Hey everyone, Michael here with the Bitcoin Way podcast. Thank you for tuning in. Today on the
show I have Peter St. Ange. Peter is an expert in many things. He is a bartender turned economist.
He can go deep on geopolitics, so many things. So we covered Iran, Venezuela, counterterrorism
operations in Ecuador for the United States. We covered tariffs. We covered really a range of
topics and ultimately it came down to what is the impact on Bitcoin? Where does he see the world
headed over the next 5, 10, 20 years? And I think you're going to find this fascinating. It was a
great conversation. Hey, everyone. Like I said in the intro, I've got Peter here. Peter,
welcome to the Bitcoin Way podcast. Thanks for having me on. Yeah, I'm excited for this. Man,
2026, we have so much to cover. And I'm going to start with the most important thing. So you are a
former bartender turned economist. So I have to ask you, what's the best cocktail?
It is not an impressive cocktail. I'm not proud, but my favorite is Kahlua and milk.
Obviously, you can put vodka in it, which makes it a white Russian. Absolutely delicious. If you've never had it, it's addictive.
Okay. What was the most popular cocktail that you served then? What was everyone ordering?
Almost everybody just does gin and X or vodka and X. So like the screwdriver, gin and tonic, those are like 80% of orders are going to be really boring.
stuff like coke and uh rum and coke just pretty pretty boring stuff the pain in the butts are the
frozen drinks and the freaking long island iced tea you gotta like clear your entire shelf yeah
for long island like everything's in there it's like remember when you're a kid and you go to
burger king and you get the coke and you're like well i like coke but i like sprite too and so you
just go ahead and put everything in your like that's long island iced tea yeah except for it's
not all ready to just press a button and fill for you you've got to you got to prepare it
Yeah.
I mean, I guess nowadays you probably have Long Island iced tea mix, I bet.
But when I was coming up, we had to walk uphill both directions.
Yeah, no, I hear you.
I hear you.
Okay, let's get into the less important stuff.
You talked about on a recent video you did, one of your daily videos, which by the way,
I love.
I think so does the rest of Bitcoin Twitter in the world.
a I think it was a must must pass housing bill that somehow a CBDC or some sort of a reference
to a digital currency of sorts is seems to be slipped in. What's the nature of the bill? And
then what was the language being used that you call that out? Yeah, so they've got this housing
bill. Everybody in America is pissed off that housing is so expensive. It's one of the big
pieces of the affordability problem, along with health care is probably the other big one.
And so Congress knows that they have to fix it. Inflation is the top voter issue. Before the war,
inflation was actually really low. Like Truflation does private sector alternative to government
statistics on inflation. They scrape, I think it's like 13 million numbers, something in the
state. And they literally scrape them. They don't have economists who, you know, throw
dildos at the wall and make up numbers, right? These are like actual direct scrapes. And according
to them, inflation was down to 0.7% before the war, which that is so low. Like literally,
that is the point where the Fed starts trying to create more inflation. Like as long as you
have a central bank, you're really never going to get that low. So that's essentially zero
inflation with a central bank. And now it's up because gas exploded and the gas feeds through
everything else. And I was like one and a half, one six. But the moral of the story is that
inflation was actually very tame. But the issue is psychologically, because prices went up so much
during Biden's term, people still feel like everything's really expensive. They still feel
like inflation is really high, even if it's bumping along to 0.7 percent. Moreover, during the election,
Trump said he was cut everything in half. Right. This is how Trump talks. But anyway,
houses are going to cut in half. Everything's going to be half the price. And of course,
I mean, that's not economic. Like, even if you could somehow do that, like, you know,
if you wave the magic wand and Caesar takes over and puts in all the good policies, you have Javier
Malay take over the U.S. with a chainsaw. Even if you did all that, the Fed actually wouldn't allow
that. They would, again, they would create inflation. But having said, the issue is that
voters are really pissed off about inflation. So they have to do something. They don't want to touch
medical. There's a lot of donors. It's an absolute mess. That's just a landmine.
So instead, they're looking at housing. So they have this housing bill and they do some useful
things in there. They try to get rid of red tape, local zoning, which is a big reason why houses
are so expensive in San Francisco or New York, rent control, punishing locations for rent control by
withholding federal construction funds. So there's a couple of useful things they're doing.
There's some other less useful things that they're doing, like allowing community banks to lend more money that they don't have.
So that's fractional reserve banking, letting them get closer to the big too big to fail banks, which keep about seven cents in the vault, whereas community banks keep about 10 cents in the vault.
They're upset because they want to inflate just like everybody else.
So that's the housing bill. And they're they're doing so.
There's two ways that crypto, broadly speaking, intersects with it.
And one of them is stable coins, where the ability to pay interest on a stable coin has now become sort of a political football that the House and the Senate are trying to use to get this housing bill through.
And the reason for that is that fractional reserve banks, of course, don't want competition from a stable coin, which given the Genius Act last year, stable coins have to be backed in practice back with treasuries, which is essentially as good as cash.
And so that means that a stable coin then becomes a full reserve bank that pays 5% interest, whereas your bank has 7 to 10 cents on the dollar and pays zero interest and charges you a bunch of fees.
So Wall Street, of course, is very strongly opposed to that.
So they're trying to stick that in there to get that banned.
On paper, it's banned.
But like Coinbase has a rewards and loyalty program.
Like it's not really banned.
So they want to extra double ban it.
And then the other one that they snuck in there, which like this was unbid.
Well, I presume, honestly, I presume Ripple paid for it.
but is this little detail in there that allegedly it's a CBDC ban.
Republicans have done this a couple of times.
They do these CBDC bans, but the trick is the ban only,
it is written in a way that it only bans what's called a retail CBDC.
Okay, it does not ban a wholesale CBDC.
Now, a retail CBDC is where you treat the Fed like a bank.
Okay, so you've got basically U.S. government stable coins, CBDC.
Those would replace the U.S. dollar. And those are parked at the Fed. And the Fed cannot go bust because it's a money printer. Right. So the Fed will always be safer than a bank.
And so, you know, the bankers fear again is that this time the Fed would wipe them out because it's not that the Fed's fully banked, but the Fed's, you know, it's a money printer.
So in order to prevent that, OK, they want these CBDC bans that only focus on retail, but they leave alone a so-called wholesale coin where the Fed does the CBDC to banks and then banks can pyramid on that.
And so the issue there is that the only thing that's keeping a CBDC out of law is that the banks are afraid of it.
But if you do a partial ban of retail, then you have taken all the spikes off a CBDC.
You have turned it into something that banks catastrophically fear into something that banks get a cut.
Sure. Why not? Right.
And so government itself always wants a CBDC because it gives them control.
It gives them, you know, they can monitor what you're spending on.
They can control it.
They can literally, for instance, they could enforce negative interest rates so that if
you don't spend your money, it melts.
Right.
Which would be excellent stimulus for the next time there's a recession and they have
an election coming.
So governments always want this.
Right.
They want the surveillance.
They want the control.
The problem with this partial CBDC ban is that it flips banks from being against the CBDC to being pro.
Now, people might ask, like, what the hell is a CBDC bill doing, you know, doing a housing bill?
And that's that's how Washington operates. Right.
The game is you you you horse trade to give people things.
And in practice, the things you're giving are things that your donors requested.
In this case, the bankers want a ban on retail CBDCs, but only retail CBDCs.
Ripple also would like a wholesale because Ripple delusionally imagines that they are somehow going to be the CBDC.
That's not how it works. Governments don't give that kind of prime real estate away.
But at any rate, that's what Ripple thinks.
And, you know, Ripple is swinging and swimming in so much money because, of course, they, too, are a money printer.
And so they I believe that they channel a lot of that money.
You know, when I and a team at Heritage Foundation, we were trying to figure out why, you know, because like the Republicans were running around doing this partial ban of CBDC.
And we explained to them, you know, this is very dangerous because it flips the banks to the other side of CBDC.
And they kept saying, yeah, yeah.
And we were like, so change it.
And they were like, can't do that.
And we were like, you know, it's kind of like if you're an astronomer and you see this gravitational field and you don't know why it's there.
You can see that stuff is reacting to some gravitational field.
And so you have to assume there's a planet there.
You don't see it, but there's a planet there.
And so there is some gravitational field happening in CBDCs that is pushing specifically for this partial ban, which effectively makes a wholesale CBDC, which is still government controlled.
thing, just push a button, makes it much more likely. So I was actually going to ask you something
along these lines, because I think you've described CBDCs as government run crypto with a centralized
database, which is, I think, an apt description. However, something we talk a lot about the Bitcoin
way is a concern of stable coins actually being this like a tether, for example, where they already
censored transactions based on what the FBI tells them to do, being sort of this very seamless
path to a CBDC and also never mind the fact that the government is completely inept and building
out the infrastructure themselves, probably going to be catastrophic at best and, you know, much,
much worse potentially. I mean, could you see like the stable coins themselves being the,
they're privately controlled, you know, but really at the end of the day, it's, it becomes a,
as you describe a government run crypto on a centralized database. Is that something that
you could anticipate happening? Or do you have less concern about that?
Well, I think it's a good point. The trick is that a stable coin, so a CBDC is going to be sold
as, you know, instant transfer, zero fee, like crypto or, you know, blockchain technology has
certain benefits over centralized systems, basically speed and price. And, you know, when
I was working with senators' offices, for example, Republican senators, they were excited about a
CBDC because, for example, it would lower the costs of exporting corn. Okay, so cross-border
payments are a big deal for the constituents they represent. And so the benefit of a private CBDC,
a private stablecoin, is that it removes those advantages, right? So you can have those cost
and speed advantages in, you know, Tether, for example, in which case the CBDC brings
nothing to the table.
So that's the benefit of it, is that it basically guts the use case or the argument and a lot
of the political support for a CBDC.
The downside is exactly what you're describing, which is that fundamentally any centralized
organization that the U.S.
government can get its hands on, which is pretty much everywhere in the world, there's
like five countries that the U.S.
government isn't allowed to go arrest people in.
those are always going to be captured to a certain degree. So it's a trade-off. But yeah,
the risk you're describing is real. So, okay. So how likely if you look out into the future,
because I don't know where we're at in the legislative process on something like this,
how likely do you anticipate this must pass housing bill to be passed? What do you think
ultimately gets incorporated in terms of a CBDC stable coin? Like, do you think the yield for
stable coins are coming or do you think they're going to the banks are going to win?
How do you think this plays out if you were to guess?
Yeah, I think it's a toss up on both.
The CBDC thing is more likely because there's so little attention paid to it.
Most Americans don't know what a CBDC is.
They're not angry about a CBDC.
So, you know, I and others try to raise awareness of it.
You know, most Bitcoiners, I think, understand it, but most normies do not.
So that could, you know, slip in there.
The stable coins one is interesting because, you know, traditionally banks have had much, much more lobbying heft.
They're one of the biggest donor groups.
They're up there with health care.
Really, it's those two that own Washington health care pharma.
And banks, you know, traditionally basically gotten anything they wanted.
So they would loosen the rules so they could take more risk or print more money or get bailouts or whatever it is.
what we saw with the Genius Act is that if crypto, not Bitcoin, but crypto, sadly,
there's not that much money in Bitcoin because we're not scammers. We don't have outrageous
profits in our industry, whereas other companies do. At any rate, there's enough profit running
around in shit coins that they, during the Genius Act, they pretty much matched Wall Street
toe to toe, which is pretty striking. I think that's really one of those sort of unsung,
plate tectonic shift last year was that somebody took on the banking cartel and won. Now,
it didn't win entirely, right? So it did ban interest, for example, but it was a toothless
ban so far. So I think it's 50-50. Does the shitcoin industry mobilize again so that they
can outbid Wall Street? That's really a question. But you think that's a real debate, and this isn't
Like Brian Armstrong and JP Morgan, you think this is a real them butting heads and not some sort of political theater where the outcome has been pre-negotiated?
Because I've heard that.
Like, hey, behind the scenes, like these guys are sitting in backroom deals.
They know what the end result is going to be, but they have to make it look like it's the freedom fighters versus the banks or whatever the narrative is.
It's always possible.
Policy is a small world.
And a lot of these guys like there's no laws against coordinating your donations.
You know, there's like laws against price fixing, but not coordinating your donations to put pressure on people.
So, I mean, I wouldn't be shocked if that's what they're doing.
The economic interests are definitely on the other side of it.
So, you know, like when they come into the battle, they're definitely on different sides of it.
Stable coins do stand to drain resources from fractional reserve banking.
Having said, you know, did they sit and have a steak dinner and work out some compromise that they can both live with, which would probably look like, you know, allowing interest, but doing it in some way that it's only capturing the crypto people.
It's not capturing the normies. And, you know, there's different ways you can structure that so that a normie would like your grandma is probably intimidated by the notion of opening a Coinbase account and then replacing.
her bank account with it. Now, she doesn't understand that if she were to do that,
those stable coins are fully backed, whereas her community bank up the street that puts out
cookies at Christmas, that money is actually in some hedge fund in Peru. So she doesn't understand
this. But as long as she doesn't understand that, it's not an existential threat to the bank. So you
can structure it in a number of ways so that from the bank's perspective, the damage is done within
the crypto bros, which is not a large market for them anyway. A, they're young. B, a lot of their
money is in crypto. It's not in dollars. Yeah. Okay. So I want to sidetrack us for one second
before I move on to the next subject. I'm curious. You mentioned, you know, like your work at
Heritage. What is, what's sort of the take on Bitcoin? I still see a lot of gold bug sort of
folks from like the places I would expect to see that. What's been the response? You going really
hardcore into Bitcoin. Are people getting more receptive to that on the sound money front? Or
is there still a lot of resistance in your mind? Yeah. So, you know, I think the funny thing about
Bitcoin is it's progressing birthday by birthday. You know, so 10 years ago, you know, the average
Bitcoin or whatever was 28, now they're 38. So you do have a lot more people who are in positions
of influence in normal organizations who understand Bitcoin, who advocate for it.
So you are seeing a gradual shift within Heritage. When I joined, gold was crazy when I joined in
2021. And Bitcoin was just completely insane. Like, you know, you got to see a therapist.
So I know Heritage has shifted massively. We are 100 percent pro-gold, pro-Bitcoin,
anti-fractional reserve banking. So we've shifted massively. Most of the think tanks in Washington
have not. So they're generally hostile. They regard Bitcoin as like a sideshow,
but it'd be way too risky to actually use it for anything important. They generally regard gold as
a sideshow, even though, of course, gold has a heck of a track record. So, you know, but policy
circles like in Washington, I think they're several decades behind the rest of the country.
So like whatever normal people are thinking about money, it takes a lot longer for that
to percolate into Washington.
Okay.
That's fair.
Okay.
Let's talk about the war in Iran.
Could you maybe, I'm having a heck of a time following this.
There's just, it feels like every day there's new conflicting information.
I have to hit grok on everything I see on X to see what, what I can kind of confirm.
What's your assessment of what has happened so far?
What's transpired to the best of your ability?
And then we'll talk about sort of the economic consequences downstream in a minute.
Yeah, so I don't think the war has turned out the way that Trump wanted so far.
I think the original hope was that you would club, you know, you would decapitate the regime,
you would destabilize them.
And then one of two things would happen.
Either what happened in Venezuela, which is that the remainder of the government,
Somebody steps in and says, I'll take over. And can we be friends? What do you need from us?
So that worked fantastically in Venezuela. Venezuela is now basically a client state of the U.S.
It does what we tell it to. Or their hope was alternatively that there would be this spontaneous, you know, Iranians would rise up and they would topple the government.
So neither of those had happened. I think the Iranian leadership is much deeper than we expected.
In other words, there's there's more layers who are who are like into this thing so they can just keep going.
And the Iranian people have not risen up. That may be because 10,000 of them got murdered in January.
They did try rising up. So I don't know if I should laugh about that, but it's sad.
At any rate, for whatever reason, the Iranian people have not risen up.
The regime is still capable of crushing dissent, intimidating people.
Now, having said, you know, Trump, one of the things that I think is unique about Trump is that he takes his promises very seriously.
So I know from working in Washington, the people in the administration, there are people in the White House who sit and track every single thing Trump ever promised.
And, you know, they're very eager to get a checkbox on that.
Most presidents don't. They just say crap. And Trump looks like he just says crap.
But he actually does take that stuff seriously.
And one of the big promises that he made in this war even more than whether we get their uranium or the Strait of Hormuz or whatever the outcomes are one of the biggest things he promised was four to six weeks So I think that the war has not gone as maybe some of the promoters hoped However I think that
Trump is very eager to stick approximately to his timeline. Pete Hegg said, I said,
stretch that to maybe eight weeks or so. But I mean, we're coming up on that. We're about two,
three weeks away. So if you look at sort of personality wise, you know, you've also got the
midterm elections coming up. Even if oil prices go down tomorrow, it takes a while for the economy
to recover from all this. It also, once the economy recovers, there's also a lag with perceptions.
You know, so like if, if companies are firing people and if prices are going up,
your paycheck doesn't make ends meet. If that fixes, it still takes a long time for voters to
feel like that fixed. So the question is getting that in there by midterms, which, you know,
they're what, seven months away. But when you're talking about economic perception, seven months
is not very long. So there's a bunch of things that are pushing for a short war.
On the other hand, if you look at, you know, you can look at prediction markets,
say that we're probably 50-50, that'll go into June. They're saying 25% odds it goes into 2027.
If you look at oil futures, those are saying basically August is when oil futures start coming back down.
So the difficulty at this point is like sort of everything is on hold.
You know, Bitcoin prices, gold and silver prices, the economy in general, markets, of course, all of that is on hold for the war.
And nobody has any idea how long the war is going to go.
Trump is almost uniquely chaotic. I think that is absolutely intentional. He wants to keep the other
side off balance. But the end result is, you're even seeing now, when Trump makes some noise how
the war will end soon, the market reaction is relatively muted. Today, he floated that
we might drop control of Hormuz, which raises the prospect of a much shorter war.
and the market jumped, but it didn't jump as much as it should have based on that.
So I think that at this point, you know, on Wall Street, they're calling it headline fatigue
that just nobody knows what this president's going to do.
I know because I make daily videos. Right.
And so, you know, I have to make the video the night before.
And I lay awake in a cold sweat wondering what the hell Trump is going to do tonight,
because maybe like tomorrow's video.
Yeah, I don't know. Maybe he'll win the war or he'll, you know, like who knows?
So it's tricky being an investor.
Now, of course, if you're a true Bitcoin, you just hodl.
You don't care what's happening.
And so it's not that big a deal.
But for, you know, for, I mean, I guess you could argue there's like another sigma class
of Bitcoiner where they do care because every last penny is in Bitcoin and they got to pay
the rent.
So I guess for those people, they would care.
So I just began learning and I'm scratching the surface as to how oil and energy flows
about the world. If Trump, what you alluded to there, Trump's comment that maybe we end the war
and the strait stays in Iranian control, or it stays closed or blocked, you know, largely.
What is the impact on U.S. economy, I guess global economy, if that were to continue to be the case,
even if the war ended? Because to me, that seems, from what I'm gathering, that's highly
consequential or could be. Is that fair or no? Well, it's consequential in terms of the U.S.
exiting the war. The way that it's being framed a lot in the media, they're focusing on his
comments saying that the rest of the world has to handle the straight on their own. So if they want
the oil out of the straight, then you guys have to go take it. You have to man up, grow a pair.
Realistically, if the U.S. declares victory and goes home, then at most, Iran would put a tax
a toll on ships going through the Gulf,
or going through the Straits,
they're already doing that.
I don't know if they're doing it today,
but they were doing it in the recent past,
where they were charging each ship $2 million.
That comes out to about a dollar a barrel.
So they'll just pay it.
Realistically, the Europeans, Japan, Korea,
they do not have the force projection
where they can actually do anything about it.
Iran's neighbors don't want to do anything about it
because it would be a mess.
China is sensitive, but they also don't want to do it.
I think what China is afraid of right now is that their air defense systems are apparently garbage.
There's speculation that they executed the guy who was the head of the missile defense.
It failed in Venezuela, it failed in Iran.
He's either disappeared or he's executed.
I think China doesn't want to do anything militarily because they're concerned that all of their stuff is garbage.
And if the whole world knows that, they lose leverage with Taiwan.
They lose leverage with India.
They have a lot of neighbors who they have various conflicts with.
Vietnam, you know, there's sort of been a permanent Cold War with Vietnam ever since they got their butts handed to them in the in the 70s.
So I think China definitely doesn't want anything. So worst case scenario, which I think would be a nice scenario, is that the U.S. declares victory and goes home.
And I, you know, Iran probably tries to tax oil. Dubai and Saudi and Iraq won't like that.
But you know what? They have big, beautiful militaries. If they want to do something about it, they can.
And so I just had a tweet earlier where I was saying, you know, that it's too early to dream big.
But there is the possibility that because of this war, NATO could break.
Trump's fighting with NATO because they're closing their airspace when, from his perspective, we need them.
So NATO could break and maybe we could shift the rules now where like China has to protect its own oil.
Like we don't do it for free anymore.
Interesting. Interesting.
So to what extent have you, like, as you've watched this unfold, the war, what are you, like, I tend to imagine that the average normie probably isn't seeing this, but there's probably some metric or some data that you're seeing that you're like, man, like, this is a glaring example of just how fragile the fiat system is, the supply chains that fiat have constructed are.
Or is there anything in particular you could point to that if someone's like not really clear on why, you know, why fiat is garbage and why Bitcoin might fix some of the challenges we face that you're like, this war demonstrates that?
I think the biggest takeaway is that what fiat does is enables all of these adventures.
Right. So, you know, if you go back, I mean, really, for the past hundred years, every time governments screw something up, the way that they get out of it is that they shoot their central bank, shoot a trillion dollars at it over and over until the problem goes away.
And the end result is that every crisis converts into inflation.
But what it also does is it finances every crisis.
So like the central bank becomes the venture capitalist of the crisis industrial complex.
So, you know, America, let's see, we have a close to $2 trillion deficit at 7% of GDP.
That is deep war level.
OK, we were relative peace the past couple of years.
7% in peacetime is obscene.
That's, you know, third world basket case territory.
And why is that possible?
Because the Fed stands ready to print it off.
The Fed fundamentally backs up with a giant money printer.
The example I like to give is COVID, right?
So if you imagine some random country like Canada, and you get the COVID thing, and you have the staff meeting, and they all say, okay, so what are some options?
And let's say you don't have a central bank, so you have some junior bureaucrat who says, okay, I got a crazy idea.
Let's shut down the entire economy.
Tax revenue will drop by half or more, but that's okay because we just lay off all the federal workers.
We just cut all the government expenditure.
So you would get fired, right? You would get sent to like, you know, the deep north up in Siberia.
Yeah, you'd be out of here tomorrow, right? The only way that that plan could work to shut down the entire economy and pay all the voters to sit on the couch so that they support lockdowns and, you know, they watch dancing nurses.
The only way that you could make that work is with a gigantic money printer. That's exactly what happened. Right.
So they did the lockdowns. They, you know, did the virtue signaling. I uniquely care about grandma. You, you know, anti-vax bozos have blood on your hands.
Very, very expensive virtue signaling. Right. It cost them. I think at one point it was seven trillion that the Fed balance sheet increased.
But, you know, they they were able to do it. Not only could they do it, but shooting all that money at it made everything go up.
It was weird. Like you shut down half the world economy and all the stocks went up.
Bitcoin went up. Gold went up. Everything went up. Amazing. Right.
Because they shoot the money. The money first goes into markets and then it dribbles out into consumer prices.
So the you know, when I look at this war. The near term, the fiat is helping in the sense that, you know, like everybody knows, markets know if everything goes to hell, then they'll just shoot money at it.
And so, you know, the so-called Fed put. But the wider issue is that the reason that we are in this war, the reason we were in all the wars, the reason we were in World War I, as Safedine discusses, all of those are because of central banks.
They are the venture capitalists of the crisis industrial complex.
Interesting. So you mentioned Venezuela. I have to ask. To me, like, I feel like I woke up, saw the news, blinked, and then we moved on to something else.
we did depose a world leader. And to be fair, we had like, I'm not an interventionalist. You
probably guess that about me, Peter, but we, we had someone come on a spaces that we did,
who was from Venezuela, living in the States. And he was talking about how he's like, Venezuelans
are cheering this on. Like it was, it was bad, you know, and I can sympathize while not agreeing
that I want my tax dollars or, you know, my children to have to pay debt on some intervention
that doesn't directly affect me.
But what was your take on,
was there maybe like a more,
like it felt like just this impromptu,
like we're gonna just pull this thing together.
But then I hear about people talking about,
hey, migrating to a multipolar world.
We need to own the Western hemisphere
with the Monroe Doctrine.
Like, how do you look at what happened there?
And is there sort of a continuing story
in the background that we're so focused on Iran now that we're not even seeing with Venezuela?
Yeah, I mean, so the Venezuelan regime is garbage. They're communists. I encourage anybody to depose
communists at any time for any reason, using their own money and their own lives. Of course,
I don't want the government to do this because there's a lot of crappy regimes in the world,
and we would, you know, we would spend everything we have doing it. Plus, we're already $2 trillion
in debt, which is, you know, already inviting a financial crisis. So I would prefer we not do it.
But having and, you know, the whole dominating the hemisphere, you know, Switzerland dominates nothing. Right. It has no external military. It invades nobody. It has no sphere of influence. Liechtenstein is arguably a sphere of influence. It dominates nothing. And it does just fine. Why? Because it goes out and buys crap.
It can buy lithium and it can buy oil and it can buy food and all the rest of it.
So to me, it's a fallacy.
Why do you have to dominate stuff?
To what end?
Our being a major player in the Middle East, what precisely has that done for us?
Us being influential in Africa, again, what exactly did we get for that?
So I think it's – I've met Venezuelans.
They are absolutely thrilled at Trump.
They love the fact that he told the oil companies, you can't just take the revenue out.
You know, like the oil companies had longstanding lawsuits from when their resources were seized by the government.
He said, no, no, no. We're going to put those on the back burner because the resources are for the Venezuelan people.
I think if you're Venezuelan, you should absolutely love this president.
I mean, he's just been astounding. However, that's not his job.
And he has said this 100 times. He said, you know, when people talk about how nobody likes you in Europe and he says, my job's not.
to be liked in Europe. His job is not to be liked in Venezuela. I sympathize with Venezuelan people.
I encourage any, you know, bored billionaire to go raise an army and go do it on his own. But
fundamentally, yeah, it's not our war. There's a lot of wars in the world and we can't afford them
all. We can't afford what we're doing now. You got a lot of Somali learning centers that need to be
funded. Exactly. Exactly. There's a, yeah. And potholes that need to be paved would be my
preference. So do you think the reason for that, are you optimistic about Trump's intentions that
it was to help the Venezuelan people? Or was this an oil natural resources play? Is there something
else happening that is, or at least that Trump perceives to be benefiting the American people
long-term or something else? Yeah, I think for better or for worse, Trump, whatever filter Trump
used to have is not there anymore. He gives speeches now where he's like, you know, I like
to be around dumb people. Dumb people, you know, I don't like people who are too smart.
The man has no filter. Okay. Like tactically, that's, that's not a good thing to say,
even if that's true. At any rate, he's got no filter. So I honestly, I take it as work. I think
he invaded some sympathy for the Venezuelan people. I think more of it was that the Venezuelan
government was causing a bunch of problems, right? They were sending the narco boats. That's a
legitimate issue. The number of Americans who die every year from overdoses is roughly the number
who died in the entire Vietnam War. That is like a legitimate self-defense issue. There's other
smaller things. For example, Venezuela was not, you know, they emptied their prisons to a certain
degree and just dumped them all north so we could have them. And they were not taking them back,
right? So we would arrest these criminal Venezuelan migrants and then Venezuela would say,
yeah, no, we don't want them. So, I mean, there were some legitimate grievances. I think the
single biggest one was that he genuinely doesn't want China having influence in Latin America.
You know, China has been very big into buying friends with the checkbook. I mean, frankly,
I don't know why we care if like Swaziland is friends with China. Like, you know, yeah,
what are they going to do? So it doesn't bother me, but I think that it does bother Trump. He
wants the U.S. to be the uncontested power, at least in the Western hemisphere.
Okay. And we'll get out of Central America, South America here in one second. But
in the midst of all of this, I saw we were doing some sort of an anti-terrorist campaign in Ecuador.
Was that just that? And it happened to come on my radar? Or was there,
in your view, some other play at hand?
We, I mean, we do those everywhere. I think, uh, you know,
people have tried to tally how many bases we like formal bases. We have,
I don't know, 150. I mean, it's, it's, it's astounding. You know,
every so often you only hear about it when somebody gets killed.
And so like somebody will get killed in what was it the other year,
Niger or something. And then people were like, what, what,
why do we have soldiers in Niger? Yeah. So.
So, yeah, the good thing is all of our intervention is teaching people, Americans geography that they don't learn in public school.
Which, again, what are you going to do with that?
What are you going to go vacation in Niger?
Hey, everyone knows where Ukraine is.
Everyone knows where Iran is now.
Everybody knows what a straight up or lose is now.
And we're all experts on it, too.
Yeah.
The yen carry trade.
I became an expert on that overnight.
That's true.
Yeah. So let's talk a little bit just sort of macro, I guess. We U.S. debt recently hit thirty nine trillion dollars.
I think the what would it be? The CBO is looking, you know, a decade out.
And we're talking the U.S. debt doubling here very, very quickly.
And it tends to be very conservative projections, obviously, that the government's going to put out.
what do you, I mean, I assume you agree that's going to get higher, higher, higher. Any other
comment on that before I proceed with questions though? Is that where we're going?
Yeah. Yeah. I think absolutely. It's going to keep getting higher. You know, unfortunately,
the incentives are, there is no predator, there's no natural predator spending in Washington and
everybody, no matter what the party, you benefit, you as a Senator or Congressman or President,
you benefit from spending more. So everybody wants to spend more. There is no countervailing force.
The only limit on it is either a crisis or going back to that central bank with the crisis
nestro complex. You know, if you get a crisis, the Fed will shoot the trillions at it, get out
the bazooka trillion after trillion until it goes away, which converts into inflation. So I think
fundamentally, it will keep going to a crisis. It will probably take longer than people expect.
You know, people in the 1970s thought that we were right on the edge of apocalypse. And 50 years
later, we're not. Anybody who invested the apocalypse in 1978 lost money. So, you know,
it'll probably take longer than it seems. But unfortunately, I think there's, you know,
we just had a natural experiment with Doge where Trump, believe it or not, had been hostile to
federal spending. Every single budget in his first term, he tried to cut $100, $200 billion,
big money back then. Every single time Congress walked away. Doge, of course, Elon is a force
in nature. He can do things no mortal can imagine. Bounced off Washington, didn't even make a dent.
By their own tally, Doge claims $200 billion in savings. Well, that all got gobbled up in a single
year from Medicare, Social Security, Medicaid, no doubt, welfare fraud. It gobbled all of it up.
And that was one time doge. That was one year it gobbled up. Next year is going to gobble it up
again and again and again. So we just had a natural experiment. We had the perfect storm.
We had, you know, Republicans promised they were going to slash federal spending for 50 years. We
had unified Republican control. We allegedly had fiscal conservatives. We had Elon Musk,
possibly the most capable human on Earth heading this thing up.
We had Trump, who by all accounts, he is very hostile to the federal government.
He does not believe that it is a force for good.
All the stars aligned.
Every single planet was in sync.
Nothing.
So I think the takeaway from that is it's hopeless.
And I think that's why gold and silver were taking off before the war.
They exploded last year.
I think silver was up three X, just numbers.
They were both in backwardation, indicating severe supply stress.
So I think that precious metals saw that.
Now, Bitcoin, I think, didn't move up because Bitcoin still had a big run that came from,
you know, there was a lot of hope when Trump won.
He said he was going to pay the Bitcoiners back.
I think that has not turned out as much as people might have expected.
So Bitcoin sat that one out for that reason, or put differently, it got its rally early.
But gold and silver basically said they took one look at what happened to Doge.
you know given the republican congress given trump and they said it's game over right there is
nothing stops his train as lindon says yeah no i think that seems that seems about right because uh
like i was i'm i'm no longer real optimistic when anyone takes office even if it's someone who i
you know align with or like some of the the things that they say to me i just i look at
the, um, kind of to your point, there is no one who is incentivized to go after the spending.
There, there are too many handouts, votes to buy, or you could say accumulate if you,
if you want to be a little more gracious. Um, but I, I would have guessed, I knew Doge was not going
to fill the deficit, right? That to me just seemed insane. I was a bit surprised that they
couldn muster up a little bit more political capital to do something meaningful that wouldn be gobbled up in the first year But maybe in retrospect you know I kind of threw my hands up I don know if like going into Doge what was your anticipation
Like, did you think they were going to bounce right off of Washington?
Or did you think there was a real a real shot at making some meaningful impact?
The problem is that if you're really going to make a big impact, there's only so much
you can do as president.
a lot of it has to come from Congress because there are these forests of laws that are passed
in there. They're crony laws and they protect all this stuff. Right. So when people complain
about the Obama judges and the Biden judges, those guys are downstream of these corrupt
laws that are stuck in there by Congress because some donor paid them to. So to get rid of all of
that garbage, to get rid of the spending, to get rid of the fraudulent, all the money going out in
Minnesota and California. To do all that, you need Congress to do it. And Congress cannot do it
because of something called the filibuster, right? So you need 60 votes to pass. Almost never does
one party have 60 seats. There was a time when they would horse trade and they would sit the
back room over cigars. They would cut deals. They don't do that anymore. So in practice,
nothing major can get passed anymore. So we're essentially frozen more or less at the FDR
revolution. So, you know, FDR gutted the republic. It was essentially a constitutional coup.
He, you know, imposed this administrative state, the deep state. That is essentially frozen in
place because of the filibuster. Now, I guess the good news, the short-term bad news, long-term
good news is that it looks like the Democrats are planning to cut the filibuster next time they get
power. If they do that, then short term, a lot of terrible stuff happens. Basically, whatever
Kamala promised happens, if you get rid of the filibuster. However, it moves us a lot closer to
finally being able to break this logjam because, you know, what I think the past year has shown us
is that the FDR super state is indestructible the way it is. You can't get it out without breaking
the filibuster. Okay. So are you a, like, do you adhere to the thesis of the big print? Is that,
is that what we do with the 39 trillion in debt, the war, the everything going on? Like,
is, are you and Larry Lippard pretty well aligned on, on where you think this is headed?
Yeah, I think absolutely. So, all right, take a Biden inflation. So depending on how you counted,
it was at least 20%. That effectively paid off 8 trillion of debt or what? 7 trillion of debt.
right so you know because when you have inflation the economy keeps up with inflation sort of by
definition but the debt does not because the debt is in nominal dollars so that effectively that was
the biggest like forget the 1990s right bide inflation paid off in an enormous amount of debt
seven trillion dollars in debt now it did in a horrible way right it did it by gutting the
american people and impoverishing us and now you know kids moving in with their parents is at great
depression levels. I mean, it was absolutely horrific. But if the only thing you care about
is the debt to GDP ratio, then you loved Biden inflation. You would want a heck of a lot more of
it. You know, famously, the Weimar government in the 1920s, the national debt was eating the
country alive. I think it was three or four times GDP. This is from absolute memory. Anyway,
it was very large. It was larger than our debt is today. And they had a couple of years of
hyperinflation and then the national debt costs the same as a loaf of bread. So that's the concern
is that if you let things keep running and, you know, we've already got the template or I was
talking earlier about the Fed shooting a trillion in every crisis, we already have the template,
right? If anything goes wrong, every time short-term interest rates spike, for example,
which they do about every two, three years now, that used to be called a crisis. Now the Fed just
shoots money at it, right? So all of these disasters, they all convert into a big print.
Now, they're going to try to make it go slow, because I like to joke that we don't have a
gold standard, but we have a pitchfork standard, which is that, you know, like, why does the Fed
try to keep inflation around 2%? There's no scientific reason for it is because they know
empirically that you go beyond that and people start getting upset. And then they start putting
pressure on Congress, then Congress, you know, starts to clip their wings. So in practice,
this, you know, it's like a gasoline thief. You know, you take one gallon a night. You don't
drain the whole tank at once, right? Because they're going to notice that, right? You take
a little bit. You take like a quarter gallon every single night. You're going to make a lot more
doing it that way than you will stealing all the gas all at once. So, you know, I don't think it's
going to come all at once. They are going to try to restrict it. Central banking has it kind of
down to an art where, you know, they can just shave off a little bit here and there. And by the way,
They steal a lot more than it looks.
They don't steal 2% a year, right?
People think, okay, 2% inflation.
So the Fed printed or stole and gave to somebody 2% of all the money in the world.
No, they took a lot more than that because an economy naturally is deflationary, right?
Because you have all the money in existence.
You have all the stuff.
If your population goes up, if you're more productive, if you're using computers and AI
and whatever to make more stuff, then you have more stuff.
You have the same dollars.
so you actually have deflation.
The stuff gets cheaper.
So what the Fed manages to do is soak all that up.
Probably the biggest deflation we had
over the past 20 years was China.
So when I was a kid, buying a toaster,
you had to think hard about that.
You had to shop around.
You had to go buy Consumer Reports
and figure out which toaster was good.
Why? Because adjusting for inflation,
they were like $150.
Today, you can get a toaster for $7.99.
Maybe not today, today,
but they're very, very cheap because of China.
So China was a massive deflationary impetus that created political issues because it stole a lot of jobs.
But in terms of inflation, quality of life, consumer spending, we should have just gone through over the past 20 years, we should have gone through this massive deflation.
We should have got like 30 percent deflation. All of that was gobbled up by the Fed and handed to Wall Street, to the federal government subsidizing debt.
So they take a lot more than it looks, probably on the order of six, 700 billion a year.
So that effectively, they're borrowing so much that the debt keeps growing.
But if they get to a crisis, a lot of the sort of black pill crowds imagines that there's going to be this great crash.
And then the righteous shall prevail.
And I know it'll all convert into inflation, which is nice if you happen to be a Bitcoiner or a gold bug.
Silver is a little bit trickier.
You will inherit the earth.
It's so interesting.
I actually had this conversation with a friend recently.
I was explaining that.
Even if you take them at their 2% CPI, that's how you perceive inflation.
I was like, first of all, that's not really what inflation is.
I mean, look at monetary inflation.
You're looking at probably 7%, 7.5%, 8% or something like that over the last two decades.
And so that's really what they're stealing from you because you know that 2% is a lie.
But prices should be decreasing by, let's say, 3% a year.
Like the Delta is 10%.
Like that's what you're being robbed of.
Like you could be getting 10% wealthier each year, or at least you could be 10% better off, I guess you might say.
And it's just so distorted.
But honestly, it's fractional reserve banking, central banking.
It's all of these forces that are so opaque to most people that you have to really be interested and really be curious and study hard and read a lot of books and listen to a lot of good podcasts.
that most people just have no idea.
Like if they heard what you just said,
I think they'd completely misunderstand
just how serious the situation was.
And if you paint a picture of what's possible,
I think that's really important for people.
Like they might understand Bitcoin on a life raft view.
Like, okay, I can understand
you want to protect yourself from the fiat system.
But in terms of the wider question,
Like what happens to society if you return to sound money? And there, you know, you can look back at the period before the, you know, two worst policies in American history, which were the income tax and the Federal Reserve.
Those came at the same time. They essentially gave the government the ability to seize unlimited quantities of society's resources and then use those for wars or cronies or whatever it is.
So you can look back at the period before then. I call it the top hat singularity. But the period from about 1875 to 1913, it is an astounding period. Everything was invented. If you take every single thing that Elon is famous for, every one of those was invented in that 40 year period.
computers, hyperloops, rockets, airplanes, helicopters, everything, magnetism, electricity,
telephones, everything was invented in that 40-year period. I think people have no idea what
we've lost. Since then, we have been running on the fumes, commercializing everything that was
invented in 1875 to 1950, or 13. So in other words, if you imagine a counterfactual where we did not
do the Fed. We did not do the income tax. Therefore, we did not have World War I because
there was nobody to finance it. They would have mucked around for six weeks on the border and
called it a day. If we didn't have those things, it's depressing to think where we'd be.
You know, like Starbucks, people working at Starbucks would make a quarter million,
meaning that they would only do it for like five, seven years and they go backpack for their, you
all the things we would have if we hadn't strangled it in the crib in 1914.
Yeah, I've said before that it's hard to imagine a world where we hadn't hampered nuclear and where
we could have accepted Bitcoin in 2009 as the form of money. You combine those couple of things.
And you're right. I've actually given those examples before. I think the combustion engine
was invented around the same time. I was trying to explain this to another friend. This was like
a year ago that all of the cool things Elon does or, you know, anyone, you know, name your tech
billionaire, all of it is incremental improvement on technology that is 120 years old. All like all
of it. And they're like, no, this is like the most technologically crazy age. I was like, no,
imagine going from, I have to open my windows when it's 95 degrees out just to get some,
just to get a breeze to like, I have air conditioning in my home. I can be comfortable
24 hours a day. That is a way bigger lifestyle upgrade than Elon shooting rockets off, which
has no bearing on my life. Right. So I think it's, uh, it's just hard to conceive of if you,
if you don't go do the, do the studying of the history. Um, Peter, uh, I actually just typed
this down cause I hadn't, didn't have this on my list, but tariffs, I have completely lost track
of where we stand on tariffs.
I was following this for a while.
I would love your opinion on tariffs generally,
just your view of tariffs as an Austrian.
And if you have any sense as to where we currently stand
with 200 some odd countries,
I would love to hear your analysis.
Yeah, I kind of dropped out of the headlines.
So broadly speaking, a tariff is a form of a sales tax.
It's a sales tax on a particular class of goods, imports.
Like all sales taxes, it's therefore evil.
It transfers resources to the government.
It drains the lifeblood of people, et cetera.
So tariffs are terrible for the same reason taxes are terrible.
Having said, Trump had two goals with his tariffs, which is why I've been generally going easy on them,
which are, number one, to get other countries to reduce their trade barriers,
which if you can threaten other countries and they remove their trade barriers and then you remove yours,
that creates a better world for everybody.
I think everybody agrees that.
The second one is to reshore production. So to bring factories back to America.
That worked with Ronald Reagan, for example. He threatened the Japanese with tariffs.
They moved production to the U.S. to the point where almost half of Japanese cars sold in America are actually made in America.
And the Japanese don't care. Right. They just want to make money.
OK, they'll make it in America. They'll make it in Japan. They'll make it in China.
They don't care that much where they produce it. The country of Japan may be nationalist, but Toyota doesn't care.
Right. They're paid to make profits. They don't care where they make it.
So those were the two goals. Now, the reshoring, I think, is that was turning into the more interesting of it because Trump, the way that he was negotiating with countries was he was saying, look, I can hit you with this catastrophic tariff or you can build a bunch of factories in America and I'll let you off easy.
And that's what countries were going for. So Korea, Japan, Europe, Taiwan, Saudi Arabia, the Middle East, all of these guys, they were promising a combined, it was over $4 trillion of investment that they were going to build.
So, you know, Taiwan, a semiconductor is building a hundred billion dollar plant in Arizona, a whole bunch of projects.
And the rule of thumb is that every trillion dollars is worth about a million jobs.
Right. So that's that's enormous. Right. That would cut our employment rate in half.
That was a very big deal. So this is what Trump was getting. Right.
He was threatening with these massive tariffs, you know, 40 percent.
and the country would say, okay, you got me. I'm going to take all, like Taiwan took 99% of its
tariffs off American goods. It was obscene they ever had them because we protect them for free.
But anyway, setting that aside, they got rid of 99% of the tariffs and they sent, I don't know,
300 billion or something, which would be, well, that'd be about 300,000 jobs that they were going
to be creating in America. So Trump has been very transactional, has been very, very clear.
Japan, Taiwan, Korea, they understand their media.
I mean, they're smart.
Their media is a lot smarter than ours.
And they sit down and say, OK, they say, look, Trump is transactional.
Here's what Trump wants.
You know, he wants he wants factories.
He wants the trade barrier.
And they sit down and they give it to him to stay on his good side.
So in light of that, right, on the one hand, tariffs on themselves are bad.
On the other hand, Trump was getting so much good out of them. And, you know, if you look at most countries like in Africa or Brazil, for example, tariffs have failed catastrophically.
When you read like in The Economist magazine or The Financial Times and they criticize tariffs, they're thinking of those tariffs.
Now, the key there is that if you pass tariffs and you fail to make it attractive to produce in your country, right, this is what typically happens in Brazil or Africa or somewhere.
They say, OK, we're going to tariff everybody.
But if you try to produce here, you know, the tax rates are going to be astronomical.
The red tape, you get a bribe of everybody.
You know, who knows if the minister of whatnot wants to give your business to his son?
Maybe he will.
You know, property rights.
So in those contexts, yes, tariffs are catastrophic. Brazil, Africa should not have tariffs. They're not adult enough to handle tariffs.
OK, but what Trump was doing here was, first of all, he was, frankly, extorting the foreign investment into the country.
Secondly, he was trying to get tax rates down. He cut the income, the corporate income tax in half, which is the most important for investment.
He was cut, you know, he cut taxes across the board. The one big, beautiful bill, which extended his first term tax cuts, slashing regulation. Right. Zero help from Congress.
He got rid of the global carbon dioxide endangerment rule, which claims that CO2 is a pollutant.
Huge issue in manufacturing, basically wipes out small manufacturers.
So he was getting rid of the two biggest problems to manufacturing in America, which are the tax rates, especially for small businesses and the regulations.
So if you're doing that, if you're putting tariffs on, you're actually making it attractive to produce in your country.
Right. Just kind of to imagine the end result of that, like if Trump were king, then he would put the corporate rate at zero.
He would get rid of all of the regulations, you know, basically roll us back to the 1950s when, you know, people were not eating each other in the street.
But we didn't have this this this crony regulatory state laid on top of it.
If you were to do that, you wouldn't have to threaten countries.
Everybody in the world, like every Japanese company would be trying to move to.
He has zero tax. He got less regulation. You know, it's we have tons of oil, tons of resources in the U.S.
They would be falling over themselves to move here. So in light of that, I think that, you know, that's why I've been supportive of his tariffs, even though in general I oppose most tariffs.
Now, where do we stand? The Supreme Court struck them down under the law he was using, which is called YIPA.
there's three other laws with four other authorities so things like discriminated
against u.s exports national security threats which by the way they're using national security
for upholstered furniture so it's a very expansive definition in washington so they could basically
block anything through these other laws the thing is that those have to be litigated as a process so
that's slow so what he's trying to do in principle is to replace the epa tariffs the epa tariffs were
super clean. That was, you could declare an economic emergency and just hit anybody with
anything. These other tariffs has got to go through step by step. So he's trying to recreate them.
He's trying to homebrew them. The problem is that that takes time. And all these countries that
were going to invest billions or trillions of dollars, they're all waiting to see how that pans
out, right? Because maybe they won't have to do it. Yeah, yeah, yeah. So you would say you approve
of the notion of tariffs in this sort of unique case by virtue of the context in which they're
happening, the intent that you perceive there to be, how would you rate the execution? Because this,
this, when we were talking about this on our show, it, it just felt like we were getting jerked
around with, okay, we're extending, you know, no tariffs until this date and then this date,
and then we're going to slap a new one on. And on one hand, maybe that, you know, I've heard
enough references to 4D chess to be skeptical. However, I don't understand how a lot of this
stuff works in practice. Maybe there's maybe the volatility that we saw with the tariffs was
by design. What do you think of that? Yeah, that's the great debate with Trump is,
you know, in the back of his mind, is he running a TV show where he's got to keep it interesting
every month? And so something weird has to happen? Or is it 4D chess? So, you know, the charitable
take, I mean, it would be that this is intentional. It's a way to force countries. You know, I think
that partly when he first came in, he wanted to communicate to countries that, you know, for a
long time, there's been these very narrow norms of what the U.S. would do. Like, if you piss off
the U.S., then we'll, you know, do this tiny little whatever. We'll not issue as many loan
guarantees for your companies or like just tiny little tweaks. Right. And I think he wanted to
send the message that, look, everything's on the table with me. All right. I will take Greenland.
I mean, I will do things you haven't even dreamed of. So I think that was absolutely intentional,
right, is to raise the threat level. And his goal is to get countries to fold. I don't think he
wants to go to war with countries. He wants to bully and intimidate them. And, you know, that's
his job. He represents the American people. He doesn't represent the European people. Screw them.
his job is not to represent foreign countries. Now, I encourage Europeans to have nationalists
who represent them. I don't, you know, I don't, I don't dislike Europe or Korea or whatever,
but the job of every country is to advocate for itself. And I think that that's what the bullying
was. Now, having said, you know, yanking them around does something interesting because if you
yank the rates around enough, at some point countries just, they can't make a deal anymore.
Like, in other words, negotiation becomes impossible.
You know there a famous game from the 1950s called Chicken where you know two hot rodders aim cars at each other and then whoever swerves first loses right He the weak guy You got to be careful about words I not exactly sure what he going to post At any rate but well
there's a way to win chicken, which is that you remove your steering wheel and you hold it out
the window. Okay. So now the other guy has to, he's got to turn. If he doesn't turn, he's literally
dead, right? So you indicate to the guy, I can't turn. And so in this case, if you yank the rage,
20%, 10%, 50%, 70%, 120%.
If you yank them all over the place, you're basically saying,
that's a steering wheel.
I can't negotiate with you.
Your companies have to move here.
So that's an interesting question where at some point the companies,
they can't walk away from the U.S. market because the U.S.
is one quarter of the world economy.
I don't think Americans understand how dominant we are.
We are a quarter of the world market.
We tend to be the highest income consumers.
So you make like there's a lot of industries where you make all your profit in the U.S. and then everything else is just gravy on top of that.
So they can't walk away. So they can't walk away. And the tariffs could be 70 percent tomorrow.
At some point you say, you know what, screw it. Just build a factory in North Carolina.
The wages are cheap. The energy is cheap. The energy is like a third the cost of Germany, half the cost of Japan.
Just pull the trigger. So it may be intentional, basically holding the steering wheel at the window.
So that's interesting.
Okay.
So my last sort of topic I wanted to cover with you is just broadly the U.S. economy,
because I've seen you, you've done a number of videos on, I didn't even like prepare this
question exactly, but I saw you talking about like number of college grads who are not,
who aren't able to find employment in their field of study or at all, probably in many
cases, obviously like rising healthcare prices.
You go down the list, I feel a bit insulated, as a Bitcoiner, I feel a little bit insulated from what I see on some of your videos, for example.
But the data suggests that there are a lot of people struggling.
And we've seen unemployment at like the big tech companies.
AI is going to obviously replace many.
At the very least, I think most people agree a lot of white collar jobs are probably going away because of AI, at least over the next few years.
Um, like what's your, uh, what's your take on what's, what is actually happening on main street
that maybe you don't hear in the political narratives that you don't see on mainstream
news. And what do you think this looks like for the next, you know, five, 10 years? Does it get
better? Does it get worse? Do they just blow a trillion dollars at the problem? Like what's the,
what's the exit for it? Yeah, I think economically,
sorry, I think economically, we are in one of the golden ages of all history,
because of technology, not because of the government, the government is trying to screw
it up as much as they can. And, you know, this is partly things like AI, computers,
the internet, even just computers and the internet, they have not finished
raising productivity, raising incomes. A lot of it is foreign countries. You know, so
if you go back 30 years ago, roughly 1 billion people in the world were really productive in the
global economy. Now it's like 4 or 5 billion. You get innovations, you get, you know, if you look at
Chinese manufacturing, for example, it's genuinely impressive. There's a lot of fields where the
Chinese are actually leading edge. A couple of years ago, the city of Akron wanted to have like
a hundred year anniversary of, of like highlighting Akron's history in glass.
They were like the seventh, the Silicon Valley of glass a hundred years ago.
So they were going to build this curved glass wall to, to, you know,
show off because that was invented in Akron.
The thing is that no American company can make a curved glass wall.
It's a hundred year old technology. Nobody can make it here.
So they had to buy it from China. You know, Akron, Ohio,
did not want to buy from China. Right. That was going to be in the news.
These are all union guys. Okay. They tried.
impossible. So if you look at it from a technology perspective, I think we are an absolutely golden
age in terms of rising incomes. The government is, of course, going to try to take everything
it can. But again, putting that in perspective, governments have been rapacious for 100 years.
There have been many times when people thought that the end was nigh and it gets postponed.
And the reason is that what governments are doing is parasiting some of that technological
advancement, right? Like with China, right? They gobble it up. They pay the cronies. They buy the
wars. They do all this. So what they end up doing is, you know, tech moves us three steps. Government
knocks that back one. I think most likely that process is going to continue. I think the biggest
fear that people have right now is jobs, specifically with AI. But it's not just AI,
It's factory automation. If you look at the jobs lost since 2000 in manufacturing, for example, only about a third of that was China. Two thirds of that was automation. So if you go into an American factory nowadays, remember I visited a rubber factory in Kentucky a couple of years ago.
and it's amazing right every workstation had either one guy or zero guys just having a little
alarm that would call the guy over if something went wrong you had like i don't know 15 steps that
each had zero to one person and then you had a last step called flashing where they cut off the
little little nipples on the on the rubber okay and that had like 80 80 women sitting there with
scissors right and you're just looking at this thing and like you can see the process right one
by one, they replaced, you know, because each of those steps probably had 10, 20, 30 people.
So, you know, it was a whatever, a 7000 person factory and a shrink, shrink, shrink, shrink.
So that's all going to continue. But that's that's been going on for 150 years. Arguably
has been going on for a lot longer than that. You know, in ancient Greece, they worried about
oxen replacing farm workers and they'd have all these extra men who wouldn't be able to raise a
families. You have to send them to war or else they're going to cause trouble. In medieval Europe,
it was water wheels and windmills were going to take all the jobs away. The Industrial Revolution,
of course, that was going to wipe out all the jobs. The internet was going to take away all
the jobs. It was going to replace all the white collar workers with spreadsheets and Word documents.
Every single time, right, thousands of years of automation, every single time what happens
out the other end is that you have, you find new jobs because human wants are unlimited.
And those jobs pay much, much better. So it's an escalator. So what happens is the automation is
the escalator that every so often you have to take a step down. So you used to be an accountant.
Now you have to drive for Uber. But the thing is that the automation itself is raising the wages.
So if you look at the industrial revolution, for example, a farm worker today, if they're American,
they make about 25 bucks. If they're like an illegal, they make more like 15. Okay. Compare
that to what a farm worker made in 1800, right. In modern terms. I mean, it was like, it was like
$14 a day. Right. So even, even the jobs that step down, the automation picks it up. The problem
is that the timing doesn't matter. Right. So, you know, you do have accountants who have to go drive
for Uber. I just saw a statistic that the average babysitter in the U.S. makes over $20 an hour.
Babysitting is just about the lowest skilled job possible. You can be a 16-year-old in high school
with no experience and you can babysit. $20 an hour. That's striking. So people are not going
to starve to death. The automation is going to create more jobs because automation makes you
richer, as you get richer, middle-class people consume things that only rich people used to
consume. So consider that today, even like the poorest Americans, people on welfare,
they get their nails done, they get their hairs done. They don't raise their own chickens. Okay.
They go to the store and they effectively hire butchers. They hire farmers to raise chickens.
They hire butchers. They hire people to bring it, in many cases, to bring it literally to their door.
this is a level of services this is the poorest people in america do this right they use like
uber eats you know so and and this is what happens in a rich society is that services spread uh you
know also as a society gets richer people have more stuff you know so the average house in america
in 1950 was 950 square feet like if you think of how big that is yeah it's like a apartment now
It's like a one-bedroom apartment.
The average house today is like 25 square feet.
So stuff gets bigger.
People have second homes.
They have swimming pools.
They need the pool guy.
They need the electrician.
They got more to go wrong.
The fundamentally demand increases for all of the other jobs that AI does not replace.
And so what's fascinating to me is that it's almost an inverse of the Industrial Revolution.
So the Industrial Revolution wiped out physical labor.
And so but it made everybody much richer because, you know, a tractor is 50 times more efficient.
So everybody got rich, but the blue collars got knocked down.
And when the smoke cleared, blue collars today make much more, you know, seven, 10 times more than they did.
But white collars make 50 times more. Right.
So if you look at what's the equivalent of a professor before the Industrial Revolution, it was some crazy guy sitting in a park yelling about stuff.
I mean, literally. Right. That's what the philosophers were in ancient Greece.
They were all they were effectively homeless like Socrates. One of them lived in a barrel. Right. So these white collar jobs were not valuable before the Industrial Revolution.
What happened is we got rich. A certain amount of that was siphoned off by special interests who then funneled into the universities or, you know, medical care, of course, advanced.
So being a doctor is much more, it requires a lot more brain work than it did in, you know, 1800, so on.
So it's sort of, the escalator went up for everybody, right?
Even blue collars in America have air conditioning.
However, it reshuffled.
And what I think is going to happen with AI is going to reshuffle the other direction.
So very specifically, highly educated, high income, older, by the way, white women.
So Karen, if you look at the demographic profile, they are like around zero.
What's also fascinating to me is if you think about the people who write AI doom porn.
OK, so professors, people who work at think tanks, journalists.
OK, everybody writes AI doom porn is 100 percent the people who are going to get replaced by AI.
Plumbers, plumbers are not writing AI doom porn.
Right. So they are terrified of a world like already today.
hey, the plumber makes more than the journalist.
He might make more than the professor.
They're terrified of a world
where the DoorDash girl makes more than that.
I think that's what happens with AI.
So again, the escalator goes up
because AI makes everything so efficient.
It cuts prices.
Now, people always say, no, no, no, AI is BS.
It's just pretending.
It's mimicking what it read on Reddit.
Okay, fine.
If that's the case, then false alarm.
Forget about it.
AI is not going to do anything.
but I think it is pretty significant because I use it every day. It is brilliant. It is as smart
as the best economists. You know, people used to ask me these like really far out sci-fi questions,
like what happens if, and you know, I'd be like, oh no, this is a good challenge. Let me,
and now like I ask AI and I'm like, yeah, I didn't think about that. Okay. It's, it's freaking
brilliant. I can say as a practitioner. So I think that AI is absolutely going to change things.
Specifically it's going to do what the industrial revolution did, but this time it's going to
dethrone the white collars who tend to be Democrats. They tend to be influential.
They tend to, you know, they're the ones who influence institutions and the government and
the AI doom porn. So I think that there will be an institutional backlash to it because,
right, when the Industrial Revolution came, the guys who pitched hay, they couldn't stop it. The
most they could do was like burn down factories every so often, right? The Luddites in this AI,
why, okay, this is the ruling class.
This is the elite who's getting dethroned.
So I think it's going to be absolutely fast.
I'm there with popcorn.
Yeah, I probably tend to agree with that.
And the amazing thing is a lot of it's going to end up being open sourced.
And it's like Bitcoin.
It's like anything that they try to do to stop it.
There's going to be a workaround.
Someone in another country that doesn't fall under the king
is going to figure something out and open source it.
So I lied to you.
I was going to ask, I said that was the last topic.
I do want to ask, in everything we've discussed, right,
we've got war, we've got AI, geopolitical turmoil,
tariffs, all these things.
What does all of this mean in aggregate?
You have to go one by one for Bitcoin.
And is there a reason you think, like, do you see,
do you look at Bitcoin adoption as, you know,
you're bullish on where we're going over the next 12 months?
I don't really care about price too much,
but are you kind of think we're done with the stickiness
of the $60,000, $70,000 range here soon?
Or what's your take?
Yeah, I mean, price, I have no idea.
That's the right answer.
That's correct.
Yeah, I think adoption continues.
I think adoption got a little bit of a slowdown
simply because the paper hand tourists
are playing in silver.
They're not anymore, but for a while there,
they were playing in silver and gold and other things.
So, you know, I think that's why price took a hit recently.
But having said in the long run, you know, the long term adoption, I think, is still solid.
I think it's interesting that, you know, when we talk about the potential crises, the solution to all of those because of central banking is inflation.
So like every crisis can, in a sense, be translated into inflation, which means that every crisis accrues to Bitcoin.
So I think in the long run, I mean, certainly as a hedge, you know, anybody who's invested in stocks or something, I think absolutely has to have a chunk in Bitcoin.
But I think as time goes on, you know, all of those crises, like each crisis gives a boost to Bitcoin price and also the Bitcoin adoption.
And then sort of the meta question is, can fiat go on forever?
However, you know, is there some point where the inflation, you know, the crises get big enough that the inflation gets run away?
There's some point like 50 percent a year where inflation tends to accelerate very rapidly.
People just dump all their cash. And if we get to that point, which has happened many, many times in history.
Right. I mean, history is really just a cycle. Right.
Where you have inflation and then everybody wises up and goes to gold.
They get inflation again. They wise up and go to gold and you do it again and again.
And of course, it's a cycle because every time they go to gold, you know, the fundamental problem with gold is that you can't like you can't in the modern day.
You can't have a currency that is literally gold coins.
It's it's too expensive.
It's you know, you have to have some currency, whether it's electronic or paper, that's backed by gold.
Now, the problem is that if you back it with gold, you can't say that your gold is in a secret place and you can't tell anybody where it is.
Right.
You have to give the address. You have to show the camera with the sharks with the lasers on their heads.
And so you have to show it. And once you do that, government is going to is going to give you a visit and they're going to have opinions about what you should do with this goal.
It's very risky to leave it here. Why don't you leave it with us over at the Fed, in which case it'll be rehypopulated.
We reland down. Right. So it'll be gone. And so, you know, the I think it's ironic because for gold bugs,
they say that the reason why Bitcoin is BS and gold rocks is because gold is physical, right?
You can drop it on your foot. It's real. You can hold it. Okay. But that is also the reason why it
is terminally vulnerable to government seizure. The government doesn't have to seize it. They just
have to have opinions about what you should do with it next. And so for that reason, we keep
going through the cycle. What is exciting for me about Bitcoin is that once you get into Bitcoin,
you don't have to get out, right? Because government cannot capture it. So then the
question becomes, okay, well, you know, if Fiat is going to die, which on a long enough timeline,
it will, the question is, you know, when does that happen? If it happens like in the next 10 years,
which I think is extremely unlikely, then we go to gold because there's some institutional memory,
because the older people who have more influence on the world are still gold bugs, okay, over the
next 10 years. If the end doesn't come for 30 years, then I think at that point, it's more
likely that you go to Bitcoin. Because if you look at young people, young people who understand
central banking, who care about the basement, almost none of them are in gold. Yeah, like,
you know, almost like, I guess, 45 or 50 is roughly the dividing point. I used to say 40,
but that was five years ago. So let's call it 45 is the dividing point. Anybody over 45 or 50,
they just want to hear about gold. Anybody under that age just want to hear about Bitcoin.
So ironically, in a sense, Bitcoiners should be rooting for the fiat system to keep going a little
bit longer so that the gold bucks flip over to Bitcoin. Now, having said, if it does happen in
the next 10 years and we go to gold, then at that point, you know, even the people who own gold,
I think are going to be much more receptive switching over to Bitcoin because Bitcoin at
this point has a lower inflation rate than gold. Gold is mined, I think, around 1.2 or 1.5% a year.
it's effectively its inflation rate whereas bitcoin is now below that so even if we do go
in the next 10 years i think we revert to gold as we have hundreds of times through history
uh and then at that point you know bitcoin continues eroding the market share of gold
so i think either way yeah if we zoom out 30 50 years i think there's a very good chance that
we'll have a bitcoin standard yeah i think uh in a worst case scenario if we had to if we were to
migrate to something like a gold standard or migrate to gold is like a more meaningful aspect
of commerce. I think very quickly we realize, oh, maybe this could have worked in the 1970s,
but not in the digital, not in the digital global economy that we have in, you know, 2020 or 2030
or 2035 or something. So I think we run out of, we spin out of gold pretty, pretty quickly would
be my guess. You, you necessarily have to decentralize gold because it's made of atoms.
You have to store it somewhere. And once you store it somewhere, it's centralized. It's got all the vulnerabilities.
Makes sense. All right. My last question for you, Peter. I promise this time.
What is an unpopular opinion that you have and you get some bonus points if you offend Bitcoiners with it?
OK, so offense. I don't know how offensive this is to Bitcoiners.
So I think that as much as Bitcoiners hate the Fed, the Fed is the best salesman, the best promoter on earth for Bitcoin.
You know, if we had a system where either central banks were disciplined and careful and were actually protecting the dollar, which they did for a minute in like 1920, if we either had that system or if we were already on a gold standard, then I think that it would be.
it'd be much harder to get people to appreciate and understand the power of Bitcoin. So,
you know, in a sense, Bitcoin is created by central banking. It's sustained by central banking.
I hate central banks. So, yeah, the Fed is Bitcoin's biggest champion.
And the worse the Fed gets, you know, the more incompetent it gets, the more that helps our case.
So it's it was the curse that instigated the I guess the origin of Bitcoin. And now it's the
blessing that demonstrates why we need bitcoin so very badly a bitcoin would not exist if not for
the creature of jekyll island yeah well said all right peter thank you so much for your time man
why don't you tell people where they can uh find you read your sub stack listen to your podcast
anything else you want to send them to yep so i make daily videos and a little three and a half
minute shticks on liberty and freedom or liberty and economics rather those go up on x the artist
for really known as Twitter. I also do deep dives every week on profstaydons.com and I
do a podcast where I round up all the videos at profstaydons.com.
I love it. Everyone needs to check these out. You learn a lot very quickly. I'll tell you just
personal story. I've got a sister who's a teacher and I've been, I've sent her your videos like
20 times. I'm like, you need to do this in your domain. Like this, like these three,
five minute videos, people love these things. It's something about them just like connects.
What's funny about it is that you can, you can get really deep on stuff because it's only like
three and a half minutes right so like a single thing yeah like um like people don't get tired
right so like if i do something on like central banking and m2 you know money supply and then
how that relates to inflation if you're doing that for 20 minutes especially at like eight in the
morning no yeah yeah it's got to be short it's got to be as simple as possible uh
you know, so you can explain difficult concepts to people.
But I think there's a ton of fields where there's massive
appetite for that, you know, whether it's psychology,
anything to do with science. There's a lot of people who,
you know they just love learning different things like paleontology or chemistry or whatever I think there huge appetite for it Yeah we need a Peter St Ange doing three videos in every discipline And everyone would be a lot smarter
So Peter, thank you so much for your time.
We'll catch up again soon.
Awesome. Thanks for having me on.
Cheers.
And that's a wrap.
Again, I hope you enjoyed my conversation with Peter.
I know I did.
He's an awesome guy to talk to.
Go check out his videos.
His three to five-minute daily videos he does
are incredibly informative.
and you'll learn a lot just sitting down
and listening to an expert for a few minutes
every single day.
Of course, if you need help taking your Bitcoin
into proper 100% self-custody,
go to thebitcoinway.com slash podcast.
You can schedule a free 30-minute consult
with a member of our team.
We will walk you through what it is we do,
how we do it, why you need to be your own bank,
and we can train you and get you across the finish line
to do just that.
And of course, if you need help with online privacy,
setting up your privacy phone,
we have a plan B residency option.
So all of your self-sovereignty needs, we've got you covered.
Again, go to thebitcoinway.com slash podcast.
You can schedule a time.
Until next time, stay safe, stay sovereign, and remember the yield on Bitcoin is freedom.