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Language: en
if you want to be successful you've got
to be paranoid think about the fraud
verdict that was just handed down in the
FTX case a lot of paranoia during the
due diligence process would have gone a
long way also there are just so many
warning signs in the economy right now
that people really need to be paranoid
about what comes next right now 86% of
Executives believe a recession is coming
seven stocks alone account for 28% of
the S&P 500 debt has reached just
absolutely dizzying Heights and here to
discuss all of this and more and what
you should do about it is Patrick Bet
[Music]
David FTX Sam bankman freed just gets
convicted on all seven counts absolute
Madness uh obviously fraud at the
deepest level as I look at what's
happening it feels like yet another one
of these pieces of instability on um an
economic chest board right now that is
all over the map with a whole lot of
things going on I'm curious to get your
take not only on FTX but how you think
this ultimately fits into a landscape
that feels very unsustainable with the
amount of debt and printing uh that we
have going on right now so one uh uh
that's great news is accountability as
long as accountability is being done
that's a good that's good this guy stole
8 billion on people's money we're not
talking $8 million or $80 million eight
billion dollars and he was practically
buying politicians is what he was doing
left and right uh second biggest donor
behind uh Geor George Soros George Soros
gave I don't know what his number was
but this guy was in a 29 million range
is what he was he one time uh uh offered
Trump how much do I have to give you to
not run I don't know if you're aware of
this or not I did hear that yeah and
then Trump jokingly said a billion
dollars he said I would give you money
for you not to run think about what he
wanted to do behind closers he literally
looked at everybody as a pawn as a way
to move them so the guy getting 100
years we're going to see obviously what
happens when this thing ends but did you
did you ever see the paper that his
mother wrote years ago uh uh about
personal responsibility do you remember
that I didn't read it but I heard about
it and that's one of those things super
distressing did you read the book going
infinite no I did not really really
interesting it got bad reviews so I'm
not sure sure why it got B going
infinite I'm almost certain that's the
name of the book if somebody can fact
check me on that um but it was really
fascinating to hear how this was
somebody who was completely unemotional
on the inside um who I'm going to guess
just literally had no feelings or
thoughts about taking the money and he
was so going back so this idea of people
having a Messianic complex people become
so convinced that they know what's right
for the world that oh whatever we need
to do I'm going to be able to work this
out I'm smart enough to figure this out
it's worth whatever risk um and really
trying to completely remake the world in
his own image and do I think that it was
fraud in the way that Bernie moff
committed
fraud no
but did he just blatantly steal people's
money in order to put people's money at
risk in order to uh shape the world the
way that he wanted it yes was just
absolutely crazy hearing the detail like
page after page of somebody who just not
didn't even seem to know where all the
money was going just used everything
like his own piggy bank and was
splashing so much money around and had
the sense it was going to last forever
really really pretty horrifying yeah but
but two things that makes me think about
one the people who are in that space who
did some similar things are sitting
around same saying I don't want this
thing to bring more attention to me on
what happened with me so this is going
to scare a lot of other Bad actors that
are worried if they're going to be found
out company-wise there's some other
companies that are also a little bit
concerned about uh uh how they're going
to be doing the financing but I want to
read this to you his his mother spf's
mother was a Stanford law professor once
wrote an article Beyond blame and she
said we have to move past this whole
concept of personal responsibility okay
her word we have to get past this
concept of personal respon the limits of
personal responsibility the fact that we
have gotten so little in return for our
blame mongering at least opens up the
possibility that people would be
receptive to a new approach the next
time something goes terribly wrong like
your son going to jail for 100 years and
stealing 8 billion suppose that instead
of immediately asking who is to blame we
were to ask how can we fix this problem
yes Mom how did you raise a son like
this that stole $8 billion from people
so to me this is multi-dimensional I
don't know his mother I've never broke
bread I don't know who she is if Mom is
a Stanford law that means this is a
smart mom and if he is able to convince
this many people to give him this much
money you know and convinces guys like I
don't know if it's shamat or the or one
of these guys that he raised all this
money and they said hey we recommend you
having a board and he says go f yourself
I don't need a board to tell me what I'm
doing who the hell in the first place
trusted giving this guy this much money
without a board who so so for the people
that are upset I cannot believe I lost
this much money for my client next time
you given somebody to manage money for
you ask them any reason why we're giving
this guy at this age this much money and
you don't have a single board seat let
me get to straight you guys don't have a
single board seat yes we don't have a
single board who negotiated this deal
who the hell is this guy has he done
four is he the modern day Steve Jobs
with three other exits in the past that
you're going to say yeah this guy we can
depend on is he Elon Musk no he's just a
regular guy okay so the people who did
that you have to kind of give a little
bit of blame to them for not you know
get in greedent by the way this is a lot
of smart people that were involved we're
not talking about regular people uh but
but uh the fact that this has taking
place where this guy went from being the
modern day what did the Kramer called
them
he called him the Moder day JP Morgan
Chase do you remember this Kramer called
him the modernday JP Morgan Chase if you
can quote that it may be somebody else
but I think it was Kramer and he was
screaming off the top of his lungs and
all these people that got FTX money um
that uh you know they're going to have
to come back and maybe that's going to
show up again but I I don't really put a
lot of blame on those guys they're just
getting sponsorship money you either
pick the money or you don't pick the
money you're picking the CEO but uh it's
pretty wild to see what's going on here
but the best news is a certain level of
account accountability for this to be
taking place no doubt yeah going back to
the idea that they didn't uh even demand
a board seat I mean this is really
ultimately what the um the Euphoria look
like now I had never been through a
market cycle of euphoria I had no idea
what the signs were I mean now obviously
I'm familiar with the when your Sho
shine guy starts giving you stock tips
that's when it's time to sell um and it
really did have that sense of like
nobody wanted to miss out on the you
know the one grand slam that was going
to come out of this and that reading
going infinite was utterly fascinating
about like what he was really like how
awkward he was and how people started
reading that as like genius and that of
course he really was smart it's not like
he wasn't bright but he was I mean yeah
I don't know how much of this ties to
the idea of his mom and nobody's taking
blame I don't know there's something
very undisciplined like if if I were
just going to take it down to uh do I
think he's nefarious or do I just think
he believed he could do no wrong
believed he was the smartest guy in the
room which ended up being the punchline
to Enron I think the documentary is
called the smartest guys in the room and
it's like you this is so my thesis one
thing I'm really banging a drum on now
is just getting people to distrust
themselves like I I set my company up
where anybody can tell me when they
think I'm doing something wrong I
fortunately am not smart enough to run
this company where I'm going to make
every decision and be right every time
and so I constantly need people being a
checks and balance system letting me
know when they think I'm doing something
stupid so that I'm not
blinded and it feels like when you have
this messy on a complex put together
with somebody who really believes that
they're the smartest person in the room
and who's going to tell them otherwise
like you guys don't know what I do and
look at all this success that I've had
and I'm a singular mind and I'm going to
be able to do this and if you have those
two things together that really is how
you go off the terrifying deep end three
things uh one uh is uh wework I don't
know if you're following weor with what
they're going through and
2017 they were valued at $47 billion you
know how much soft Bank gave them in
2017 you know what they raised 18
billion 1.9
billion they raised they missed a 90 5
million interest payment they're about
to shut down we work okay um Andy
Fastow who was a CFO vron okay one day
I'm in a uh uh Four Seasons in Dallas
I'm doing a business planning session
and once a quarter I would go away I'm
at the hotel 20 miles away from my house
but I would have a room full of stickers
stuff on the board and I'm just writing
what we're going to be doing so I go
down I'm swimming then I go to the sauna
I'm sitting there how you doing how you
doing good what are you do I'm this oh
no wait yeah how long you been in the
financial industry 20 28 years who are
you with Morgan sany d right you know
I'm looking at a couple speakers to
bring to my event who would you
recommend oh who I'm going to tell you
you're going to think I'm crazy who's
that Andy fastel which Andy fow the CFO
of Enron the CFO of Enron yes do you buy
any chance to have his number he says if
I give you his number please don't tell
them I give you his number I said let me
call this guy I'll tell him I got the
number from uh uh somewhere but I won't
give the name I call Andy Andy is
paranoid he doesn't know who I am yeah 3
years later I bring Andy as a keynote
speaker at Vault conference last year
you know how I opened this up I said the
reason why I brought Andy in is to help
you guys not go to jail Andy gets up he
opens it up this way he says in this
year the number one CPA magazine of the
year I was the CFO of the
year he says then the next thing I want
to show you this is my jail card wow my
jail ID card one year I'm the CFO of the
Year running in around with 100,000
employees next year you know I'm
um I'm in jail and they they found a way
to kind of scare his wife as well and
they kind of separated him and he had to
go do six eight years whatever it was
anyways the moral of the story is
this study very closely who you're in
business with uh quby raised billions of
dollars and went out of business in no
time they were paying actors $100,000 a
minute to do 12 minute movies do you
remember those days with Kevin and all
that stuff and katberg and all these
guys were involved in it but if if you
see something coming in that even the
brightest of the brightest of the
brightest minds are getting involved in
ask some of the questions do we have a
board seat who's in the ear of the CEO
who's talking to the CEO what are his
values and principles does his mother
believe in personal responsibility what
are we dealing with here so ask more
questions before you jump in with
excitement because other people are
getting involved well so here's another
fascinating thing that um I I think
we'll have more things to say on this
topic later but the idea that what you
have are a set of ideas because they
were effective altruists and I didn't
know anything about it until I read the
book but reading the book it was like
okay he was an effective altruist he
hired a bunch of effective altruists
some of the people that helped them
raise money were effective altruists and
so there was this mindset and I won't be
able to do effective altruism Justice
enough but it's basically what is the um
I think they take a utilitarian approach
so what's the best good that can be done
with this so what's the most good you
can do with your life what's the most
good you can do with the money and so in
trying so interesting because this ties
into your idea of selfish versus
selfless and so they really believe that
they were the most selfless people
around and that they were just trying to
run everything through an equation of
like what's the the greatest number of
good that this can go off and do and in
some weird way it breaks and so even
though it really does sound awesome like
you're really saying I'm not going to
live a lavish life I'm going to give all
this money away in all these different
ways but and now I'm just really
hypothesizing here this wasn't in the
book but as I was reading the book I I
kept getting this feeling that I think
part of what ended up happening is the
algor them running in the back of your
mind is as long as these dollars go do
the most good it doesn't matter sort of
where they end up and so he had largely
a political agenda and was just like oh
these dollars will be best spent there
not thinking like well we only have so
many dollars that we can spend and there
are or should be Capital restrictions
you can't mix funds right that all got
way farther back got pushed way farther
back into the recesses of his mind
versus what's the highest good in his
mind that this money could be put
towards now again I'm super speculating
he didn't say any of that I don't know
that but that's how it felt reading the
book and these are the results these are
the results that we experience now for
me a basic red flag you know earlier we
were talking you and I if I ask you for
$10 million I say I'm going to take $5
million off the table you don't get any
board seats and I'm going to pay myself
$500,000 you all the red flag red flag
red flag red red flag
versus no here's where it's going to go
this is what we're going to be doing how
do you not have when you're given that
kind of money how do you not have a
board seat and accountability to hold a
young entrepreneur Co accountable how I
can answer that question so you are in a
position where you have a lot of capital
because this is a time where capital is
just flying everywhere so you have a ton
of capital that you have to deploy you
start hearing of this wonderkind who it
just has this crazy investing strategy
where he's arbitraging in South Korea
and it all sounds absolutely brilliant
and uh he is the next big thing he's an
effective altruist he's not even doing
it to get wealthy he'll show up in these
meetings in like cargo shorts and no
shoes not having yeah and so all of a
sudden it's like okay is he crazy or is
he a crazy genius and so the narrative
starts swinging to he's a crazy genius
and so yes he shows up and yes he's
going to play video games while he's on
the call with you
but that's because his brain works so
fast that he has the basically he's able
to fractal his mind and do the video
game over here and so as that becomes
the narrative people are buying the
story and so people will buy the best
story to quote um Morgan howel again
Morgan says it's never the right data
point it's not even the right answer
it's the best story that's going to win
and so the story they were telling about
this guy because I remember I was really
on the periphery of of hearing about him
and it was like he was the good guy he
was the guy that had all the right
incentives all the right reasons was
just doing good with his money wasn't
trying to be rich didn't live a lavish
life which wasn't entirely true um but
the story was there and when the story
is there everyone's euphoric number only
go up you've got a ton of capital you
have to deploy you find a once in a
generation genius he's being validated
on stages with Bill Clinton and whoever
and all of a sudden it's like okay well
the cost of being able to get in on this
is that we're not going to get a board
here's a crazy thing though the question
is is he going to get pardon the
question is is he going to be able to
get released the question is how many
people did he give money to that are
afraid if he leaks information of what
happened that maybe campaign funding
could come out maybe he has more control
of over other people is he kind of a
modern day Epstein not the kid stuff but
more how he held people hostage with
money information on the back end uh the
next thing is going to be who's going to
turn on him that took money from him and
how they're going to react um because if
things start getting weird it tells you
he's got a lot of intel on some very
powerful politicians in America yeah
yeah so we only have to wait a few days
for at least sentencing and then we'll
see beyond that all right as I think
about all this it it goes back to what I
started with we're we're on sort of
Shifting Sands here we've got a very
complex macro uh
environment and what what does all that
mean do you still think that we have uh
a recession coming and if so what do we
do about it good question so let's go
through
this you know how uh a doctor uh has
seen 5,000 patients over the last 20
years okay and he's got a very Niche
thing that he does it could be skin it
could be you know uh uh kids it's but
it's very specific and a lady comes in
and she says this part of my body hurts
no problem but 420 people have come and
I've said this part of their body hurts
in his mind out of the 420 it breaks
down to four different things it's
either this this this this so now as a
doctor he's going to use a process of
elimination let me test this that tells
me it's not this boom boom boom great
it's not this let's take blood and urine
it's not this let's take an MRI it's not
this let me take a sample it's this
great now you know okay what's the worst
thing a doctor can tell you when you go
to him the doctor says what I don't know
I don't know that's the worst thing when
he says I don't know what's wrong with
you I've never seen this before that's
like the last thing you want to hear
tell me I have this or I have this or I
have this but do not tell me I've never
seen this before for so today's economy
when was the last time we had this case
study let's look at case studies okay
what's different between today and 2008
market crash 2008 market crash was about
no income no assets Nina loans Banks
were giving them money left and right
hey uh stated income you're trying to
qualify for a $720,000 loan how much
money did you make last year Tom I'm a
school teacher
$48,000 you're not going to get
qualified for this time I going to ask
this question one more time how much
money did you last year I just told you
$48,000 do you want to get qualified for
this or not yeah okay one more time how
much money did you make last year
62 that's what it was no income no
assets in 2008 right 2007 and then I
remember the month when I knew it's over
because the one guy in La who was making
400 Grand a month uh had an office in
Tanga Valley in Tanga or Koga 30,000 ft
of Office Space November of 2007 he
shuts it down oo and this is right after
you're seeing WAMU Countrywide you know
all these other companies that are doing
what they're doing very problematic when
that took place so then you saw cities
like Riverside Community Riverside
County
65% houses foreclosure oh then you had
loone modification then you have people
that were buying five six homes paying
the negative amortization payment which
means if you got a loan this was a
program that came here from
Australia with the story you always hear
about that this program was in Australia
we brought it in America it was meant to
only be for people who are affluent okay
you got a $20 million loan on a house
you got $40 million in a bank account
I'll give you 20 million no problem you
got four payments to make you got your
15year loan which is going to be the
biggest loan you got your 30-year fix
which is going to be reasonable but it's
not a 15-year loan then you have your
interest only that you're literally only
paying interest and the loan stays the
same amount or you got your negative
amortization payment which means the
loan gets bigger every month that you
pay it because it's negative
amortization every month the loan gets
bigger okay so for example for the
average person in America would have
been something like this it would have
been neam payment was 1,200 bucks a
month interest only was 1,800 bucks a
month 30-year fix was $3,100 a month and
15E was $4,500 a month okay so people
are like dude buy another house and
another house and another so I got five
houses that I'm paying 1,200 bucks on I
can afford to do that except that was
only for two or three or five years and
then all of a sudden your 1,200 payment
goes to $4,200 Time 5
houses how do you pay $20,000 a month
you can't do it boom foreclosure
foreclosure foreclosure so that's not
the case study of today the case study
of today is somehow some way the
government thought it's a good idea to
lower interest rates to
1% and we had 3% loans that were going
on and then we talk about 128 month
expansion by the way if there's no coid
that would have been 150 month expansion
that we would have had that's not good
to have 150 month expansion because
during that cycle that we went out
Tom money was so cheap that people were
just picking up money and buying stuff
left and right it was so cheap go get a
house go get a car rates were low you
these big companies are getting $50
million lines $100 million lines $200
million lines go get as much money as
you can then Co hits when Co
hits philosophically it was a [ __ ] show
go work from home 18 months that's what
you got to do essential
non-essential and then when that took
place companies like Twitter and many
others said at Twitter under Jack dorsy
you can work from home for the rest of
your life what a Noble company that's
what we got to do and then so we go
through that cycle and then people
started abusing employers and they had
two jobs of they weren't telling anybody
but they're making 82 here and 88 here
so they're making $170,000 thinking they
can do this fraud that they're doing for
the rest of their lives and then they're
living a $170,000 year lifestyle not
realizing that's not going to be around
forever and then the money that they put
into the system all of a sudden people
have cash in a bank like never before so
we had $2.2 trillion of cash Americans
every quarter that thing went from 2.2
trillion to 1.7 trillion to 1.4 trillion
to 1.1 trillion and our savings as a
nation kept going lower and lower and
lower and lower so then we have um more
money being printed into the economy and
then we have the election then now Co is
gone now we got to get people to come
back to work they don't want to come
back to work they want to work from home
then companies like David Solomon
Goldman Sachs they start saying no you
got to be there for accountability on
Monday morning and all this other stuff
if you don't you're not getting your
bonus people started kind of getting
creative that's unfair that's not cool
I'm going to go get another job many did
then some companies came out and said no
we're just not doing that and then you
know that is taking place and then you
have a bit of War you have craziness
going on with another War you have all
of these things taking place and then
suddenly Jerome Powell sees inflation's
going to
8% wait a minute what's going on here we
got to lower it to 2% how do you lower
it to 2% let's start increasing interest
rates we raise this is crazy we raised
4.88% in the shortest amount of time
ever in the history of
America there's a chart on statistic you
got to see this it's a great Visual and
it shows historically when we've had to
increase rates it's over a three-year
span or it's over a six-year span or a
three and A2 year span no no this is
over a 12 month 15mon span
4.88% boom like this hoping inflation
goes down okay inflation moves a little
bit sales of homes to the lowest than 20
years mortgage applications lowest than
27 years people who were doing loans I
don't know if you have friends who were
doing loans or mortgages or real estate
these are guys that were making a half a
million dollars 3 years ago per month
they're not making nothing right now
guys who are making $100,000 a month are
having a hard time making $8,000 a month
right now loans there is no loan
application because even new homes are
not being sold to do the loans of new
homes so home sales are down because
typically when refi comes down people
will sell homes no one's selling homes
today why are they not selling homes
today because they're still sitting on
some cash and they don't want to give up
that 3% loan they got a year and a half
ago and then you look at the data okay
let's just say I do sell this house I
got to go buy another house but I got to
get that house at 8% I'm not willing to
do it why would I do it so I'm not going
to there is no motive to sell the house
so now what's the ticking Time Bomb a
few things
one Jerome Powell is trying to increase
rates hope fin hoping unemployment
increases because that's what we need
they need the unemployment to increase
it's not moving still 3.7 3.5 3.8 3.9
it's not moving it's right
there okay so either we need
unemployment to go up or we need people
to run out of money if people run out of
money and they're stressed out guess
what they they do they're going to sell
the house so today numbers came out
saying it's 55% more cheaper to rent
than buy this is the highest we've had
ever wow it's
55% cheaper to rent than to buy today
this is not a buying season this is a
renting season okay this a Wall Street
Journal many of these other articles
we'll talk about okay meanwhile
the economy is growing the econom is
going up Dow Jones oh it's killing it
based on seven companies magnificent
7even and you know who these Magnificent
Seven companies are Nvidia you got these
Facebooks the Amazon the apples these
seven companies that are preventing the
company from country uh the market from
having a crash then while all this stuff
is taking place um Powell now is dealing
with a war he's afraid he wants to raise
the rates a quarter but due to the war
that took place in Israel he doesn't and
then data shows which is by far the most
interesting data to answer your question
here is how much after these five
situations where we raised the rates
multiple times in a span this being the
shortest uh in the most condensed time
frame how long does it typically save is
there a formula of when recession comes
if at all here's what they realize
recession usually comes on average 11
months after the last month they raised
the rates so what does this mean if
Powell's no longer going to raise the
rates and the last time they raised the
rates was September let's just say that
means recession is going to come when
not October so you got October November
December January February March April
May June July August August of next year
three months before election that's if
it follows the trends of the last five
times when they raised interest rates so
how did I start off the story I talked
about the doctor that has met 4,000
different patients and the 420 or you're
kind of going through this the problem
of everything I just told you could be
completely wrong because there's a fifth
when the doctor says I've never seen
this before so we've never seen current
climate current climate before for us to
be able to put it and say well according
to this and according to that we've
never had this situation before yeah
that's the thing that makes me really
tense but there are fundamentals that
when I look at I think oo like there it
isn't possible to sustain this so the
thing that I just just keep coming back
to is debt and interest and when you
look at the charts that show the
interest payments and how they're going
to go up and up and up and even people
that locked in you know say three-year
fixed rates at really low rates in the
corporate Market that all goes away in a
few years and so you start looking at
just the absolute Behemoth numbers that
are going to be due to service that
money and it becomes completely
untenable and the bad news is it becomes
untenable both at the individual level
where we're more in debt than I forget
ever or close to it but individuals are
in psychotic amounts of debt
corporations are in ridiculous amounts
of debt and the nation is in a
ridiculous amount of debt all while
we've had two major printing events
since 2008 and so now you really have a
very unstable market so there's a great
quotes called Minsky Financial
institutional hypothesis instability
hypothesis excuse me uh and he said when
an economy is stable people get
optimistic when people are optimistic
they go into debt when they go into debt
the economy becomes unstable and now
that's even without the crazy rising in
interest rates so we have like this for
me it seems self-evident that there is
going like that that gravity insists
that things come back down but they
haven't yet and so just when I want to
get bullish and be like hey obviously
this is all going to come crashing down
it just keeps not and not and not
um my intuition is that a recession is
inevitable but the market can remain
crazy longer than you can remain solvent
whatever the quote is um why hasn't it
happened yet and how do you think about
because obviously you have the you have
similar concerns that I have only the
paranoids survive but how do we turn
paranoia into an action
plan yeah so everything is right now
about mapping out different
possibilities so for example if we're
right now in a conference room and we
got bored to write on we would write on
you and I would write on and we would
say okay uh World War III takes place
what do you think are the chances of
this taking place Ray doio says 50% yes
okay does a um Jamie Diamond says this
is the most danger Dangerous times we've
had in America in decades okay cool so
if World War III happens what happens to
the economy who's going to be the
parties involved are we going to be
involved purely through proxy or is
there going to be attack here then you
write down the possibilities okay if
this happens what are you going to do if
this happens what are you going to do
then next what happens if unemployment
all of a sudden goes to 7% 6% what
happens if inflation goes down what
happens if Powell starts lowering rates
back down to 5 4% holy [ __ ] that's
that's going to be crazy what Happ so
you got to write all of these different
scenarios down but here's a couple
things that we have to be thinking about
and you said which was fascinating one
so credit card debt highest it's ever
been you know what's the craziest thing
about uh uh credit card de being being
the highest it's ever been tell the
average interest rate on credit card is
the highest it's ever been Jesus forget
about the debt so people are worried
about the debt so imagine the interest
rates in the last 5 years has gone like
this to 23% or the average is 23% on
credit card you know what 23% means that
means the debt doubles about 2 and a
half years that's like loone shark
number that's loone shark three years
your debt is doubling right but that's
what we got right now credit cards okay
so our debt is
record-breaking the forgiveness for your
uh loan school loan is gone so now you
have to start paying for it that's $3
$400 a month that people are expecting I
think October November starting then
let's set that part aside go to the
corporations you were talking about that
are borrowing money this year they're in
interest payment on corporation that
borrowed money is going to end up being
around $530 billion just interest oh my
God next year it's going to 730 next
year it's going to 1.1 trillion in the
next five years it's going between 1.3
to$ 1.5 trillion just on the corporate
debt that we're talking about by the way
next part car payment a credit no one's
affected good credit they're making the
credit payments on
time mortgages we're not saying anything
crazy with people would credit not
making payments we're still good car
payments and subprime they're seeing a
spike in defaults where people are not
making car payments the first sign
you're seeing on what's taking place no
problem let's go to the next one that's
the scariest one us has $33 trillion of
debt worst that's ever been the highest
that's ever been no problem what does
that really mean nobody can really
figure it out here's what it means of
the money that we have about eight
trillion of it the rates are gonna
re-calibrate and we're going to have to
have new rates that we going every
single time the rates go up one point
just one point for the US government our
interest payments Tom increases by $320
billion Jesus so imagine we raise rates
by three points just interest it's a
trillion doll more per year if it's 6%
$2 trillion more per year that's that
then last thing that I'll just kind of
get you to be thinking
about
um so anytime you want to know if the
economy is back to normal go to
Vegas Vegas is humming like okay we're
good and always whenever you go to Vegas
talk to cab drivers and talk to the
drivers who are doing Uber always ask
how's conventions doing how are you
seeing with traffic are you noticing
things canceling no this has been crazy
for us the last 3 months everything's
good but if they start seeing a downturn
they're typically an indicator of what's
to come Transportation industry we
consult for a lot of Transportation
companies at BV Consulting one of my
friends I'm about to go meet with them
right after
this they're their con their
construction company that's very well we
have these three clients that we have
who are doing
Transportation two of them are doing a
100 million 80 million a year numbers
are down 40
50% one of them is doing a billion a
year their revenue is down 70% oh so
let's actually talk about transport why
would Transportation be down
70% aren't Walmart Amazon companies
ordering stuff to ship it from here to
there why would that be lowering what do
they know that we don't know again these
are people who have data to Insider
stuff that we can sit there and say
these are great indicators when you're
studying these things on what's going on
does this mean recession is going to
come here like I told you earlier when
we were talking my bigger fear is a
reverse market crash which Venezuela
just went
through which all of a sudden the rates
get lowered and DOW an S&P goes and DOW
goes from 33 40 45 50 55 just goes Voom
is that just the dollar losing its
purchasing power yes exactly that's what
happens the more we're printing like for
example a Michael Jordan um card uh
years ago a bgs 9 a half sold for
$78,000 I like oh my God that's crazy
but then all of a sudden all of these
boxes kept entering the
marketplace of 1986 Fleer so guys
started buying these things and they
were sending more to get graded at
Becket and PSA the more they got cards
graded that $78,000 card bgs 9 and half
became a $60,000 card $50,000 card
$40,000 card $330,000 card you can
probably buy bgs 9 and a half today for
$20,000 $25,000 okay so the
inventory increases the more we print
money the more you print dollars and
it's more accessible the less it's value
the less it's worth so these are some
things that's going on uh today uh so
you know like I you you sit there you're
like okay so does this mean guys are not
going to make a lot of money no no
you're going to see the first
trillionaire in the next 24 months
because none of this is going to affect
the guys at the top none of it this
printing money every time they print
money the guys at the top make more
money every if there's anybody that
should be against printing money it's
low and middle- income families if
there's anybody that should be against
printing money is them if there's
anybody that's for printing money guess
who it is the guys at the top why
because the poor in Middle America can't
keep money they spend it and when they
spend it what do they buy a product
owned by somebody in the S&P 500 or
other people who have businesses money
flows up they can keep printing money
all they want so when low and middle-
income families are like look at these
guys all they care about is themselves
let that bill pass for $2.7 trillion you
simply look at them and you say you have
no clue how money works you have no idea
how money works
guess what let's print $1
trillion Rich are okay with it you ain't
going to get the rich complaining about
printing $10 trillion or $5 trillion
black Rock's going to be like all right
cool we're at8 to1 trillion of money in
our ETFs and we're buying up a bunch of
different companies we're buying up all
these properties today right now it's
going to be nothing but in the next few
years you have to go through us and we
dictate the market and we're going to
own it all and what are you going to do
about it you know this these are these
are a lot of different moving parts that
is going on to me and again for me um
the the idea of Middle America not being
able to make the money they need to make
to be able to afford a house send their
kids to school live in a nice place
enjoy some of their dreams maybe not the
biggest ones but some of their dreams
are going to become a reality Middle
America is getting smaller and smaller
and smaller every single time we print
money you can reboot your life your
health even your career anything you
want all you need is discipline I can
teach you the tactics that I learned
while growing a billion doll business
that will allow you to see your goals
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today for people that don't understand
the mechanisms of printing money it goes
like this you are you have to have a
mechanism by which you put this new
money that you created out of thin air
by Fiat literally just saying it now
exists uh you have to put it into the
system the way it's put into the system
is by buying assets because typically
low and middle income people don't buy
assets they buy products like you were
saying then they aren't beneficiary of
that unless there are stim stimulation
checks now those they will get sent
directly to them so there are ways to
put it in their pocket but what you're
effectively doing is socializing losses
so you are spreading the loss out across
everybody because while I get it that
um because I own assets I'm going to be
disproportionately either protected or
actually gain the gain isn't real and so
it's really I'm looking at the price is
going up and it makes me feel like oh I
really did something but in the end I
didn't in the end it just my dollar buys
less and so it takes more dollars to buy
the same thing because nothing
fundamentally happened the business that
I own a piece of did not become more
productive and therefore can actually
generate more by adding more value to
the world so once you understand that
like I actually as a wealthy person do
complain when people print money because
I'm like hey there is a point at which
you break everything because the money
is just going to hyperinflate and it
isn't only going to be the stock market
that goes up it's going to be the cost
of bread and gas and taking your family
to a movie and all of that and so um
look I I'm conflicted in fact Patrick
Bet David you're going to educate me
here I'm conflicted about money printing
because the only reason I got into doing
Financial content and quite frankly
learning about financial content or
Finance in general uh was because of
coid when coid happened this was me not
being very far out from having worked at
Quest and I had a thousand employees in
the inner cities and I was like they're
all going to get obliterated I'll be
fine I'll still be rich on the other
side of this but they're going to get
wiped out because I didn't know money
printing I didn't know that they were
going to socialize losses and in doing
that that actually kept us from going
into something that probably should have
been worse than the Great Depression and
they money printed their way out of it
and we ended up being okay because it
was spread across a lot of people now I
hate that I was t taxed
without um without it being acknowledged
as a tax and I feel that I've paid an
inordinate amount of money but if that's
what stops everybody from going into a
horrendous depression I don't know I
don't know that it was a bad idea but I
know that it because I am such a student
of Ray doio I know that governments once
they start money printing they can't
stop and every time in human history
that it's been used as a tool it's used
Until It Breaks Until It Breaks every
time without exception and that
typically as it's racing towards
breaking I think it's what eight out of
the last 14 times it's ended up in a hot
War so usually as the debt the big debt
cycle go watch R Delio's video as the
big debt cycle comes to an end and and
uh money's inflating away to nothing
debt is completely out of control nobody
can make their payments everybody's
defaulting you have to have a complete
reset of
the wealth which is I think why
everybody calls this the great reset or
the big reset or whatever because we are
we are actually stopping we are
forestalling catastrophe right now by
printing but we are only forestalling it
and nobody I've had a lot of people on
the show nobody can tell me how you pull
out of this death spiral other than
austerity and no one's going to do
[ __ ]
austerity
yeah well I mean Ray when he uh uh did
that one video if you've never seen that
one video it's like 32 minutes where he
explains the history of money and
finances and what's going on if you by
way it's got like 20 or 30 million views
very few 32 minute uh Finance videos are
going to have that manys everybody must
watch it
but yeah so how can you fix this thing
well the the question my question would
be is it a how do you fix this thing in
a year no one's going to know how to fix
it because it's not going to happen how
do you address this and make progress
towards you know getting better that
over a 20year span okay now we're
talking 40e span even better then you
have to forecast and see what Solutions
are going to be needed the next 20 30 40
years the problem with America today is
the following here's one of the problems
with America which by the way is a
beautiful thing but it's also pral
whoever that gets elected we have
cyclical Cycles okay you got Carter gets
elected then it's Reagan senior then you
have Clinton then you have have Bush
then you have Obama then you have Trump
then you have Biden so Republican
Democrat Republican Democrat Republican
Democrat so every time you do this every
eight years the system is like changing
so Cycles are changing whatever you're
doing is changing so you can't really
consistently build on a philosophy over
a 20-year period because in America you
you can't put a 20-year plan in place
there is no such thing as a 20-year plan
in America cuz whoever's the next guy
that's going to come take your job is
going to say no we're not building that
wall no we're not going to do that no
we're going to cut those benefits no
we're going to add these benefits no we
are going to spend more money no we are
going to do that no we are going to
leave this war no we are going to get
into this war the these things the the
complexity of what we're asking
about is challenging because no one
leader is going to run for 20 years we
just don't have that okay would you want
it in a in a way when it comes down to
the economy uh uh yes I would want it
selfishly for me and you because we're
alive today is it good for America long
term absolutely not okay absolutely not
because if that one person's a shitty
person that gets into office for 20
years this thing's gone it's destroyed
okay so at least this allows us to not
be able to go super extreme because you
have to get it through Congress and
Senate and it's already complicated
enough to do that but to fix this thing
you're never going to have both sides
agree philosophically e on what they're
going to be doing over a 20e span all
right let's go to the next side that
we're talking about while all this stuff
is going on you have uh um the the war
right now with China and India that is
also taking place with iPhones are now
being made in India you can now get
iPhones where on the back of it it says
Made in India first time not made in
China says Made in India really guess
who blocked Tik Tock in their country
India guess who's blocked 100 apps of
China India India is not afraid of China
now why does China not like India why do
they always be on closed doors talk [ __ ]
yet at the same time they're part of
bricks you got Brazil you got Russia you
got India you know you got China and I
think it's South Africa that's part of
the bricks right okay so they're part of
the same thing but there's also a way of
you know competing the reason why I like
India a lot and I think India is going
to play very important role here is
because India has seen how China
negotiated with us and they realized
we're not doing that but India's also
seen the mistakes China made with the
one child Rule and
overexpansion and what's going on with a
lot of these properties that they build
out in cities that looks like just like
Paris I don't know if you've seen the
city they build in China it's a city
everything Paris has it has it looks
identical to Paris if you Google this
same kind of architecture if I tell you
if I show you the picture you would
think it's
Paris they spend billions of their own
money to build a city replicating
exactly Paris that's what China did okay
wow so we're talking about you know the
whole everything everything they have
they have a sh same exact model that
they have over there exactly when you
see the pictures like when we're done I
can't wait for you to see these pictures
to see what that looks like so China
overexpanded very quickly India is
watching China they had their one child
one child
policy the average age of a Chinese per
right now is 38.4 years old India is
2728 okay India's uh IIT Institute is
producing incredible Engineers many
companies here will hire Indian
engineers and they're rock stars better
than m in many cases so I think India is
very important for the next 20 30 40
years very important as long as India is
there China's going to hate it they
they're not going to like it the fact
that Tim cook right now has got a very
hard job I think Tim Cook in the span of
four weeks lost $350 billion of
valuation for apple in four weeks $350
billion okay one because iPhone 15
didn't do what they expected it to do
two because China is now giving them a
hard time because China is their number
one market of iPhones they sell now
China is sitting there saying wait a
minute we sell more iPhones in this
country than anywhere else yet you're
giving our business to India who the
hell do you think you are right then on
the back end the real war that's taking
place is the semiconductor chips and
there's different levels to the
semiconductor chips that's being built
and China's specialized in the cheapest
kind to make the easiest kind to make
where some countries have specialized on
a tough kinds to make when it comes on
to semiconductor chips this is why China
can't stand Taiwan being there this is
why China wants Taiwan because Taiwan
specializes in building the extremely
technical semiconductor chips that the
rest of the world uses and then there's
complete other aspects to this that you
can get even deeper on so taiwan's going
to play play a very important role you
know we can't have a Russia Ukraine or a
you know Israel Palestine Gaza Armenia
aeran turkey we can't have that taking
place with Taiwan Taiwan needs to stay
separate that needs to stay protected
how we do that I don't know how we're
going to do that we're getting involved
in one too many wars but if if Taiwan
stays free and China relies on them
because China destroyed the world during
Co absolutely destroyed we realize 80%
of medications being built there 80% the
technology that we need is being built
there they controlled everything car
pricing use prices went up 50% like what
are you talking about you mean to tell
me I bought this car for $90,000 it's
used you're willing to pay me $130,000
yes are you serious yes why we don't
have chips to make cars are you kidding
me no Rolexes they were making Rolexes
for 18 months they didn't have equipment
to make Rolexes you go to a Rolex shop
that had one one watch like what do you
have we only have one watch can I order
Rolex no we're 12 months you're not
going to get are you serious yes nothing
this is what was going on at Rolex store
so again the stuff that gets me
optimistic is
India is Taiwan is we're committed to
the semiconductor business here uh the
things that concern me is China is
erdogan being wanting to be involved in
the Israeli War because most people
don't realize the most powerful military
in the Middle East is not Israel Israel
is powerful but Israel has 300,000
soldiers of which I think 150 is
reserved turkey has nearly 400 active
350,000 active Soldiers the number one
military in the Middle East if Turkey
gets involved you know so we have all
these dead things that we're looking at
ob