Kind: captions
Language: en
I saw this in
2012 um because of what happened in
Europe and I saw what was happening in
the US it's one of the reasons I bought
a and built a house in the Cayman
Islands I just thought I need a plan B
and the plan B needs to be somewhere
where nobody cares
about but I can still live a high
quality of life it was a very purposeful
decision knowing where the world was
going to go because there was no
solution so the kind of realizations
that you're having now I had it's more
visceral for now because you're just
seeing another banking crisis but we saw
it in 2012 we saw really bad outcomes
there and I think the US one is still to
grow so it's just it's just the the
delayed response of H having it happen
to you the moment it does it's like okay
get it now so I did this and I don't
think that's going to go away I'm hoping
for a miracle what doesn't go away sorry
populism
anger uh Division and a separation into
smaller States I actually spoke to um an
old client of mine old friend who is one
of the world's great macro thinkers this
Italian counts and he speaks very
quietly I was telling him about this I
was like I think Spain is going to
Splinter into countries the UK is
probably going to Splinter Scotland will
probably separate you know blah blah
blah and he
said listen R the trend of the last 50
years was superstates the EU the United
States of America Amica he said usually
those things end up separating again and
if you think he said you know he was a
whatever he was a account from a Italian
you know one of the Venetian States
these little small states he said the
world does this es and flows
centralization decentralization right
it's very common he said it's not
necessarily a bad thing it's the getting
there that could be Troublesome depends
how it how it happens you know don't
forget we disbanded the British Empire
that was
gigantic and yes but there was some
pretty ugly stuff that happened like you
know the uh what happened in India when
we kind of gave back the keys and
everybody killed each other in the
partitioning it's ugly but it did happen
over time so I don't know I think the
trend is not going to go away unless we
somehow change this economic equation
because that's what's driving
it yeah it's the same equation that's
driving it
yeah very very distressing and I think
unfortunately I think the pieces are
already on the table in terms of how we
could potentially change the economic
system uh which is effectively Bitcoin
you have to remove the ability to
inflate once you take that away though
there are also consequences on the other
side and so uh it is a very um man it's
a very Tri my my my argument has been
you can't do this at once anybody who
does this wants the end of the
world it has to happen as a Glide path
and over time the crypto side of the
equation the new rails for the
system can experiment get itself sorted
out figured out and then we can go so my
I spoke to the to the Department of
Defense about this in
2014 13
13 and I said you know they periodically
you know reach out to
PE people like me you know thinkers
about stuff who who are looking at
crises and stuff like that because their
job is to to assess risk and I was
talking to them about it and I said
obviously he said you know we're worried
about debt we're worried about the
system blowing up I said yes obviously
everybody is um because that's one of
the things they need to game out what
happens
if the West loses control of money and
debt and everything
else and I said well I think the answer
is there and I think it's Bitcoin he
said yeah tell me more I said and I
think the US government and the UK
government invented it which is the NSA
and the gchq in the UK who the two World
centers of cryptography because even how
the white paper's written it's
transan
yes I always have and I asked the
Department of Defense they said yeah
we've considered that
too they official or it was just people
from that that went rogue I don't think
it's a necessarily A rogeness I think
like Google have like Google X where
they do tons of experiments right they
know that one of the esoteric risks for
the entire Western system is the issue
of
money so there's probably groups of
people who have given things to try and
if you concede a new system maybe they
tried 100 these and just one succeeded
we don't
know but it would make sense because
that's what they do this kind of
stuff so one of these took
off and so I think it's always been I
don't think it's a coincidence that came
out of the financial crisis I don't
think it's a coincidence that that the
harving cycle and all of this is all
related it is the solution or is it
always has been the solution you just
can't go there tomorrow so all you need
to do is let it happen slowly and manage
that transition you'll be okay there'll
be times where it speeds up because
we've got something bad going on and
there's times when it slows down but if
you and that's what I think the US
government regulation is trying to do
they don't want to bank crypto just slow
this down because if all the deposits
leave the banking system it's game
over if they don't set up a way of
collecting taxes because everybody's
living in crypto and they have to ask
your honesty in what trades you've done
that's not going to work for them
because they can't pay the
bills
so I think it's they're trying to catch
up um I think that the UK will have a
cbdc I think the Europeans will it's all
coming relatively soon relatively soon
next five years three years four years
and they'll feel more in control of the
system that they've got because they
need to pay the interest payments
because if not and the a the benefits
the Aging benefits you all of the Social
Security is a problem with such an old
population So speaking of managing this
transition well how bad do you think the
banking crisis gets before it
stabilizes so feels that we're in the
kind of Summer phase of we know it's bad
but nothing extra is happening but
meanwhile the deposits keep leaving the
system because the FED are not a
whistling past the graveyard going la la
la I can't hear you the problem is
interest rates are too damn High which
is the same problem I said they need
basically to get back to zero again and
it's leaving the
system
so there's two phases of this one is the
banks will start getting worse again
we'll see the use the K ETF which is the
Regional Bank ETF it's it's easy you can
look at that get on Yahoo finance
wherever you see the price of it going
down that's telling you it's kicking off
again and the outcome will be to keep
bailing out these Banks whether they
force them into merges which is how the
banking crisis in 2008 started and then
eventually it's like [ __ ] we need to
give money and sort this out so we will
see that we know that the banking system
can't go to a full-blown reset because
we've already had that I think it'll
bring down one of the big Banks before
it gets really serious and which one is
that I don't know Bank of America
something like that that share price
doesn't look great the long the
structure of it but in the end the
Federal Reserve will come with their
magic illusion bullet the magic money
and that man magic money will will will
solve all of this and we will all get
mutualize because the asset prices will
go up and we won't own enough of them
and we will get poorer so that is coming
the commercial real estate so the quick
one is the deposit flight the FED need
to cut rates the yield curve which is
the value of money in the future that uh
of interest rates in the future has to
be higher than currently it's the
opposite right now so that needs to
happen and then in 2024 and 2025 it'll
all be about the commercial real estate
because all of these like real Vision
has offices in New York for 65 people
and three people go to the office the
moment we can get out of our lease we
will get out of our lease as is
everybody and all of the stuff's going
to be empty so I think that's um that
will all end up on the FED balance sheet
so the the banking crisis will continue
it'll make it harder for the average
person to get get a loan and the Federal
Reserve will see this as the economy
goes into recession and eventually
they'll start cutting rates and
eventually The More Cowbell comes back
and as I like to say it is written we
kind of know there's no other outcome as
we as we go deeper into
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impact so if we're already in recession
all that happens we go deeper into
recession it's already written we know
the outcome yeah I mean
Jesus uh heavy okay so I want to go back
to
cbdcs um I've heard you say if I'm not
misquoting that you have a contrarian
position here that you think maybe
they're not all bad they're not all bad
because firstly I do not buy the
arguments that well they've got control
over your money if you do this you're
signing over to the devil I'm like you
guys signed over to the Devil by having
a bank account all of your funds are
available and if you're telling me Oh
well they're going to force us not to
use cash and you're telling me you're
using cash for anything apart from
tipping the valet guy at the restaurant
and buying weed you're lying nobody uses
cash nobody uses cash use cash for my
weed R I live in California no exactly
so nobody uses cash it's a it's a
lie and so they're using their credit
cards they're using their PayPal or
their
venmo they're then on social
media they've got Google everything is
accessible by the government that your
privacy was the story 30 years ago not
today it's gone so a
cbdc means that the
government
can become
more well they can even stop money now
you've seen it you know you're the
Russian suddenly you don't have the
money right so all of that is always
still there now so yes they can penalize
you but I also think you can do good
with it so I think there's a load of bad
outcomes and governments will abuse it
fact I also think there's some really
amazing outcomes for
economics how so I I've heard you say
that but I don't understand how that
would work I think so let's say you have
Hurricane
Katrina devastating people aren't
insured it's a it's a
catastrophe so how it happens now is the
federal government makes a payment to
Louisiana and blah blah blah and all
these middlemen and everybody grabs it
stuff and it doesn't get to the people
you could give 3 million people in New
Orleans instant payment in
seconds you cannot give economic
stimulus to wealthy people you can give
it to poor
people you can
penalize people who have excess
savings versus the people who who don't
have enough savings so I.E you can give
poorer people a 15% interest
rate to to to lend that IE to get on
deposit okay that's all that's
interesting and maybe they can borrow
money at One Price versus another you
can do a lot of Behavioral economics and
changing the system and behavioral
economics everyone's like well that's
the Chinese government they've got spy
cameras everywhere I mean look the US
government knows everything what you do
I mean every time I come into the
country I just stare at I stare at the
global entry recognizes my face I don't
even show my passport to anybody I'm
into the country I'm then into an Uber
everyone knows where I'm going my Apple
Maps clocks me I mean look forget about
it all the governments are the same so I
just think economically speaking we
could do interesting things we don't
have to be so Lite about how
we use fiscal
stimulus and that we can
create we can create incentives good
good incentives if dealt with well
H if dealt with well yes uh you said
something all governments are the same
that uh I violently disagree with what
no it's just a meme it's just a meme
you're all what governments stand for We
Stand For Freedom we stand for that it's
all a meme they they're all the same
they all control their people in a
certain way and dress it up in a
different manner one says we're
protecting you the one says the enemy's
out side the other they're all the same
that how do you hold a society of large
numbers of people
together you create different ways of
doing it and it's it people it it pisses
me off when people say us good then bad
by whose
judgment what because 1.4 billion people
in China live your their life
differently than the 350 million
Americans they're bad we're good because
they don't follow our system that's
insanity and Americans would suggest
that they're pressed up against the
window desperate to get out of China
because they hate it go there they don't
hate
it why would the Japanese want such a
regulated Society because it works for
them so we just have to drop our own
lens of who is good and who is bad and
I'm you know I've traveled to I don't
know 120 countries I've lived in several
I'm just very open-minded about
different people choose different
systems that suits them but most
governments in the end try to help their
people but we'll also abuse them in the
process and it's just different
ways it's interesting um so I don't know
that I disagree with the that at a very
high level in that everybody is doing
something uh you didn't say nefarious
but I will say nefarious and it just
comes down to the flavor of power right
power power is just different flavors of
power yes however have having read a
Trilogy of books that I will recommend
to anybody the specifics of how
different moments in different societies
will uh rear the dangerous head it does
seem to me that you want to imbue the
populace with a certain mentality that
will keep the government in check and so
I think the thing I'm pushing back on
are the moments where the humans cuz
ultimately all of us could rise up and
and stop our government
um but when you look at Ma's China or
Hitler's Germany or um Stalin and
Lenin's Russia they they are terrifying
to a level that I don't think modern
people have availed themselves of to
realize how wrong this can go and so
when I look at the
cbdcs um I don't I don't have a lot of
wisdom here I want to be very clear that
I'm now thinking through something out
loud for the first time but uh reading
the red famine for instance which is not
part of the the trilogy of books just
because I alluded to it I'll say it uh
Gulag archipelago which is about
Stalin's Russia um the rise and fall of
the Third Reich which is about Hitler's
Germany uh and Mao the endold story
which is about ma China they they all
illustrate a level of um human evil that
is is just unimaginable then there's a
fourth book which is um the red famine
which is about the Ukraine in the 1920s
if I remember correctly uh when they
went in to the Ukrainian farmers and
said um all of you kulacs who are
basically you're you're out producing
other farmers and therefore you must be
stealing from people and so they killed
imprisoned them all this stuff and and
because you just killed your best
Farmers basically all of the farmers
start starving to death because the
government is just seizing all of their
grain and so you kill the best and then
you seize everything from everybody and
there is a moment in the book where a
woman eats her own seven-year-old
daughter and I was like I'm out like it
it is things can go so wrong and I worry
that we we've had such a period of
stability that we forget that there is
this darkness that is present in the
human
animal uh as uh Soldier niton said the
guy that wrote the goog archipelago who
by the way was in the Googs uh he said
the line between good and evil runs
through the center of every human heart
and so I worry that we we have to
eternally protect ourselves from how
wrong things can go and so I do look at
a cbdc with a little bit of hesitation
as you map it out and say I'm already
doing everything I had to laugh out of
anxiety uh because you're right I don't
use cash for anything uh so 100% And
it's not a big change to you I think
you're fearing the wrong thing I think
the fear is right say what you think I'm
fearing Central Bank digital currencies
I think are a
distraction what is actually happening
is you've already got Capital controls
in the United States it's hard for a US
citizen to move the money around you
can't even get rid of your damn
passport you're stuck in your state you
can't even leave your state you pay tax
everywhere in the world nobody else does
I think there's three countries in the
world that pay ta that force their
citizens to pay tax if they live outside
of their
country I don't know what it is but I
would fear the US going to war with
China it's fine to be a economic War
it's fine to be very cous of of another
Rising
power but if they go to war the outcome
is
terrible that is a much bigger risk than
a central bank digital currency it
is as as you said there's something goes
wrong with power that can lead to these
outcomes when humans overextend
it and hubris is one of the risks and
that power to control the
world I that that to me is a bigger risk
there may be another risk the Enemy
Within I the collapses on
itself can happen too there's there's a
number of ways your leaders can let you
down and you should always be
vigilant so I do agree but I think the
cbdc war was lost a long time ago the
Privacy from your government war is not
going away because of Technology because
Elon Musk has got you know he's putting
40,000 satellites in the sky every GPS
can see you and everything so that all
went so you just need to make sure your
government is not going to abuse that
because that's when it gets really
bad yeah that that actually my Big Lot
sense it's abuse of
power not monetary abuse as much as raw
abuse of power my biggest existential
threat is do not go to war with
China because that was the outcome for
Hitler for the economic collapse there
were reasons people go to war and the
outcut and the end result is not
good so I'd be worried about more of
that stuff but the US is kind of
warmongering like crazy right now
rattling its saber it's like against
China or in the
Ukraine it's against
China and it's it's okay to not like
China's system because it's different to
your own it's okay to feel threatened
because China has
economic um Power in increasing and
that's threatening your system that's
all okay just don't go too far if you
like that clip check out the full
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