Kind: captions
Language: en
If you've ever looked around and
wondered why things feel broken even
when you're doing everything right, the
story sounds simple enough. The rich are
hoarding money and everyone else is
getting screwed. But what if that's not
even close to what's actually happening?
The explanations we're being fed might
feel good, but they don't hold up.
Today's guest, Daniel Priestley, is here
to expose what's really behind the
economic freak show that is devouring
young people. This episode is going to
shock and validate you. Strap in because
I bring you Daniel Priestley.
The uh debate that you did with Gary
Economics, it really showed a thing
that's happening. The resentment that
young people have for the economy. Yeah.
What on earth has happened to build up
that kind of anger? The economy is
dividing in two. So what's happened is
that we've gone from a very much a bell
curve economy where if you're uh an
average person, then life's pretty good.
Take the 90s for example. It was
probably the best time in history to be
average. If you're average, you get a
house, you get a car, you get travel,
you get everything. All resources have
moved towards the middle. And then the
thing that technology does, technology
creates inequality. So we got to have a
look why is economic why is economic
inequality driving so hard and fast in
the last 20 or 30 years. And to me it's
obviously technology. And I I start with
an analogy. And the analogy is if we
were to run a marathon and we had 50
people who are running on foot and then
we gave some bicycles to a few people
and then we gave some cars to a few
people, it would be completely obvious
why there is a massive inequality in the
time because a couple of people are
leveraging technology and a couple of
people are not leverage leveraging
technology. So, I've personally
experienced this because I've grown up
in a small town where everyone had very
normal jobs that didn't really leverage
technology. And then I've ended up as a
software entrepreneur and I've built a
global business where we have clients in
150 countries and all of that just
happens magically like like just magic.
And then people might talk to our
customer success team and it's an AI
agent and they may not even know they're
talking to an AI agent. So I'm seeing
that companies and people that um invest
in tech and that are leveraged by tech
uh have this huge advantage. So what's
now happening especially since co is
that we've got an acceleration happening
in the USA over 18 million people
describe themselves as digital nomads
now. Wa yeah it's huge and millions
millions more describe themselves as
work from anywhere. So we are seeing
this group of people who who are on a
bicycle. They're using YouTube channels.
They're using uh automation. Uh they've
got software companies. They're they're
no coding or V vibe coding, you know, uh
customuilt applications that make their
life easier. And then you've got this
majority of the population that are just
playing by the rules that the school
system gave them. The school system
says, "Hey, don't form a team because
that's cheating. Uh you know, don't be a
disruptor. That's cheating. Don't be an
attention seeker. That's cheating. Um,
and the school system basically says
what you're meant to do is become
skilled component labor and find an
office or a factory or construction site
and go out and plug yourself into
somebody else's machine and become a cog
in their machine. And if you do that,
you'll get well looked after. And of
course, those rules have changed. Okay.
uh when I look at the economy, while I
concede all of the points that you just
made, when I look at the economy, I say
the problem is debt and money printing.
So, it's interesting that you're
stacking a another problem on top, but
one is um debt, money printing,
inflation, is that anywhere on your
radar problem? Totally. So, capitalism
is such an incredibly powerful system
and it gets better and better and
better, but then it gives birth to two
children. So child number one is
technology and it creates technology
that's awesomely powerful and it creates
a disadvantage to those who don't use it
and a massive advantage to those that
do. The second child is called finance.
Now finance is different to capital. So
capital is money accumulated from the
past and finance is money brought back
from the future. So in up until
1970 the capitalist system ran on
capital. So, imagine a scenario. Uh, I
want to invest in something, a business.
I go to my dad and I say, "Dad, can I
borrow
$10,000 uh because I'm going to start a
business." He looks at the business plan
and he says, "It's a bit risky, but I do
have $10,000 saved up. I'm going to lend
you the money. I've evaluated it based
on the risk and the reward, and it's
from the past. I saved this money up,
and now you can take a risk with my
capital." Finance works differently. So,
finance. Imagine you go to a business
coach and you say, "How much is it to
get business coaching?" And the business
coach says, "Uh, I charge $10,000 for
business coaching." You say, "I can't
afford $10,000." So, the business coach
looks at your business and says, "With
my help, you'll be able to afford to pay
me $1,000 a month for 11 months. So, I'm
going to lend you my business coaching
now on the condition that we create an
agreement that you will continue to pay
me into the future." So what the
business coach has done is brought money
from the future back to the present to
get you what you want
today by accessing future cash flows. So
that's finance. So what we had in 1970s
was a dominant capitalist system running
on capital and what we've had ever since
is a capitalist system running on
finance. We figured out how to finance
everything. The other switch is the
ability to forecast. So it was
incredibly difficult to come up with
cash flow forecasts and assumptions
prior to things like Excel spreadsheets
and and all of that. Once we created the
technology to look further forward into
the future, once we collected enough
data, the smart people at the world of
finance could say, "Oh, wait a second.
We've got a spreadsheet that says that
we can get you to afford this car. We've
got a spreadsheet that says we can get
you to into this house. We've got a
spreadsheet especially for governments
where we go, "Oh, you've got this many
taxpayers paying this much tax. Oh, we
can bring forward all of that money
through um a banking license and we'll
actually just print that based upon the
future forecast and bring it forward."
And initially it uh frees up a huge
amount of productivity. So in the early
days of uh central banking and bringing
money forward from the from the future,
all of that money hits an economy that's
starved of productivity. All sorts of
things could have happened that weren't
happening and suddenly there's a
productivity boom. However, very rapidly
we burn through all the productive
investments that you could make and
suddenly it's all just
consumptiondriven stuff. So, initially a
productivity boom, then a consumption
boom by bringing money from the future
and then we run out of productivity and
consumption needs and we go, "Oh, now
the economy is stagnant." Um, so should
we stop bringing money from the future
or should we slow this process down? No,
we can't because we need we need
interest payments as well. We better
pile money back so that we can make
these payments and that's where you
spiral out of control.
Was there anything in um Gary's approach
that surprised you? I'd be a little bit
rude. I was surprised that when I talked
about the differences between different
taxation for someone who's an economist
and someone who's wanting to advise the
country on tax um he had a very low
resolution view of the differences
between taxing profits, revenues and
wealth um and he almost just cycled
between profit, revenue and wealth
without distinction. Even when I talked
to him about when I was trying to
explain about inheritance tax versus um
uh the taxes trusts pay uh periodic
taxes. He didn't understand that there
were just multiple types of taxes. He
just kept obsessing that this number is
smaller than my income tax. I wasn't
prepared for him to just have such a
very low resolution view of it. I know
that's so rude to say. I I mean it's
hard to say when he's not here in the
room to defend himself. But um but yeah,
that that surprised me. The more that I
learn about the economy, the more that I
learn about how uh the economy actually
works, the more shocked I am that this
is how things go. But then the more that
I look at the way that the next
generation is responding to it, I really
am surprised by how much they're leading
with emotion rather than going into
problem solving. What's the solution?
Mh. Uh, and so the
the popularity of Gary's message I both
get because I think he has his finger on
something and I will do my best to steal
man it and really represent it in good
faith on the show for sure. I would
literally have him on in a second. Um,
but in the meantime, I'll do my best to
represent where I really think they're
coming from. I have been surprised by
um that they're getting caught up in the
what he says feels right and therefore I
don't care if it is right. That doesn't
surprise me. He's a mirror of of the
anger that is in out there. Exactly. Um
so I was I was prepared for that because
I'm connected to so many people who are
angry and upset and I'm angry and upset.
There's no part of me that wants an
unequal society. What? But what are you
angry and upset about specifically?
technology. No, I'm angry and upset that
uh young people who work hard um are
told, "Oh, it's because you're having
too much avocado on toast or it's
because, you know, you're not
entrepreneurial enough." I I feel
annoyed that it's been so obvious for 20
to 30 years that we need to change the
schooling system, that we need to
provide different opportunities, that we
need to prepare our economies for this
stuff. And we we've done none of those
things. And we've got a generation of
people who have been prepared for an
economy that just doesn't exist anymore.
So, I'm upset about that. I'm upset that
the government just seems to make really
short-term knee-jerk decisions. We're
not playing a big picture strategy game.
We're not thinking 100 years into the
future and what, you know, what it means
today. And now we have this group of
people who think I'm the bad guy. Um
because I've built some technology
companies that have scaled up, I'm on a
panel having to defend creative
entrepreneurship and not and to
basically say it's a bad idea to overly
tax entrepreneurs because they are going
to be the engine room of the economy and
they can do this from anywhere in the
world. One thing that I really wish the
whole world could understand is
something called the clinical method
that was created in the 1700s. And it
basically distinguishes clearly between
symptoms, causes, and treatments. Uh,
and it basically says what are your
symptoms? What are you experiencing?
What's the pain? And then it says let's
keep an open mind about what might be
causing that. Let's have a look at the
potential things that are causing that
pain. And then only when we understand
the symptoms and the causes do we then
assign a treatment plan and then we test
and measure to see if the treatment plan
is is different. Now, when you see a
debate between someone uh who has, you
know, a view that's perhaps left leaning
and a view that's right leaning, it's
often the case that the left-leaning and
right-leaning person can identify the
same problem and agree on the problem.
And then they're looking at what's
causing it and they might disagree on
what's causing it and they certainly
disagree on how to treat it. What is
really upsetting is that a lot of people
would look at me in my response to
Gary's comments and say, "Oh, he doesn't
care about people. He doesn't recognize
that there's a problem. He doesn't
recognize that people are hurting. Of
course, I recognize all of those things.
Of course, in in that experience, I
totally agree there's a huge problem,
but I just massively disagree on the
causes and the treatments of that
problem. Okay. So, uh, it seems like a
pretty reasonable reaction if
technology, money, printing, debt, all
of it is splitting the wealth and so
that you get ultra haves and ultra have
nots. That you would just go tax the
life out of the billionaires. Literally
tax them out of existence. I hear that
said a lot. Billionaires shouldn't even
exist. Uh, why is that flawed thinking?
There's a couple of reasons. socialism
and that sort of thinking sounds like
the right thing to do. Um, it sounds
like a great idea and it's not new. You
know, Karl Marx came off the back of uh
something called the angles pause. Uh,
it was 50 years of inequality caused by
the industrial revolution from 1790 to
1840. Um, we had all sorts of massive
inequality, people on the streets.
Charles Dickens was writing about that
particular time. Oliver Twist, all of
those kind of things. Same idea.
Industrial revolution as technology, the
people that use it, massive advantage.
Exactly. Same idea. So, new technology
comes in, the industrialists boom in
wealth. Um, and then you've got a
disenfranchised peasantry that have come
off farms and agriculture and have been
displaced off their farms. They're now
in the cities. They've got nothing to
do. They don't have the skills. They're
lining up for food in factories. um
slums and squalor and all of this sort
of stuff. So the the issue is
that when socialism is
tried, it builds a large state
government to administer larger and
larger amounts of money. Um and that
creates an even bigger compounded
problem. I mean, wouldn't it be nice if
a computer system perfectly reallocated
capital to to different people and that
and then those people had productive
things to do with that capital and all
of that sort of stuff just reorganized.
But it doesn't work like that. You have
to then extract the wealth from the
billionaires. So, you got to identify
what is their wealth. Where is it?
You've then got to extract it. That
poses its own problems because
billionaires in the same way that I say,
"Oh, the way to beat Roger Federer at
tennis is just slam the ball really
hard." It's like, "Yes, but he also
knows how to play tennis and he can
return the serve." So, he knows how to
return the serve really well. So,
billionaires also know how to move their
money out of jurisdictions. They know
how to play the game. So, identification
is an issue. Extraction is an issue. And
then you need to administer it. So, you
now take this money on. What is going to
happen with a government that actually
gets a new income stream? They're going
to go to the central bank and they say,
"We have a new income stream." And the
central banker says, "Well, this is how
much you can leverage that up. You can
leverage that up 20 times." So, if
you're collecting another 10 billion
from these billionaires now, you can get
200 billion worth of more debt. Um, so
we've built a system where if you do
that, you're going to compound the
problem. But on in addition to that,
you're going to fundamentally change the
system so that there's almost no benefit
to winning. There's no there there's no
benefit to innovation. Now, capitalism
does actually have a really good answer
to this. And the answer is not that you
just simply take everything off the
billionaires. Uh the answer is that you
enforce competition. You break up their
empires. And to break up their empires,
in the industrial age, an empire was
based on just nothing other than scale.
It was all about big scale. So we took
standard oil and we said, "Hey, we can
break that up into I think 30 different
companies." And they said, "Once we
destroy that scale and you all have to
compete with each other, then the
markets get restored." The modern uh
monopoly is based on ecosystem, not
scale. So let's take Amazon for example.
uh you've got the shopping side, you've
got AWS, you've got content, you've got
Whole Foods, supermarkets, uh you've got
uh all these different types of
businesses that's that sit together and
it makes it extraordinarily hard to
compete with any one of them. If you
were to attack the retail stores with
competition, then they can be supported
by the online retail. If you were to
attack the AWS business, it could be
supportive of the other businesses. So
you end up with this ecosystem like a
ginormous um bouncy castle that you bump
into one side and it does nothing
because the other side absorbs it and
and returns the favor. So it's it's a
very difficult problem. Now the way you
handle this problem is you recognize
that the nature of monopoly has changed
and you break up ecosystems. So you take
uh Google and you say Google, you guys
going to have to float YouTube and it's
going to have to stand on its own two
feet and it's going to have to compete
as its own business and you're also
going to have to break off Google Mail
and that's got to compete on its own.
This all sounds good for the
entrepreneur, but for somebody who's
like, "Bro, I can't afford a house. Like
break up Google into a gazillion pieces
and that does not allow me to buy a
house." Got it. So where where are
people going wrong? The issue with
affording a house is that we do have a
in the UK especially, we have a housing
traffic jam. We actually have 9.4
million big family homes with two people
living in each of them. So we have uh
9.4 million homes that have two or more
spare bedrooms. So we actually have big
family homes, but there's no incentive
to sell down. In fact, there's a
disincentive. we have a tax called stamp
duty that actually means that if you do
sell your big family home and buy
another smaller, more appropriate house,
you're going to pay taxes on that. Um,
so the vast majority of people who have
a big family home, they bought it in the
'9s. They've paid it all off. Uh, they
can live there very, very cheaply. The
kids come back for Christmas. It makes
total sense. But we just have this
housing traffic jam. The only the only
buildings that we build for housing now
are like apartments and flats. So you
end up with all these people living in
condos because there's plenty of those
that are affordable and then no one gets
a big family home because those are
stuck with the baby
boomers. There are some countries that
had a baby boom earlier than our baby
booms. Japan, Germany, um Italy. And
what's actually happening now that their
baby boomers are just that little bit
older is you can't give property away.
So if you go to Japan outside of like
super urban crazy, have you seen this?
Yeah. How cheap the houses are? Yeah.
There are houses that you can buy if you
pay the taxes on the houses. So outside
of the super urban Tokyo, obviously
that's a bubble. It's its own thing. But
if you go outside of there, there are
beautiful homes in Japan that that you
can get if you pay off the taxes that
are owing. You can buy a village in it
in Italy for a million. A village? Yeah,
a village. A village. Yeah. You want a
village? I thought for sure you were
going to be like, "Sorry, sorry, not a
village." No, no, a village. You can buy
multiple houses with a church and a town
hall and Yeah. Like little villages in
Italy. In Italy. Yeah. Okay. I didn't
see that one coming. Italy is now trying
to get people to go there by offering
€200,000 a year flat tax and that's all
the taxes you will ever pay uh per year.
One of the points that Gary made in the
interview, again, Gary as a proxy, I
think he really does represent something
that people are going through. So, I
don't mean to I'm not trying to pick on
him or uh overindex, but uh he said
something in the uh debate that went by
really quickly and nobody said anything
about it, which was um I don't want to
redistribute, but I do want to force the
rich, I don't remember what exact if he
said billionaires or wealthy or
whatever, but I want to force them to
sell their assets so that the assets go
down in value so that the average person
can buy the assets. Yeah. Um is that the
right goal? I love how simple sounding
solutions to complex problems make me
feel like I feel really good when
someone says, "Hey, here's a simple
sounding solution to a really complex
problem." I'm like, "Ah, that makes me
feel a sense of relief." But then you
look closer. So what happens when the
assets within a country come crashing
down is that foreign buyers massive
private equity funds from around the
world come in and buy those assets cheap
and then there is no asset ownership
within the country. Then you begin then
you then you walk down the path of being
a a completely closed economy. The USA
can be more um uh exclusive than other
economies. The USA is a special case.
There is US exceptionalism um built into
the system and for multiple reasons
mostly geography. Um but for most
countries they have to be free and open
trading countries. We just don't allow
people to do this this this no foreign
investment. Um you can't have uh
intellectual property crossber
intellectual property rights. We're
going to do tariffs. We're going to make
it illegal. We're going to do all of
that sort of stuff. That is a race to
the bottom. You are now basically moving
in the direction of North Korea versus
South Korea. Um, so if the goal, say
more about that. Why would that be true?
I I'm the government. I'm really trying
to be deaf. I understand what my people
are going through. Um, I want to do this
with a scalpel.
Why am I on the wrong path? Let's go
back to the the first principle of why
this is all happening is that we built a
system on the industrial age. And the
industrial age, the operating system of
the industrial age is geography.
Geography is the most important thing in
the industrial age. It's all about
geography, land borders, um, and and
geographical part trading partners. And
the first thing that's written into
every government is the geography of
that government, you know. So you have
the London city council and the um
British government which covers this
territory and uh, you know, the
Californian state government which is
here's the borders. So we're dealing
with a fundamental operating system
called geography. The digital economy,
the cloud economy doesn't respect
geography at all. So if I have a digital
business, I can be I can have my company
in one place, I can live in another
place, I can have my team in 30 other
places, I can have my customers in 150
other places. Um, and none of that slows
me down at all in a geographically
unlimited place. As soon as you start
making a geography undesirable for
productive people and making a geography
undesirable for investors and and for
you know um uh highly productive
creators then essentially you almost
freeze it in time in the industrial age
while the rest of the world's moving on.
um you know, for example, if those sort
of draconian
uh laws and taxes continue in the UK,
I'll just leave. Like I I will leave. Um
and it's very easy for me to leave. And
there are plenty of countries that will
give me amazing deals to go. We'll get
back to the show in a moment, but first,
let's talk about one of the biggest
blind spots in your life, money. Most
people have no idea where the money
actually goes. It leaks out through food
delivery, online impulse shopping, and
those concert tickets you forgot you
bought. Monarch Money fixes that. It's
not just another budgeting app. Monarch
is like having a personal CFO in your
pocket. It gives you full visibility and
control over your accounts, your
investments, your goals, everything in
one dashboard. Over a million households
have already taken control of their
finances with Monarch. It was named Wall
Street Journal's best budgeting app of
2025 for good reason. It works. Get
control of your overall finances with
MonarchMoney. Go to
monarchmoney.com and use code theory to
get 50% off your first year. That's
monarchmoney.com code theory. This is a
paid advertisement. And now let's get
back to the show. This is such a natural
instinct that needless to say this has
been tried before. Uh so what what can
we see by looking through history when
you start just ratcheting up taxes on
the wealthy? what actually happens. Uh
well, we Yeah. So, some great examples
would be Argentina, North Korea versus
South Korea is a classic example. East
Berlin versus West Berlin was would be
another example. Um the USSR versus
Western Europe. Um ultimately, these are
all examples of what? High regulation
versus lower regulation, big government,
big tax, high regulation, um closed
borders, um you know, all of those kind
of policies. Uh they're all examples. um
where the where we've had A versus B
testing. So, we've actually done an A
versus B test. We got South Korea that
said we're going to trade aggressively
with the world and we've got North Korea
that said we're going to be completely
insulated. Um which one would you rather
live in? Now, North Korea has great um
great scores for um income inequality.
Uh everyone earns nothing, right? So,
it's it's nice and equal society. So if
your primary goal is equality, is it I
mean there is always going to be an
elite starving to death. There's one
family that's not starving to death, but
if you take the the millions of people
uh the vast majority of the population,
they have equality. They've got equally
got nothing. Um and then you go to
Singapore, Singapore has income
inequality, but it also has the like the
best economic conditions of Southeast
Asia. Um it's the place where people are
dying to get in there like like you know
like it's the best thing in the world if
you can get yourself into Singapore if
you're in Southeast Asia. Um you know
there was it was very clear which way
people ran when the fall of the Berlin
Wall happened. You know there weren't
there weren't people living in free
markets who were trying to get
themselves desperated. think is it that
people think um it can be handled more
deafly this time because when you look
at history and the examples that you
gave are great and I don't know how
familiar people are going to be with
them people I think will know North
Korea South Korea you can see it on a
map at night North Korea is just black
there's nothing there's nothing South
Korea is vibrant I think people go
that's a cartoon like don't give me that
example but then okay cool then let's
look at East Berlin and West Berlin it's
literally the same city divided in half
same idea another Great example is
Poland. So Poland was part of the USSR
and uh part of like the Eastern European
U thing, low productivity, you know, uh
low like poverty uh like high poverty,
low productivity, um you know, really
desperate situation, people trying to
get out of Poland. And about 10 years
back, they start aggressively going
towards free market capitalism and you
know, making sure that they can trade.
Really 10 years ago. It was around that.
Yeah. Well, that obviously it's 50 years
since they were in the USSR, but then
around 10 years ago, they really said,
"Hey, we're we're going to go rule of
law, re really big on rule of law. We're
going to go like double down on
entrepreneurship, lower taxes, better
conditions for starting companies, and
they're the fastest growing economy in
Europe." I don't know this story. Yeah,
Poland. Poland's a great story. Um then
you get Germany, one of the most
talented, productive, respected
manufacturers in the world. Um they go
down the socialist route and um uh you
know, they get the Green Party in there
and it's all about uh hey, we're going
to be, you know, making sure that we can
push for equality and we're going to,
you know, remove the incentives and high
t really high taxes and all this sort of
stuff. And they've just flatlined like
completely flat or or they're dropping
precipitously. Um from what measure?
GDP. GDP per capita. Um uh the levels of
poverty are rising. Um crime is going
up. Uh all all the things that you don't
want to happen are happening. Okay. Um
you and I are both I think we might be
mad as hell for different reasons, but
you and I are both mad as hell and we're
not going to take it anymore. Gary's mad
as hell. He's not going to take it
anymore. Millennials mad as hell. Not
going to take it anymore. Uh, but we're
going to have to map out why I think
we're all mad. Uh, so, okay, you broke
down the three things. Maybe we're all
mad for the right reasons. We see that
the income equality is problematic. It's
really becoming hard to move from
lowerass to upper class. Obviously, it's
actually not true. I was about to, I
think, make a false statement. maybe
know the data better than I, but uh
certainly people that are upper class
have a hard time generationally keeping
it. They lose it. I think the rate's
like 60%. 60% drop out. Yeah. Uh but I
think we've had more people join the
upper class. The upper class is at an
alltime high. Yeah. So fascinating.
We're hollowing out the middle class.
Okay. So if we're going to put our
finger on that, if you actually have a
look at the middle class, um the middle
class is kind of like drifting down, but
it's caused by people going up to the
upper class. So and down though, right?
And then there's a slight increase in in
poverty. So it's mostly but it's
actually if you look at the the data,
it's actually that a lot of people are
are joining this. U one there's there's
a very big frustration that when you and
I were kids, we did not have any insight
whatsoever into how other people lived.
There was maybe a TV show called
Lifestyles of the Rich and Famous. There
was a few tabloid magazines that showed
houses that people lived in, but it was
not in your face. Um, occasionally, like
me growing up, I saw I probably saw one
Ferrari on the road in my entire like
life up until age 20. And I remember it
going past and going, "Wow, I just saw a
real life Ferrari in the wild." Um, so
there just wasn't there just wasn't the
same exposure to lifestyles of the rich
and famous. Today you are just bombarded
with, oh, here's a 17-year-old who
floated his company on the NASDAQ and
here's a 23-year-old who has 16 cars in
the garage and you know, so there
there's also a sentiment that this is
amplified. Is it just that people are
now able to see it or is there really a
problem? No, there's there's there's
going well even if there wasn't a
problem, there's going to be a problem.
This problem is going to get big, really
big with AI coming in. Like AI is going
to really accelerate the difference.
We're going to spend a lot of time
talking about AI, but before we get
there, I want to make sure that people
really understand what's happening now
so that they know how they can get out
of the biggest. Let's let's stay at this
problem level. The biggest problem, the
number one problem is I can't get a
house. That's the biggest problem. If
you benchmark your life by your ability
to buy a house, this is the worst time
in the last 100 years to or 80 years to
be able to try and get on the housing
ladder. It is disgusting. Why? Uh well
because the government inflated currency
and anyone who owned fixed assets like
houses the the houses inflated alongside
the currency um and the essentially the
value of labor is dropping because of
automation and technology. So you get a
double whammy of labor kind of like the
value of your time and labor and skills
going drifting down. At the same time
the government's inflating up and the
houses are keeping pace with inflation.
So what those two things have done is
they've said it used to be that your
income times four is how much the house
is that you would live in and now it's
your income times 9. Woof right that's
the big one. So and that just feels
completely unattainable. So for
example the house that I live in in
London it's a massive sevenbedroom house
beautiful garden and all that sort of
stuff. It would have been a house that
a pretty like if you look at all the
people who've owned that house, I don't
necessarily think that you would have to
be a global entrepreneur super like
winning entrepreneur of the year or or
being a bestselling author to get that
house historically. Um whereas it it now
feels like if you're going to live in a
a big house or if you're going to buy a
big house, you better have sold a
company. like you like you have to have
done something really extraordinary to
get what would have been a big family
home uh not that long ago. Uh you know
it probably would have been a doctor's
house or it probably would have been a
dentist's house or it probably would
have been someone who was you know a
senior manager in a factory that
employed 100 people or something like
that. Uh maybe it would have been you
know someone who worked at a senior
level of a newspaper. I don't know. But
it wouldn't have it wouldn't have felt
like uh impossible because if you were
to take the historical value of that
house maybe uh you know you earn 100
grand and it costs 400 grand. Well now
if you earn 100 grand you're going to
pay 900 grand for that. Right. Right. So
this anyway this housing problem getting
on the housing ladder trying to get on
the housing ladder while it's still
inflating. I'm going to give you my
breakdown on the money printing side and
how we end up here. If you think I'm
going wrong, let me know. But I think
it's very important that people
understand this. So, every time somebody
gets the privilege of being the reserve
currency, they abuse it. And they abuse
it by bringing on debt. And the reason
that they can bring on debt is because
they know they can print money out of
literal thin air uh counterfeit money to
pay off that debt or the interest if
they need to. Uh certainly what the US
has done, this is exactly why we're 36
trillion dollars in debt because we know
that we can print money to cover things
like the 2008 housing crisis, when banks
fail, the auto industry at one point. I
mean, just on and on and on and on and
on. We can print our way out of it. Uh
people mistake the buying power of the
dollar going down for asset prices
actually going up in value.
There are times like Austin's usually
the example that I use where you have a
massive influx of people because Austin
just got cooler and so people are like,
"Oh, I want to be in Austin." And low
tax, right? And so people flock in low
tax, got cultural energy partly because
of low tax, uh, attracted people and now
those property values begin to go up,
like actually go up. There are fewer
properties and so they're worth more.
Now, most of the time, your house isn't
actually going up in value, unless
something like that has happened to your
neighborhood. What's actually happening
is that what your dollar buys is going
down. And so, the price of the asset
goes up in order to match um the amount
of lowered invalue dollars, you would
need to buy that same thing. Because
people understand a house as an asset in
a way that they'll never understand
shares in a company because you can't
live inside of a share in a company. not
going to make cool memories with your
kids with the shares in the company, but
man, you can like raise kids in a house
and like you really attach and people
just get it. Yeah. And so when that when
the buying power of the dollar plummets
and the house holds steady at like
purchasing power essentially, it seems
to be going way up in value. So people
think, "Oh my god, like we've got to
push people buy a house, man. This is
the greatest way to make money." when in
reality it's basically just a forest
savings account that cost you a fair
amount of money to update taxes. For a
long period of time, a long period of
time, houses were just seen as a
utility. Like they were just like my
grandparents never thought about housing
as something that would make money. It
was housing was just utility. You you
live in a house because you need to live
in a house. It was not an investment
vehicle and it probably would have more
of that vibe if it wasn't for money
printing. Exactly. And so getting people
to understand this, this is my hobby
horse. My audience will have heard me
talk about this a gazillion times, but
money printing becomes the problem.
Money printing is immoral in my opinion.
The government ought not be doing it.
Federal banks probably shouldn't exist.
I'm doing a much deeper dive on that
now. But like the the fact that people
do not understand money printing to me,
even though I buy into what you're
saying about technology, I get that.
That feels like another nuanced piece to
the puzzle. But like the big offender in
all of this from where I'm sitting is
the UK uh took the sterling when they
had the reserve currency and knocked out
99.9% of its value. The US is rapidly
doing the same over the last 100 years.
The dollar's gone down well over 90% in
value. Um and so that creates this
illusion that the asset prices are going
up. Yeah. And there are also good
reasons that people fire up the money
printer. Um because when money is a
fixed uh in fixed supply, you run out of
it. So for example, if we did have just
gold coins, as your economy becomes
super successful and you're producing
all sorts of new value in the economy
and and incredible innovations
happening, you actually just run out of
gold coins and it becomes this real
problem. the the market forces money
printing um in one sense because it
starts creating IOU notes. Um so for
example, if we ran out of gold coins and
you and I wanted to trade and neither of
us actually had physical gold coins, we
would of course create a trusted IOU
note um out of thin air in which case we
can like you know do that and then a
small circle around us start to say oh
yeah I trust Tom's uh IO IU note so if
you've got one I'll I'll I'll start
trading it. So, uh, I think before the
greenback, there were 300 US currencies
and they were basically IOU notes
because we ran out of physical products
to trade. The history of money is crazy.
Most people do not understand it at all.
But, uh, that PSA is merely me trying to
get people to understand your dollar is
declining in value. Your house isn't
going up in value. But it's also
important to understand it's not like
some evil, um, you know, boogeyman comes
along and says, very evil.
Okay, I'm happy to like have this
debate, but know that I become wildly
unhinged. So, uh, so yes, so yes, the
evil guys get in a room and in Jackal
Island and they come up with the plan.
However, he means that literally Jackal
Island, it's the whole thing. Read the
book. Yeah. Uh, so, so yes, the evil
guys show up and do that. But it's
unavoidable. It doesn't know evil guys
will show up and and they'll you know if
you if you put food down ants are going
to come to it when you hit this
particular problem then the evil guys
have to come along and come up with some
additional plan right and the issue is
is that you can't have a fast growing
economy. It's very very hard to have a
um to have a sound money approach
because you your economy grows so fast
with capitalism that you eventually run
out of the actual trading mechanism. So
uh there are there are inherent inherent
problem inherent problems in the in the
mix. It's not like a oh let's just go
back to sound money. Sound money is also
a problem. Okay. So, man, dear dear
audience, I'm we're going to drag you
into some of the complexities here for a
second. Uh, if for no other reason than
I'm I was very impressed with how many
of the details you actually understand
about this and so we'll we'll find out
where each of our edges are of what we
actually understand because I certainly
do not understand at all. And truly, as
the island down this rabbit hole more
than I am, I'm way way way down and
we'll see what happens. But uh I am
hyper aware that as the um island of my
knowledge grows, so has grown the shore
of my ignorance. Interesting. So
unfortunately, the deeper you go, the
more you realize, oh my god, like this
spirals and spirals. It's a complex.
It's a complex system. Wildly complex.
When America was founded and Alexander
Hamilton effectively invented the modern
economy, the modern version of
capitalism that has justly rewarded so
many people. um he knew debt was the
problem and they were trying to break
away from England and the abuses of
money that England was doing because
England was the reserve currency before
currency. Yeah. So you guys went down
the same path and he was like okay this
is a human nature thing. You put the
picnic out the ants are going to come.
He was well aware of that and he said
okay look you need the ability to use
leverage aka debt in order to pull some
of that future gain forward to actually
make something now. So I will often tell
people, hey, look out my window and you
can see downtown Los Angeles. That is
what aggregated capital looks like. When
you either have saved and you apply it
or you pull it forward through finance,
but either way, when you aggregate
capital, you can build incredible
structures. Architecture is just an easy
way to see what it looks like when you
can pull a lot of capital. That's a
great point. So aggregating capital is
incredibly powerful. Alexander Hamilton
looks at that and he says, "Okay, we
need a mechanism for leverage." So, we
need a mechanism for debt, but we need a
counterveailing weight. And the
counterveiling weight was whenever
you're pulling money forward, you have
to have a repayment plan. And you have
to say, "This is how I'm going to pay
for it. This is when I'm going to pay
for this by." And he said, "If you don't
do that, the debt begins a spiral and
you have to print and you get
inflation."
And we just didn't listen. Yeah. And so
the very thing that the man who invented
the US Treasury uh warned us about is
exactly what's come to pass, which is
debt that just spirals out of control.
And you mentioned this earlier that you
run into an interest problem. And right
now in the US, the in interest on the
debt is larger than we spend on defense.
And it will rapidly become larger. UK uh
it's twice what we spend on defense. Oh
my god. So, this is exactly how this
madness spirals out of control. The
interest problem is another problem a
lot of people don't understand. And I
love to tell what I call the 11th marble
story, which is essentially if you've
got a brother and a sister, and the
brother says, "I've got 10 marbles." And
the sister says, "I want to borrow those
10 marbles." And the brother says,
"Okay, but you got to pay back 11,
right? You have to have the 11th marble
has to be um paid back to me, and then I
will borrow lend you the 10." So the
sister has the 10 marbles and then pays
one, two, three, four. Gets close to
having the 10th marble. I've got one
marble left, but I owe 11. Right? And
then the brother says, "Hey, you've been
so
responsible in paying back. Why don't I
give you back these nine marbles as a
new loan, but now you owe me 12?" Right?
Because the 11th marble doesn't exist.
Yeah. Right. So there is no 11th marble.
So what actually happens if you keep
playing that game, eventually the sister
owes the brother 20 marbles and then the
brother says, "Oh, you're so
irresponsible. Here I am. I've been
lending you all this money. You're
bankrupt." And the poor sister's saying,
"But like I've been I've been paying as
much as I can and I just got myself
spiralled into debt." The 11th marble
never existed. When we lend money into
the economy, we lend it with the
condition of interest. So we lend a h
100red billion into the economy on the
condition that we pay back 110 billion.
Yeah. But the 10 billion doesn't exist.
So the only place that you get that 10
billion is out of massive productivity
increases. You have to have huge
increases in productivity or you have to
pull it out of the ground in oil and
gold and those sorts of things and and
and or or actually food. um you create
productivity and just to really make it
problematic if you pull those things out
of the ground too fast it causes
deflation and you have another problem
on your hands. Uh sorry you well I was
just saying eventually deflation in
price but you have an inflation in
currency because but you end up hitting
this point where there there is no 11th
marble. Um, so when when central banks
keep lending, so what they do is they
lend lend lend lend. This is the evil
part. They lend lend lend lend lend lend
lend and then when you run out of your
marbles they go so irresponsible. Now we
have to put a VA. Now we have to put a
sales tax on everything. And then if we
do that then we'll then we'll reset
things. And then you play the game again
and they go so irresponsible. Now we
want to put death taxes in. Now we want
to put inheritance tax. H, you know, you
guys are so irresponsible. Now you have
to give back all those buildings that
the government owns, right? Keep going.
Yeah. Because eventually you hit, drum
roll please, war. Yeah. And uh the the
crazy thing is this has been given the
worst name in the world. It's called a
debt jubilee. When you get to the point
where you realize, oh, no one's ever
going to be able to pay back this debt.
It is too much. And people just say, I'm
not going to pay you back. I'm not
giving you the 8,000 marbles that I owe
you. You or owe you. Uh, you only gave
me 10. Yeah. And uh, end of end of the
Monopoly game. End the Monopoly always
ends the same way. I'm not playing
anymore. Yeah. Um, I'm done. You win.
I'm done. I'm not I'm not going to keep
going around the board. And what we're
seeing now is end of Monopoly game with
uh, Gen Z. They're just sitting there
going, there's no way to get a house.
There's no way to uh, go on holidays.
There's no way to live like the
Instagram influencers. Um, there's no
great jobs going. Uh, I'm I'm done. Uh,
and you know, Gen Z turns up to the job
interview and says like, "What's the
work life balance situation here? I
wanna I wanna Yeah. I want to work
remotely and I want to do as little as
possible. I'm going to lay flat." Yeah.
So, that's the end of the Monopoly game.
Yeah. We'll get back to the show in a
moment, but first, let's talk about one
of the most valuable advantages in
content creation, speed. The faster you
go from idea to edit, the more content
you can win with. Opus Clip makes that
instant. If you're building a brand or
running a business, you already know
content is not optional and you need a
system. And for a lot of creators, that
system breaks at the editing stage. Opus
Clips AI powered editor gives you
prolevel video output without the
bottlenecks, budget, or burnout. You can
add branded intros, generate AI B-roll
with one click, tweak captions, layout,
voice over, all without the tech
overwhelm or a full production team.
It's drag and drop simple, but powerful
enough to keep your brand sharp across
every platform. No more bottlenecks,
just faster, better content. If you're
ready to go from idea to upload without
slowing down, go to the link in our show
notes and give it a try for free right
now. And now, let's get back to the
show. Um, I'm going to paint a way
darker picture of the end of the
Monopoly game. It is Russia invades
Ukraine.
Israel uh levels Gaza. Iran gets the
Houthis to uh bomb things. China and US
are locked in what's known as
Thusidities trap. It is it's not the
only way out, but it is by far the most
common. So this is a loop that repeats.
It's known as the big debt cycle. Yeah.
And at the end of the big debt cycle, at
the end of the monopoly game, people
usually go to war or revolution. But
blood flows. It It's the only way to get
people to be okay with, hey, all that
money I owed you, I'm never paying you
back. The only way to make people okay
with that is you just kill so many
people that people like, I don't care
anymore. Fine. and I accept what's known
as a debt jubilee where all the debt is
forgiven and we start over and then
whoever comes out the other side of that
gets to be the reserve currency and they
will do it again and it takes somewhere
between 150 and 250 years and it's
happened in the last happens over and
over 500 years happened almost five
times. Well, this is uplifting. This is
uh this is not uplifting. This this is
the thing that I know you're kidding,
but this is the thing that absolutely
terrifies me. And for the first time in
my life, listen, I'm wealthy and I don't
think anybody escapes this. And so
that's the thing that freaks me out is
uh where do we go from here? So I watch
the debate with you and Gary. I'm
tearing my [ __ ] hair out because I'm
like uh you're saying all the right
things, but he's beating you on emotion.
Yeah, totally. His feels right. Yeah.
Yeah. Like I find myself wanting to be
on his team just because Yeah. Yeah.
Yeah. Like [ __ ] those guys. Like give my
money back. Like what the [ __ ] Yeah.
But literally as I go down the path of
finance, the more I'm like uh
the the game itself is it's
fundamentally rigged.
And no one has shown me, which is what
you're here for, Daniel. Yeah. All
right. No one has shown me the bloodless
way out of this. Let's explore
something. Um, for most of human
history, the backdrop of the economy
didn't change massively
uh across a 250ear cycle. Um and like we
had the agricultural age which lasted
thousands of years and we had the feudal
system which emerged as the main system
uh of government which was essentially
kings, queens, lords, dukes, vic counts
all of those sorts of people and then
the professional class who surrounded
them and protected their you know their
their future and then the peasantry
surfs uh who like so you the deck of
cards is based on this. You've got king,
queen, jack, and then you've got 1 to
10, which is the peasantry, the faceless
masses. Um, and they're they're very
different. You're never going to look at
cards the same way again. Oh, I'll I'll
go deep on the cards if you want to know
what's in fascinating in the cards.
Well, okay. Well, the