Kind: captions
Language: en
Trump's Liberation day has everyone
throwing fits lutnick and Vance have to
do damage control China lengthens its
lead on energy with another Mega Dam as
a world grapples with ai's insane power
Demands a remote human bot tag team
surgery inches us closer to a Sci-Fi
reality fleets of flying cars launch in
China that would make the Jetson proud
Tesla continues its nose dive though as
they post yet more horrific sales
figures Jack dorsy explains how he
thinks Bitcoin could die
$80 video games hit the market Drew
between the potential of global
stagflation and a dam that can literally
slow the rotation of the earth today's
quite the ride it literally added time
to the year that was like nuts to me I
was like how did you we build something
that like what much bigger so yeah China
already has a dam that is slow the
rotation of the earth and they're
building one that's a lot bigger it's
crazy it is nuts um well if the cats all
out of B it is Liberation day um some
people are call days into Liberation day
now some people are calling it liquidate
day after all the uh stock market
reactions to it so people are upset um
Trump released his plan for reciprocal
tariffs based off of trade deficit that
had both trade barriers as well as other
countries trade uh tariffs um so we had
the chart in our last episode so now
it's just been blowback so I've seen
blowback with both Republicans uh
breaking with Democrats saying this is a
little bit too far I have heard
Republicans ringing the bell that this
is going to bring manufacturing back
let's just level set and kind of say
what what do you think is happening give
us kind of a a refresh of what actually
happens today and what do we think is
going to happen in the short term yeah
so I think the really important part
here is that people not jump on a team
the reality is we don't know what's
going to happen and Ray Delio had a a
really great uh tweet thread that we'll
go through after we do the Vance uh
letnik thing let's do that first but um
he had a really thoughtful tweet thread
that was like here are how tariffs work
and so we don't know what the second and
third order consequences are going to be
but we're we've got a high degree of
certainty about what the first order
consequences will be and so getting
everybody to not play political ball and
instead say this is where we're trying
to end up so Trump has been very clear
on where he wants to end up whether he
gets there is a different question but
he wants to end up where we are not
beholding to China for our manufacturing
and where we reinvigorate our own
manufacturing base here in the US
so that we can take care of the working
in middle class so his whole hypothesis
is that globalization was terrible for
America it it did drive down the cost of
goods but also at the same time not
saying it's positive but at the same
time America has started growing at a
much slower rate so um I forget who said
this but I think it's really brilliant
the the current model of globalism for
America is let them eat flat screens and
so for people that know the let the meat
cake thing you you can get into this
delusional bubble where you don't
realize what's going on beyond that
myopic thing that you're looking at and
sure if you're wealthy the great irony
is Marie anet never said let them eat
cake but let's not get hung up on
details like that Drew uh that's
nonetheless become the the famous way to
capture the ethos of that moment that
led to the French Revolution so we have
something similar going on right now
which is hey but we've delivered you all
of these cheap goods and so uh please
don't look at the fact that we're now in
a cold war with a competitor in the form
of China please don't look at the fact
that they control the vast majority of
your manufacturing which you saw the
realities of during covid uh and please
don't look at the fact that if you went
into a kinetic war with China that they
could uh turn you off from a
manufacturing perspective in the same
way that Israel has turned off Gaza so
you don't want to be in that position
and I didn't see anybody loving it uh
when Israel could do it to Gaza and we
really shouldn't love it when it could
be done to us so uh from where I'm
sitting again I don't know if Trump's
policies are going to work all I know is
as Ray Delio points out in his tweet uh
you can't keep doing what you're doing
now so you absolutely must protect
yourself from a uh a wild trade
imbalance because this is how you get
into the Absurd deficits that we get
into that's complex we'll talk more
about it that's one two you cannot have
somebody that you're in a cold war with
and could I hope not but could could
find yourself in a kinetic war with you
can't let them control your
manufacturing especially not
manufacturing of uh the very weapons
that you would need to defend yourself
which are drones which is exactly the
position that we're in right now China
controls basically that entire supply
chain so the position that we're in
right now is fiscally untenable and it's
untenable from the working in middle
class and it's untenable from a national
security standpoint so you must act and
that is the very reason that Trump was
elected from where I'm sitting
now the debate becomes is what he's
proposing actually going to work and for
that I want to look at both sides but
again you're going to have to start with
what are we trying to achieve so if you
hate his policies do you agree on what
we're trying to achieve but just think
he's not going to get there or do you
have a totally different thing let's Peg
that but I think a lot of this is
emotional reaction not cause and effect
chain reaction so uh let's see copy that
um JD Vance and Howard luik were playing
cleanup uh going to local news outlets
explaining what this actually means for
local
Americans elected on is bring the cost
down for people but also uh bring
manufacturing back to the country that's
right these are going to kind of hit
each other right explain to us how you
get manufacturing here but also get the
cost down for the American people well
if you go back a little bit Lawrence
remember the during the first Trump
Administration everybody said that
Trump's tariffs were going to be
inflationary back then and what actually
happened we had 1.5% inflation we had
the fastest growing economy in a
generation and we had the beginning of a
manufacturing Renaissance in the United
States of America then of course we had
four terrible years of the Biden
Administration but I think it's useful
for all of us to step back and ask us
ask ourselves what has the globalist
economy gotten the United States of
America and the answer is fundamentally
it's based on two principles incurring a
huge amount of debt to buy things that
other countries make for us and to make
it a little bit more Crystal Clear we
borrow money from Chinese peasants to
buy the things those Chinese peasants
manufacture bro that statement is so
inflammatory to me when I heard that I
was like it's nuts wait why why do we
have to go out of our way to say that so
anyway I'm not sure what he's trying to
do with that peasant has connotations
horrific ugly disparaging
connotations that [ __ ] is so
inflammatory that that to me was the
whoo moment of this whole thing like
you're already in a spot where people
are people on both sides of the aisle so
this is after you've got a vote in the
house where Republicans were voting
against this very thing saying that um
the president cannot do things that are
taxes that goes through Congress full
stop and they're saying tariffs this is
in reference to Canada if I'm getting on
my facts straight uh saying that you
can't do tariffs because that's
effectively attacks and that's the
purview of Congress so anyway this is
all being battled out and now you've got
this weirdly inflammatory rhetoric
coming from the vice president while in
my opinion uh they should be doing
damage control that feels like and I
haven't seen yet so maybe nobody like
got their feathers ruffled but that one
hit me real weird that was a sour note
for me I feel like JD Vince likes to pop
off um this is giving me zilinsky Vibes
like you should say thank you and now
he's calling Chinese peasants when
Chinese is our biggest tree
adversary I'm not even going to say
partner like we're that's the deficit
that we're most want to slash and
calling them peasants I feel like is a
great start of a negotiation but yeah oh
man I didn't read the AR I I won't I
won't derail us on that we'll stay on
tariffs but that one is a real sour note
for me yeah and then on the other side
Howard lutnick was on Bloomberg and I
feel like he had a more business
oriented
Take Along with that there there there
sometimes are are some unintended
consequences and if it's the biggest
reset of of the economy us and global
economy since World War II you know in
the world order in terms of currency is
that is there a trump put there maybe
there's not a trump put on the stock
market but what about on a um a
collapsing
dollar it it it just can't happen I mean
if you think about it the United States
is a $9 trillion economy and we are the
consumer of $ 20 trillion of goods and
other countries are producers of goods
and we are the buyer of goods so if you
want to build your product you're going
to have to build it in America if you
want to avoid these tariffs or these
countries have to fundamentally alter
the way they do their business those two
things going together are going to
result in interest rates in the United
States of America being much much lower
high quality production jobs much much
higher domestic production of huge
amounts of factories that's GDP right
Remember When Donald Trump says we've
got5 trillion dollar of factories Coming
to America think of five trillion
divided by his four years that is huge
GDP growth on Factory building which all
of you are not yet thinking about these
Factory commitments are going to create
huge growth in America before we move on
to this next question which is equally
brilliant I these two questions to me
are the right two questions so um let me
try to plain English the first question
and please speak on behalf of the
audience if there's anything that you
think is unclear like this is the time
to push back because if people can
understand the geopolitical game that
actually exists because we're we're
talking at this surface level of tariffs
and all that um but I think there's a
more important game to be played which
is understanding if you go to the chart
that Trump showed in the Rose Garden uh
they do a bad job of showing it but
nonetheless he's holding it up you can
find it online uh in fact if you can
pull it up please do and it shows the
the um tariffs that we're going to be
placing on people and I think people are
very right to look at the math to
scrutinize it to ask whether this is the
right mathematical equation because
they're billing it as here are the
tariffs that the other countries have on
us and we're just doing roughly half of
it with a of 10% so some people even
though they have according to them 10%
on us we are then just applying 10% on
them for the most part it's roughly the
midpoint uh what he's calling friendly I
think uh friendly reciprocal tariffs or
kind reciproc reciprocal tariffs
something like that um but the first
question anybody should ask is wait a
second what is that math based on and so
there it's something they're calling uh
trade barriers now they do have a math
equation it it is I won't even pretend
to understand the actual mu Sigma minus
divided like all that stuff it there's
literally not a number in it it's all
symbols uh and this is not uh the
mathematic side of it is not where I'm
going to be able to shine but you can go
find the debates on the actual math but
I think it is very right to ask that
question but what I want to talk about
is just understanding that there is
something called trade barriers okay the
most important one that people should be
zooming in on is the manipulation of
currency so we'll go through ralo's
tweet but one of the things that he
talks about in the Tweet is uh you have
to understand the way that currencies
are manipulated and the way that tariffs
interact so you put a tariff on a
country and it ends up being
deflationary for the country that's
having the tariffs put on them so just
take us China uh we're tariffing the
life out of China we have historical
tariffs already and now we're layering
like the fenel Tariff plus more tariffs
so it's like we're really tariffing uh
China okay so what ends up happening in
China for
China you get this defl
pressure on the goods because they made
all this stuff and they planed to sell
it to the US and now we're saying nope
you're not going to be able to sell it
in the US at the price you thought you
were going to be able to sell it which
means now it's like oh the demand for
the things I China made these things
having a predictable amount of demand
based on the previous year sales that
were based on a known price when you
force me to change my price through this
tariff AKA tax uh now I'm in a position
where the demand just got lower but I've
got the goods so now I'm going to flood
my own Market with these Goods because I
don't have that external Market to send
them to I can't dump it in the US I have
to keep it in China exactly and so now
the Chinese are like well there's so
much of this it's not as valuable I'm
now I'm not paying as much as I'm used
to paying because there's three of them
now as opposed to one of them exactly
and so now it's this is cheaper for
us here's where deflation gets weird
because non crisis created deflation is
good you want your computer to get more
powerful and to stay at the same price
that's deflation so because the final
price is the same you don't think about
the fact you're getting more and more
and more for your dollar which means you
can buy an older version for less and
less and less youed to buy $200 for a 40
for a 20-inch TV now that $200 get you a
50in TV correct and that you could go
buy the 40-inch TV for like pennies so
now you're making a product available
for much much cheaper or you can get the
same price for way way more okay so when
it's not crisis Le deflation is awesome
you want your stuff to get cheaper you
want to get more bang for your buck when
it's a crisis Le deflation now you've
got a problem because companies start
going uhoh uh I don't have a new thing
to sell you at the same price but you
get more for it I have the old thing now
that I have to sell at a lesser price
and I'm going to have to let some people
go so you start layoffs you start firing
people you start shrinking down
and the government looks at that and
goes okay we don't want to be in that
position so we need to do something that
is going to protect us from losing those
jobs I'm oversimplifying but that'll
give you an anchor to hold on to so we
don't want people to lose their jobs Inc
comes central banks and when I say
central banks you should hear wolves
howling in the background the reason
that you should hear it isn't even
necessarily that they're born to be evil
it is that they cannot help but have
second and third order consequences that
I think that not everybody's going to
agree with this that I and many others
think are manipulations of the market
that create things like 2008 and you get
these huge bubbles because the FED as
it's known here in America or the
Central Bank in China they're trying to
uh protect you from things so in this
case they're trying to protect you from
the deflationary effects of tariffs and
so the way that they do that is they say
okay we've got to find a way to increase
demand inside of our own country and
outside of our country and we're going
to do that by lowering the value of our
currency so now all of a sudden somebody
in the US goes oh you're tariffing it at
whatever 100% but you just cut it in
half the cost so effectively for me this
is the exact same price and so
this is the war that's going on behind
the scenes and so there is a ton of beef
between the US and specifically China
there's probably more countries that are
doing this where the US is saying hey
part of these trade barriers the reason
that you're saying we don't tariff you
what do you mean and letnik is saying
that's [ __ ] you may not call it a
tariff it has the exact same economic
impact as a tariff and so what you're
doing is you are making my goods more
expensive in your country as a [ __ ] you
to me so you're saying oh you're going
to tariff us well I'm not going to
tariff you back but I am going to lower
the value of my currency by printing
money they're going to give it a fancy
name like quantitative easing it's
counterfeiting it's printing money
people have heard me talk about that
many many times so that government is
going to print money so that their
currency is worth less so that the
dollar compared to the R&B the dollar is
stronger and now when I'm selling that
product in even though it has increased
tariff it has the the cost of it is
decreased compared to a dollar and so
they can begin to balance it out so you
tried to do this thing you tried to
Strongarm China but they then have this
other lever that they can pull which is
to make their currency worth less and so
you get into all this currency Warfare
back and forth and there's a
longstanding belief on the part of the
us that China has artificially deflated
their currency so that they could flood
our Market with cheap goods from China
even though they've become a more and
more sophisticated manufacturer which we
talked about in the previous episode
where Tim Cook comes on is like I don't
know what made you think that the labor
is cheap the labor isn't cheap but if
you drive the cost or if you drive the
value of the currency down the cost of
those highly skilled Goods is still
cheap once it lands on your Shore if
you're China and you can do all this top
down [ __ ] and be like [ __ ] you I don't
care dear Chinese that we're inflating
the life out of your currency which is
by Tom bil's metric evil it is amoral
because it robs power purchasing power
from all of the people all of the
Chinese people or anybody else that
holds R&B uh so I think that that is
legitimately immoral and it's one party
one Mind One Direction Nobody Hey listen
we have a fed and the FED does the same
[ __ ] so I'm not by any means letting us
off the hook I'm just trying to set the
table for people the argument is going
to happen at the level of tariff tff
tariff tariff tariff what letnik is
trying to get across is boys and girls
this battle is far more sophisticated
than that and I wish [ __ ] uh Vance
would stop saying [ __ ] like Chinese
peasants trying to be a dick about it
but there really is a thing going on
where TR China's like oh baby we we will
inflate the [ __ ] out of our currency to
keep these Goods cheap uh and then good
luck explaining to the American people
what's happening because we're going to
go to war as they have been very clear
we'll fight any kind of war that you
want to have and we will fight it till
the end uh let us not forget that tweet
so when they put up
the the tariffs quote unquote tariffs it
it isn't that simple there is a far
deeper war going on yes I think we got
it I think the currency manipulation if
I can say it back to you just to make
sure I interpreted it right was that
let's say this mug is a dollar yep and
now I say I'mma put a tariff on this so
now if you try to sell it to the
American people it's going to cost you
$2 yep China's going to say oh you're
trying to put a tariff on it to make it
more expensive so instead I'm going to
turn my dollar I forgot what they one
Let's uh R&B one yep let's let's uh use
real numbers so that we can track this
so uh let's say China says I sell this
to you and unfortunately I don't know
the conversion rate on R&B so I could be
so far off on this uh but let's say this
mug is 100 R&B MH and we set that price
because that's going to be a dollar in
the US whatever and you put a tariff on
it and now it's going to cost $2 in the
US if I can make a 100 R&B now worth
half the amount that it was before
because you doubled the price now it
comes across even though it's now uh
went from 100 to 200 R&B if I can make
200 R&B worth $1 we're back to this only
cost a dollar so they just inflate they
inflate the currency so much that it's
still the buying power is the same or
roughly the same they probably won't get
to exact parody but they get to the
place where you're like n it's a little
bit more expensive but it's not a big
deal and so you get some of those
purchases back you won't get them all
back probably but you can certainly
mitigate uh the impact gotta okay so
then with that said you you're saying to
sum up Howard Luck's point now was like
this is not just about tariff on Imports
and goods there's other things that are
going into the boat and that's why we
had to do this I would like people to be
way more paranoid than that okay Howard
lutnick is going to point out the
reality that there is a far more
complicated game being played it is
important for people to understand that
one there's a far more complicated game
being played and two Howard letnik is
likely to spin and position to make his
team look right yeah so that you'll back
him
as we push forward on this but I would
like to remind
everybody doesn't matter what Howard
letnik says or Trump says or anybody
says left or right it's all Spin and
they may have the best of intentions but
nobody can predict the future this game
is so
complicated uh this is probably the time
to pull up the ray doio tweet because he
does such a phenomenal job of walking
through the basics and each level of the
Tweet we see how
oh first order consequences pretty easy
to predict second order consequences get
a little weirder third order
consequences are like oh my God I have
no idea what the chain reaction is going
to be because this all comes down to how
do people react because does China
inflate their currency to drive the
value down or do they do retaliatory
strikes on us and they're like [ __ ] you
we'll deal with pain but now you're
going to deal with more pain all that
stuff all your Pharmaceuticals all of
your drones we're just going to blow the
prices up because you think you can hurt
us but we think we can hurt you even
more uh and so the war will get messy
the reason I brought all of this up is
so much of this debate really needs to
be had at the level of how what is the
math that we're using to say this is the
right amount of tariffs to
apply
uh they've posted it so people that
understand that level of math can get in
there and do it um I'm going to take it
at the level of like plain English of
okay this is how we're running it and
it's the simplest way to sum it up is
this isn't straight tariffs this is um
trade deficit uh plus the hurdles that
they put in place like that's basically
what they're trying to get to is there
are hurdles that are unseen like the
things that we just walked through
that's what we're accounting for that's
where this number comes in um but be
paranoid that they're doing this to be
aggressive and that's where I come down
to do you agree with what they're trying
to achieve because if you agree with
what they're trying to achieve then we
can debate whether this is the right
thing to do or not because to get
manufacturing back on our Shores you're
going to have to put a shock to the
system yeah and just for the record
Russia North Korea and Cuba weren't on
that list not because they have zero
trades but because they have economic
sanctions the US is not allowed to do
business with those countries yeah
there's no point we'll be back with the
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is a p advertisement and now let's get
back to the show all right pull up the
all right here's the ray alio thing uh
the effects of how the effects of
tariffs how the machine works all right
I'm going to really um try to do this
quickly the first ones we probably gonna
have to read for btim so one uh tariffs
are taxes that one raise revenue for the
country imposing them that both the
foreign producers and the domestic
consumers how much paid by each depends
on their relative
elasticities uh which make them an
attractive tax okay what does that mean
it means that the reason that people
lean on tariffs is it's a tariff that
you share or a tax excuse me that you
share between uh the buyer and the
seller so now neither side is having to
carry the full weight uh two tariffs are
taxes that reduce the global
efficiencies of production so this is
deglobalization just to be very clear
about what Trump is trying to do uh
tariffs or taxes at three are
stagflationary for the world as a whole
we talked about this exactly how that
works uh tariff tariffs are taxes that
for make companies in the importing
tariffing countries so in this case
America more protected from foreign
competition in the domestic Market let's
just say China which make them less
efficient less globalist but more
capable of surviving if aggregate
domestic demand is maintained through
monetary and fiscal policy meaning we
want to bring manufacturing back we want
to make these things here in the US now
you're able to pay your workers instead
of Chinese workers so you're creating
jobs um and you've got the manufacturing
capabilities like when Tim Cook came on
and said China is not skilled labor uh
sorry China is not cheap labor they're
skilled labor and the chattering class
was like laughing ha Trump's such an
idiot like look these guys are skilled
and you just think they're cheap I was
like uh [ __ ] he just screamed
at you you've made Americans in capable
of doing these things because globalist
policies sent all that overseas and they
were [ __ ] smart about it and they
said yeah we're going to get really good
at this and we're going to bring
efficiencies and Technical knowhow to be
able to produce better and make things
cheaper all of that stuff plus using
currency manipulation in order to feed
that machine so that they're capable of
the most extraordinary manufacturing
Feats like building a dam that can slow
the rotation of the earth Drew so
um this is the kind of thing you have to
be aware of that by onshoring
manufacturing the long-term consequence
is you get really good at manufacturing
so this isn't a haaha trump doesn't know
what he's doing it's Jesus man don't you
want us to be good yes it's going to
take time but holy hell the Journey of a
Thousand Miles begins with a step like
you've got to first get things back uh
okay uh next tariffs are attacks that uh
five are necessary in times of
international great power conflict to
assure domestic capabilities for
production this is exactly what we were
just talking about boys and girls we are
in a cold war with China this is the
great power conflict to which he is
referring all right tariffs are attacks
that six can reduce both current account
and capital account imbalances which in
plain English means reducing the
dependencies on foreign production and
foreign Capital which is especially
valued in times of global geopolitical
conflicts Wars now yes look at the this
from the American side but if you also
want to know why China is selling off
their American debt that's why they
don't want to be holding US Dollars like
that that's no bueno at this moment for
them okay so Ray says those are the
first order consequences all right I
won't drag us through everything else
but there uh is more if you want to just
scroll down for anybody that wants to
pause it and look at the different
things uh so we starts going on to the
ways that this begins to fractal in
complexity um R we talked about yeah
monetary policy that's the FED I've
tried to simplify all this in the
examples that I've been giving so you
don't necessarily have to go Point by
point but they're there on the screen if
you want to pause and look at them so
this is the game that's being played
again please guys if you can hear my
voice right now don't team up don't uh
left good right bad right good left bad
don't play that game what's the goal
what do you believe the goal should be
and then what is the chain of cause and
effect that you think leads to that and
then map back to what they're doing and
say oh they're it's step three is where
they're making a mistake because I don't
think that that's going to lead to this
now Ray Delio's punchline and as a
reminder of who Ray Delio is uh there
are three there's more but three of the
greatest capital allocators of our time
are Howard letnik the Secretary of
Commerce for the Trump Administration um
Scott bessent the secretary of Treasury
and Ray Delio the guy commenting on this
I'm pretty sure Ry has he's built the
largest hedge fund in the world at least
at one point so at one point he was the
single most successful person in the
world at looking at the global
macroeconomic setup and saying I'm so
convinced that I'm right that I'm going
to bet billions of dollars and he's made
more money doing that than anybody and a
close I don't know that they're second
and third but Scott bessent and letnik
are real [ __ ] high so these are
people that know how to look at the way
that trade actually works and say I
understand this better than everybody
else because these gambles in the stock
market are competitive one person wins
somebody else loses and so they've just
beat everybody so those are at least for
this conversation the three people we
were talking about so uh the policies
being put forward when you hear Trump
talk about them they sound manic when I
hear Scott bessent letnik diio look at
them I feel like I have a much uh firmer
understanding of what they're attempting
to do now Ray's punchline to actually
say it out loud is that you got to watch
it's unclear what's going to happen
because I don't know how China's going
to respond China's only one of the many
countries that are now uh having tariffs
placed on them so all you can do is say
as he listed out the the goal that they
are trying to achieve is one of the
potential Downstream effects of tariffs
it is not guaranteed but it is certainly
like that follows naturally from these
things in a world in which the second
and third order consequences fall into a
certain path and so that's what we have
to wait and see what happens with the
second and third order consequences I
want to get this followup question
because we're hearing this a lot is
about you say it a lot that this is like
a game of chicken that Trump and a lot
inv shout out was this MSNBC yeah CNBC
so these guys had the best onew punch
that I saw and and one of the things
that I was speaking to a whole number of
CEOs yesterday who need to actually make
some decisions and the question is how
soon do they make those decisions and
they talk about what they think of as
this game of chicken a a almost
political game which is to say they
don't know whether these tariffs which
are being announced today are going to
be the same in a month two months six
months and more importantly in four or
five years when in fact the factories
that they would have to invest in today
would be up and running what do you say
to that CEO who says you know what I'm
actually going to take a I'll take a
flyer and I'll wait a year or two see
how this all plays out before I do
anything which also means that we're
going to have a real freeze in terms of
investment I think you're going to see
and we've been feeling it every day that
you're going to build in America that
this is a reordering of global trade and
it's really thoughtful if you understood
how rough rough these other countries
are on American Products rough and and
their tariffs are just like the tip of
the iceberg the classic the rest of the
iceberg below the water is so rough and
so difficult and they have subsidies and
they have trade barriers and you can't
sell because if you if you lean one inch
to the right or one inch to the left oh
you're not allowed to sell I mean I tell
the story we made a deal in 2012 to take
Korean cars in exchange they were going
to take our produce and Agriculture and
when McDonald's tried to bring in french
fries they actually said we can't bring
in the French fry the American company
can't bring in the french fries because
we couldn't prove the origin of the
potato I am telling you the rules of the
world are so stacked against us that we
are just the consumer of the world and
it's going to end and once that ends and
once America wakes up to it and now all
of America is going to wake up to it the
every body is going to build their
factories here everybody's going to move
their factories here and America is
going to become the producer of much
much more of what we consume there will
become a balance interest rates will be
much much lower the United States of
America will be much much stronger we
are growing much too much like the rest
of the world our growth rate should be
double or triple them because we are the
greatest economy and we are feeding the
world and Donald Trump would like to
have America First how about we feed
America first he has to say this so uh
unfortunately Alexander Hamilton called
it when he put his finger on the fact
that the position that he basically
created the Secretary of the Treasury uh
which again is our boy Scott bessent um
Hamilton realized oh this is going to be
a PR game and whatever the Secretary of
the Treasury says is going to Echo
because this is a game of
confidence and I know people hate it
when I say that the stock market is
gambling this is all gambling this is
all uh what do people think what's the
sentiment yeah people will try to Anchor
you on no no no it's all about profits
it's really not I'm not saying that's
not a major influence it certainly is uh
but you can have an unprofitable company
that's unprofitable for years Netflix
I'm looking at you and people value it
to the moon because they think one day
it'll be profitable anyway this is a
game of confidence he's got to say this
um the reality is if you look inside of
his heart he doesn't know what's going
to happen but you can't be paralyzed by
fear you can't stand still we are in an
untenable situation something has to be
done now I love fiery debate about
whether this is the something or not uh
and I think that um that guy
unfortunately I don't know his name uh
but the guy asking that question this is
for me like one of the biggest questions
as a
CEO I'm like uh I don't know that the
Republicans are GNA stay in power I'm
not even sure they're goingon to make it
past midterms so given all that I'm like
yeah I'm gonna wait and see what happens
before I make any bold moves there's no
way that some percentage of these people
maybe it's 1% maybe it's 99 some
percentage of these people that are like
oh we're g to make all these big
Investments Trump yeah yeah yeah like it
is going to be very easy for them to
slow roll this and go how's he doing how
are those because they only have to buy
like what 15 months from now so 15 mons
from now they're going to get a check on
whether he's going to be a lame duck or
he's going to move forward and so you're
just like yeah we're in planning we're
going to move forward look at these you
know you spend a couple million bucks to
like show the plans to keep Trump sweet
and he's like look this is all happening
and in reality there would almost be a
dereliction of Duty if they didn't wait
to see like is this forever so because
I'll say this for all the people that
are it'll take five or six years to
build these factories probably but it
doesn't have to Elon Musk built a
gigafactory one of the biggest factories
in America maybe the world in 18 months
so I don't want to hear some [ __ ]
about it takes five years it doesn't
take five years barring absolute
ridiculous regulation and a lack of
will uh but the smart money probably
still over this one if yeah if you want
to stall it could take five or six years
like ah yeah paperwork you know that is
H we'll see you next midterms and see
what happens man I want to stay with
China because there are some crazy
things coming out of China um the first
thing we kept talking about it that they
built a dam so big that it slowed the
spin of the earth and they are trying to
build another one three times as big and
it cost $137 billion this is a tweet
from Mike Ben where I can't believe it's
that cheap though to be honest like the
the size of the one the three gorgees
Dam that they've already built is so
like megali lithic and to think that the
one that they're going to build which is
dramatically bigger is only 137 billion
like that's crazy I mean I'm not saying
that's not cheap but I'm saying Elon
could build it by himself he'd have to
sell all the shares that let me not
Backtrack on my own thing that that
isn't real money but uh got that's crazy
he got it um but with the combination of
the three dams that they're proposing
they would be able to power a company
like Germany with just country like just
those three dams it's it's nuts
um we know that this is energy dominance
is important and everybody celebrating
Energy's cost being cheaper and
cheaper ground is why is energy so
important what are they using the energy
for why do you need to slow the spin of
the earth to dominate this much energy
what do you think is the end goal of
China for being for striving for energy
dominance okay so one um do they care
about energy dominance they want to win
for sure but this is really just about I
want AI dominance or at a minimum I want
want AI parody and uh Elon in fact I
think the original tweet that I put
bring that back up because Elon does a
breakdown so Elon says as I said a few
few years ago the AI scaling constraint
will move from chips to voltage
Transformers to electricity generation
so this is why China cares deeply about
energy and I mean honestly there are a
thousand reasons to care about energy
and to sum it up very quickly everything
that you see everything that you're
touching right now is the result of
energy and labor and AI
is I'm going to call it a robot even
though I get the difference between Ai
and Robotics but this will be easier for
people to digest uh AI is a robot that
eats sunshine and if it can if it has to
eat like uh think of like I think it's
blue whales that have those filters on
their mouth and they filter all the
Plankton so they eat these tiny tiny
things so they have to literally just
open their mouth and like crawl the
entire ocean to get enough
calories uh you don't want to be in that
position you want a little bit of
sunlight to go a long way because the
sunlight is calorie dense or energy
dense probably just to stick with
reality instead of the analogy uh it's
it is very energy dense but we're very
bad at capturing that energy so if AI
can come in and solve that problem then
it's like oh my God everything that you
have you have for free so if we can
capture the energy potential of a dam of
water um because it has so much force in
the way that it moves um then you can
drive the cost of everything down
and the energy needs of AI are so
massive that you have to find new ways
to generate that energy either capture
the energy from the Sun better capture
the energy from water better um nuclear
energy whatever it's going to be but
you've got to be orders of magnitude
more um energy Rich than you are now and
so every country is going to want their
own energy Supply they they should
already because it's already so
important but if AI is the Ultimate
Weapon more potent than nuclear then
everybody is g to race to control their
own Ai and to do that you have to have
the energy that supports it yeah that
makes sense and then also in future Tech
news coming out of China commercial
takeoff is official China just cleared
the first flying taxis so straight out
of the Jetson um these are autonomous no
pilot no problem um right now they have
they will be doing stuff for delivery
Logistics Urban Transit are next in line
but right now this is just limited to SK
sightseeing by the sky um so I think
it's one of those things to start off
with tourism do a couple test flights
make sure a couple of rich people are
good then after that I see the Alibaba
the deliveries of China people are
probably going to be Dr dropping pizzas
off this way like this is the future oh
you've already I think there are already
um people doing deliveries with this and
I remember when Amazon this had to be
like 10 years ago or more Amazon was
like we're going to start doing
deliveries by drone I was like aha that
sounds hilarious now I'm like yeah
obviously so yeah this this is um a
question of when a couple of them fall
from the sky as they inevitably will and
kill people on the ground will we go
yeah okay we're not going to do this
um or does this just become the future
because it is far better than
groundbased travel it is so much faster
um you can stack cars now vertically
instead of just horizontally so I mean
it just the quality of life improvements
will be dramatic but you have two
options you can go up or you can go down
so elon's bet is that drilling uh
tunnels is going to be the right answer
because people are going to be so
freaked out when one of these crashes uh
that we'll just never go for it
so we'll see I don't know which of those
two are going to win if I had to
guess it's so much easier to build the
flying
ones you you probably just you do that
unless really really it it's killing a
terrifying number of people if it has
like you know let's say a couple hundred
deaths a year people probably rock with
it but if it's like a thousand people
are going to start being like yeah it's
not worth it it's too scary like when
someone's kid gets [ __ ] decapitated
by one of these waiting at the school
bus station it's going to be like hard
pass all it's going to take uh and then
we had this we reviewed it during our
live the first robotic surgery um that
was done remotely so as you're seeing on
the right side there was a doctor in a
different part of China that was
wirelessly controlling an autonomous
robot on the other side well robotic
like arms um to perform surgery this is
so incredible I mean this is
breathtaking now I this hits me on two
levels one uh it really do be like that
in China like
they're uh it's very impressive yes uh
and then
two the future is so bright and we are
in this age of just rapid development
this is thrilling man and I really
believe in 10 years there's no Universe
in which you would let a human operate
on you just like no way just as you
would never let a human drive you in a
car hard pass uh because the rate at
which the robots in the AI make errors
will just be dramatically lower it's not
that they won't it's that it will be
dramatically less than a human like
think about how different you feel when
you sleep poorly think about the fact
that you are way more likely to get
paroled if the um person on the parole
committee has just
eaten that's crazy yeah we we are so
fallible from our ability to actually
think clearly lack of sleep two our uh
ability to bypass our emotions
hunger that you can't have that man you
cannot have that so as we bring things
on board that don't suffer from those
same foibles we're going to lean into
them in a major way yeah and then kind
of closing that Loop even their toys
seem fun another Chinese robot uh but
this one is AI pet I'm so jealous this
is exactly the kind of thing I want to
do for kaisen this is the Exotics right
yeah this will be dope except I hate to
admit that that's our first version
won't be like that cuz I don't want to
have to deal with all the articulation
but the um LED eyes is what we're aiming
for um but it'll be static this thing is
so cool man that I guarantee
that call it two Christmases from now
it's going to be stuff like this like
just non-stop violence and you're going
to um You probably won't get there in
two Christmases but five Christmas from
now you're going to get
devices that sync up with one AI so that
you have an AI from the time you're a
little kid as you age and it's just
everywhere it's in your computer it's in
your phone it's in your fridge it's in
your toy um and some people might give
different objects different
personalities that's also possible
but oh man th this is so exciting to me
and I know some people they don't like
what they see uh when they see this
stuff I I am deeply in thralled it it
has pushed my creativity out 10 times
farther than I ever thought I would be
in my life it I was talking to a bunch
of people that many many people on this
uh live would know and in fact some of
you said last night that you listened so
hi
um very talented very successful people
that are
like it is so tempting to stop doing
half of what I do and just create with
AI and I feel it man I feel that same
impulse of what are the things in my
life I can stop doing because all of the
sudden even for me somebody with a lot
of money man you still hit barrier after
barrier after barrier
and the thought of just like all the
things that you can make build create
with AI
is extravagantly
cool so I'm excited for people I think
this is this there a period of
terrifying and we have an episode coming
out with MGA dot you guys are going to
want to watch that that one was it was
breathtaking even as we were filming it
at the end you and I looked at each
other and we're like oh damn that was a
banger yeah um there's no doubt that
there's going to be a massive period of
disruption that we're going to go
through and that period is going to be
rough the other side something pretty
extraordinary Tesla is dealing with a
period of disruption right now they're
lowest quarterly drop in deliveries ever
sales plunged 133% for the first three
months of the year the Eevee maker said
on Wednesday had delivered
336 681 vehicles for the quarter as
deliveries from Sor one more time
336,000 6 anything I know I was
forgetting a word um and it plunged for
the sixth consecutive month um
protracting a global sales
route everybody's blaming China but they
Del in China actually went up they're
still technically I think the number one
in China um that that's what Elon would
have you believe posted something again
spin spin um it both things may be true
we are the number one in a certain
category uh and our sales are down 133%
both of those things can be true at once
so yeah I mean look this is uh whether
this is all of it or not the impacts of
Elon becoming political are probably the
most interesting thing to look at
because we live in a divided world
where people really want to know what
you stand for in fact we were during the
live which guys join us for the lives
Tuesday Thursday Friday 6 a.m. Pacific
time um we were talking about the hinge
game and the woman like tap tap tap on
the things that really mattered to her
uh this is one of the things that she
was tapping on like crazy is somebody
who identifies as moderate and she's
just I'm not going to date somebody that
isn't presumably left leaning
um people want to know about the
companies and the people that they talk
to it's um it's a real thing and so you
ignore that at your own Peril Trump
tried to to warn um Elon maybe not
directly but I remember in his first
term he was like yo I underestimated how
bad this was going to be for my business
and uh there are reports that Elon will
be stepping down from Doge in the
upcoming months but nothing concrete has
been established no timeline yet yeah so
uh Elon and Doge yes he it is inevitable
that he's going to step down he said
from the beginning that he's going to
step down the question is uh is Trump
going uh oh like this is really becoming
a liability
um maybe because if you can keep doing
Doge but without all of the Fanfare that
surrounds Elon maybe that is
better the only thing I would say is
from Trump's perspective elon's taking
the bullets not him so if I know I'm
going to do Doge I would rather have
Elon for as long as I can get him
technically that's what Trump is saying
now whether that is really what Trump
means or that spin I don't know um but
yeah if I'm Elon the amount of
shareholder pressure he must be getting
it's got to be insane yeah so um there's
tremendous pressure on him just to focus
there's tremendous pressure on him to
stop being a lightning rod I mean you've
got people putting Toyota logos on their
Tesla um
so yeah th this has definitely not been
good for business we'll get back to the
show in a moment but first let's talk
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