1 00:00:00,000 --> 00:00:04,500 Gary Broad. It's been too long, sir. Welcome back to the show. 2 00:00:05,640 --> 00:00:06,660 Thanks for having me back, Marty. 3 00:00:08,020 --> 00:00:12,740 Well, we were just discussing before we hit record the last time you were on it. 4 00:00:12,820 --> 00:00:18,200 I believe I remember it was in the midst of or right before the tariff tantrum. 5 00:00:20,720 --> 00:00:27,340 And regardless of whether it was right before or right during, I think your call was pretty prescient. 6 00:00:27,340 --> 00:00:35,940 is that this is going to take time to see the sort of ramifications of a shift in trade policy 7 00:00:35,940 --> 00:00:43,400 toward tariffs to play out. And so we've had about eight or not eight, like six, seven months now 8 00:00:43,400 --> 00:00:51,800 of the implementation of the tariffs. What is your, what are your thoughts on how this has 9 00:00:51,800 --> 00:00:58,140 played out so far as it pertains to tariffs specifically. So, you know, back when, you know, 10 00:00:58,140 --> 00:01:02,280 we had Independence Day roughly six months ago, seven months ago, something like that. 11 00:01:03,560 --> 00:01:08,900 You know, what I said at the time was this is not going to be the disaster people think it is. 12 00:01:08,940 --> 00:01:12,480 You had all these fiat economists screaming, oh, no, you know, we're going to have horrible 13 00:01:12,480 --> 00:01:17,740 inflation. It's going to crash the economy. And none of that has happened. And, you know, 14 00:01:17,740 --> 00:01:22,820 to their credit. Some of them said, hey, you have to give it time. It takes a while for these things 15 00:01:22,820 --> 00:01:29,080 to work their way through the supply chains. But, you know, here we are and we're now a day away 16 00:01:29,080 --> 00:01:36,260 from November and we're just not seeing the kind of goods inflation that indicates any kind of 17 00:01:36,260 --> 00:01:42,180 disaster or, you know, any kind of massive slowdown. Regardless of that, I think, you know, 18 00:01:42,180 --> 00:01:48,320 there's a huge error in the academic models. You know, Porter's theory of competitive advantage, 19 00:01:48,320 --> 00:01:55,280 it makes sense in a classroom. And I'm a free market guy myself. But the issue with this stuff 20 00:01:55,280 --> 00:02:01,320 is the United States has been outsourcing its manufacturing capacity to lower cost 21 00:02:01,320 --> 00:02:08,780 partners. You know, I use that word very guardedly. And that's been going on for about 40 years. 22 00:02:08,780 --> 00:02:16,580 And so what happens when we can no longer make our own pharmaceuticals, our own chips? 23 00:02:18,020 --> 00:02:23,220 You know, there are all sorts of aspects of our economy that we no longer have control over. 24 00:02:23,540 --> 00:02:28,380 And, you know, what happens when we get to the point where the only thing we export is dollars? 25 00:02:28,740 --> 00:02:31,040 So it's not a sustainable situation. 26 00:02:31,340 --> 00:02:37,580 And one of the things I really like about what President Trump is doing is he's bringing back manufacturing to the United States. 27 00:02:37,580 --> 00:02:45,460 We have trillions and trillions of dollars of companies saying we're going to build manufacturing capacity in the United States in order to avoid these tariffs. 28 00:02:45,560 --> 00:02:48,200 That, to me, is a pretty good way around this. 29 00:02:50,860 --> 00:02:59,500 And touching on the point of it's going to take time to really see the full ramifications of this policy shift. 30 00:03:00,120 --> 00:03:02,400 When do you think we'll be in the clear? 31 00:03:02,460 --> 00:03:06,780 Do you think we're in the clear now in terms of understanding the effects of tariffs? 32 00:03:06,780 --> 00:03:20,280 Is it going to be a 12 to 18 month window where it's like, OK, we're in this period where we're adjusting and we'll have clear information once we get a year, year and a half out? 33 00:03:20,400 --> 00:03:25,040 Or is it safe to say now that this is moving in the right direction and we should be leaning in harder? 34 00:03:26,680 --> 00:03:28,700 So I think we're leaning in the right direction. 35 00:03:29,740 --> 00:03:36,300 It'll be interesting to me to see if the fiat economists who are screaming that this will be a disaster, but saying it's going to take a little time. 36 00:03:36,300 --> 00:03:45,180 You know, we'll get CPI data and we'll get like PMI manufacturing data over the next couple of months. 37 00:03:45,680 --> 00:03:53,420 And it'll be interesting to me to see if there is no gigantic spike in goods inflation, if they'll just admit we got it wrong. 38 00:03:53,800 --> 00:04:03,420 And if you take a look at, you know, the history on this stuff, one of the ways that the academic theories have gotten it wrong is people do substitute for different goods. 39 00:04:03,420 --> 00:04:10,760 But also when there are tariffs, you end up with an increase in domestic manufacturing. 40 00:04:11,060 --> 00:04:12,420 And that's exactly where we're heading. 41 00:04:12,560 --> 00:04:16,360 The thing that I'd be watching for right now is all the companies have said we're going 42 00:04:16,360 --> 00:04:19,540 to build trillions of dollars of production capacity in the United States. 43 00:04:19,700 --> 00:04:24,820 I want to see them follow through on it because that's that's the long term win is to put 44 00:04:24,820 --> 00:04:27,860 Americans back to work, building things, making things. 45 00:04:27,860 --> 00:04:36,640 And I get that I sound like a 1980s and 1990s Reagan commercial saying that, but there is something to it. 46 00:04:36,800 --> 00:04:42,960 And outsourcing all of that to Asia or to Mexico, that's, again, not sustainable. 47 00:04:43,180 --> 00:04:45,460 It's not something that I want to see happening long term. 48 00:04:45,940 --> 00:04:56,520 We're in a situation right now where China has just basically exercised influence over U.S. trade policy by threatening to withhold certain things that we need. 49 00:04:56,520 --> 00:05:00,900 do we really want to be at their behest? 50 00:05:01,540 --> 00:05:04,100 I think that's not a good place for us to be. 51 00:05:05,200 --> 00:05:08,020 Yeah, it's been a topic on the show for the last few weeks 52 00:05:08,020 --> 00:05:11,700 is the posturing between the US and China, 53 00:05:11,940 --> 00:05:13,420 particularly around rare earth metals. 54 00:05:14,460 --> 00:05:16,220 Obviously, Scott Pesant, Trump, 55 00:05:17,140 --> 00:05:21,100 meeting with Xi in his cabinet this week. 56 00:05:21,100 --> 00:05:23,100 Are you optimistic that something good 57 00:05:23,740 --> 00:05:24,700 can come out of these meetings? 58 00:05:24,700 --> 00:05:32,380 Yes and no. I think short term, at first of all, they've said, you know, we're going to come to an agreement. 59 00:05:32,660 --> 00:05:38,640 And the smart money was always on them coming to an agreement because it's in both sides' interest to do that. 60 00:05:39,400 --> 00:05:47,060 The thing that I think this particular White House understands, and I wish more Americans understood, is China's viewing this as temporary. 61 00:05:47,060 --> 00:05:58,060 Right. The thing that they were using as leverage is access to rare earths, which we need for things like technology, auto manufacturing. 62 00:05:58,820 --> 00:06:03,600 You want EVs. We're going to need those. And a lot of our weapons systems require that advanced weapons systems. 63 00:06:03,780 --> 00:06:13,380 You need these kinds of things. So China, by saying you can't have these things that, you know, they have an almost a near monopoly on. 64 00:06:13,380 --> 00:06:31,620 You can take entire U.S. industries offline. And that's that's where we are. It's not an accident that China has such a monopoly on this. And, you know, one of the things that will happen is if other places start to produce rare earths, you know, China can drop their price. 65 00:06:31,620 --> 00:06:39,880 They will lose money. They're willing to lose money in order to maintain market share or or basically monopoly market share. 66 00:06:40,960 --> 00:06:46,400 This is not an accident. And so, you know, I think China views what's happening here. 67 00:06:46,560 --> 00:06:54,100 We'll have an agreement, but they view it as temporary while they continue to build strength in areas where we're going to need them. 68 00:06:54,100 --> 00:07:08,440 And if the United States doesn't understand that we need to build our own capacity again in rare earths and pharmaceuticals and semiconductors, you know, these kinds of of critical industries without that, we're going to be in trouble. 69 00:07:09,260 --> 00:07:12,440 Because what are we going to do when we don't have something to negotiate with? 70 00:07:12,440 --> 00:07:24,240 yeah and that's china this year particularly with the rare earths the tariff saber out of 71 00:07:24,240 --> 00:07:30,540 saber rattling between the u.s and china and then i'm sure you've noticed but the sort of shift 72 00:07:30,540 --> 00:07:35,600 towards this alternative settlement network by putting a lot of gold registering a lot of gold 73 00:07:35,600 --> 00:07:41,780 on warren at the shanghai exchange and beginning to broker deals with with other countries to settle 74 00:07:41,780 --> 00:07:47,240 trade deals and yuan that can easily be reconverted into gold because they're putting 75 00:07:47,240 --> 00:07:52,040 all this gold up. And so it seems like China is like moving their pieces on the chessboard to say, 76 00:07:52,040 --> 00:07:59,900 hey, US, we have a strong economy, number one. Number two, we're not happy with the way you 77 00:07:59,900 --> 00:08:04,500 guys are weaponizing the dollar system and are beginning to set up alternative rails to 78 00:08:04,500 --> 00:08:11,640 sort of hedge that exposure. Yeah, that I mean, that brings me to something where 79 00:08:11,640 --> 00:08:16,400 I've had, you know, multi-year arguments with people. You know, if we go back to, 80 00:08:17,020 --> 00:08:24,340 you know, I think it was the first quarter of 2022 when the Biden administration basically stole 81 00:08:24,340 --> 00:08:30,920 hundreds of billions of dollars of Russian dollar denominated assets. And I said, this is a bad 82 00:08:30,920 --> 00:08:34,520 idea. And, you know, people got angry at me and they said, oh, no, you know, you're supporting 83 00:08:34,520 --> 00:08:39,820 Russia that you like Putin. No, that's not it. I'm an American. I want what's best for the United 84 00:08:39,820 --> 00:08:44,640 States. And what we've just done is we've communicated to the rest of the world that the 85 00:08:44,640 --> 00:08:50,160 dollar is something you can rely on only as long as you stay in the good graces of Washington, D.C., 86 00:08:50,160 --> 00:08:56,900 a place that switches leadership every two to six years. Right. I mean, we we just made the dollar 87 00:08:56,900 --> 00:09:02,980 unreliable by doing that. It didn't stop the Russian war machine. It didn't slow Putin down, 88 00:09:03,100 --> 00:09:09,500 but it did hurt the United States. On top of all of that, you know, I've had this multi-year debate 89 00:09:09,500 --> 00:09:16,520 with people where, you know, they're the BRICS coalition, right? Brazil, Russia, India, China, 90 00:09:16,800 --> 00:09:24,060 South Africa. Now that that group has grown to a couple dozen countries that encapsulate more than 91 00:09:24,060 --> 00:09:29,060 half the world's population, you know, they're saying we're going to come up with our own 92 00:09:29,060 --> 00:09:34,280 BRICS currency. And, you know, so we need to take this seriously. And people have, you know, 93 00:09:34,280 --> 00:09:39,680 they've argued with me on X, formerly Twitter, and said, you know, hey, they can't do it. Who 94 00:09:39,680 --> 00:09:43,640 will trust them that, you know, they don't really have the capacity. They're not coherent. Okay, 95 00:09:44,000 --> 00:09:49,820 fine. But we should be concerned about the fact that more than half the world's population is 96 00:09:49,820 --> 00:09:55,640 looking for an exit for the dollar. And, you know, I've I had never owned gold before 2020. 97 00:09:56,240 --> 00:10:01,400 But in 2020, I started buying it in size. I've never sold any and I just held that position. 98 00:10:01,400 --> 00:10:11,040 because you have a situation where the dollar is being debased at an increasing rate. 99 00:10:11,620 --> 00:10:13,780 You know, the purchasing power of the dollar is declining. 100 00:10:13,780 --> 00:10:19,940 But also you have central banks all over the world that are saying we want to sell dollars and buy gold and we're just going to hold it. 101 00:10:20,020 --> 00:10:22,600 And they're they're not price sensitive. Right. 102 00:10:22,660 --> 00:10:25,060 The central banks buying gold don't care if they're buying it. 103 00:10:25,120 --> 00:10:30,020 Three thousand dollars an ounce, you know, fifteen hundred dollars an ounce where I first bought it at four thousand dollars. 104 00:10:30,020 --> 00:10:32,160 It doesn't matter. They're just going to stick it in a vault. 105 00:10:32,940 --> 00:10:40,020 Yeah. Well, and that turns to sort of domestic monetary policy here in the United States. 106 00:10:40,260 --> 00:10:58,540 And I think throughout the course of this year, it's been pretty clear that the Trump administration, particularly Scott Pecent, wants to sort of align the goals of the Federal Reserve with the goals of the Treasury and begin to sort of erode the. 107 00:10:58,540 --> 00:11:07,360 perceived demarcation between the Fed and the Treasury, the Fed's independence. And there's 108 00:11:07,360 --> 00:11:10,960 been a number of things that happened this year, but obviously we had a Fed meeting this week, 109 00:11:10,960 --> 00:11:15,380 and I believe it was last month's meeting or maybe in Jackson Hole. Jerome Powell had to come 110 00:11:15,380 --> 00:11:19,900 and make an about face and acknowledge that tariffs weren't as inflationary as people 111 00:11:19,900 --> 00:11:28,340 thought they were. But in recent months, it's this idea or this theme that you have so for 112 00:11:28,340 --> 00:11:33,420 rates blowing out, you have the standing repo facility being tapped and many people wondering 113 00:11:33,420 --> 00:11:41,100 if a liquidity crisis is on the horizon in the back end of the system. And yesterday cut 25 bps 114 00:11:41,100 --> 00:11:48,900 and it looks like inflation is not screaming like the Fed thought it would, at least as it 115 00:11:48,900 --> 00:11:55,620 pertains to the CPI inflation. What do you make of the Fed's decision this week? What's been 116 00:11:55,620 --> 00:11:59,840 happening in recent months and this sort of quarreling between the Treasury and the Fed? 117 00:12:01,040 --> 00:12:06,080 Yeah. So I have a lot of thoughts on that. But first, I actually want to address something that 118 00:12:06,080 --> 00:12:11,380 you said. One of the reasons I love talking to you already was the way you said the perceived 119 00:12:11,380 --> 00:12:17,300 independence of the Fed. And again, like this is a disagreement I've been having with people. 120 00:12:17,420 --> 00:12:21,740 You know, you have all these people saying, you know, the Trump administration is, you know, 121 00:12:21,740 --> 00:12:27,040 They're changing our norms. They're, you know, they're violating the independence of the Fed. 122 00:12:27,140 --> 00:12:33,540 OK, Marty, you know, as well as I do, the Fed has never been an independent institution for the first couple of decades. 123 00:12:34,040 --> 00:12:38,700 The chairman of the Fed and the Treasury secretary were by law the same person. 124 00:12:39,320 --> 00:12:43,620 FDR used the Fed to finance his whole, you know, New Deal. 125 00:12:44,540 --> 00:12:50,940 Lyndon Johnson, you know, literally picked up Fed chairman Arthur Burns and slammed him into a wall. 126 00:12:51,740 --> 00:12:58,340 literally strong-arming the guy into lower rates. President Nixon, he did the same thing. He didn't 127 00:12:58,340 --> 00:13:05,040 slam anybody into a wall, but he pressed for lower rates, got it, and we had the inflation 128 00:13:05,040 --> 00:13:18,800 of the 70s. This has been a constant feature. I'm on team and the Fed, but we have never had 129 00:13:18,800 --> 00:13:23,740 a politically independent Fed. And every president, whether Democratic or Republican, 130 00:13:24,220 --> 00:13:30,040 has always wanted a Federal Reserve that would give them easy money policies so they can juice 131 00:13:30,040 --> 00:13:35,320 the economy. Every president wants to point to lots of economic growth, even if it's meaningless 132 00:13:35,320 --> 00:13:40,280 nominal growth. Right. It's why Washington spends so much money right now. They can all say, 133 00:13:40,700 --> 00:13:44,440 you know, look, while they're stealing, they can they can just say, you know, look, 134 00:13:44,440 --> 00:13:51,820 we have GDP growth. Well, you know, is it really? Is it is it really product or are you just, 135 00:13:51,900 --> 00:13:56,960 you know, wasting our money and counting it on your own scorecard? Right. 136 00:13:57,280 --> 00:14:02,300 Every one dollar snap benefits contributes one dollar and 80 cents to GDP. I hope you knew that. 137 00:14:03,220 --> 00:14:08,700 Yeah. Great. Yeah. I'm glad to know that. Yeah. The government multiplier. That is, you know, 138 00:14:08,700 --> 00:14:35,960 So if you think about it, that is one of the most incredible examples of a PSYOP I've ever seen, where the government, which even when it's effective, is not efficient, is trying to convince us that every dollar they take from us, every dollar they take from the productive private economy and spend on their own prerogatives somehow leads to more benefit for us than we would have produced ourselves. 139 00:14:35,960 --> 00:14:41,720 Right? Literally, the nonproductive part of the economy is taking from the productive 140 00:14:41,720 --> 00:14:46,500 part of the economy and saying, we're producing $1.80 of benefit for every dollar we steal 141 00:14:46,500 --> 00:15:02,190 from you or Guys like Krugman would make a living talking about the multiplier effect If you just think about it for a second of course that doesn make sense But it an incredible psyop that you know the newspapers reported 142 00:15:02,390 --> 00:15:06,170 And like, how stupid do we have to be to accept that as the truth? 143 00:15:08,050 --> 00:15:10,290 I think people are waking up to it, though. 144 00:15:10,290 --> 00:15:19,770 I mean, that was the I mean, that was it seems like one of the wrote scripts that was handed to Democratic politicians last week at Tim Walts. 145 00:15:20,410 --> 00:15:24,790 Keem Drefrees, I believe, tweeting it out like, hey, we need to turn Snap back on because it's 146 00:15:24,790 --> 00:15:30,130 actually stimulative for the economy. And it's like, this doesn't really make sense. 147 00:15:31,210 --> 00:15:36,390 You know, one of the things I think is really interesting, you know, look, Marty, I know one 148 00:15:36,390 --> 00:15:41,790 of the things that you pay attention to is the Overton window, right? What are we really allowed 149 00:15:41,790 --> 00:15:47,730 to talk about? And I have seen an incredible change in the last couple of weeks as we've come 150 00:15:47,730 --> 00:15:55,430 up on like, you know, the snap cliff. And previously, if we go back, you know, five or 10 or 15 years, 151 00:15:55,430 --> 00:16:00,610 it would have been unseemly to say, hey, I don't care about this program because we always said, 152 00:16:00,670 --> 00:16:05,190 oh, no, you want people to be hungry. You want people to starve. And we couldn't have talked 153 00:16:05,190 --> 00:16:13,470 about it. My thread on X, my feed is full of people saying, wait, how many people are getting 154 00:16:13,470 --> 00:16:19,310 fed by the government? How many people are on benefits? Like there, there is this visceral 155 00:16:19,310 --> 00:16:23,990 anger from people who are working saying, wait, how many people am I feeding who aren't in my 156 00:16:23,990 --> 00:16:30,750 household? And it didn't, this, this situation has actually ended up opening the Overton window 157 00:16:30,750 --> 00:16:36,250 wider where that's not what I would have expected to see. You know, people are openly saying, 158 00:16:36,490 --> 00:16:43,090 we've got too many people who are on benefits. Yeah. 40 million, 15% of the country. And, 159 00:16:43,090 --> 00:16:50,170 And to not come off as a sort of soulless, non-empathetic individual, 160 00:16:50,510 --> 00:16:53,390 there are certainly people who may need some assistance. 161 00:16:53,390 --> 00:16:56,590 But if you look into the details, it's like you're supposed to be looking for a job, 162 00:16:57,510 --> 00:17:00,050 what you're allowed to spend the benefits on. 163 00:17:00,570 --> 00:17:02,270 You can buy any crap you want. 164 00:17:02,490 --> 00:17:09,250 It's becoming clear if you hop on TikTok and you find people talking about what people actually do with the benefits. 165 00:17:09,250 --> 00:17:15,070 There's a lot of people just selling them and just using as a loophole to not have to work. 166 00:17:15,230 --> 00:17:23,550 And I think that's whether it's the SNAP benefits or the broader immigration conversation that's happening in the country right now. 167 00:17:23,590 --> 00:17:25,870 I think a lot of people are getting back to first principles. 168 00:17:26,030 --> 00:17:28,590 Wait a second. There should be rules. There is a rule of law. 169 00:17:28,590 --> 00:17:45,870 And if we don't enforce the rules, whether it pertains to what you have to do to get these SNAP benefits or the rule of law of what you have to do to be here legally as somebody who came from outside the country, people are saying, wait a second, we're not following any of these rules. 170 00:17:46,010 --> 00:17:46,910 And that can't happen anymore. 171 00:17:46,970 --> 00:17:47,770 You don't have a society. 172 00:17:47,890 --> 00:17:51,450 Why does the government exist if they're not enforcing any of these rules? 173 00:17:51,650 --> 00:17:57,290 That is the contract that we engage in as citizens with them is to enforce these pretty basic rules. 174 00:17:57,290 --> 00:18:09,270 Yeah. And in fact, you know, one of the things people, you know, the conversation has to take place in this, you know, humane, you know, we want what's best for people. 175 00:18:09,350 --> 00:18:17,090 We want to be kind. But I have more concern for my fellow Americans than I do for people who came here illegally. 176 00:18:17,090 --> 00:18:31,110 And one of the ways our government is harming our fellow countrymen is by taking people who came here illegally, giving them free housing, giving them these these SNAP benefits, giving them food and basically covering their expenses. 177 00:18:31,110 --> 00:18:43,710 And what that means is that these people can work for below market rates. Right. I mean, basically imagine, you know, you're you're a blue collar worker and your job gets taken by somebody who who's supported by the government. 178 00:18:43,710 --> 00:19:01,350 Right. Who's like, yeah, I can work for lower rates. I can work for a lower wage because the government's covering my grocery bills and my rent. And that's I you know, why is it somehow wrong to express sympathy for our own people? 179 00:19:01,350 --> 00:19:30,390 I don't think it is. And to your point, I think the Overton window is shifting. And that's what I wonder is, is there enough time between when these policies started getting implemented earlier this year and the midterms to really see immaterial effects that sort of gets regular Americans like you and I, maybe not like you and I, blue collar Americans. 180 00:19:30,390 --> 00:19:33,650 specifically waking up and saying, oh, this actually did help me. 181 00:19:33,750 --> 00:19:34,810 I can get a job now. 182 00:19:35,270 --> 00:19:36,850 And when you think about immigration specifically, 183 00:19:37,450 --> 00:19:40,450 as it pertains to rent and housing and all that, 184 00:19:40,750 --> 00:19:43,030 like pushing up the cost of real estate 185 00:19:43,030 --> 00:19:46,750 and exacerbating the housing affordability crisis, 186 00:19:46,750 --> 00:19:50,810 like if they're successfully able to cut the benefits of illegal immigrants 187 00:19:50,810 --> 00:19:53,590 and get them out of the housing, bring housing costs down, 188 00:19:53,710 --> 00:19:58,110 bring jobs back to market, bring consumer good costs down, 189 00:19:58,110 --> 00:20:03,530 then I think there's a good chance that people can say, oh, wow, this is actually working. 190 00:20:03,610 --> 00:20:10,270 We should lean into this order. Yeah. So I you know, one thing I think was lost in the data that 191 00:20:10,270 --> 00:20:19,310 we got earlier this year was you had a decrease in the number of jobs available, but you didn't 192 00:20:19,310 --> 00:20:24,710 have a decrease in the number of Americans working and wages went up. And you think, wait, how how is 193 00:20:24,710 --> 00:20:30,870 that possible? These things shouldn't have existed together. And the obvious answer was you had people 194 00:20:30,870 --> 00:20:36,010 leaving. So you had fewer jobs available, but you had fewer people looking for those jobs, 195 00:20:36,870 --> 00:20:44,010 enabling Americans to hold on to their jobs and get wage increases, right? They were no longer 196 00:20:44,010 --> 00:20:50,890 competing with illegal labor. And so what you had, and Powell was, he was careful the way you said it, 197 00:20:50,890 --> 00:20:54,570 But he talked about a labor market that was surprisingly imbalanced. 198 00:20:54,690 --> 00:20:57,070 So this is a few months ago and some people may not remember. 199 00:20:57,330 --> 00:21:02,110 But I think people were surprised that you had so many things shifting all at once, but 200 00:21:02,110 --> 00:21:03,330 remaining in balance. 201 00:21:03,570 --> 00:21:07,750 Now, you know, one thing you and I should talk about is he had some other interesting 202 00:21:07,750 --> 00:21:09,750 comments in this week's press conference. 203 00:21:09,750 --> 00:21:15,910 But, you know, this is as long as we're talking about policy, it makes sense to reference what 204 00:21:15,910 --> 00:21:16,410 happened earlier. 205 00:21:16,490 --> 00:21:17,270 I think it was in the summer. 206 00:21:17,730 --> 00:21:18,250 Yeah. 207 00:21:18,250 --> 00:21:21,170 What comments this week stuck out to you? 208 00:21:22,310 --> 00:21:32,450 Well, you saw the market, you know, tank when Powell said that, you know, a December rate hike wasn't, you know, baked in. 209 00:21:32,450 --> 00:21:44,030 And I think, you know, people, anybody with a brain would have said, well, there's no universe where Powell would have actually said, yeah, we're planning a rate cut for December as well. 210 00:21:44,130 --> 00:21:45,430 He was never going to say that. 211 00:21:45,430 --> 00:21:55,690 But I think it was the part where he said far from it. Right. It was like this hawkish hawkish message, like telling Wall Street, don't don't count on this. 212 00:21:55,830 --> 00:22:02,170 You know, we it may not be coming. And, you know, people got really worried about a hawkish Fed. 213 00:22:02,290 --> 00:22:06,970 My take on it was very different. And I know you read the piece I put out on it. 214 00:22:06,970 --> 00:22:25,510 But my take on it was very different. You had the Fed cutting for the sixth time, you know, in this cycle with the CPI, which is understated, you know, at 3 percent, 50 percent above the 2 percent target, which itself is 2 percent too high. 215 00:22:25,510 --> 00:22:31,390 You know, what the Fed is basically doing and, you know, they can talk about the employment market all they want. 216 00:22:31,510 --> 00:22:47,030 But, you know, Americans would rather have 5 percent unemployment, which is, you know, 1 percent above that baseline and 0 percent inflation because inflation affects 99 percent of the country, whereas 1 percent of the country would be losing their jobs. 217 00:22:48,310 --> 00:22:51,510 And that's, you know, that's something that I think a lot of people are missing. 218 00:22:51,510 --> 00:22:57,870 But basically, what the Fed has done is they made it clear the 2% target is gone. 219 00:22:58,410 --> 00:23:00,210 We now have a 3% or 4% target. 220 00:23:00,430 --> 00:23:07,230 And when you figure that the CPI is understated, most obviously in the difference between Case 221 00:23:07,230 --> 00:23:14,130 Shiller and OER, the owner's equivalent rent, which makes the housing prices that people 222 00:23:14,130 --> 00:23:19,330 are seeing in CPI not reflect the reality, which is much more challenging, unless you're 223 00:23:19,330 --> 00:23:19,930 selling a home. 224 00:23:21,510 --> 00:23:33,790 You know, what we really have now is a five or six percent inflation target. Right. And and they just did that at the same time that they're saying, yeah, we're going to end quantitative tightening. 225 00:23:33,790 --> 00:23:42,310 Everybody was focused on Powell saying far from it, meaning we haven't decided on a December rate cut and got upset about it. 226 00:23:42,350 --> 00:23:46,470 But the reality is this was very dovish action by the Federal Reserve. 227 00:23:47,090 --> 00:23:49,710 Right. You you had the CPI going up. 228 00:23:50,090 --> 00:23:53,790 The CPI understated a Fed cut and the end of quantitative tightening. 229 00:23:54,230 --> 00:23:56,410 How much more dovish is this Fed supposed to get? 230 00:23:57,810 --> 00:23:58,110 Right. 231 00:23:58,110 --> 00:24:05,730 I mean, to Jerome Powell's credit, I guess, and to your point, 232 00:24:06,050 --> 00:24:10,330 what do people expect him to come out in November 233 00:24:10,330 --> 00:24:13,690 and basically tell you exactly what he's going to do in December? 234 00:24:13,830 --> 00:24:15,210 But you wrote it in your piece. 235 00:24:15,810 --> 00:24:22,070 The stock market is focused solely on expectations now, 236 00:24:22,290 --> 00:24:23,530 like forward-looking expectations. 237 00:24:24,390 --> 00:24:28,010 Yeah, and by the way, that's something that I find really, 238 00:24:28,110 --> 00:24:36,370 really strange. Right. So like, you know, last week the market was looking for a 3.1% CPI print. 239 00:24:36,470 --> 00:24:42,490 We got a 3% print. And so like, let's talk about a 3% print means, right. You got a 2% target, 240 00:24:42,490 --> 00:24:50,130 which is just a made up numbers. Literally, it was made up by a European. Yeah. Like a guy from 241 00:24:50,130 --> 00:24:54,650 New Zealand is on a TV show. Somebody asked him a question. He's like, ah, you know, 1%. Like you 242 00:24:54,650 --> 00:25:00,790 just made it up on the spot. But the Fed's mandate, as you know, is stable prices. That's a 0% 243 00:25:00,790 --> 00:25:05,990 inflation target that we should have. OK, so they're going for the 2% target, which 244 00:25:05,990 --> 00:25:12,770 is not right. It's just made up, but fine. But we've been above that since the beginning of, 245 00:25:12,970 --> 00:25:20,770 it's been five years, right, since early 2021. It's been five years, right? And they cut, 246 00:25:20,770 --> 00:25:26,390 But but you saw people the week before when we get this CPI print, it's below expectations. 247 00:25:27,250 --> 00:25:29,510 And so instead of three point one percent, we got three percent. 248 00:25:29,510 --> 00:25:30,970 It's below expectations. 249 00:25:31,110 --> 00:25:32,010 Powell has to cut. 250 00:25:32,610 --> 00:25:33,050 Why? 251 00:25:33,950 --> 00:25:34,190 Why? 252 00:25:34,290 --> 00:25:36,750 The absolute number is still too high. 253 00:25:37,270 --> 00:25:37,490 Right. 254 00:25:37,750 --> 00:25:43,690 I mean, it's people are using buy now, pay later for their groceries because inflation 255 00:25:43,690 --> 00:25:48,670 is too high, because the cost of groceries is not up one or two percent like the Bureau 256 00:25:48,670 --> 00:25:51,830 of labor statistics tells us it is, right? 257 00:25:51,930 --> 00:25:58,130 People aren't financing burritos because, you know, like they're doing it because a 258 00:25:58,130 --> 00:26:02,930 burrito and a Coke is $20 or $18, you know, whatever it is. 259 00:26:02,930 --> 00:26:10,210 Like people are suffering from inflation and the Fed just reduced rates, right? 260 00:26:10,310 --> 00:26:13,970 And Wall Street is saying they have to reduce because our expectations were 3.1%. 261 00:26:14,470 --> 00:26:18,190 You know, I follow the logic, but I don't agree with that. 262 00:26:18,670 --> 00:26:30,890 Yeah. And I'm, excuse me, coughing, number one, but number two, looking for, I forget, it was the head of one of the banks. 263 00:26:30,890 --> 00:26:34,070 I thought it was Citibank, but I can't find the clip. But essentially, he was. 264 00:26:35,450 --> 00:26:48,390 We're getting to the point where the bankers are admitting that because you have this sort of dislocation between the stock market hovering around all time highs and the real economy, if you will, if you will. 265 00:26:48,390 --> 00:26:57,390 And it was the first time I've ever heard a bank executive explicitly say, I think people are flowing in equities to escape or outpace inflation. 266 00:26:58,030 --> 00:27:01,290 Equities are explicitly being used as an inflation hedge or not. 267 00:27:02,190 --> 00:27:14,510 People aren't going into index funds because I think the financials of the companies within that index are producing value and they're being productive companies making a profit. 268 00:27:14,510 --> 00:27:16,910 And that may spit off dividends. 269 00:27:16,910 --> 00:27:19,230 It's like, no, we need to escape this inflation. 270 00:27:19,390 --> 00:27:21,370 So we're just going to push all of our money into the stock market. 271 00:27:23,190 --> 00:27:23,790 Yeah. 272 00:27:23,930 --> 00:27:30,030 So the stock market, gold, silver, Bitcoin, energy, right? 273 00:27:30,490 --> 00:27:38,830 I mean, basically what this Federal Reserve has done is they are taking money from the 274 00:27:38,830 --> 00:27:44,030 99% of people who are harmed by inflation and blowing up another asset bubble. 275 00:27:44,030 --> 00:27:46,750 So, you know, like, what are you going to do? 276 00:27:46,750 --> 00:27:51,930 I have a no black pill policy, which I put into writing this week. 277 00:27:52,010 --> 00:27:57,110 Like, I don't like it, but I'm not going to complain about it or whine about it or be upset about it. 278 00:27:57,130 --> 00:28:00,650 I'm just going to own the things that are going to benefit from more long term inflation. 279 00:28:03,590 --> 00:28:08,350 Yeah. Well, and we're at this weird crossroads to. 280 00:28:08,350 --> 00:28:15,890 where you have people escaping into equities to escape inflation, 281 00:28:16,310 --> 00:28:20,490 but then you have this sort of AI theme in the background too, 282 00:28:20,590 --> 00:28:26,550 and there is this idea that we need stimulus to be able to invest in the infrastructure 283 00:28:26,550 --> 00:28:32,550 that can manifest what many believe to be the holy grail of productivity gains, 284 00:28:32,550 --> 00:28:39,050 And not only that, but an arms race against China to be the dominant AI player in the world. 285 00:28:39,150 --> 00:28:47,310 And so you have that sort of external force implicitly begging for more liquidity so that they can go build out this infrastructure. 286 00:28:47,310 --> 00:29:01,950 And then not only that, but then you obviously have the effects of the productivity gains from artificial intelligence if they're real, which I think they are to an extent right now and could grow stronger moving forward. 287 00:29:01,950 --> 00:29:10,730 And that effect on the jobs market and the economy overall, like how it seems like an interesting variable that's been added to the mix in the last two years. 288 00:29:11,790 --> 00:29:16,850 Yeah, look, first of all, I do think AI is going to be real. 289 00:29:16,850 --> 00:29:36,930 I do think there will be gains. I do think there's there's a value to it. We're not there yet. You know, like my my version of chat GPT actually tried to send me to a place that was closed when, you know, I had a time sensitive situation. 290 00:29:36,930 --> 00:29:40,690 And I said, why are you doing acid verified information only? 291 00:29:40,690 --> 00:29:42,830 Why are you sending me to a place that was closed three years ago? 292 00:29:43,070 --> 00:29:43,990 And it responded. 293 00:29:43,990 --> 00:29:59,920 I was just trying to maintain the momentum of the situation of the conversation Like wait I not asking like I not looking to chat I looking for information right That said I not buying the argument that we need lower rates that we have to 294 00:29:59,920 --> 00:30:09,280 you know, debase our currency in order to end up with AI leadership. And the reason for that 295 00:30:09,280 --> 00:30:17,460 is I'm going to give you two reasons. One is the idea here is that if we lower the Fed funds rate, 296 00:30:17,780 --> 00:30:22,340 we'll have like a lower five year, lower 10 year. But that's not what happened. 297 00:30:23,100 --> 00:30:30,180 The Fed cut. And what happened that same day, the 10 year yield was up eight basis points. The next 298 00:30:30,180 --> 00:30:36,040 day was up five or six basis points. So you had increases. And the reason is the market is correctly 299 00:30:36,040 --> 00:30:41,940 baking in a higher long-term inflation. So we're getting higher bond rates. People have this weird 300 00:30:41,940 --> 00:30:46,860 idea that the Federal Reserve controls interest rates. They don't. The Federal Reserve controls 301 00:30:46,860 --> 00:30:54,220 the overnight rate. The bond market controls the rest of the yield curve, right? So Federal Reserve 302 00:30:54,220 --> 00:31:00,980 overnight, the bond market, everything from one day to 30 years. So the Fed doesn't have that much 303 00:31:00,980 --> 00:31:06,700 control. But the other thing, yeah, that you, you got it right there. That was, that was on a rate 304 00:31:06,700 --> 00:31:15,640 cut. So, you know, I don't know about that. The other thing is AI spending is not being done by 305 00:31:15,640 --> 00:31:21,560 the general economy. You have half a dozen companies that are doing that. And those that 306 00:31:21,560 --> 00:31:27,720 have those half dozen companies have fortress like balance sheets. They're doing this with like the, 307 00:31:27,720 --> 00:31:34,580 the cash on the balance sheet, right? Google, Facebook, Meta, whatever, Alphabet, 308 00:31:36,260 --> 00:31:42,700 you know, Apple, NVIDIA. These aren't companies that are going into the market to borrow and 309 00:31:42,700 --> 00:31:48,640 needing lower rates. If anything, higher rates bring them more income. Those companies have 310 00:31:48,640 --> 00:31:53,760 billions and billions of dollars on their balance sheets, right? So the idea that if like lower 311 00:31:53,760 --> 00:31:59,800 rates just means their interest income is lower. So I'm not I'm just not buying that answer. It 312 00:31:59,800 --> 00:32:05,060 sounds good, you know, at a cocktail party. But if you sort of look at anybody's balance sheet, 313 00:32:05,060 --> 00:32:11,720 it doesn't really hold up to scrutiny. That's a very good point. And so with all this in mind, 314 00:32:12,660 --> 00:32:19,660 how do you think people should be positioning themselves? Never do. Do you think the ramifications 315 00:32:19,660 --> 00:32:25,760 of the Trump admin's policies, basically being able to get a track record and really 316 00:32:25,760 --> 00:32:34,120 get some teeth in terms of being deployed and having long-term ramifications come to fruition, 317 00:32:34,540 --> 00:32:40,600 coupled with the AI narrative, whether you believe it's stimulative or not. 318 00:32:40,600 --> 00:32:44,840 If we're going to go after that, it could be really good for the economy. 319 00:32:45,040 --> 00:32:48,720 But tied to that AI narrative is energy, which we've been talking about. 320 00:32:48,720 --> 00:32:56,960 for years. And if that is just a, an externality, a positive externality of the AI boom, and that's 321 00:32:56,960 --> 00:33:03,240 all we get, that's, I'd be happy with that is increased energy capacity, uh, expansion in the 322 00:33:03,240 --> 00:33:08,820 United States. And with that talking about over 10 window shifts, it seems like the over 10 window 323 00:33:08,820 --> 00:33:14,480 as it pertains to nuclear power specifically has completely been blown open and it looks like we're 324 00:33:14,480 --> 00:33:20,080 going to go after it. Yeah, that's that's definitely where we're heading. I've been 325 00:33:20,080 --> 00:33:26,340 doing a lot of calls in that area. And that's the way I'm playing the whole AI thing. You know, 326 00:33:26,420 --> 00:33:30,700 and look, congratulations to the people who've owned NVIDIA for the last few years. They've done 327 00:33:30,700 --> 00:33:36,540 incredibly well. But we're, you know, we're also at the point in the show where they're creating 328 00:33:36,540 --> 00:33:43,380 their own revenue, right? They're sending money to their customers that has to be used to buy their 329 00:33:43,380 --> 00:33:49,440 products. Right. And this is the kind of thing that, you know, you saw with Cisco 25 years ago. 330 00:33:50,200 --> 00:33:57,860 So, you know, that's that's something that we're seeing right now. And, you know, I think that's 331 00:33:57,860 --> 00:34:02,380 that's a potential issue. You know, there's certainly huge demand for their products, 332 00:34:02,380 --> 00:34:08,440 but they're financing their own customers. And that's a that's a gigantic potential problem. 333 00:34:08,440 --> 00:34:23,360 The way I've been playing it is on the energy side, because some of these individual contracts actually require that some of them require like, you know, eight gigawatts of power or 10 gigawatts of power. 334 00:34:24,940 --> 00:34:31,120 And if that's the case, that's multiple Hoover dams worth of power, worth of energy. 335 00:34:31,360 --> 00:34:34,100 Where is that going to come from? Because we don't have it. 336 00:34:34,100 --> 00:34:37,960 And so the way I've been playing this is is on the energy side. 337 00:34:37,960 --> 00:34:45,620 I own huge amounts of uranium. And that's, you know, because I'm a believer in nuclear. I own, 338 00:34:45,700 --> 00:34:52,560 you know, an SMR company, small modular reactors. Like, I think that's the direction all of this 339 00:34:52,560 --> 00:34:59,660 has to go. And, you know, it takes 10 to 20 years to build a Gen 3 big nuclear reactor like, you 340 00:34:59,660 --> 00:35:06,620 know, Homer Simpson works at on The Simpsons. But, you know, these SMRs can be built in factories 341 00:35:06,620 --> 00:35:15,400 and rolled out and, you know, located very close to populations. There's no meltdown. You know, 342 00:35:15,400 --> 00:35:21,380 there's no kind of like Chernobyl or Three Mile Island possibility with these. You know, 343 00:35:21,440 --> 00:35:26,420 a core can be replaced when that has to be refueled. But there's no there's no dangers, 344 00:35:26,520 --> 00:35:30,880 no radiation issues. So I think that's where all of this has to come from. 345 00:35:31,640 --> 00:35:35,860 Yeah. And it's been interesting. I'm not sure if you've been following the announcements coming out 346 00:35:35,860 --> 00:35:40,380 the Department of Energy, particularly as it pertains to FERC and demand response. 347 00:35:40,380 --> 00:35:47,960 But somebody has been paying attention to the U.S. electricity grid and capacity expansion 348 00:35:47,960 --> 00:35:52,160 since 2018 when I got into Bitcoin mining. 349 00:35:52,440 --> 00:35:59,360 It seems like with Chris Wright at the Department of Energy, who really understands this stuff, 350 00:35:59,360 --> 00:36:07,720 They're beginning to understand the problems and find unique solutions to expand capacity. 351 00:36:07,940 --> 00:36:25,620 So FIR came out and wants to fast track large load interconnection and basically use Bitcoin miners or AI data centers to basically be like a buyer first resort for energy and wait for interconnect to be built out. 352 00:36:25,620 --> 00:36:33,240 And I think that's another thing that's a good positive is people actually understanding the true problem as it pertains to energy. 353 00:36:33,240 --> 00:36:39,840 We've had massive capacity expansion in the U.S., particularly in ERCOP and other parts of the country as well. 354 00:36:39,920 --> 00:36:43,040 But we've been lacking on transmission and interconnects. 355 00:36:43,040 --> 00:36:56,340 And I think the administration and the market more broadly is beginning to realize like, OK, we are beginning to get our legs under us and remember how to build out an energy system and prioritize. 356 00:36:56,520 --> 00:37:10,740 And to your point about small modular reactors, I've literally been beating this drum for five years now, which is like plop down the reactor, mine Bitcoin with it, build out transmission, connect it to the grid and then rinse and repeat. 357 00:37:10,740 --> 00:37:17,680 It seems like that is the express intent of this administration and organizations like FERC right now. 358 00:37:18,800 --> 00:37:21,100 Yeah, I completely agree with you. 359 00:37:21,320 --> 00:37:30,900 And one of the things that's really interesting, at least as it relates to Bitcoin mining and AI data centers, is we actually don't need to build transmission. 360 00:37:31,620 --> 00:37:37,020 Right. What I think what we're going to see is one of two things. 361 00:37:37,020 --> 00:37:48,340 Either individual companies like Google will will literally buy their own SMR and build a data center next to it and they don't need to hook it up to the grid. 362 00:37:48,340 --> 00:38:03,920 Just go from there. The other thing that we're seeing, like in Pennsylvania right now, is some of these big tech companies are buying power from the independent power producers and they're hooking in, you know, basically behind the meter. 363 00:38:03,920 --> 00:38:12,640 um and so some of that is going to stop because it's getting expensive for americans who just 364 00:38:12,640 --> 00:38:17,160 want to rent an air conditioner and you know they're saying wait a minute i'm i'm competing 365 00:38:17,160 --> 00:38:24,220 with facebook or you know google for my power and they can outbid me and i don't like this and it's 366 00:38:24,220 --> 00:38:30,460 going to lead to problems but you know what can be done is because a lot of these places are already 367 00:38:30,460 --> 00:38:37,660 zoned for energy, and in some cases nuclear, you put an SMR on or near the site and just hook in, 368 00:38:38,080 --> 00:38:44,260 you know, behind the meter, and you can go from there. The thing that I really like about what 369 00:38:44,260 --> 00:38:49,720 the Trump administration is doing here is they've correctly realized that the NRC, the Nuclear 370 00:38:49,720 --> 00:38:56,000 Regulatory Commission, basically, as soon as they took over in the mid-1970s, the United States 371 00:38:56,000 --> 00:39:02,920 stopped approving and building nuclear reactors. Over the last 50 years, we have closed more 372 00:39:02,920 --> 00:39:09,480 nuclear reactors than we've built. And I think in the last, what have we permitted and built to 373 00:39:09,480 --> 00:39:16,520 in the last 40 years? So the NRC, whether intentionally or not, serves to prevent any 374 00:39:16,520 --> 00:39:23,780 kind of actual building. They require companies to submit millions of pages of paperwork and 375 00:39:23,780 --> 00:39:28,060 regulatory filings. And so what the Trump administration has done is they've started 376 00:39:28,060 --> 00:39:33,740 an accelerated program. They've got 10 companies enrolled in it where they can get accelerated 377 00:39:33,740 --> 00:39:40,200 review by the Department of Energy. And that, I think, is phenomenal. And, you know, by the way, 378 00:39:40,200 --> 00:39:47,540 there is an SMR company that's part of it, Terrestrial Energy, that just had their, they, 379 00:39:47,540 --> 00:39:56,060 you know, went through a de-SPACing. The ticker was HOND. Now it's IMSR for Integral Molten Salt 380 00:39:56,060 --> 00:40:00,780 Reactor. But, you know, you've got these companies that are saying, wait a minute, 381 00:40:01,000 --> 00:40:08,660 let's do the accelerated DOE review and not get stuck for another 40 years not building power 382 00:40:08,660 --> 00:40:17,320 plants. How profound is that in your mind? Like how if we get a few of these SMR companies going 383 00:40:17,320 --> 00:40:21,240 through the accelerated reviews successfully, they begin plopping these down. 384 00:40:22,180 --> 00:40:28,120 How transformational do you think that could be for the energy sector in the U.S.? 385 00:40:29,320 --> 00:40:30,240 I think it's enormous. 386 00:40:31,380 --> 00:40:37,760 I mean, look, before the NRC, we built more nuclear plants than anybody in the world. 387 00:40:38,220 --> 00:40:45,240 And if you were somebody who wanted to stop the use of nuclear power in 1976, 388 00:40:45,240 --> 00:40:52,300 you couldn't have done better than to have a regulatory agency that somehow manages to never 389 00:40:52,300 --> 00:40:59,860 approve anything right that just somehow manages to never make it work now the people there you 390 00:40:59,860 --> 00:41:05,620 know are are they dishonest are they you know not playing but i don't know you know maybe they're 391 00:41:05,620 --> 00:41:09,960 just all worried that if they approve something without getting two million pages of documents 392 00:41:09,960 --> 00:41:14,120 and it goes wrong you know you don't want to be the person to approve the next three mile island 393 00:41:14,120 --> 00:41:26,860 So maybe maybe they're not dishonest. Maybe they're just, you know, ridiculously cautious because from their point of view, you you can turn everything down and say, I'm just being careful. 394 00:41:27,180 --> 00:41:43,600 The thing that I really love about the DOE review is if you can get this accelerated process done, that what can happen is that that process will then produce data that can be given to the NRC. 395 00:41:44,120 --> 00:41:49,340 And they can then be in a position where they're approving something that's up and running and working. 396 00:41:50,140 --> 00:41:52,180 And that may get things moving again. 397 00:41:52,180 --> 00:41:57,140 I also spoke with an expert in this area yesterday who said something really interesting. 398 00:41:57,320 --> 00:42:03,380 He said, look, the people at the NRC, you know, they're in their mid 60s. 399 00:42:03,520 --> 00:42:04,540 They've been there forever. 400 00:42:05,260 --> 00:42:07,480 You know, all they know is how to reject things. 401 00:42:07,480 --> 00:42:14,280 You know, the younger generation of engineers coming up actually are in favor of nuclear power and want to see these things done. 402 00:42:14,380 --> 00:42:23,280 And so there may be kind of a changing of the guard along with more and better data that could allow some of this stuff to proceed. 403 00:42:23,760 --> 00:42:29,260 The unfortunate part of this is it's not going to happen in the next three years. 404 00:42:29,260 --> 00:42:34,480 And so I'm hoping, you know, whatever administration follows the Trump administration is in favor. 405 00:42:34,620 --> 00:42:37,020 Like, I want them to be pro-energy as well. 406 00:42:37,020 --> 00:42:43,140 from nuclear energy because Gen 4 is safe, and it's something that we should be taking advantage of. 407 00:42:43,420 --> 00:42:49,760 Especially when you consider this chart. I think you just got to get this chart in front of anybody 408 00:42:49,760 --> 00:42:54,360 in the US government, particularly the NRC, and say, we need to fix this problem. We need to bring 409 00:42:54,360 --> 00:43:01,900 down these prices. Energy is the base layer of our economy, and we should be exploring any option 410 00:43:01,900 --> 00:43:12,940 It allows us to expand capacity generation and drive down these prices because, I mean, at scale, that's the one thing that people will knock on a nuclear specifically. 411 00:43:13,100 --> 00:43:15,720 It's like, oh, it's not economical. It's too much of an upfront cost. 412 00:43:15,740 --> 00:43:26,480 But we haven't had the ability to really experiment with a wider implementation of this technology, which arguably over time should drive down costs. 413 00:43:26,480 --> 00:43:33,560 marty i completely agree with you and would simply add that you know for the people who 414 00:43:33,560 --> 00:43:42,220 don't know it there is a near 100 correlation between the energy a society uses and a good 415 00:43:42,220 --> 00:43:46,760 material quality of life and if people want to say hey you know but you've got your health your 416 00:43:46,760 --> 00:43:53,540 spiritual you know practice your um you know your connection other people yeah those those things 417 00:43:53,540 --> 00:43:58,320 will all determine whether you live a good life or not. But if we're looking at material quality 418 00:43:58,320 --> 00:44:07,600 of life, the R squared between that and energy usage is one. Yeah. And that's why, I mean, a lot, 419 00:44:07,680 --> 00:44:12,860 there's a lot of dooming out there right now, but I'm extremely optimistic. I'm not sure if you've 420 00:44:12,860 --> 00:44:20,740 been following the sort of industrial startup community. It's forming in El Segundo. There's 421 00:44:20,740 --> 00:44:26,100 a lot of companies in Austin. There was just a metal fabrication startup that launched in Michigan. 422 00:44:26,720 --> 00:44:33,920 The young people specifically, the Zoomers, are fascinated by this trend of reindustrialization 423 00:44:33,920 --> 00:44:39,460 and really going out and starting companies. And I think that's interesting just watching the 424 00:44:40,940 --> 00:44:51,910 sort of psychological and sociological side of things where I think people particularly millennials Gen X boomers have been conditioned to think it can never be re Like 425 00:44:51,910 --> 00:44:57,490 this is just the way it is, but it's been extremely refreshing to observe younger generations, 426 00:44:57,490 --> 00:45:03,730 particularly in the startup community, really lean into starting art industrial companies over 427 00:45:03,730 --> 00:45:12,770 B2B SaaS products in recent years. I completely agree with that. And in fact, like one of the 428 00:45:12,770 --> 00:45:21,970 things about the Zoomers is they have figured out that you're better off right now being a 22 year 429 00:45:21,970 --> 00:45:28,990 old without a college education and with four years of experience as an electrician than you 430 00:45:28,990 --> 00:45:32,610 are being somebody who spent the last four years on a college campus if you want to get a job and 431 00:45:32,610 --> 00:45:43,710 get paid. Yeah. And it'll be really, and it'll be really interesting to see if this is allowed 432 00:45:43,710 --> 00:45:50,110 to flourish. I really, I'm optimistic that it will be, but you have this political class, 433 00:45:50,490 --> 00:45:56,950 particularly in DC, that seems to be filled with a bunch of Luddites, particularly on the left. I 434 00:45:56,950 --> 00:46:02,310 mean, everybody says don't get political, but I think it's objectively clear that the left has 435 00:46:02,310 --> 00:46:09,790 gone completely insane. We're seeing it with the shutdown, their inability to bargain over this 436 00:46:09,790 --> 00:46:17,950 spending bill. And I think they're falling on tactics that were tried and true in the past. 437 00:46:18,110 --> 00:46:24,890 They were successfully able to point at government shutdowns and blame it on Trump 438 00:46:24,890 --> 00:46:31,670 during its first term. But this term, you just look at the polls, people are basically figuring 439 00:46:31,670 --> 00:46:36,690 out like, oh, you're holding the U.S. economy hostage because you want to get your your jibs 440 00:46:36,690 --> 00:46:46,010 passed and included in the spending bill. Yeah, it's there's no question that's been going on. 441 00:46:46,170 --> 00:46:53,130 You know, I also think Democratic messaging has been bad here. Like I've seen them, they get on 442 00:46:53,130 --> 00:46:58,550 these shows and people ask them, you know, direct questions about it. And instead of answering the 443 00:46:58,550 --> 00:47:02,610 question, you can tell they go to the talking points of the Trump administration, this, this, 444 00:47:02,670 --> 00:47:09,090 and this. And, you know, we're they're responsible for it. But anybody who's followed it has realized 445 00:47:09,090 --> 00:47:13,610 that there have been more than a dozen votes and Republicans are voting to reopen the government 446 00:47:13,610 --> 00:47:17,970 and Democrats are voting to keep it closed. And that's fine. As far as I'm concerned, go ahead and 447 00:47:17,970 --> 00:47:24,150 keep it closed. I actually like the government closed for one key reason. It's because it is a 448 00:47:24,150 --> 00:47:30,670 phenomenal message to Americans that we don't need them to manage our lives. Right. So I'm I'm 449 00:47:30,670 --> 00:47:35,990 pro shutdown. Like if the Democrats listen, you know, you you made the great point. Like, let's 450 00:47:35,990 --> 00:47:41,510 not get partisan. Let's not get political. I am strongly in favor of the Democrats keeping the 451 00:47:41,510 --> 00:47:48,830 the government closed. Right. Great job. Team Blue. Keep it up. Right. I'm I'm I'm on your side 452 00:47:48,830 --> 00:47:54,550 on this one. Right. And the reason is like, think about it. The government is in every aspect of our 453 00:47:54,550 --> 00:48:00,790 lives. We've now had a month without the government open and there have got to be 300 million Americans 454 00:48:00,790 --> 00:48:06,690 saying, what do we need them for? Yeah. And what what is it they do? How do they help us? I'm 455 00:48:06,690 --> 00:48:13,810 sending tax money for what? Right. And great, because we've just had a one month experiment 456 00:48:13,810 --> 00:48:21,810 in them not running our lives and somehow we're managing. Let's give it six months or a few years 457 00:48:21,810 --> 00:48:26,630 and see how it goes and check in and figure out if we need to reopen things. I tweeted that out 458 00:48:26,630 --> 00:48:30,810 four days ago on the 27th. I was like, the government's been closed down for 27 days and I 459 00:48:30,810 --> 00:48:35,430 have not noticed any material degradation in the quality of my life. Let's keep this going. 460 00:48:36,470 --> 00:48:42,110 Yeah. How did I miss that? That's the funny thing too, is the Democrats, 461 00:48:42,110 --> 00:48:47,690 was made manifest their demise because I was watching something that Peter St. 462 00:48:47,750 --> 00:48:50,010 Ange put out earlier this week. 463 00:48:51,690 --> 00:48:55,330 And apparently mechanically, if this goes on for long enough, like you literally have 464 00:48:55,330 --> 00:49:01,530 to start firing the furloughed workers completely so you could see at least one third of the 465 00:49:01,530 --> 00:49:07,290 federal government workforce get fired if this goes on, I believe, past January. 466 00:49:07,290 --> 00:49:13,190 And the thing I want to emphasize is those aren't temporary layoffs. 467 00:49:14,710 --> 00:49:18,410 That's not temporary. Those are those are permanent workforce reductions. 468 00:49:18,910 --> 00:49:27,430 And the amazing thing about this is, you know, a year ago I was saying, I really hope Doge is successful, but I'm skeptical. 469 00:49:27,430 --> 00:49:31,910 I don't think anybody can shut down government spending. I just don't think it's possible. 470 00:49:31,910 --> 00:49:36,850 And, you know, and, you know, Peter Thiel is right. Never bet against Elon Musk. 471 00:49:38,050 --> 00:49:45,870 And I was really hopeful, but it didn't surprise me when, you know, that didn't really cut a whole lot of spending. 472 00:49:46,730 --> 00:49:54,730 But this could be the thing that does it right. Like this. This could be the the doge moment when we get a real reduction in government spending. 473 00:49:54,730 --> 00:50:19,570 And by the way, that's something that's really necessary. You know, you and I were understandably and reasonably critical of Federal Reserve Chairman Powell in this conversation. And I've been critical of him for the last however many years. But let's you know, let's also be honest here. There's nothing he can do. Right. Inflation is being created by overspending out of Congress. And that is a bipartisan problem. Right. 474 00:50:19,570 --> 00:50:28,810 Whether Washington has been controlled by Team Blue or Team Red or some combination of, you know, White House and Congress, no matter what the combination is, we only have increased spending. 475 00:50:29,030 --> 00:50:31,750 And that's the thing that's really causing inflation. 476 00:50:31,750 --> 00:50:34,710 It's something that I've talked about as counterintuitive inflation. 477 00:50:34,890 --> 00:50:37,310 Lynn Alden talks about it as fiscal dominance. 478 00:50:38,370 --> 00:50:41,230 But there's nothing Powell can do to stop that. 479 00:50:41,310 --> 00:50:42,970 There's nothing he can do to stop inflation. 480 00:50:43,150 --> 00:50:45,990 And so, you know, we should we should throw him a bone on that. 481 00:50:46,050 --> 00:50:47,750 But this is really the fault of Congress. 482 00:50:47,750 --> 00:50:50,050 So if they're out of session, at least they can spend more. 483 00:50:50,950 --> 00:51:07,390 Yeah, it's cautiously optimistic because I think, I mean, unless you're marching in a no kings protest, I think most your average American is looking at this and saying what you said earlier. 484 00:51:07,530 --> 00:51:10,090 Do we really need this? What are we paying for? 485 00:51:10,870 --> 00:51:16,090 So, Marty, you and I agree that it's the Democrats keeping the government closed. 486 00:51:16,090 --> 00:51:23,350 closed, should I post on X? Marty Ben has just endorsed Democratic policies. 487 00:51:23,990 --> 00:51:30,510 Yes. As long as not New York Democratic policies, if it's federal Democratic. Well, I mean, 488 00:51:30,950 --> 00:51:36,750 and it's interesting, like we've got wins there, but then you have this sort of emerging 489 00:51:36,750 --> 00:51:43,270 sort of socialist populace, particularly in New York City with Mamdani 490 00:51:43,270 --> 00:51:50,870 coming to, it seems inevitable that it will be come to power in a couple of weeks here. 491 00:51:51,410 --> 00:52:01,570 And it's this weird manifestation of this overt democratic socialism in the financial hub of the 492 00:52:01,570 --> 00:52:08,810 world. And it is scary, to be honest, that there are a number of lemmings out there who will take 493 00:52:08,810 --> 00:52:14,970 this guy's sort of campaign speeches hook, line and sinker and think that they can actually 494 00:52:14,970 --> 00:52:23,930 impose socialism on the United States's largest city and have good outcomes. But 495 00:52:23,930 --> 00:52:30,310 I think that's something we need to keep an eye on moving forward. And that's what I've been 496 00:52:30,310 --> 00:52:33,870 thinking of. Like, how do you really cut through that narrative? Like this has never worked 497 00:52:33,870 --> 00:52:38,130 throughout history, wherever tried to be implemented. We should not be doing that 498 00:52:38,130 --> 00:52:44,110 anywhere in the United States, particularly the financial hub of the world. 499 00:52:45,870 --> 00:52:50,870 Well, you know, we've seen the same party and the same policies in every major city in the United 500 00:52:50,870 --> 00:52:57,110 States and living conditions in those cities continually gets worse. But the people there 501 00:52:57,110 --> 00:53:05,030 keep voting for the same policies. So, you know, the truth is anybody who knows any history knows 502 00:53:05,030 --> 00:53:11,370 that socialism or communism or redistribution, it doesn't work. And, and, you know, everybody says, 503 00:53:11,470 --> 00:53:16,250 oh, you know, we just did, it wasn't real communism. Yes, it was. It's, it doesn't work. 504 00:53:16,310 --> 00:53:21,030 It's not going to work. Um, unfortunately, you know, every generation needs to learn 505 00:53:21,030 --> 00:53:25,550 that lesson through hard experience. It's available in books, but that requires, 506 00:53:25,550 --> 00:53:31,730 you know, reading something longer than a TikTok video. Um, and you know, people don't want to do 507 00:53:31,730 --> 00:53:36,650 that, okay, you know, fine, then they're going to learn. And the thing that is really amazing to me, 508 00:53:37,030 --> 00:53:41,570 as somebody who lived in New York City, who lived in Manhattan and worked in finance for 25 years, 509 00:53:42,250 --> 00:53:46,910 you know, all these people who say, you know, the rich aren't paying their fair share. 510 00:53:47,470 --> 00:53:52,230 Hey, well, you know, one, nobody ever defines fair share. The beauty of fair shares, 511 00:53:52,670 --> 00:53:59,490 everybody's in favor of fair, but it's never specific. But more importantly, the tech space 512 00:53:59,490 --> 00:54:05,610 of New York is a very, very small number of people. The top one or two percent of taxpayers there 513 00:54:05,610 --> 00:54:14,130 are highly mobile. They run finance firms. They can pick up and leave. And by the way, 514 00:54:14,230 --> 00:54:19,410 they don't have to move to Florida. They can. They don't have to. They can move to Connecticut. 515 00:54:19,550 --> 00:54:23,170 They can go to Greenwich. They can go to Westchester. They can go to Long Island or New 516 00:54:23,170 --> 00:54:28,590 Jersey. They don't have to pick up and have all of their employees move. They literally just need 517 00:54:28,590 --> 00:54:36,630 to go one county over in any direction. And and New York has just lost its entire tax base. So, 518 00:54:37,190 --> 00:54:45,210 you know, none of this is going to work. You know, I own a home in Connecticut. We're expecting 519 00:54:45,210 --> 00:54:52,430 a flood of refugees and much higher property prices. And it looks like there's a good chance 520 00:54:52,430 --> 00:54:57,990 that New Jersey could get a Republican governor in a couple of weeks. How incredible that is. 521 00:54:58,590 --> 00:55:05,170 Right. Right. Virginia, New Jersey. Like people are they're getting tired of of seeing these policies. 522 00:55:05,170 --> 00:55:17,810 They're willing to try something different. The thing that worries me, Marty, is, you know, so we've been very critical of the left in this conversation and reasonably rightfully so. 523 00:55:17,930 --> 00:55:21,410 Right. I endorse everything I said, everything I said, I stand behind it. 524 00:55:22,270 --> 00:55:28,330 But one of the things that does worry me is Republicans run for office saying we're the 525 00:55:28,330 --> 00:55:29,470 party of fiscal sanity. 526 00:55:29,630 --> 00:55:31,130 We're going to get things under control. 527 00:55:31,390 --> 00:55:34,830 You know, we're, you know, not going to be the party of tax and spend. 528 00:55:34,830 --> 00:55:36,910 And we're going to do things that make more sense. 529 00:55:36,970 --> 00:55:37,090 Right. 530 00:55:37,090 --> 00:55:38,010 We're the adults in the room. 531 00:55:38,290 --> 00:55:40,350 But they don't actually do it. 532 00:55:40,650 --> 00:55:41,330 They're lying. 533 00:55:41,930 --> 00:55:45,730 Republican Team Red, when they're in charge of Washington, they don't cut spending. 534 00:55:46,270 --> 00:55:48,870 They talk about it, but they don't actually do it. 535 00:55:48,870 --> 00:56:00,570 And so, you know, we correctly criticize Democrats as being horrible communists, but we should also criticize Republicans as being liars because they spend like Democrats. 536 00:56:01,130 --> 00:56:02,510 It's a bipartisan problem. 537 00:56:03,470 --> 00:56:04,630 Yeah, it really is. 538 00:56:05,330 --> 00:56:09,870 And hopefully the government shutdown doesn't give either of them the ability to lie. 539 00:56:10,750 --> 00:56:15,790 I think I think it's incredible that if we could get you elected to the Senate, you'd be voting with the Democrats right now. 540 00:56:18,870 --> 00:56:20,090 This is fascinating. 541 00:56:20,590 --> 00:56:20,750 Yeah. 542 00:56:21,810 --> 00:56:23,330 I'm very optimistic right now. 543 00:56:23,610 --> 00:56:25,450 And I guess to wrap this up. 544 00:56:27,530 --> 00:56:28,650 You have a deal. 545 00:56:29,630 --> 00:56:32,490 For the listeners of the show for deep knowledge investing. 546 00:56:34,310 --> 00:56:34,990 If you. 547 00:56:37,050 --> 00:56:38,330 I'll let you explain it. 548 00:56:39,090 --> 00:56:39,250 Yeah. 549 00:56:39,310 --> 00:56:39,470 Yeah. 550 00:56:39,510 --> 00:56:46,330 So if you go to deep knowledge investing dot com, there's a subscribe now button in the top right if you're interested. 551 00:56:46,330 --> 00:56:51,030 So, you know, what we're doing there, I talk about macro stuff like this all the time. 552 00:56:51,410 --> 00:56:54,710 But, you know, I also have my own portfolio up there. 553 00:56:54,850 --> 00:57:00,330 And, you know, whenever I have a new idea, I write it up for subscribers and explain how I'm investing and why. 554 00:57:00,330 --> 00:57:05,290 And because the important thing is, you know, you and I, we've just complained about a lot of stuff. 555 00:57:05,670 --> 00:57:09,250 But I'm investing in a way to take advantage of all these things that you and I don't like. 556 00:57:09,250 --> 00:57:17,290 And so for people who want to take advantage of that, just click, you know, the subscribe now button and we have a coupon code for you, for your people. 557 00:57:17,730 --> 00:57:21,350 It's TFTC21. 558 00:57:21,750 --> 00:57:27,750 And that gets you guys 21% off of a paid subscription, whether you do monthly or yearly. 559 00:57:28,210 --> 00:57:28,790 Well. 560 00:57:29,730 --> 00:57:32,330 I appreciate you offering that to our audience. 561 00:57:32,330 --> 00:57:39,310 I mean, I think you're one of this audience's favorite recurring guests over the last couple of years. 562 00:57:39,430 --> 00:57:44,490 The YouTube comments are always clamoring for me to bring you back on more consistently. 563 00:57:44,850 --> 00:57:49,230 So I'm sorry it took us six months to catch up, but I'm glad we did. 564 00:57:49,330 --> 00:57:51,850 And not only that, it's on Bitcoin White Paper Day. 565 00:57:52,270 --> 00:57:57,010 It's the 17th anniversary of Satoshi Nakamoto releasing the Bitcoin White Paper. 566 00:57:57,010 --> 00:58:04,150 so marty i'm gonna tell you bitcoin is my largest position because i bought a medium-sized position 567 00:58:04,150 --> 00:58:11,450 and then didn't sell it just became it just became huge and and you know the one change 568 00:58:11,450 --> 00:58:21,070 the one change i made so i bought in 2021 20 no 2020 when i was 15 000 runs up to 64 000 comes 569 00:58:21,070 --> 00:58:27,110 back down to 15,000. I didn't get upset. I didn't lose sleep. I didn't worry. I just bought more. 570 00:58:29,930 --> 00:58:32,610 I think we're sitting pretty now, hovering at 110. 571 00:58:34,350 --> 00:58:40,310 Yeah. So, you know, I saw somebody, you know, saying, do you think it hits 100,000 first or 572 00:58:40,310 --> 00:58:45,210 150 first or, you know, is the next 10,000 or 20,000 up or down? And I don't know the answer 573 00:58:45,210 --> 00:58:49,830 to that. But somebody asked me the other day, do I think it'll hit a million? And I said, yeah, 574 00:58:49,830 --> 00:58:54,070 absolutely. And a friend of mine said, you know, I want to buy Bitcoin, but I think I missed it. 575 00:58:54,090 --> 00:58:57,710 And I see you didn't miss it. He said, how do you know? And I said, well, do you think Congress 576 00:58:57,710 --> 00:59:01,970 is going to stop overspending? No. You think they're going to stop debasing the dollar? No. 577 00:59:02,370 --> 00:59:07,930 Then you're not too late. We're all going to be billionaires one day in dollar terms. 578 00:59:08,710 --> 00:59:13,570 Well, yes, it's that old Saturday Night Live Jimmy Carter thing. You know, like, 579 00:59:13,570 --> 00:59:18,870 wouldn't you like to have a $6,000 suit? You know, wouldn't you like to have a $100 cigar? 580 00:59:18,870 --> 00:59:27,690 are, right? Like, not really. No. Gary, this has been a pleasure. Thank you for joining me on this 581 00:59:27,690 --> 00:59:33,390 Friday morning, and I hope you have a great night in Tel Aviv. Yeah, Marty, thank you so much. Really 582 00:59:33,390 --> 00:59:37,370 appreciate you having me. Always great talking with you. I enjoy these conversations. Looking 583 00:59:37,370 --> 00:59:40,290 forward to the next one. I am as well. Peace and love, freaks.