into this. It's directly into carbon credits and some businesses that have exposure to that and businesses that are basically tackling some of the problems and the challenges in the marketplace. But ultimately, again, it just to me seems that there are a whole lot of opportunities here based on this big trend. These bureaucrats, these policymakers, the high priests are demanding their human sacrifices. They're creating a gigantic industry. [00:55:39.490] And we do hear about it a lot right now, but if you think we hear about it a lot now, you ain't seen nothing yet. This is still fairly nascent. If you compare what's happening right now in the climate market and the carbon credit market, etc. But if you compare this today to the ambitious climate and carbon goals that they've set for 20, 30, 20, 40, 20 50 and so forth, again, so I said you've got to have a longer term view. This isn't some overnight thing where you can just go, oh, I'm going to buy something and I expect it to go up 40% tomorrow. [00:56:09.400] That's not really what we're talking about here. This is something with a very long term view. It's not anything that somebody says, oh, I got to get in right now, or anything. We spend a lot of time studying this, trying to figure out the best ways in the best approaches, the right people to work with, etc. Or spent really a lot of time studying this. [00:56:27.820] And it's something that, again, you should never invest in anything that you don't understand. You should really, really do a lot more research and understand everything about the market and what you personally think are the risks and the opportunities. But there is literally so much money being put into this and a lot of it is completely silly, nonsensical. Some of these are just terrible ideas. But the momentum is what it is and it doesn't seem to show any sign of slowing down, let alone stopping. [00:56:53.650] And because of that, they are creating really a mountain of opportunity here for people that can see this and understand where these trends go. They are like the high priests of the Mayan civilization or the Celtic druids, or even the Roman elite who put their thumbs up and down or really sideways for the whether or not people live and die in the Colosseum, they're more than happy to watch people suffer. Or at least they're turned a blind eye to the suffering that they create, to the sacrifices that they demand for their sole definition of the greater good. Again, you don't have to accept that. You don't have to be the sacrifice. [00:57:27.390] And that's why we have a plan B. That's why we create options for ourselves. And there will always be options because like I said, there's never universal acceptance for these things. Even with COVID there were options. There were places to go where you could still have a sane and normal life. [00:57:43.470] And it'll be the same with just about everything. You rarely have universal blind acceptance to a single rule around the world, and COVID taught us that. But at the same time, we shouldn't ignore the obvious momentum of this trend because there will be a whole lot of opportunities that come along with it. Thanks very much for listening and we'll talk to you next week. Close Podcast Transcription

You’ve probably been following the news that FTX, one of the largest cryptocurrency exchanges in the world, is in hot water. And frankly that characterization is an insult to hot water. FTX has already filed for bankruptcy. Potentially $10 billion or more of customer money is at risk. The new CEO states that the company’s internal controls were “a complete failure”. And the company’s founder, Sam Bankman-Fried, has proven himself to be, at a minimum, an irresponsible, reckless child, if not a full-blown fraudster. It’s easy to lay the blame exclusively on him. And he clearly deserves a lot of it. But a failure (if not fraud) of this size cannot be perpetrated by a single individual. Even Bernie Madoff had accomplices. Or people who should have noticed but were totally negligent at their jobs. In fact the Madoff scandal is a great example. Madoff’s firm had to undergo routine regulatory examinations. And yet, year after year, the Securities and Exchange Commission completely failed to notice the rampant fraud. In the aftermath of the Madoff scandal, a US Department of Justice investigation concluded that in the SIXTEEN YEAR period between 1992 and 2008, the SEC had “more than ample information” and that they “could have uncovered the Ponzi scheme well before Madoff confessed.” The report further blames the regulatory agency’s failure on “systematic breakdowns in which the SEC conducted its examinations and investigation.” Talk about being asleep at the wheel… In the case of FTX, there were also a lot of people who failed to notice what was happening. Most notably, Sam Bankman-Fried became the #6 biggest political donor in the United States; 99.6% of his contributions went to progressive candidates. Did any of those politicians really scrutinize where the money came from? Did any of them ask for audited financial statements to make sure the money was clean… or to make sure that the guy wasn’t spending his customers’ money? Apparently not. Politicians happily cashed the checks and didn’t ask any questions. This is an outrageous failure. Politicians constantly pass rules and regulations making financial compliance far more onerous for everyone else. (If you don’t believe me, try going down to your local bank and withdrawing $25,000 in cash… and see how quickly they treat you like a criminal suspect. You’ll be there all day filling out forms and justifying your actions.) But do they apply those same rules to themselves? Absolutely not. They just take the donations. It’s a despicable double standard. Also culpable in this massive failure are the prominent venture capital firms who enabled this overgrown man-child to go rogue. Sam Bankman-Fried raised at least $1 billion from investors, including firms like Softbank and Sequoia Capital. Softbank, of course, is infamous for its enormous investment in WeWork, effectively encouraging CEO Adam Neumann to recklessly spend other people’s money. It seems that Softbank didn’t learn its lesson, because they once again dumped a mountain of cash on a guy who is even worse than Neumann. More importantly, however, Sequoia and Softbank are hard core, sophisticated investors. They have huge teams of lawyers, bankers, and analysts. And, even though FTX is a private company, as investors they would have had access to the company’s financial statements. In other words, they should have seen the impropriety. They should have seen it, and they should have done something about it. But they didn’t. They stood by once again in silence, enabling Bankman-Fried’s irresponsibility. Despite this colossal failure of a major player in the crypto sector, however, it’s important to separate FTX (the company) from crypto (the idea, and the asset class). In my view, FTX isn’t even a crypto business. It’s a financial institution, little different than Bank of America. Whenever you make a deposit at Bank of America, that money becomes BOA’s asset. In other words, legally it’s no longer your money. It’s Bank of America’s money. You become an unsecured creditor of the bank. And, subject to certain regulatory limitations, Bank of America can go and gamble away your money on crazy loans and investment fads. We’ve seen plenty of examples of banks recklessly speculating with their depositors’ funds in the past. The entire 2008 financial crisis, in fact, was because banks gambled with their customers’ money. And it almost brought down the banking system. This is basically FTX’s business model. They took in customer deposits, including cash and crypto. Those deposits became FTX’s assets, and customers became unsecured creditors of FTX. This is the way any financial institution works. And FTX was essentially a financial institution– highly centralized with a distinct lack of transparency… with the added risk that a single moron had total control over everything. Frankly this is the opposite of what crypto represents. Crypto is all about decentralization and transparency, and that no single person or group has control. So FTX in no way represents crypto; it’s just another conventional financial institution that acted irresponsibly with other people’s money. It’s not the first. It certainly won’t be the last. And its failure underscores even more how important a decentralized financial system is. This is the topic of our podcast today. I walk you through the history of several other industries, starting with railroads, that underwent spectacular financial bubbles rampant with fraud. But even after the bubbles burst, the good ideas still remained. Railroads were a great idea that fundamentally improved our civilization. And even after the railroad bubble burst in the 1840s, great companies and great technology remained. The same goes for the Internet– it’s a great idea that has fundamentally improved our civilization. And even after the dot-com bubble burst in 2000, great companies and great technology remained. Crypto is still a fantastic idea. It has the power to move the needle on human civilization. (When you think about it, it seems almost bizarre that in 2022, highly centralized and bureaucratic financial institutions still exist and operate largely in the same way they did in 1822.) And despite some of the recent failures in the crypto sector, some fantastic assets and great technology still remain. You can listen in here. Open Podcast Transcription [00:00:01.060] Today, we're going to go back in time to October 6, 1829, to the tiny village of rain hill in the northwest of England, where a 25 year old British inventor by the name of Robert Stevenson was about to do something profound. Stevenson had entered the competition of his life, and the stakes were so high, he knew they would either ruin his family's reputation, everything his family and especially his father had worked for for so long, or he was going to fundamentally change human civilization forever. It was only one of those two outcomes, and he knew it. Robert Stevenson's father was George Stevenson. George Stevenson was a very prominent, very famous inventor during the British industrial revolution, whose most closely associated with advances in railroad technology.   [00:00:47.260] In fact, George Stevenson is actually known as the father of railways. Now, that didn't mean that he invented railroads or railroad technology. In fact, archeologists have uncovered a tremendous amount of evidence going back to even the neolithic era, thousands and thousands of years ago. The oldest really rail there's a timber causeway that dates back to more than 3800 BC. In southern England, about 50 miles from where stonehenge is sort of near the welsh border.   [00:01:17.310] It's so old, actually, it even predates stonehenge. It was built by a civilization that's so old that archeologists and historians don't even actually have a name for it. So this is really, really old technology. The babylonians had some very crude sort of rail and track technology going back to 2200 BC. The ancient greeks had actually quite impressive five mile track that connected the peloponnesian peninsula to mainland Greece, dating back to around 600 BC.   [00:01:44.670] So this is very, very old technology, but at the time in the ancient world, it was basically stone or wood or timber, where you could basically put a little wheeled cart that was being pulled by horses along a track. And they would use this either to take raw materials from, say, open pit, mines, maybe fields, or they would chop down trees from forest and put the timber inside of a cart that was being pulled along a track by horses. And maybe it would even go across a short waterway over very, very short distances. This is primarily what it was for, but the cost was very high. As you can imagine, it was all human and animal muscle at the time.   [00:02:23.230] So it was a lot of effort for human beings to actually lay track. They didn't have machines, they didn't have really any equipment. And a lot of these civilizations, this was, even if we go back to the one in England, this was pre bronze age, they were really still using stone tools. So it took a lot of effort to lay track. They hadn't really perfected iron working.   [00:02:42.840] So the tracks were basically made of timber, and because of it was made of timber, can break more easily, and they couldn't put very much weight in the cart it was being pulled by people and horses. So the cost benefit wasn't really worth it. And because the cost benefit wasn't really there, the technology developed very, very slowly. But eventually, and I'm talking over very long periods of time, there were advancements, metallurgical developments that made iron working a lot easier. And once iron became cheaper, easier, better, and this took literally thousands of years, then iron rails were eventually introduced where people realized, oh, we don't have to use wooden track anymore.   [00:03:19.630] We can actually use iron rails instead of wood or stone. But the rail itself, the carts were still being pulled by horses. Everything was still powered by horses. But then came the real revolution in 1776. And of course, 1776 is very famous for the American revolution, but that's not the revolution I'm talking about.   [00:03:38.610] 1776 was also the year that James watt finished his design, perfected his design for the steam engine. We actually did an entire podcast about this, about how important that was to human civilization. 1776 was also the same year that adam smith wrote and published the wealth of nations, essentially giving birth to capitalism. So three really important things happened in 1776 the birth of the United States, the birth of capitalism, and the development of the steam engine. All three of which also fundamentally changed human civilization forever.   [00:04:10.240] Now, inventors and engineers after 1776, and they saw the steam engine, they thought, oh, my god, this is amazing. Now, all of a sudden, instead of having to use horses and people and so forth to do manual labor, now we have this inanimate fuel source. We can take wood and eventually coal, and we can burn it. And using that heat energy, we can heat up water, which is going to create vapor and steam, and use that steam to actually power and drive pistons and turn wheels and crankshafts and so forth. And from this, they actually began to apply that steam technology to rail.   [00:04:44.380] Now, it took about 30 years, three decades, but the first real steam powered locomotive engine came in 18 four. And so they used steam technology to create something that could actually pull a car. This was a locomotive engine built on steam technology, but it was way too heavy. The engine was so heavy, it crushed all the tracks. They put this big engine on the tracks, and all the tracks just crumbled.   [00:05:07.610] But at least it worked. That was in 18 four. Now, eight years later, in 1812, amidst all the gotta think about what's going on in 1812. In Britain, they're fighting the US. In the war of 1812, they're fighting against Napoleon, who's running all over europe.   [00:05:21.120] All these things were happening in 1812. And yet, despite all of that, there was still a lot of advancements in technology. In 1812, the first sort of actually commercially, economically viable locomotive engine was introduced. It was another steam engine, and they were able to make it a lot smaller, a lot more power efficient. So it wasn't so heavy that it just crushed everything below it.   [00:05:42.010] It crushed the tracks and so forth. And it was in 1812 that's when George Stevenson looked at the technology and said, okay, I think there's something here. I'm going to get involved in this. Now, george Stephenson was a remarkable guy, really remarkable guy. Talk about a kind of rags to riches story guy that just pulled himself up from his own bootstraps.   [00:06:00.090] He was born in 1781 in northern England, near the Scottish border. So if you've ever been to England and you're familiar with regional accents in England, he had a very heavy northern English accent that was actually a bit of a chip on his shoulder, on top of which, he grew up in an extremely poor family. He wasn't educated at all. He had very limited formal education. And George Stevenson was actually even illiterate until the age of 18.   [00:06:24.570] He came from a very, very low class working family, limited education, but was completely self taught, had an intellectual curiosity, was a voracious reader, learned everything that he could, was constantly doing experiments, and self taught in science and technology and engineering, really, through trial and error. One of his early inventions, when he was in his mid 30s, he made an improvement on something called a safety lamp. Safety lamp was a really important invention at the time, because, again, if you think about the 1800s, they had invented after James Watt had perfected the steam engine, and there were more and more advancements in that. And they realized, wow, we need a heat source, something that we can burn to produce heat, to heat up that water, to make the vapor and the steam. And so instead of burning wood, they realized that they could burn coal.   [00:07:09.430] Why coal? Well, because coal is a much more efficient fuel source than wood. If you think about the amount of BTUs or joules or calories, whatever unit of energy you want to use per kilogram of wood versus coal, coal is a much more dense energy source. You get a lot more BT use of heat out of a kilogram of coal versus a kilogram of wood. They realize we need to use coal because it's a much more efficient fuel source.   [00:07:33.970] So they had coal mines all over the place, people mining for coal. Now, most people probably never been in a coal mine. They're really dangerous places, and you've got all sorts of dangerous chemicals in the air and so forth. And obviously, they're also very dark. And so back then, they had lanterns and lamps everywhere.   [00:07:50.200] And you're talking about actually putting flame in an environment where you've got dangerous chemicals in the air. And a lot of times, a lot of coal mines actually just literally explode from the combination of the heat, the flame in the lanterns, and all the toxicity in the air. And they would just exploded the air itself would combust. They were really dangerous. And so they created these things called safety lamps to try and cut down on the explosions in coal mines.   [00:08:15.040] George Stephenson created one, a version of a safety lamp to actually reduce and eliminate explosions in the combustible air that existed in coal mines. And he created a really nice version of a safety lamp, something that was actually better and safer than existing versions of safety lamps that existed. Now, George Stephenson had a lot of records of his invention, all the experiments that he had done. He had witnesses of people that saw him conducting experiments and so forth. And yet when he came out with his final version of, he said, OK, here's my safety lamp, he was actually accused of stealing the idea because they said, no, no, no, you're an uneducated poor person from northern England.   [00:08:51.420] You couldn't have possibly invented that. And there was actually almost a mini trial of sorts where panels of experts convened and determined whether or not somebody with his lack of formal education, his lack of fancy titles, his lack of a noble upbringing, etc, could have possibly invented something so good. Now, George Steven was eventually exonerated from that, but for the rest of his life, he maintained a very healthy distrust for experts and scientific committees and so forth. And he actually went out of his way to make sure that his son Robert was formally educated. He went to private school, took elocution lessons to actually speak with a nonregional English accent and so forth.   [00:09:30.520] He really had this chip on his shoulder for the rest of his life. And he hated experts. Oh, did he hate experts. But he ended up having a great deal of success. And eventually, again, after this sort of first commercial viability of railroad and steam engine technology, he realized, this is the future, rail is the future, and I'm going to get in on this.   [00:09:50.620] And he became very, very successful in applying his brain towards developing locomotion engines that were based on this steam engine technology. Now, the first engine that he completed was in 1814, and it was a pretty remarkable feat at the time. It could haul 30 tons. 30 tons. It had a 30 ton towing capacity.   [00:10:09.850] It could actually tow up a hill at about 4 miles an hour. That was a remarkable feat at the time. 4 miles an hour, obviously, is nothing today that's about as fast as a relatively casual stroll on foot. But to be able to tow 30 tons up a hill at 4 miles an hour was an incredible feat in 1814. And that really catapulted George Stevenson into prominence in the rail industry.   [00:10:32.060] Now, that brings us back to the beginning. That brings us back to October of 1829. The Industrial Revolution was really heating up. The British economy was booming. There were factory owners everywhere, and lots of factories, by the way, in northern England, and they were looking for a cheap way to transport raw material to their factories.   [00:10:49.480] There was a group of entrepreneurs that had launched a new railway, and the railway was actually called the Liverpool and Manchester railway, obviously, because it was a railway between two northern cities in England, liverpool and Manchester, two trading cities, commercial cities, manufacturing hubs. And originally, the directors of the company had planned on using they knew that steam technology was where it was at, but there are a couple of different ways to do it. And one of the things that they had originally envisioned was they said, well, let's just use stationary steam engines. So the idea is that we would have sort of an engine office at one end of the track, literally dozens of miles away. And we'd have this stationary engine room.   [00:11:31.110] And the engine room would just sit inside of this room and it would use cables. And the steam engine would power the cables and basically pull the track. So you have an engine room on one end of the track, you've got the trains on the other end, and the trains are attached to cables. And the engines that just sit in this room essentially power the pulling of the train cars all the way to the other end. And George Simpson said, no, no, that's crazy.   [00:11:56.580] Don't lock the engines in a room. Put the engines on a car and let the car let that steam engine tow the rest of the train behind it. So you've got the engines actually on the track instead of sitting in a room that's pulling everything with really big heavy duty cables. Now, the directors of this Liverpool and Manchester railway were a little bit skeptical at the time, so they decided, let's hold a contest and let's see if George Stevenson was right, because they knew what they could do with the stationary steam engine. They knew that they could pull their train cars at this point.   [00:12:29.610] Now, again, this is 1829. They knew. They said, well, look, we think we can get to about 10 miles an hour here, and that's a pretty big deal. So if you think you can do better than that, then we'll adopt your technology. And so they announced a big competition.   [00:12:41.290] And the competition, because it took place in this little tiny village of rainhill, the northwest of England. It was known as the rainhill trials. And today, we would almost kind of call this a hackathon, right, where some big companies says, all right, let's all get together. Let's have a competition. Whoever has the best software code wins.   [00:12:57.160] They did this in 1829, and the rules were, they said, look, if you think you've got a steam engine that you can or some kind of train that you can mount that can pull all these cars, we want you to enter our competition. And the rules are pretty simple. The entrance you had to run the train. The train had to do ten round trips on a 175 miles length of track. So basically it was going 35 miles.   [00:13:20.980] Ten round trips times one point. So it's basically 20 times 1.75, so 35 total miles. And they said you have to have an average speed of 10 miles an hour. There are some weight limits and things like that to make sure that they didn't completely cause the iron rails to buckle. But the rules are fairly simple.   [00:13:37.770] And you had ten people that came in and said, okay, I'm going to compete in this ten entrants. Now, of the ten, only five actually showed up. The other five couldn't even finish their designs in time. Of the five, four failed to actually complete the trials. So the only one that actually completed was George Stephenson's engine, which he nicknamed the rocket.   [00:13:59.850] That was actually kind of funny. The other couple of engines, for example, there's one called Cycloped. Cycloped was the name of this engine. It wasn't even actually a steam engine. It was almost hilarious at the time.   [00:14:11.560] These people went backwards in time. Instead of force, instead of using the steam engine, they used a horse. And their engine was basically a horse walking on a drive belt. If you think about almost like a horse walking on a treadmill, that would power somehow this engine that was pulling all these other cars. But during the competition, the horse actually fell through the floor of their engine room, and so they were disqualified from the competition.   [00:14:35.660] One of the other major entrance that was actually sort of the favorite at the time among the media and everybody. It was sort of the if you're a fan of the rocky series, if you think about rocky four, it was called novelty. This was the Ivan drago of the competition. It was lean, it was tough, it was fast, and coincidentally also built by a Swedish guy. Dolph luncher is also a Swedish guy, although he was playing a Russian in the movie.   [00:14:58.110] But a Swedish guy named Johann Erickson. Johan Erickson was a very famous inventor. This is a guy he ended up actually moving to the United States and designed the very first iron warship for the union navy called the USS monitor, fought a very famous naval battle during the US. Civil war. But the novelty, which was Johann Erickson's version of the steam engine, which was the favorite, it was tough, it was fast, it was a really, really good machine, but it was really temperamental.   [00:15:26.080] And it was so, so many moving parts, so many complexities to it, that it actually didn't last the trial. And it collapsed and broke down so many times that I had to actually withdraw from the competition. Stevenson's, George Stevenson's version of it was called the rocket. It was the only engine to complete the trials. He kept the design simple so it wouldn't constantly break down and so forth.   [00:15:48.610] And because, again, stevenson had a lot of mistrust for judges and panels of experts and so forth. He actually put his son Robert in the competition and let Robert run the exercise, let Robert actually conduct the train, and so forth, because Robert, again, he was educated in private school, he spoke with that nonregional accent. So George Stevenson felt that people would take his son Robert more seriously. So here we are in 1829, October, we're in the rain. He'll trials, Robert Stevenson, he's got the rocket, he's up against novelty, he's up against this ridiculous Cycloped, the horse on the treadmill that fell through the floor, and Robert Stevenson won.   [00:16:26.350] With his father's design, george Stevenson's rocket engine was the only one to complete the trials. And after that, the directors of this railroad, the Liverpool Manchester railway, said, that's what we want, that's exactly what we want. And that really did fundamentally change everything. The implications were enormous. George Stevenson proved that his locomotion technology was superior to everything else, including and especially this idea of having stationary engines mounted in an engine room 30, 40 miles away, pulling cars.   [00:16:55.620] Because Steven said, look, if you do that, there's going to be a limitation to how far these cables are going to go. And then what happens if the cable breaks, whatever. He envisioned national railways and rails going hundreds and even thousands of miles and so forth, and he said, you just can't do that if you've got a stationary engine room with cables pulling the railroad cars. You gotta put the engine on the track pulling the vehicles. And that really fundamentally changed everything.   [00:17:22.450] It changed everything in transportation, it changed everything in terms of economic and trade and growth, and it really kicked off a major boom in railroads. So the Liverpool and Manchester railway opened literally months later. And to much fanfare, everybody made a big deal. They said, this is the future, it's coming, and it's actually here today, thanks to George Stephenson. And they actually had a big ceremony where the Prime Minister was in attendance, a lot of politicians were in attendance.   [00:17:50.020] And at one point, it was a horrific accident where George Stevenson's rocket engine was being put on demonstration. There was a local member of parliament that apparently was on the track and got fatally, mortally wounded by the steam engine that was being demonstrated at the time, literally right in front of the Prime Minister. Now, fortunately, as unfortunate as that was for the MP that ended up getting killed by that accident, it didn't dampen anybody's enthusiasm for railroads and railroad technology. And the more people saw what this could do, the more the technology improved, the more people got interested in this. And of course, like any great technology, it didn't take very long for the bankers to get involved.   [00:18:30.690] The Liverpool and Manchester ended up going public. The stock price soared. A lot of railroad companies at the time were public companies. Their stock prices soared, and it didn't take very long again for the bankers and the stockbrokers to go, hey, we could make money off of this. So next thing you know, you've got stockbrokers promoting every railroad company they could find, going around to investors saying, you've got to get in on this technology, this is going to be huge, this is going to be enormous.   [00:18:52.660] And the stock prices soared. And then not shortly after that, not long after that, you've got new companies now that are going IPOing into the marketplace. You've got the stockbrokers that are taking all these railroad companies public. In fact, this really starts seeming up. By the mid 1830s, between 1836 and 1830, 70 had 59 new railways popped up on the market.   [00:19:14.140] That was actually a really big number at the time. And rail stocks in general absolutely boomed, really, really boomed through the mid 1830s. And then all of a sudden they turned and fell by about 50% by the end of 1837. Now that was basically a sort of entire boom and bust cycle. It took about eight years from 1829 when George Stevenson's rocket technology was first commercialized, and then grew gradually, then boomed, and then busted by the end of 1837.   [00:19:44.980] So between 1829 and 1837, the whole boom and bust in railroads took about eight years. That was the first cycle in railroad technology. But then the cycle began anew and there was actually several years from about 1838 to 1843 which the industry was in a low. And during this period of time, there were a lot of railroad projects that were entirely abandoned. The total miles of railroad track in England declined, the number of railroad companies declined.   [00:20:11.470] And people thought, oh, there's not really any money in this, and so I'm not even going to pay attention to it. But eventually enthusiasm started to rise again in about 1844, and there are a lot of reasons for that. There was even some legislation that was passed. Parliament got together and started passing bills and laws advancing railroad technology once again. And then investors started looking at saying, hey, if the government's in on this, then there's probably something to it.   [00:20:32.470] So I'm going to get back into railroad stocks and next thing you know, it's 1840, 418, 45, and people start buying railroad stocks again at a really, really feverish pace. And in 1844 alone, railroad stocks increased by about 40%. And again, it brought out the irrational exuberance. Local media, including names that still exist today, like the Times and the very vulnerable economists had entire sections of their papers devoted to railways. What was going on with rail stocks and who were the hot rail stocks of the day and so forth.   [00:21:04.600] And a lot of it, honestly, there's even a lot of allegations that many of newspaper reporters are being paid off by stock promoters in the railroad industry just to write puff pieces and get investor enthusiasm to. Soar there were a lot of fraudsters that began inventing stories even people went out and they would start fake railroad companies just to raise capital from unsuspecting investors. And anybody who was even in a hint who would just go out to the marketplace and say, hey, I'm starting a railroad business. That was enough to get investors to throw money at you. There are even celebrities that got into it.   [00:21:38.160] Charles Darwin, charlotte bronte, who wrote Jane aer, if anybody went to high school in the United States, probably had to read Jane Eyre at some point, that was Charlotte Bronte. Got in on rail stocks. A lot of politicians got in on rail stocks. A lot of former politicians ended up joining the boards of railroad companies. All these noblemen who were sitting in the house of lords ended up on the boards of railroad companies.   [00:21:59.440] A lot of people that were on the boards of railroad companies ended up being elected to parliament. There was a revolving door in parliament between the government and the railroad industry. And it got to the point where railroad stocks were so prominent that rail stocks made up more than 70% of the entire British stock market value, and nearly half of all the listed companies in the stock market. Right? That's crazy when you think about it.   [00:22:23.200] Half of the listed companies in the stock market were railroad companies. That's totally insane. Especially a couple of years before, there were hardly any railroad companies, and then a few years later, nearly half of all listed companies are railroad companies. Many of them were unprofitable. There was one famous rail line called the York and North Midland rail line, for example, that before this kind of boom in the 1840s, they were profitable.   [00:22:48.490] They had a return on equity of about 10%, which is a decent return on equity before the boom. And then all of a sudden, during the boom, they took in all this investor capital. They started throwing it away at stupid projects, things that actually lost the money, and their return on equity fell from plus 10% to minus zero 3%. So basically they went from being profitable, being unprofitable, simply because capital was so cheap, it was so easy to get. It led to a lot of really stupid decisions and misallocations.   [00:23:16.650] So this is now we're in the mid eighteenforty s, and England's economy began to suffer. You might be aware of something called the very famous Irish potato famine. Well, this actually starts taking place in the mid eighteenforty. There's a bad harvest in England, a fullblown famine in Ireland, 1840, 518, 46. This creates a political crisis in parliament.   [00:23:37.120] The bank of England has to raise rates. They have an outflow of gold out of England, they start losing money. Money supply actually falls and it turns into a fullblown by 1847, a fullblown financial crisis. This lasts for years, and obviously during a fullblown financial crisis like this, all asset prices fell, including and especially rail stocks. Rail stocks had blown up so much and gotten so high, so frothy, that when the financial crisis kicked in, they were the ones that plummeted the most.   [00:24:06.210] And they finally bottomed out years later, in 1850, to the point that rail stocks, the sort of the london stock exchange railroad index was 25% below the previous low in 1843. So it was a pretty cataclysmic decline in these railroad stock prices. But there is something you could argue. Some good that came out of this, and the good that came out of this is that even though there was a big stock bubble in railroad companies, and a lot of I mean, there was fraud and there was deceit, and there was all sorts of crazy things that happened, rail technology still fundamentally changed human civilization forever. Even still to this day.   [00:24:46.060] Even to this day. So much of world trade is actually based on rail. In the United States, railroads are still a really, really important part of the transportation systems, what they call the intermodal system. The US. Imports all sorts of junk, basically from china.   [00:25:01.650] And these boats come to the port of los angeles, or port of long beach, where they're loaded onto rail and they move across the united states on rail. To this day, railroad technology is still so critical to global trade and transportation. It really did fundamentally change things forever. So yes, there was a bubble, and yes, there were a lot of crazy things that happened, but it left behind a fundamentally good, strong technology. It's also important to point out that even after the bubble burst and the market bottomed out in 1850, there are a lot of really, really good railroad companies left in existence that made a lot of money for investors.   [00:25:36.490] Because they were still fundamentally good, well managed businesses that continued to make lots and lots of money for their investors over a very long period of time. Now, this story is familiar, and it's not just rail. In fact, something I've already written about before, there was another period in british financial history called bicycle mania. bicycled mania was in the 1890s, where bicycles are still a relatively new technology. You've probably seen those old photos of bicycles where you have one giant enormous wheel and one teeny tiny little wheel in the back.   [00:26:07.960] Those are called the penny farthing model, and they were really dangerous, as you can imagine. The cool thing about those bikes is that they can get really, really high rates of speed. You see people zooming across the streets of london. The other problem, the big problem though, is that they were very unstable. Those penny farthing bikes were so unstable that if you hit just a little bump or a little pothole or something like that, of which there were many numerous potholes on london streets at the time, you would really just flip over the handlebars.   [00:26:35.820] They called it taking a header. And it was incredibly dangerous. People had all sorts of. Injuries from this. And so they developed better technology that made bicycles safer and faster and cheaper and all these things.   [00:26:47.530] And this is the big thing that happened in the 1890s. By the mid 1890s, we saw that this bicycle, you know, the index of bicycle stock source 258% just in the first six months of 1896. So we're talking about nearly tripling of the index just in six months and 1896. That's pretty frothy. On top of that, you had 238 new bicycle companies that were floated in the first half of 1896.   [00:27:14.700] Most of these were just empty shell companies. They had nothing to offer but fancy promotion, made a lot of sort of high promises, but they had absolutely nothing, they had no intention of ever manufacturing a single bicycle. It was just a bunch of unscrupulous stock promoters that were trying to make a bunch of money off of a bubble. And yet similarly that bubble burst and yet the underlying technology remained. Bicycles were really good ideas, still are a really, really good idea.   [00:27:38.820] I would say probably not as important as railroads. Although, I don't know, I guess if you're in Denmark or the Netherlands or one of these places, it's a really big bicycle culture. Maybe it is for you, but this is still bicycles were really, really good idea. And the idea remained even after the bubble burst. And there's still plenty of companies that actually were responsible.   [00:27:57.190] Professional businesses that still made money with bicycles continued to develop bicycle technology for decades and decades to come. We saw this with.com bubble. There were lots of idiots, lots of speculation in the late 1990s, the bubble, the dotcom bubble was outrageous, but the internet was still a good idea. And after the dotcom bubble burst, the internet still remained. It was a great idea.   [00:28:19.470] And there were still plenty of companies, including from the dotcom bubble, that survived, that did well, that continued to exist and even to this day are highly profitable. We can already see this in other industries. We can see this in the electric vehicle industry, for example, when Tesla was really one of the first major players in the market. Now you've got all these electric vehicle companies coming out, it's becoming this really hot industry to be in where some guy comes out and says, I'm going to start an electric vehicle company and investors are throwing money at them. And you get the saga of this company, Nicola, where the CEO, I believe Trevor Milton is his name, who has actually been indicted and convicted.   [00:28:57.130] It's just making stuff up. I mean he went to investors, said, look at my vehicle and how it's moving and completely powered by electricity. And it turns out that the engineers just put the car in neutral and had it rolled down a hill. I mean the whole thing was a complete and total scam. It was a total fraud.   [00:29:13.560] This guy's already been convicted. So we can already see that exact same thing. You got a lot of knuckleheads doing dishonest things, but it doesn't change the fact that there's still some good technology there. Now, not all bubbles are created equal. And again, if we go back into history, we can see there are some bubbles that are completely stupid and totally pointless.   [00:29:32.670] Like tulip mania. Tulip mania was so stupid because you're talking about something that's literally you're talking about a flower that's literally going to die and people are paying outrageous sums of money and bidding up the price of that stuff. Something that's literally going to die, that has no real utility or value in the marketplace or anything that actually is going to move the needle for human civilization. But a lot of bubbles that we see financial bubbles are actually based on really sound ideas, including obviously railroads and bicycles and the dotcom bubble and so forth. There are a lot of examples of this.   [00:30:06.280] There was also in England, actually, there was an emerging market bubble in the 1820s, 1830s. This is a time, a period of time where there were lots of independence movements. In Latin America in particular, you had places, Chile and Argentina and Brazil and so forth, all these places in the early 18 hundreds that started winning their independence from Spain. Now you have these brand new countries in places where there's a lot of natural resources in the 18 hundreds, natural resources, really big deal. Remember, this is a time where everything we're mining coal and so forth.   [00:30:37.840] And so you've got now places that have really rich deposits of natural resources and investors in Europe are saying, hey, that sounds great, we should invest in these countries. And these brand new countries are thinking like, well, we have investor appetite in Europe. We should probably go and borrow money. We can issue sovereign bonds. Bankers from London get on boats and go out to Brazil and go to Argentina.   [00:30:59.370] And they sit with the government, they say, hey, we can bring you a lot of money and you can issue these bonds and so forth. And there became actually this big kind of emerging market bond investment fad. And there were some people that took a lot of advantage of this. There was one guy, very famous fraudster with the most spectacular Scottish name, Gregor McGregor. Gregor McGregor created literally just made up a country, it was called Poyes.   [00:31:24.900] And he just invented this country and said, oh, there's this country called Polyass. And he made it sound like it was the city of El Dorado. The streets are paved in gold and they're sitting on huge natural resources and they're borrowing money right now. And so he raised all this money for a bond, a sovereign bond for a country that didn't even exist. And so obviously that was an incredible fraud and people lost money.   [00:31:47.560] But it doesn't take away from the fact that sometimes actually loaning money to sensible governments and resource rich places is actually a good idea. Investing in emerging markets can be a good idea. The internet was a good idea. Railroads were a good idea. Bicycles were a good idea.   [00:32:04.480] And obviously all of this leads us to crypto. Crypto, the original technology bitcoin, the genesis block. This goes back to the white paper in 2008. The genesis block for bitcoin was mined on January 3, 2009, and the growth since then has been ridiculous. It was in a stealth phase for a really long time.   [00:32:25.150] It went to a major mania phase in 2017. A lot of you guys probably remember that, where quite famously, thanksgiving 2017. So it would be five years ago, right around now. We're coming up on thanksgiving week here. So thanksgiving 2017, bitcoin was like the talk of the thanksgiving dinner table.   [00:32:44.800] And, and, and, you know, coinbase opened up millions of accounts in the next couple of weeks, and there's all this crazy mania with people coming in buying bitcoin, and the price went up to a record high and then had a pretty significant crash after that. And that was really similar to the first railroad bubble. The first railroad bubble, again was nine years from 1829 to 1837. And with bitcoin, it was 2009 to 2017. So actually a similar nine year period in that first cycle where the technology was sort of invented and perfected to the time that you had this huge bubble.   [00:33:19.770] Then bitcoin had a cooling off period, basically all of 2018 and 2019, and then with the pandemic, but probably by summertime in 2020, crypto got really, really hot again. And what do you know, the government was printing all this money and paying people to stay home and all these sorts of things. A lot of people sat at home and they bought crypto. They started trading NFTs and so forth, and it got really, really hot. And of course, they rolled out all the celebrities.   [00:33:46.870] They had matt damon and tom brady and all these people. Basically, matt damon was daring people to invest in crypto. You're a coward if, you know, fortune favors the bold and all these sorts of just silly expressions. And it's quite hilarious if you've ever watched south park, they got panned on south park for this. And again, the super bowl commercials and all these things, just like we saw in the railroad period right in the 1840s, where we had the celebrities and the politicians and so forth.   [00:34:16.380] And it was the same sorts of things. We've seen so many shenanigans with crypto, all sorts of ridiculous ways that promoters invented to just take money from people. The ICO craze that went back to the last cycle. All these new constantly with new tokens and people saying, oh, I'm you know, anybody that just went out with a white paper was able to go out and raise a bunch of money and sell their ICOs and pretending that they're creating new blockchain technology. There's an entire industry of people who did nothing but write white papers specialized in promoting specific tokens, paying celebrities to do all these things, bringing politicians into it, bringing even central bankers are very highranking.   [00:34:55.240] Central bankers that got pulled into the crypto sector. And that leads us to 2022, where this year we've seen several highprofile failures. We saw terra, celsius network, and now most recently, just over the last few weeks, this spectacular collapse of FTX. FTX is the most recent one, probably the biggest one, where you've got, I mean, honestly, the story of FTX, it just doesn't make sense. In less than three years, they came from literally nothing.   [00:35:28.450] They started to being this huge company, this guy's, this multibillionaire, throwing cash around. You've got a CEO who in one respect seems to be a very intelligent person, but in another respect a complete and total moron. They had horrendous internal controls. I don't need to tell you all this, you probably have been following it. You can read the stories for yourself if you're listening to this far off into the future.   [00:35:50.440] This is a pretty big deal in the crypto industry. And you've got a company that's holding on to an enormous amount of other people's money, other people's assets. They had horrendous internal controls where the CEO is basically using other people's money as his own personal slush fund. And honestly, to say that this behavior was completely unethical doesn't even scratch the surface of how much rampant fraud and corruption there was in all this. And because of this, it's interesting is that most asset prices have been taking a nosedive lately because the economy is turning down, interest rates been going up and so forth, and crypto has been falling as well.   [00:36:34.350] But this particular issue with FTX has caused cryptocurrency to fall even further simply because of this FTX debacle. And what's important to understand is that just like the bursting of the railroad bubble didn't actually invalidate rail, and neither did the bicycle, and the dotcom bursting didn't invalidate the internet. I was talking with some friends over the weekend and one guy said, you know, it's not like when pets.com went bust in the 1990s. That meant that the internet was a bad idea. Of course the internet was a great idea.   [00:37:04.530] Regardless of what happened with pets.com and some of these really spectacular dotcom failures, what's happening with FTX fundamentally has nothing to do with crypto. When the enron scandal in the early 2000s, bernie madoff, one of the biggest stock scams of all time, it did not invalidate stocks as an asset class. It meant that Bernie Madoff was a bad guy. It meant that obviously investors need to do more due diligence on their counterparty, there needs to be more internal controls in the industry, but it didn't invalidate owning stocks as an asset class, and the dotcom bursting didn't invalidate owning technology stocks. The fact that FTX was a total fraud and that frankly, the guy that runs the show and owns the company seems to be a total criminal here.   [00:37:54.660] It doesn't say anything about crypto as an asset class or an idea, or the value of cryptocurrency as an idea. It's important, actually, to point out that FTX, in my view, is not even actually even a crypto company. FTX is a financial institution in the same way that bank of America is a financial institution. What does bank of America do? They take other people's money.   [00:38:16.180] Other people's money? Depositors money sits on bank of America's balance sheet. Once you make a deposit in bank of America, it's no longer your money legally. It's bank of America's money. You're now a creditor.   [00:38:29.290] You are an unsecured creditor on bank of America's balance sheet, right? So that's the same thing as FTX. You go and you deposit your crypto. FTX is holding on to your money, and it's actually not even crypto. People go and deposit fiat money, dollars and euros and pounds and so forth, and FTX is holding on to that money.   [00:38:49.860] Well, guess what? That's not your money anymore. That's FTX's money. It's the exact same thing as bank of America. It's a highly centralized institution, just like bank of America.   [00:38:59.880] There's very little transparency, frankly, even worse than bank of America. Bank of America, at least, has to issue quarterly audited, financial statements. They have to have management discussion. They have regulatory disclosures they have to make. Even with all that, the transparency sucks, right?   [00:39:15.210] Because bank of America has all these assets on their books, and there's very, very little detail about those assets. Do we actually know what's the quality of the loan portfolio? Do we know the quality asset portfolio? Are they buying all sorts of toxic assets and crazy derivatives and using other people's money to do it? Well, we don't really know.   [00:39:32.440] They just have huge line items where they say, we have $800 billion in loans, and we go, okay, we don't actually know anything about the loans. We don't know. Are the loans good? Are they safe? Are they made to credit worthy counterparts?   [00:39:45.070] We really have no idea. We just have to trust the bank of America knows what they're doing. With FTX, it's even worse because FTX doesn't even publish financial statements. So essentially, what FTX has done is the same stupid stuff that banks did in 2008, where banks were taking their customers money and they were making crazy gambles on wild financial speculation and silly investment products and so forth, buying toxic securities and all these sorts of things that became very famous back in 2008. FTX was kind of doing the same thing.   [00:40:15.510] FTX is taking other people's money. They were funneling it into a related party company that was then gambling it away and doing all sorts of crazy stuff. And a lot of those investments lost. And because those investments lost, all of a sudden you've got people that have deposited cash with FTX, they're now going to lose a lot of money. You got the CEO.   [00:40:33.940] This guy, Sam Bankman Freed, who claims that FTX was audited. So either he's a complete liar and they weren't actually audited, or you've got auditors. Now that it's yet another major regulatory and accounting failure. Auditors are supposed to look out for the shareholders. If this company had actually been audited, the auditors should have flagged this in a second and said, no, no, no, this stinks.   [00:40:58.600] None of this makes any sense. These guys are gambling with their customers money. When you have customers money that should be sacrosanct, that should be so wholly and sacred, you don't mess with other people's money. And so, again, either this guy is a complete liar or the auditors just weren't doing their jobs. Or both.   [00:41:19.170] It could have been both. Who knows? And again, this is just outright fraud. Just like this guy at Nicola who was saying, oh sure, look at our vehicles moving by themselves, when in fact they were just rolling downhill. Or Bernie Madoff telling everybody, oh sure, look at all these investment returns you're making.   [00:41:33.990] This seems to be a case of a guy that just made it up, just made up everything that he needed to do and was making an enormous amount of money. What was he doing with that money? Well, it turns out this guy was also one of the biggest donors. He happened to be a donor to the Democratic Party. I don't know if that really matters in this particular case, but he was doing it seemingly with other people's money.   [00:41:53.400] So this is another massive political failure where you've got a bunch of politicians, they're taking in huge amounts of money from this guy. Nobody's asking any questions. What's interesting is that there are so many industries right now, especially in the financial sector, that are required to conduct all sorts of compliance checks, things. For example, the banking industry called KYC, know your Customer. And I know these things because I own a bank.   [00:42:18.100] And it's a crazy process where people make deposits and withdrawals and trenches, and bank compliance departments have to go and understand where is this money coming from and where is it going and who's the person that's going to and is this person a criminal? All these sorts of things that go on behind the scenes a lot of times without customers even knowing that politicians aren't doing that at all. Some guy comes in with his crazy hair and his big personality and shows up and says, here, I'm going to write you a huge check. And they go, OK. And there's no compliance checks.   [00:42:49.590] Nobody is there wondering like, hey, where's this money coming from? And are these audited financial statements or any of this? Nobody. They just take the money. So this is a huge failure.   [00:42:59.880] They just take the money. Politicians, what a surprise. They don't hold themselves to the same standards that they expect everybody else to. They just take the money. There's no compliance checks whatsoever.   [00:43:10.230] And this guy, it turns out, that could have been writing checks with other people's money to politicians that were just happy to accept the money and never asked any question about where it came from. This is also so on top of an accounting and regulatory failure, failure of the auditors, failure of the politicians to even ask any question go, well, this guy's writing a lot of checks. Does that even make sense? There was a failure of investors vestors that cheered on this guy's recklessness. Once again, the usual suspects you got I believe Sequoia was in on this.   [00:43:40.080] SoftBank was in on this. A lot of these big investment funds, I gotta say, it's a weird culture with venture capital firms who I think have been consistently I mean, there's been so many moral and ethical failures. These are the same guys who cheered on, for example, Adam Newman, famously, of WeWork who stood by and just scratched their butts while this guy was double dealing, pretending like he owned the word we and just milking the company for millions and millions of dollars and just sat there and did absolutely nothing. And it's this classic sort of startup investor culture with these VC funds. They love the crazy guy.   [00:44:22.780] It's like the weirder the founder, the better. It's just this bizarre culture where investors are attracted to crazy founders that have whatever it is, they got crazy hair and crazy personalities and crazy habits and all these things. And there was one story, quite famously, where this guy, Sam Bankman Freed, was going out during an investor pitch, was playing video games during an investor pitch. He was playing League of Legends during an investor pitch. And investors actually like that.   [00:44:51.570] I mean, people will take a guy like that and write him a check, write him a big check for tens of millions, hundreds of millions of dollars because, oh, look at that, he's so unorthodox. He plays video games during investment no, he's a child. He's a child. He's an irrational, irresponsible child. And if he's going to play video games during an investor pitch, what is he going to do with other people's money?   [00:45:14.520] He has no respect for anybody's money. He's not going to respect investors and investor capital. He's sure as hell not going to respect customers and customer money and internal controls and accounting standards and all these grown up things that businesses actually require. And so to me, this is a major problem. I believe in the startup culture where you've got these people, these investors, these venture capitalists that deliberately go out and find irresponsible, crazy people because they think it's that famous line from the SoftBank Founder that if you saw the movie on Apple TV, you know, he said, who wins in a fight between the I don't remember exactly what he said.   [00:45:55.710] It was like the smart guy or the crazy guy. And he says the crazy guy always wins. And so they want to bet on the crazy guy. No, don't bet on the crazy person. Bet on the smart person.   [00:46:05.110] Bet on the person that's actually honest and talented and hardworking and actually has a real vision that's an actual sensible investment. Instead, I got to go, like, if you got some crazy thing, you got crazy hair, crazy personality, crazy habits, all that. Investors love that sort of thing. And it's nuts. It's completely nuts.   [00:46:23.160] And that kind of culture is responsible for this fraud, where you have these very, very smart big investment funds, venture capital funds, they should have known better. They should have been looking I mean, these big investment funds that invest hundreds of millions of dollars and are supposed to be run by responsible adults, those people should have been looking at this. Where were they? Where were their lawyers? Where are their accountants?   [00:46:47.890] And all this, to me, they have just as much blame as the accountants and all the political failures and so forth. These people that are also investing their investors money, the venture capital fund should have been looking at this and they weren't. And shame on them. Shame on them. This is a horrible fraud that touches a lot of people, and there are a lot of people at fault here.   [00:47:09.990] But again, FTX is not crypto. Everything that I've been talking about here I haven't even scratched the surface of the fraud or at a minimum, the malfeasance, the impropriety, the lack of responsibility. But the point of all this is that FTX is not crypto anymore than Pets.com was the Internet. I'm not even suggesting go and invest in crypto or anything like that. Leave that to yourself.   [00:47:35.790] My whole point is that you should separate the fraud from the asset class, separate the spectacular failure of an individual business or even multiple businesses and multiple enterprises that have failed from the asset class, and even more specifically, separate the fraud from the idea. And the idea with crypto is very simple. Does the world need a decentralized financial system? Yes, absolutely. In fact, if anything, this whole issue with Ft X and the accountants who failed and the politicians who failed, and the big hotshot suit and tie venture capital funds who failed, proves more than ever, the world absolutely needs a decentralized financial system.   [00:48:17.170] And will there probably be more uses of this? Will there be more use cases? Will there be more use and demand for crypto, for blockchain, for distributed ledger technology, for DFI in the future? Yes, probably. There probably will be in the future.   [00:48:31.080] Regardless of Sam bankman freed and FTX. The thing to keep in mind is that regardless of what happens with individual instruments and securities, good assets survive, good ideas survive. They prosper long into the future. The railroad bubble burst in the 1840s and it wiped out all the fraudsters. But what survived were the real companies.   [00:48:54.160] The real companies survived and they bounced back and they thrived. It was the same after the dotcom bubble that bursts. It will be the same with the electric vehicle bubble that's already forming. It'll be the same with crypto. The tulips died, right?   [00:49:08.610] The Tulip mania and the Netherlands, it died. The tulips literally died. But rail got better and the railroad, the bicycles, the dotcom investors, etc. People that got into that invested in solid IP, people that invested in responsible managers, that grew professional businesses, that continued to develop fantastic technology that actually changed the world for the better. Those people still made money.   [00:49:33.570] Those are still valid investments and valid ideas. And that's absolutely still out there with crypto. Again, I'm not encouraging you to do anything with your money, not suggesting you should buy crypto or crypto related businesses or anything of the sort. My point here is you should absolutely separate a bunch of idiots and fraudsters from the idea and the entire asset class. Those two things are completely unrelated.   [00:49:56.730] And with FTX, by the way, I just gotta say, I mean, this was talk about, this is anticrypto. FTX was highly centralized and complete lack of transparency run by one guy who could do anything he wanted to. That is the opposite of what crypto stands for. Crypto stands for decentralization. It stands for transparency.   [00:50:15.930] It stands for no single individual having control over everybody else. So as far as I'm concerned, FTX wasn't even a crypto company. It was just another highly centralized, frankly criminal financial institution that steals money from its customers. Just like we've seen over and over again so many financial institutions stealing money from their customers. But you know what?   [00:50:38.460] If passed this prologue, sambafi doesn't have anything to worry about because we never see any of these bankers go to jail. They stole so much money from their customers, never seen any of them go to jail. Occasionally get a slap on the wrist. So if this guy's lucky, then pass his prologue and he'll get a slap on the wrist and he'll be like Adam Newman, he'll be out in a few years raising money for his next venture. But regardless of all that, again, it has nothing to do with crypto.   [00:51:03.060] It has to do with one guy who set up a business that's not even a crypto business. It's a centralized financial institution that has failed. It's failed in every way. It's failed financially. It's filled with its customers, it's failed in its mission, but it is not crypto.   [00:51:17.080] And you've got to separate the fraud from the asset and the idea. Thanks very much for listening. And since we're coming up on Thanksgiving, we're going to take next week off, but we'll talk to you again in early December.   Close Podcast Transcription