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Speaker 3: You can In Ireland, it can be hard to get

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enough vitamin D from the sun, but did you know

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that ninety percent of us also don't get enough vitamin

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D from the food we eat. Avim More super Milk

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is packed with goodness and fortified with vitamin D which

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can help you shine. Avan Moore super Milk a super

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source of calcium and vitamin D avan More make every

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day this good. Figures based on twenty twenty three f

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s a I.

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Speaker 4: Report meaning a live man like this man letting butterfly

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flapping his wing, dig down in the forest Man, it

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gonna cause a tree fall, letting five thousand miles away.

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Speaker 5: Man, nobody's seen.

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Speaker 4: Nobody who.

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Speaker 5: You don't need No, Man, we don't like you followed

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another story and you got ed like that. That's the win. Man,

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don't blackly down on the panel, man, Man don't matter.

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Speaker 6: Man, you know the stormy. It is actually quite difficult

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to record with you, not necessarily because of your scheduling

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or you know, don't have anything interesting to say, because

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I swear every time we do this, we end up

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talking for like half an hour before even get rolling

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about just completely unrelated things like goy beams and literary

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literally release release.

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Speaker 5: Oh man, it's all it's all true. It's good to

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be back. I wish one of these times we're gonna

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have to I'm gonna have to come on and talk

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about something positive. But today is not going to be

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that day.

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Speaker 6: Yeah, today is most certainly not that day.

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Speaker 5: Uh.

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Speaker 6: So we're going to talk about a couple of things.

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Inflation for one, uh but more generally kind of the

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all of the compounding issues from uh basically the Federal

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Reserve and setting interest rates. Right, there's a really interesting

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discussion to be had about Canada. That you know, we

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can get into in a little bit, but I think

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it's important to talk about this because if you've really

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heard anyone talk about this, who's outside of the band

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of normal people, right who depend on something other than

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assets for their daily living expenses. Sort of hard to

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bridge that golf, because what really prompted this discussion was

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a comment, you know, when you and I were going

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back and forth about this, where I just asked an

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open question of how much of the growth in the

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market since eight plus or minus is actually due to

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the market growing and how much of it is just inflation.

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Because in that conversation we were talking about the fact that

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really we've been in a recession of some type pretty

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much off and on ever since that we never really recovered.

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And I saw this happen in real time as I

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finished up college, where the Biden admin just changed the

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definition of what a recession was, so we magically weren't

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in a recession. It's magic words theory of economic analysis.

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But once I did some digging, and people will know this,

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this isn't the most esoteric knowledge, I realized that well,

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that exact exact same thing happens to inflation, right The

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way that it is measured is completely and totally contrived.

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So that was really the genesis of this conversation. And yeah, man,

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I'll kick it to your story.

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Speaker 5: All right. So if we take the SMP Composite Index,

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I have it up somewhere here, all right, the real return.

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So let's just say I think that what is the

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when you see what the overall adjusted or what the inflation?

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What the h we'll say the S and P andrew

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annual return for twenty twenty five, right, it was nine

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point three percent by year end, all right, so that's

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not great. But what's the actual rate of inflation? Well,

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I can tell you it's not two percent. You probably

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already know it's not two percent, right, so actual inflation? See,

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all right, it's just this is funny. This is funny.

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You know how you just said, like the Biden admin

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changed the definition of what a recession was, and everyone

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and we thought that was really funny. Everyone online joked

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about it. But what everyone didn't I guess didn't know

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or maybe knew a long time ago and forgot. The

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Federal Reserve has changed the rate at which it calculates

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inflation three or four times now since you've been born.

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So basically, when something is inconvenient, they just stop calculating it.

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So in nineteen eighty we used to factor things like

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housing costs, energy costs, healthcare into our inflation metric our CPI,

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and then in nineteen ninety we threw out two of

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those things, and in two thousand we threw out even

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more things. So now when we calculate inflation, the cost

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of housing is not included, the cost of houses not included,

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the cost of energy not included, the cost of health

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care not included, and they'll probably throw out groceries too,

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So maybe they'll just calculate inflation on, you know, the

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cost of streaming services. I don't fucking know. So if

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we were to calculate inflation on what inflation used to

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be calculated on, right, the nineteen eighty methodology is probably

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the most honest we've ever been. And if I look

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at that same inputs just calculated the way we used to,

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twenty twenty three was fifteen percent at sixteen percent inflation,

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twenty twenty four was twelve thirteen percent inflation. Right, it

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was at a steady ten percent a year from nineteen

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ninety three to twenty nineteen, So if you had one

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thousand dollars, let's say in twenty twenty, right, So something

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costs one thousand dollars, that thing from twenty twenty to

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twenty twenty six is now nineteen hundred dollars, right, which

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is a actual rate of inflation. Because these are lagging indicators,

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I hadn't do it forward, all right, So about fifteen

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percent a year has been the actual rate of inflation

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since twenty twenty to now. And that compounds like compound interest.

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This is the thing that everybody Boomers don't understand about inflation. Oh,

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boomers were lied to about everything. So when they say

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on the news that, oh, inflation is coming down, it's down,

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you know, down one percent. Inflation's coming down. That'd be

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like saying you have a fifteen percent interest mortgage and

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for one year I charged you fourteen percent. That's basically

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what it's saying. Inflation compounds just like interest, and the

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cumulative effects are kind of what boomers can't see. So

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when you talk about stock market returns, you can adjust

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them downwards for the inflation each year, but that doesn't

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really factor in the cut of inflation You've already got

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in there. So actual stock market returns. Right for the

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last I don't know, f S and P five hundred

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is ranged somewhere in between ten to fifteen, ten to

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seventeen percent, and now let's minus twelve percent out of

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that conservatively, and then you're looking at your real rate

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of return. So all this big stock market bubbles, Trump

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is talking about how the S and P five hundred

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is going to be at new highs, it's not. We're

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at zero percent actual returns. Maybe two percent returns, three

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percent returns the highest. So that means if you were

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to like, let's say you're investing, you now need to like,

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if you did twenty five percent returns that year, you

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would be very very happy. But you didn't actually do

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twenty five percent. You did a little bit more than ten.

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So in order for you to keep up, you have

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to earn fifteen to twenty percent just to tread water.

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And no one's earning fifteen to twenty percent a year.

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So even boomers with their stock market returns, those are

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all fake, right, It's just happening slowly to where they

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don't notice. They see their four to one k going

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up and the value of their house going up, but

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they don't compare that to the purchasing power. Right. So, like,

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let's say you're a boomer whose house doubled from twenty

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twenty two to twenty twenty four, which most of them did, well,

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the cost of everything doubled, right, That thousand dollars thing

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now costs nineteen hundred dollars. So even the boomers who

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are so scared about their housing costs, like their value

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of their house, they don't know that the value of

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their house hasn't increased at all. It's actually gone down.

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So inflation is so ubiquitous, it's kind of baked into

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everything that people don't notice it, right, or they don't

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notice to look at all aspects of their life. Right,

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So they see their stock market returns as separate from

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what happens to the value of the dollar they see

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they're housing their house, you know, price, as separate, and

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they're really all a function of the same thing. Right.

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The boomers really haven't made all that much money in

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real terms at all. So it makes the situation that

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the younger generation is put in significantly more damning because

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if you say, all right, boomer, you really actually haven't

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made that much money. All the money that you think

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you made has actually just been currency debasement. Okay, well,

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then what does that make the youngest generation, who's you know,

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quality of life has now you know, been admitted by everyone,

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it's going to be exponentially worse. Everyone thinks the boomers

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had it so much better. They did in certain aspects,

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but not since nineteen eighty they haven't. And most of

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the Boomer gains that we look at as gains happened

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after nineteen eighty. They've just been riding. They've basically been

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cheering on currency debasement, thinking they've been getting a pay raise.

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All of the cheap stuff that we talk about, like oh,

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you're able to buy a house at this price. You know,

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a single family could you know, be sustained off of

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one guy working a factory job. Not in nineteen eighty

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and certainly not since. So the time that people are

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really attributing to, like, you know, livable time was when

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the boomers were kids, right, like teenagers' early twenties like that.

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But what's gonna happen now, And this is what I

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kind of wanted to talk about is velocity of money,

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And no one really talks about velocity of money and

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velocity of money is probably just asn't. So when you

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ask a libertarian about inflation, he'll talk to you about

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the Federal Reserve and say a bunch of dumb shit.

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He doesn't understand. This is why Peter Shift is always wrong, right.

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He has no idea even now why the price of

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gold is going up because he's a fucking retard. Sorry,

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I really I shouldn't swear so much. But libertarians aren't

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factoring in velocity of money, right. They'll tell you how

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much money was printed, and oh, well, if you print

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this much money, of course this is you know, gonna

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is going to happen like inflation happens much much more

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from velocity of money. So the Trump government is going

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to try to tamp down inflation, even though he thinks

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he's going to be able to run it hot, just

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like he probably thought he could do everything for Israel

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and you know, win domestic politics. He's quickly finding out

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that's actually not the case. The admin is going to

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be forced to choose yet again, and by the person

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that he picked. All right, everyone is like kind of

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obsessed and like, oh, this guy is the son in

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law of the head of the world sign and his Council, Like, yes,

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this is also true, but he is a really big

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hawk as far as FED policy. So that means they're

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going to try and tamp down inflation, and they're going

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to do that with the only tool that they have,

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which is the interest rate, which generally works kind of Right,

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if I raise the interest rate, people borrow less money

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and they hold loans for less amount of time, and

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most of our money, right, most of the printing doesn't

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happen at the federal reserve. This is again why libertarians

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are fucking wrong about everything. All of the money printing

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happens in the banks because they're supposed to do that, right,

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So the treasure the Federals sells them treasury bonds at

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a certain rate, and then they take those treasury bonds

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and put them in their bank vaults, call them reserves,

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and they will lend against them, right, usually like ten

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to one. And it's the lending that they do, the

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issuing of mortgages things like that, that actually prints the money. Right.

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The money is printed by loans created off of those treasuries.

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The money isn't printed by the creation of treasuries.

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Speaker 6: Well, and Stormy, as I'm sure you're aware, during COVID,

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and it might still be the case. I haven't checked.

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Speaker 5: The reserve rate was dropped to zero, yes, yes, I

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was going to get to that even further, ridiculously increasing

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the amount of effective inflation. Yes. And then also this

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other thing happened, which are called non bank lenders, right,

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this is a new phenomenon. Like all of those like

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by now pay later apps that you've seen just explode everywhere.

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Those are lenders. They're printing money right like you're you know,

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I mean, let alone payment.

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Speaker 6: The explosion of digital consumer looks, you know, that's any

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one of these other kind of give knockoffs.

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Speaker 5: And also the sports betting people don't see sports betting

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as inflationary, and it very much is right because when

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someone is, you know, placing a bet at like ten

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to one odds, right, that's leverage because if you win,

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you expect to be paid that ten to one, don't you.

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It's no different than leverage. So the explosion of derivatives

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is another type of again lending. This is where the

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inflation actually comes from, that end velocity. So this new

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man is going to raise the interest rates very sharply,

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and I mean sharply. I don't think it'll be I

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don't think people give credit where credit is to Jerome Powell.

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Jerome Powell's a saint. The world economy existed on basically

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zero percent interest rates. The US had a negative interest

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rate for like ten years, right, because if the interest

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rate is two percent, but inflation is like a lot

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more than two percent, that means the interest rate is

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effectively negative. So the US has had negative interest rates

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for a very long time, which again created the explosion

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in lending, which is explosion in the monetary supply, which

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is why boomers think that they were getting rich but

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were actually just treading water themselves. They're easily fooled, those boomers.

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But he raised the interest rates from effectively negative interest

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rates to five percent during a fucking pandemic, all without

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a market crash, a credit where credit is due. Jerome

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Powell knows how to do his fucking job. And this

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guy is probably going to be as aggressive, if not

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more aggressive. So what happens when interest rates go up?

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People borrow less money, right, So that's how they that's

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how they're going to bring down inflation. Because don't get

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me wrong, Jerome Powell, over the course of raising those

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interest rates he basically zapped five trillion dollars with a

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goybeam and disintegrated it. Right, five trillion dollars disappeared by

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him raising interest rates. That's going to happen this time.

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Except what's also going to happen is the velocity of

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money is going to tank. We're already seeing it now.

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Every single person listening to this is probably agonizing over

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each and every expense that they have to make, and

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that means people are scared to spend money. And when

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people are desperate to save money and to spend as

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little as possible, the velocity of money goes down and

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the inflation goes up rapidly. Right, So, if velocity of

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money is high and money is changing hands and moving

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all around, its inflationary value is effectively zero. But if

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everyone yanks all the money out of the system right

283
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and tries to stuff it away and there's less money

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going around, counterintuitively, it makes things more expensive. It's just

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coming from it's just a demand side problem instead is

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a supply side problem. So they're going to create a

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demand side problem at the time when they go about

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trying to solve the supply side problem, and unfortunately they

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are taking They're using the one lever that is in

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their control to solve a problem and then create a

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problem that is in a domain where they do not

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have control. Because velocity of money is entirely psychological and

293
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macro effects based, right, So, like I say macro effects

294
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because if you are, you know, trying to agonize over

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all of your spending, trying to spend as little money

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as possible, you are reducing the amount of velocity of money.

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But if I also ship your job to India, I've

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effectively done the same thing. Well, and I've pulled your

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whole salary out of the money supply have to decrease

300
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the velocity of money by however much you used to

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make well.

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Speaker 6: And to that point, look, you know, I was never

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a highly compensated employee, right in the grand scheme of.

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Speaker 5: Things, incredibly undervalued, thank you.

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Speaker 6: That's a nice way to say perpetually unemployed. But what

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you would have is that jobs like that would have

307
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been a way to outpace or at the very least

308
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keep pace with inflation, relatively high compensation text advantaged ways

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to dump that money into the market. You don't need

310
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to get into that. That's a discussion for another day.

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And now obviously that's quite expensive for the firm, which

312
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is why they are they are offloading. But a problem

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which historically has been reserved for a working class and

314
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for young people, it's coming for your laptop job. Right

315
00:25:13,400 --> 00:25:16,359
you can't, I mean not everyone. I'm sure someone will,

316
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but the ability to out earn this is sort of

317
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going away. And unless you already have assets, because again,

318
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when you know, monetary velocity goes down, if you're a seller,

319
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you have to deeply, deeply discount whatever you're selling because

320
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people are you know, generally it's like, well I don't

321
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want to be giving up money, but this is such

322
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a good deal I can't say no to it. Well,

323
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even people who do have assets, well, sure they have

324
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an asset, that's good, they own that thing, But if

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they don't have the income to service that, to make

326
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their mortgage payment, they're going to get blown out of

327
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the water because the market for or most things is

328
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going to crash. And there are leading indicators of this,

329
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right yep. Buying in you know, assets like cars is

330
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way way down. Cars have been hit by inflation like crazy.

331
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Speaker 5: This is actually the perfect example. I'm glad you hate this.

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Speaker 6: This is a perfect.

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Speaker 5: Example of how demand can collapse but prices can still increase.

334
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Speaker 6: Exactly because you know, demand for new cars is, you know,

335
00:26:28,880 --> 00:26:32,359
way down. You've been reading stories about this really sense

336
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around twenty two to twenty three, but it sort of

337
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continued to pace. But one, well, the interest rates up,

338
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so your cost of lending is proportionally quite high. But

339
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also people are unlikely to dump something for more of

340
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a loss than they're comfortable with. So you just have

341
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in general incredibly low velocity of both money and of assets.

342
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Speaker 5: Bingo. This is why. SO housing is another thing I

343
00:27:07,720 --> 00:27:17,160
think we should talk about because the so I think

344
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I made a prediction a long time ago on maybe

345
00:27:21,000 --> 00:27:23,920
this show or others right, that the demand for housing

346
00:27:24,000 --> 00:27:30,799
was going to collapse just from demography and overall, you know,

347
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prevailing financial conditions. And I think we've seen a pullback

348
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in every major housing market in the country, and things

349
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still aren't selling, like literally nothing is selling. All of

350
00:27:48,839 --> 00:27:54,400
the boom states, right, Colorado, Texas, Florida are now the

351
00:27:54,440 --> 00:27:59,160
lowest transaction volume states in the country. The amount of

352
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real estate actions that have happened this year are half

353
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of what they were the year prior. Right, So fifty

354
00:28:11,440 --> 00:28:18,400
percent of demand just disappeared, and that's going to steadily increase,

355
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and the prices with those are going to go down briefly,

356
00:28:25,160 --> 00:28:27,000
and then the thing that Jay and I are talking

357
00:28:27,000 --> 00:28:31,559
about is going to go up. Right, So you're going

358
00:28:31,599 --> 00:28:34,400
to basically shake a bunch of people out of assets,

359
00:28:36,200 --> 00:28:38,720
and then those prices of those assets are going to balloon.

360
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It if you didn't want to set up a permanent

361
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underclass and you just happen to do it by accident,

362
00:28:53,440 --> 00:28:55,319
I don't think you could have come up with a

363
00:28:55,359 --> 00:28:59,720
better ide way of going about it. That you really

364
00:28:59,759 --> 00:29:07,799
can't it because the boomers they're going You're going to

365
00:29:07,839 --> 00:29:14,240
see a lot of properties literally rotting away because the

366
00:29:14,319 --> 00:29:18,920
boomers that lived in them died and their kids can't

367
00:29:18,960 --> 00:29:23,119
sell it because no one wants to buy it, and

368
00:29:23,160 --> 00:29:26,880
then no one can afford to buy it to move

369
00:29:26,920 --> 00:29:33,039
in it. Right, So you're going to have a housing

370
00:29:33,160 --> 00:29:36,279
problem at the same like you're going to have a

371
00:29:36,359 --> 00:29:40,039
housing problems in like cost of housing at the same

372
00:29:40,119 --> 00:29:44,680
time as you're going to have basically a ton of

373
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inventory empty everywhere, which you're starting to see now, so

374
00:29:52,160 --> 00:29:59,039
that there's very few things that that administratively can fix

375
00:29:59,119 --> 00:30:03,279
this without really like a total crash out, and I

376
00:30:03,319 --> 00:30:05,319
don't think that's what people are bracketing for.

377
00:30:06,359 --> 00:30:08,880
Speaker 6: Well, and this is the point that uh Mark Mitchell

378
00:30:09,160 --> 00:30:13,640
of Rasmussen, who's on my show not too long ago made,

379
00:30:14,799 --> 00:30:17,640
oh thank you. He made a really interesting post to Twitter.

380
00:30:18,640 --> 00:30:23,519
It was today or yesterday, relatively recently. Ree basically was

381
00:30:23,519 --> 00:30:26,519
was talking about a recent meeting he'd had with the

382
00:30:26,559 --> 00:30:30,039
President where he said, I went in there and I said,

383
00:30:30,359 --> 00:30:34,319
mister President, you need to crash the housing market. H

384
00:30:35,359 --> 00:30:39,559
That's that's an option. And he was basically saying He's

385
00:30:39,559 --> 00:30:41,000
like yeah, and I could tell no one had ever

386
00:30:41,039 --> 00:30:43,200
told him that before. And you see that in the

387
00:30:43,200 --> 00:30:46,160
messaging from the administration, right, He's he said, you know,

388
00:30:46,200 --> 00:30:49,079
I will do nothing that allows the value of housing

389
00:30:49,119 --> 00:30:49,680
to decrease.

390
00:30:50,759 --> 00:30:55,279
Speaker 5: Uh. Well, so we're not foreclosures are now hitting the

391
00:30:55,319 --> 00:31:01,640
full time. The foreclosers are now coming close in in commercial.

392
00:31:01,119 --> 00:31:04,960
Speaker 6: Real estate, right, this is like, I mean commercial real

393
00:31:05,039 --> 00:31:07,640
it's been screwed for six years.

394
00:31:07,440 --> 00:31:09,480
Speaker 5: Yes, but so has our housing market.

395
00:31:10,160 --> 00:31:13,559
Speaker 6: Well, and that's my point, right that you know, you

396
00:31:13,599 --> 00:31:17,440
could look at the situation and in uh you know,

397
00:31:19,440 --> 00:31:22,880
not corporate point is in kind of like business and

398
00:31:23,279 --> 00:31:26,480
real estate in twenty twenty and say this is never

399
00:31:26,559 --> 00:31:30,880
coming back, this is screwed. But it's taken more than

400
00:31:30,920 --> 00:31:34,680
half a decade for that to actually shake out. And yeah, sure,

401
00:31:34,680 --> 00:31:37,160
we're on a long enough time span. You know you

402
00:31:37,200 --> 00:31:39,440
can simply say, well, I'll stack cash and wait for

403
00:31:39,480 --> 00:31:40,759
the market at the bottom of the fall out of

404
00:31:40,799 --> 00:31:43,960
the market. But you need a place to lay it.

405
00:31:44,640 --> 00:31:47,920
And let's also acknowledge that you know that these same

406
00:31:48,000 --> 00:31:51,559
trends are hitting rent because someone is paying a mortgage

407
00:31:51,599 --> 00:31:54,480
on your apartment. I think someone is being forced to

408
00:31:54,519 --> 00:31:56,279
bear the higher cost of interest.

409
00:31:57,079 --> 00:32:00,279
Speaker 5: Like, sure, what do you what are you going to

410
00:32:00,319 --> 00:32:07,279
put that money into? You can say gold. Okay, everyone

411
00:32:07,359 --> 00:32:10,359
that says gold, are you gonna stuff your money in gold?

412
00:32:10,680 --> 00:32:15,000
Has never tried to liquidate gold, right, They have never

413
00:32:15,079 --> 00:32:18,640
tried to buy anything with it. Because when you go

414
00:32:18,759 --> 00:32:21,359
to buy something with gold, when you turn your gold

415
00:32:21,480 --> 00:32:24,880
into money again so you can make your purchase, you

416
00:32:24,920 --> 00:32:29,079
will be surprised to find out that no one's gonna

417
00:32:29,079 --> 00:32:35,319
buy it at whatever the spot price of gold is. Right,

418
00:32:35,480 --> 00:32:43,079
you will take a ten to twenty percent haircut. You

419
00:32:43,119 --> 00:32:46,279
can just go to Kickko and find out what the

420
00:32:46,279 --> 00:32:52,039
wholesale rates are for buying, and that's basically a global

421
00:32:52,039 --> 00:32:55,920
exchange or a national exchange. And you'd be like, wow,

422
00:32:57,559 --> 00:33:00,640
so basically I buy a thing for this price and

423
00:33:00,680 --> 00:33:02,759
no one will buy it for me. No one will

424
00:33:02,759 --> 00:33:08,599
buy it for me quickly for the same price. Well

425
00:33:08,599 --> 00:33:13,359
that's bullshit, Yes it is, Yes, it is bullshit, right,

426
00:33:14,119 --> 00:33:21,960
because when you are the seller, you either have two options.

427
00:33:22,799 --> 00:33:25,640
You could either just run around and ask everyone you

428
00:33:25,720 --> 00:33:29,440
know to come buy a piece of bullying off you

429
00:33:29,559 --> 00:33:32,680
the guy, when they could just buy it from like

430
00:33:33,680 --> 00:33:36,279
a place that actually sells gold. Like so just do

431
00:33:36,359 --> 00:33:40,880
you trust the stranger on Craigslist? No, you just buy

432
00:33:40,920 --> 00:33:45,640
it from the people that sell gold, or you try

433
00:33:45,640 --> 00:33:49,160
and have or you're forced to sell it to them

434
00:33:49,200 --> 00:33:52,440
and they're not buying it back for full fare. So

435
00:33:52,480 --> 00:33:54,000
all of the people that say like, oh, well, I'm

436
00:33:54,000 --> 00:33:55,920
just going to just keep all my money in gold,

437
00:33:56,119 --> 00:33:59,000
well great, try and turn that into money when you

438
00:33:59,039 --> 00:34:03,359
need to buy a house. Tell me how much money

439
00:34:03,400 --> 00:34:04,400
you saved.

440
00:34:05,480 --> 00:34:09,199
Speaker 6: I mean, let alone the storage of transport issues. Right. Yeah,

441
00:34:09,960 --> 00:34:14,360
I actually do know someone who everybody does a piece

442
00:34:14,360 --> 00:34:21,000
of land with a quote Suzuku's Jimmy worth of silver bullion. Uh,

443
00:34:21,039 --> 00:34:24,039
but you know, One it was the seventies, and two

444
00:34:24,960 --> 00:34:26,920
it's in Baltimore. You really want to go to Baltimore

445
00:34:26,920 --> 00:34:27,519
to pick that up?

446
00:34:28,119 --> 00:34:33,840
Speaker 5: Uh? Try driving through Baltimore now with the Suzuki samurais

447
00:34:33,880 --> 00:34:37,679
full of silver silver dollars. Well.

448
00:34:37,880 --> 00:34:43,320
Speaker 6: Uh, he did describe remembering his dad with an open

449
00:34:43,360 --> 00:34:48,280
bolt with an open bolt transferable uzzi. Uh, so you

450
00:34:48,320 --> 00:34:50,159
know that's how you do that.

451
00:34:50,320 --> 00:34:50,880
Speaker 5: Yeah, it was.

452
00:34:51,000 --> 00:34:52,079
Speaker 6: It's a pretty cool story.

453
00:34:52,360 --> 00:34:54,679
Speaker 5: Uh. Yeah. But the less if you can do this,

454
00:34:55,039 --> 00:34:58,199
you and if a person is in the position to

455
00:34:58,480 --> 00:35:04,880
drive a Zuki Samurai full of silver bullion at the

456
00:35:04,920 --> 00:35:12,280
same time as you know, wielding or having holstered an

457
00:35:12,280 --> 00:35:16,360
open bolt, fully automatic uzzi and drive through the hood

458
00:35:16,360 --> 00:35:19,679
of Baltimore, if anyone is able to do this, you

459
00:35:19,760 --> 00:35:22,920
are like duty bound to do this. Well.

460
00:35:23,000 --> 00:35:25,199
Speaker 6: Also, like, if you're that cool, what do you taking

461
00:35:25,199 --> 00:35:29,159
advice from us for? Right, You've obviously got you've got

462
00:35:29,199 --> 00:35:31,920
other plans. Uh.

463
00:35:31,760 --> 00:35:34,559
Speaker 5: Yeah, Land is actually a good thing. Land is better

464
00:35:34,599 --> 00:35:35,039
than gold.

465
00:35:36,480 --> 00:35:43,239
Speaker 6: So one other thing, Stormy. Uh. One of the things

466
00:35:43,280 --> 00:35:46,000
that that you talked about when when you and I

467
00:35:46,039 --> 00:35:50,280
were on the phone is that this problem is not

468
00:35:51,239 --> 00:35:57,000
unique to America. You're the one's making this this decision.

469
00:35:57,599 --> 00:36:00,920
But you know, as you said, right, the Fed coughs,

470
00:36:00,960 --> 00:36:04,840
the world catches a cold, and specifically you were talking

471
00:36:04,880 --> 00:36:09,239
about the nation of Canada, which I'll be honest, man,

472
00:36:09,280 --> 00:36:13,199
I am sort of equal parts disturbed and amazed by

473
00:36:13,519 --> 00:36:16,679
the Nation of Canada. Nothing to do with you Canadians listening.

474
00:36:16,679 --> 00:36:21,880
You're great, particularly if you give me money. But maybe

475
00:36:21,880 --> 00:36:25,800
we could examine that as one example of how this

476
00:36:25,960 --> 00:36:30,239
causes issues for other people than just kind of normal working.

477
00:36:29,960 --> 00:36:34,159
Speaker 5: Americans, and Canada is actually a very good case study

478
00:36:34,360 --> 00:36:39,559
of how this could shake out, right, which obviously isn't great.

479
00:36:40,760 --> 00:36:49,719
So Canadians have a couple problems. So one, well, you

480
00:36:49,719 --> 00:36:52,519
guys have lots of problems. But let's just take the

481
00:36:52,559 --> 00:36:58,079
Canadian real estate market, right, So Canada basically exported all

482
00:36:58,119 --> 00:37:02,880
of its production capacity, right, the ability to make things right.

483
00:37:02,920 --> 00:37:07,480
The regulators have made it impossible to you know, start

484
00:37:07,559 --> 00:37:12,079
up a thing to make things Agriculture is basically regulated

485
00:37:12,119 --> 00:37:15,400
all to hell. Energy is regulated all to hell, and

486
00:37:15,480 --> 00:37:18,519
it doesn't really make a lot of money just as

487
00:37:18,559 --> 00:37:23,920
a nation. So that's gonna I'm gonna come back to

488
00:37:23,960 --> 00:37:26,320
that in a second, and that's going to be important.

489
00:37:27,480 --> 00:37:35,559
So Canada has had a real estate boom bigger than ours. Right,

490
00:37:35,639 --> 00:37:39,440
So as much as people are upset about what's happened

491
00:37:39,440 --> 00:37:43,000
to us real estate prices, you should just be thankful

492
00:37:43,000 --> 00:37:47,039
you're not in Canada, right, because Canada real estate prices

493
00:37:47,480 --> 00:37:52,519
have I mean literally like quadrupled in ten years more.

494
00:37:54,360 --> 00:38:02,079
And if you're in an economy where nothing makes money

495
00:38:02,719 --> 00:38:08,000
but housing is shooting through the roof, what do you

496
00:38:08,039 --> 00:38:15,039
put your money in housing? Right? And so much so

497
00:38:16,360 --> 00:38:22,960
that forty percent of Canadians right have either a small

498
00:38:23,400 --> 00:38:29,400
or a large chunk of their savings, like their retirement

499
00:38:29,440 --> 00:38:36,840
savings in real estate trusts right, or real estate investment

500
00:38:36,880 --> 00:38:41,679
companies right, real estate funds because real estate was the

501
00:38:41,679 --> 00:38:46,360
only thing making any money on paper. Right, The only

502
00:38:46,400 --> 00:38:50,679
thing going up in the Canadian stock market was real

503
00:38:50,800 --> 00:38:52,960
estate funds. Because the only thing going up in Canada

504
00:38:54,239 --> 00:39:00,519
was real estate. And they have a real problem. Well,

505
00:39:00,639 --> 00:39:02,960
you can tell that they have a real problem because

506
00:39:03,000 --> 00:39:07,840
the five biggest real estate investment funds over the last

507
00:39:07,840 --> 00:39:15,920
two years have all suspended redemptions. Right. So a fund

508
00:39:16,000 --> 00:39:24,639
suspending redemptions is like your bank account suspending withdrawals. It's

509
00:39:24,679 --> 00:39:29,800
not a good sign. Right, They're basically saying investors can't

510
00:39:29,840 --> 00:39:33,960
take their money out. So now that forty percent of

511
00:39:34,000 --> 00:39:37,760
Canadians that have their and most of it not even

512
00:39:37,760 --> 00:39:40,559
to their knowledge. Right, there's a whole bunch of these

513
00:39:40,599 --> 00:39:45,039
bullshit money market funds like these black Rock ETFs and

514
00:39:45,400 --> 00:39:49,159
dumb shit like that and automatic you know, basically automated

515
00:39:49,440 --> 00:39:52,559
four oh one k investment machines, right, because that's really

516
00:39:52,599 --> 00:39:55,239
what it is like if you have Blackrock or Vanguard

517
00:39:55,360 --> 00:39:58,320
manage your four oh one k retirement savings, it's just

518
00:39:58,360 --> 00:40:02,559
a really retarded and I mean it's literally right compared

519
00:40:02,599 --> 00:40:04,360
to like what a lot of the hedge fund guys

520
00:40:04,360 --> 00:40:08,440
are running. The algorithm that decides what stocks your four

521
00:40:08,480 --> 00:40:13,039
oh one k buys has literal down syndrome, right, It's

522
00:40:13,079 --> 00:40:19,360
the most unintelligent, you know, robot ever and it just

523
00:40:19,400 --> 00:40:23,679
basically throws you into whatever is moving or whatever is

524
00:40:24,480 --> 00:40:28,440
anyways it's done. So most Canadians probably don't even know

525
00:40:28,480 --> 00:40:33,320
that their money is in these real estate funds, so

526
00:40:33,360 --> 00:40:38,480
they don't know that their money is locked in them, right,

527
00:40:39,159 --> 00:40:41,880
the algorithm can't trade out of them because they can't

528
00:40:41,880 --> 00:40:47,320
get their money out. But you know, unless you are

529
00:40:47,480 --> 00:40:51,920
like Hawke eyed on your four oh one K. You're

530
00:40:51,920 --> 00:40:56,000
not going to know this is an issue, right. Mostly

531
00:40:56,039 --> 00:40:59,280
it's the individual private investors that are screaming about it.

532
00:41:01,239 --> 00:41:06,599
So they built a fuck tone of housing because it

533
00:41:06,639 --> 00:41:10,920
was making a lot of money. Right, A literal garage

534
00:41:11,760 --> 00:41:18,039
in Vancouver or Toronto, a literal one bedroom garage, not

535
00:41:18,119 --> 00:41:21,239
even like a fucking condo. A garage that has been

536
00:41:21,320 --> 00:41:24,239
turned into a garage or sorry, turned from a garage

537
00:41:24,280 --> 00:41:28,639
into a tiny home will cost you almost a million dollars.

538
00:41:30,039 --> 00:41:35,880
So everyone obviously was in the garage building business. Like

539
00:41:35,920 --> 00:41:38,760
you can pay a million dollars for a shack, okay,

540
00:41:40,400 --> 00:41:44,679
and a Canadian may not live in a shack, but

541
00:41:44,800 --> 00:41:48,760
in you know, five Indians will. So they had plenty

542
00:41:48,760 --> 00:41:53,239
of people to sell them to, which all sounds just

543
00:41:53,519 --> 00:42:00,800
shitty but fine, except for the fact that in Canada,

544
00:42:01,039 --> 00:42:04,039
and as an American, we are going to find this

545
00:42:04,239 --> 00:42:09,360
incredibly unjust because like we we have a concept of like,

546
00:42:09,440 --> 00:42:13,159
if you make a deal with somebody, you make a deal, right,

547
00:42:13,199 --> 00:42:16,239
and the terms that you agree upon are the terms.

548
00:42:17,760 --> 00:42:21,519
But in Canada that's not the case. So if you

549
00:42:21,559 --> 00:42:27,360
have a mortgage, you don't A fixed rate mortgage is

550
00:42:27,400 --> 00:42:31,320
something that doesn't exist in Canada. Right, it is an

551
00:42:31,320 --> 00:42:35,320
adjustable rate mortgage that you have to renegotiate every year,

552
00:42:35,719 --> 00:42:40,760
or sorry, every three years, from what I understand, and

553
00:42:42,039 --> 00:42:48,480
that means if interest rates go up, when you go

554
00:42:48,599 --> 00:42:55,039
to renegotiate that mortgage rate, your payment it. Basically it's

555
00:42:55,079 --> 00:42:57,039
the same exact thing that blew up the housing market

556
00:42:57,079 --> 00:43:02,960
in two thousand and eight, those adjustable rate mortgages. Because

557
00:43:03,039 --> 00:43:06,280
for the last thirty years of them dishing out these mortgages,

558
00:43:06,800 --> 00:43:10,000
the interest rate hasn't moved more than like one percent

559
00:43:10,119 --> 00:43:14,079
up and down in either direction, right, like half a

560
00:43:14,159 --> 00:43:18,039
point a quarter of a point. But in the last

561
00:43:18,039 --> 00:43:24,320
five years, especially the last three years, interest rates have

562
00:43:24,360 --> 00:43:27,920
gone up a hell of a lot more. And I'll

563
00:43:27,960 --> 00:43:33,400
talk about that last, right, Well, sixty percent of those

564
00:43:33,400 --> 00:43:37,840
mortgages are going to renegotiate this year. And if anyone's

565
00:43:37,880 --> 00:43:40,719
been checking what has been happening in the Anglo sphere,

566
00:43:41,159 --> 00:43:45,920
right as the as the FED raises interest rates slightly, right,

567
00:43:45,920 --> 00:43:51,719
this is to your point about the world catching a cold, right, bank,

568
00:43:51,880 --> 00:43:57,079
let's take at the Bank of Canada. Now, I'm now

569
00:43:57,079 --> 00:43:58,880
going to be specific because I don't want to piss

570
00:43:58,920 --> 00:44:14,800
off any Canadians. M hmm, okay, yeah, bond yields. We'll

571
00:44:14,800 --> 00:44:19,760
say the five year government all right, let me see.

572
00:44:20,360 --> 00:44:32,119
Oh yeah, So across the anglosphere, interest rates on government debt,

573
00:44:33,519 --> 00:44:38,519
which is basically where your interest rate from your mortgage

574
00:44:38,559 --> 00:44:49,960
is calculated, is has been on a tear lately. And

575
00:44:50,320 --> 00:44:54,239
here I will I will take a little screenshot and

576
00:44:54,239 --> 00:44:58,159
then we can look at this chart together. All right,

577
00:44:58,239 --> 00:45:07,960
So mortgage is are basically calculated off I believe. I

578
00:45:08,000 --> 00:45:12,400
don't know if it is the because in the US

579
00:45:13,400 --> 00:45:16,239
mortgages are calculated off the five year and the ten year,

580
00:45:17,760 --> 00:45:21,679
but I think Canada is roughly similar. I think it's

581
00:45:22,079 --> 00:45:25,119
I think it no, sorry, it's it's capted in the

582
00:45:25,159 --> 00:45:27,079
ten year, in the thirty year. I think with Canada

583
00:45:27,119 --> 00:45:31,280
it's the same thing. But the interest rates across the

584
00:45:31,320 --> 00:45:38,760
anglosphere are just stacking up very very quickly. And for

585
00:45:38,960 --> 00:45:47,239
like a for a government bond to move a quarter

586
00:45:47,320 --> 00:45:53,760
of a percent, right, a tenth of a percent in yield, right,

587
00:45:53,800 --> 00:45:56,199
So interest rate basically right, So the interest rate that

588
00:45:56,239 --> 00:46:00,639
the government pays on its debt, if you're a bond holder, right,

589
00:46:01,559 --> 00:46:08,079
that is yield to you. So in February twenty twenty five.

590
00:46:08,159 --> 00:46:14,039
The interest rate on government bonds in Canada right on

591
00:46:14,159 --> 00:46:21,880
the ten year was two point nine percent. It's now

592
00:46:22,280 --> 00:46:27,800
up a point in a year, which is a very

593
00:46:27,920 --> 00:46:32,280
very very big deal, and it's projected to go up

594
00:46:32,320 --> 00:46:36,880
another point by the end of this year. Right, so

595
00:46:37,079 --> 00:46:44,840
two percent on government debt is going to basically shake

596
00:46:44,880 --> 00:46:49,679
out to like a four percent at the time that

597
00:46:50,519 --> 00:46:52,159
it shakes out at. I mean, what is it. What

598
00:46:52,280 --> 00:46:54,400
is a mortgage rate right now? Seven percent?

599
00:46:55,239 --> 00:46:58,000
Speaker 6: Yeah, it's pretty punishing, but I mean, in story.

600
00:46:57,800 --> 00:47:00,639
Speaker 5: The FED rates only four and a quarter, so that

601
00:47:00,679 --> 00:47:03,760
extra two points comes from the banks off of the

602
00:47:03,800 --> 00:47:06,360
government interest rate. So if the government interest rate goes

603
00:47:06,440 --> 00:47:10,760
up two percent, when they go to negotiate that mortgage

604
00:47:11,360 --> 00:47:13,960
at the end of this year, sixty percent of them

605
00:47:14,400 --> 00:47:18,519
it's going to be three or four percent higher than

606
00:47:18,559 --> 00:47:23,199
whatever it is they're paying now, and in you know,

607
00:47:23,519 --> 00:47:29,440
in mortgage terms, four percent. I mean to give you

608
00:47:29,440 --> 00:47:32,559
an example, I went, I was looking to buy a

609
00:47:32,679 --> 00:47:36,639
house in twenty twenty one, and I knew the stock

610
00:47:36,679 --> 00:47:40,920
market was going to crash, and I knew that every

611
00:47:40,960 --> 00:47:45,639
time the stock market crashes, the FED drops interest rates

612
00:47:45,719 --> 00:47:48,360
to basically zero. So I'm like, all right, cool, all

613
00:47:48,400 --> 00:47:52,320
the people buying houses are buying them in cash, but

614
00:47:52,440 --> 00:47:56,400
basically cash that's borrowed against their stock portfolio. Stock portfolio

615
00:47:56,519 --> 00:47:59,719
gets you know, a thirty percent haircut. Nobody will be

616
00:47:59,719 --> 00:48:04,760
buying houses for cash anymore, which was correct. What I

617
00:48:04,800 --> 00:48:10,119
didn't see is the FED, for the first time in history,

618
00:48:10,920 --> 00:48:15,920
raising interest rates into a stock market crash. So I

619
00:48:16,000 --> 00:48:19,199
was looking at I think the hom I was looking

620
00:48:19,239 --> 00:48:23,679
at was one in three quarter million, and the mortgage

621
00:48:23,719 --> 00:48:28,239
payment on the amount that was going to finance was

622
00:48:28,320 --> 00:48:33,679
roughly like four grant for grand a month. The interest

623
00:48:33,760 --> 00:48:36,719
rate going up, the FED interest rate going up one

624
00:48:36,760 --> 00:48:40,840
in three quarter points made the mortgage rate go up

625
00:48:40,960 --> 00:48:45,920
to point nine points, and that two point nine point

626
00:48:46,039 --> 00:48:53,679
difference turned a four thousand dollars payment into a eighty

627
00:48:53,679 --> 00:49:04,519
five hundred dollars payment, same amount borrowed, same term, two

628
00:49:04,559 --> 00:49:14,119
percent increase, the payment doubles. So the people in Canada,

629
00:49:14,199 --> 00:49:19,039
sixty percent of them, are going to have their mortgage rate,

630
00:49:19,039 --> 00:49:22,920
their mortgage payments double. And this is why the real

631
00:49:23,000 --> 00:49:32,320
estate funds are freezing redemptions. Because another scary thing is

632
00:49:32,360 --> 00:49:37,440
that Canada doesn't do gibbs like we do gibs. Canada

633
00:49:38,000 --> 00:49:41,920
just puts them on the payroll. So some retarded number,

634
00:49:42,039 --> 00:49:49,519
like almost forty percent of Canadians are employed by the

635
00:49:49,519 --> 00:49:53,400
federal government, like their government, right, So rather than just

636
00:49:53,800 --> 00:49:58,079
hand them free money, they just hand them bullshit jobs.

637
00:49:59,719 --> 00:50:05,920
So if you're a government employee, you're kind of on

638
00:50:06,000 --> 00:50:11,679
a fixed salary. So if your mortgage payment doubles, you're

639
00:50:11,719 --> 00:50:16,480
going to lose your fucking house. That's all I wanted

640
00:50:16,519 --> 00:50:22,280
to say. And if you know a third of your

641
00:50:22,280 --> 00:50:27,320
economy is real estate speculation, that's going to be really

642
00:50:27,360 --> 00:50:31,679
bad for you or sorry for your economy. Like Canada

643
00:50:31,760 --> 00:50:35,000
is going to get a two thousand and eight, but

644
00:50:35,159 --> 00:50:41,639
only after it restructured its entire economy around housing. So

645
00:50:41,719 --> 00:50:45,679
two thousand and eight is bad. But the US did

646
00:50:45,719 --> 00:50:51,639
not structure its entire economy around housing before the crash.

647
00:50:52,039 --> 00:50:56,800
Canada has restructured its entire economy around real estate, and

648
00:50:57,159 --> 00:51:00,280
it's going to have a real estate blow up. Gonna

649
00:51:00,280 --> 00:51:03,480
be really bad.

650
00:51:04,400 --> 00:51:08,480
Speaker 6: So before we went live, so to speak, you mentioned

651
00:51:08,880 --> 00:51:11,360
that one of the things you really want to do

652
00:51:12,599 --> 00:51:17,599
is not simply offer analysis, right, offer some sort of

653
00:51:18,239 --> 00:51:21,880
viable alternative or viable path. I realized you You've been

654
00:51:22,119 --> 00:51:27,960
quite a grim picture here, So to be honest, like,

655
00:51:27,960 --> 00:51:28,719
what should people do?

656
00:51:29,559 --> 00:51:35,920
Speaker 5: Okay, So the only time you can really make if

657
00:51:36,360 --> 00:51:39,159
if everything is going according to plan, no one can

658
00:51:39,239 --> 00:51:44,840
make any money, right, So, like, if the stock market

659
00:51:45,360 --> 00:51:49,400
is just steadily crawling up every single quarter, just up

660
00:51:49,440 --> 00:51:51,320
and up and up, and you're on the bottom of

661
00:51:51,400 --> 00:51:55,320
the ladder, you're never going to be able to climb

662
00:51:55,400 --> 00:51:58,559
that ladder because everybody else is also you know, all

663
00:51:58,599 --> 00:52:01,079
the people above you are also you know, moving on

664
00:52:01,239 --> 00:52:04,920
up faster because they have more money compounding. Right. The

665
00:52:04,960 --> 00:52:08,360
only way a person can move up in the economy

666
00:52:09,039 --> 00:52:14,920
is when other people fall down. So we're talking about

667
00:52:14,920 --> 00:52:21,320
something that is ostensibly very scary, but it is also

668
00:52:21,440 --> 00:52:26,559
a chance for people to move themselves up. Right. So

669
00:52:27,559 --> 00:52:32,239
they price options all right, How much an option costs

670
00:52:33,840 --> 00:52:38,280
is a function of how much volatility is. And if

671
00:52:38,840 --> 00:52:43,440
volatility is very very high, right, the cost of that

672
00:52:43,519 --> 00:52:48,000
option is going to be equally high, right, because they

673
00:52:48,000 --> 00:52:54,760
are pricing the chance of you know, the assets swinging

674
00:52:54,800 --> 00:52:59,000
in either direction very aggressively. Right, They're trying to cover

675
00:52:59,039 --> 00:53:06,920
their ass So with people, right, that volatility is where

676
00:53:06,960 --> 00:53:12,760
you make money. You can't make any money if everything

677
00:53:12,800 --> 00:53:17,000
goes according to plan. You need volatility. If there is

678
00:53:17,039 --> 00:53:22,840
no volatility, then there's no gains to be had right

679
00:53:22,880 --> 00:53:27,840
when everything goes So how people should see this is

680
00:53:29,079 --> 00:53:36,119
imagine if you knew that certain parts of the economy

681
00:53:37,719 --> 00:53:40,800
are going to be really bad for people that have

682
00:53:40,880 --> 00:53:44,519
their money in certain things, or how they position themselves

683
00:53:44,599 --> 00:53:53,360
according or how they position themselves, right, Because what's a

684
00:53:53,360 --> 00:54:01,519
good way of putting it. How is that I'm trying

685
00:54:01,519 --> 00:54:03,199
to think because there's a lot of people that just

686
00:54:03,320 --> 00:54:08,880
straight up don't have any assets at all, right, But

687
00:54:08,920 --> 00:54:13,599
if you have some assets, and I'll probably get a

688
00:54:13,599 --> 00:54:19,480
lot of criticism for this, but I hold a lot

689
00:54:19,519 --> 00:54:24,960
of bitcoin and everyone is like, oh, well, bitcoin went

690
00:54:25,119 --> 00:54:28,960
down a whole bunch, like it always does, but it

691
00:54:29,000 --> 00:54:35,360
provides me liquidity, right, and it basically runs in much

692
00:54:35,360 --> 00:54:42,000
of the same mechanisms. Mine is the volatility as golden

693
00:54:42,039 --> 00:54:45,599
silver does, but it allows a lot faster liquidity. Right.

694
00:54:45,679 --> 00:54:50,719
This is why JP morgan is is allocating a lot

695
00:54:50,719 --> 00:54:56,960
of money to crypto, specifically bitcoin, not you know, ethereum

696
00:54:57,039 --> 00:55:04,039
or whatever has been doing the same thing they bought

697
00:55:04,119 --> 00:55:09,440
all the way down. In any type of really inflationary environment,

698
00:55:11,440 --> 00:55:18,079
you're going to see things that have liquidity and store

699
00:55:18,119 --> 00:55:26,599
of value become everyone's favorite assets. So how do you

700
00:55:26,639 --> 00:55:31,159
deal with a hyperinflationary or sorry, an inflationary environment. You

701
00:55:31,199 --> 00:55:38,760
buy assets? Okay, what else can you buy? You buy commodities, right,

702
00:55:38,800 --> 00:55:45,199
and the commodity cycle is just now starting. Land is

703
00:55:45,199 --> 00:55:50,760
a commodity, especially agricultural land is a commodity, and it's

704
00:55:50,920 --> 00:55:56,159
one of the things that our economy has grossly underpriced

705
00:55:56,199 --> 00:56:00,840
for a tremendous amount of time. Right, you don't actually

706
00:56:00,920 --> 00:56:05,000
have to go plant crops. You can literally just lease

707
00:56:05,039 --> 00:56:10,960
the land out to farmers. So the income generation is

708
00:56:11,039 --> 00:56:15,280
kind of like sticking a renter somewhere like you were

709
00:56:15,280 --> 00:56:20,440
talking about, like, oh well, you know, even if no

710
00:56:20,480 --> 00:56:23,960
matter what happens to rents, there's somebody behind that renter

711
00:56:24,159 --> 00:56:29,320
has to be paying that mortgage. Right. So land is

712
00:56:29,360 --> 00:56:33,440
something that is infinitely more liquid than gold is without

713
00:56:33,480 --> 00:56:39,920
the haircut. Right, it's different than housing. People should recognize

714
00:56:39,920 --> 00:56:45,840
that commodities. If you want something that is publicly traded

715
00:56:45,920 --> 00:56:50,079
that you can slide into and out of, right, turn

716
00:56:50,159 --> 00:56:56,039
to money very very quickly. People need to focus heavily

717
00:56:56,079 --> 00:57:00,360
on commodities because you're basically facing a one to an

718
00:57:00,360 --> 00:57:05,679
eighty year commodity supercycle. That's a whole separate podcast. But

719
00:57:08,039 --> 00:57:13,360
there is specific types of assets where a lot of

720
00:57:13,400 --> 00:57:16,480
this stuff will pass you by and that have been

721
00:57:16,519 --> 00:57:20,000
grossly underpriced. Because the thing that we've had in this

722
00:57:20,079 --> 00:57:25,000
hyperinflationary environment is which medical amount of capital concentration? Right?

723
00:57:27,320 --> 00:57:30,599
Not only is there a metric fuck ton of money,

724
00:57:31,480 --> 00:57:34,199
but the metric fuck ton of money is all concentrated

725
00:57:34,920 --> 00:57:40,480
in very specific things, right, which in my opinion is

726
00:57:40,559 --> 00:57:43,239
very very dumb things. Right. And it seems that the

727
00:57:43,280 --> 00:57:45,920
market's kind of thinking it's dumb too, which is nice

728
00:57:46,559 --> 00:57:50,639
because software companies are basically falling apart right now as

729
00:57:50,679 --> 00:57:53,719
far as the stocks, and you're seeing all of that

730
00:57:53,880 --> 00:58:00,199
money have to go into things like small caps, into commodities, right.

731
00:58:00,280 --> 00:58:04,559
So as money bleeds out of these balloon industries, these

732
00:58:04,559 --> 00:58:08,559
balloon sectors, it's going to reprice a lot of other things.

733
00:58:09,599 --> 00:58:12,800
But basically, getting yourself on the ladder board should be

734
00:58:12,920 --> 00:58:19,239
the most important thing, whether it is assets in public markets,

735
00:58:19,679 --> 00:58:25,920
whether it is real estate. In terms of land, I

736
00:58:25,920 --> 00:58:29,079
wouldn't want to be I wouldn't want to be flipping

737
00:58:29,079 --> 00:58:32,639
homes right now, right, But land is also something that

738
00:58:32,800 --> 00:58:35,039
people can afford, right, it's not something that they're priced

739
00:58:35,039 --> 00:58:39,039
out of. Right, Land is infinitely cheaper than the house

740
00:58:39,079 --> 00:58:42,920
that you put on it, but now nobody wants that house.

741
00:58:43,760 --> 00:58:48,079
So for people with no money, they need to be

742
00:58:48,119 --> 00:58:51,840
skill stacking. I mean I'd almost have to really think

743
00:58:51,880 --> 00:58:57,960
about it for like some time to basically tell the

744
00:58:58,000 --> 00:59:01,519
person without any money, you know how they need to

745
00:59:01,559 --> 00:59:06,760
position themselves. But for a person with even a small

746
00:59:06,760 --> 00:59:11,639
amount of money, you have a chance to get it

747
00:59:11,760 --> 00:59:20,719
right in a way that will not necessarily set you up,

748
00:59:22,159 --> 00:59:25,480
but put you on a ladder where you otherwise wouldn't.

749
00:59:25,880 --> 00:59:28,000
Like a good example of this would be like after

750
00:59:28,000 --> 00:59:34,800
two thousand and eight, I was sitting at my kitchen

751
00:59:34,840 --> 00:59:37,079
table with my dad. I had just gotten out of college,

752
00:59:39,599 --> 00:59:44,159
and like this was it was like two thousand and nine,

753
00:59:44,239 --> 00:59:47,159
so the crash was like in full swing and my

754
00:59:47,280 --> 00:59:53,039
dad is sitting there and he's like, if you had

755
00:59:53,719 --> 00:59:59,280
an extra hundred thousand dollars right sitting around, like would

756
00:59:59,320 --> 01:00:06,760
you buy GM Ford and Bank of America? And I

757
01:00:06,800 --> 01:00:10,119
mean these stocks where I think Bank of America I was,

758
01:00:11,440 --> 01:00:16,760
I always get it wrong, but these stock were dollar

759
01:00:17,320 --> 01:00:23,719
like single digit and low double digits. I mean it

760
01:00:23,719 --> 01:00:27,440
looked like they were going to go bankrupt. Nobody knew.

761
01:00:27,760 --> 01:00:31,000
And there was a series of three or four stocks

762
01:00:31,039 --> 01:00:37,679
my dad asked me about and I basically pussied out.

763
01:00:38,000 --> 01:00:40,400
I said like, oh no, like you know, I did

764
01:00:40,559 --> 01:00:43,039
the typical dum or take. I was like, oh no,

765
01:00:43,239 --> 01:00:45,559
we just saw bear Stearns go bankrupt. There's a good

766
01:00:45,639 --> 01:00:49,800
chance Bank of America could go bankrupt. You know, FOURD

767
01:00:49,800 --> 01:00:53,000
and GM. It kind of looks like it's over for Ford,

768
01:00:53,239 --> 01:00:56,480
and it really looks like it's over for GM. And

769
01:00:56,599 --> 01:00:58,639
there was one other stock. I can't remember what it was,

770
01:01:00,800 --> 01:01:07,840
But if I had told him to buy that those stocks,

771
01:01:09,599 --> 01:01:12,199
I can't remember. I did the math once and it

772
01:01:12,239 --> 01:01:17,559
would have been something like fifteen million bucks. So in

773
01:01:17,599 --> 01:01:22,679
a crash, you have a chance to buy things at

774
01:01:22,719 --> 01:01:27,920
fire sale prices. Basically, a whole bunch of investment bankers,

775
01:01:29,000 --> 01:01:33,079
you know, fell off the ladder, and all of a sudden,

776
01:01:33,119 --> 01:01:37,519
all of these rungs opened up. A lot of people

777
01:01:38,559 --> 01:01:41,920
made a lot of money coming out of the Great

778
01:01:42,000 --> 01:01:45,599
Financial Crisis that never would have been able to make

779
01:01:45,639 --> 01:01:49,320
any money if anything had just gone on the way

780
01:01:49,360 --> 01:01:53,400
things always go. And people should look at it. If

781
01:01:53,440 --> 01:01:56,960
you're not on top a crash is the best thing

782
01:01:57,000 --> 01:02:01,960
that can happen to you. I mean, inflation's going to suck,

783
01:02:02,800 --> 01:02:06,440
but there's ways of mitigating inflation. I'll let people, you know,

784
01:02:07,000 --> 01:02:11,480
research various ways to basically, you know, I can't help

785
01:02:11,519 --> 01:02:14,239
you make groceries cheaper, but if you've got a couple

786
01:02:14,360 --> 01:02:17,079
hundred grand that you're trying to keep away from inflation,

787
01:02:17,280 --> 01:02:20,679
there's a ton of ways to do that. But people

788
01:02:20,679 --> 01:02:25,679
should look at this like an opportunity because it's the

789
01:02:25,719 --> 01:02:28,760
only It's only when things get shaken up really really

790
01:02:28,840 --> 01:02:32,119
hard that there's a chance to make moves. When everything

791
01:02:32,199 --> 01:02:35,400
just goes on accordingly, the big things just get bigger

792
01:02:35,559 --> 01:02:39,239
and the rich people just get richer. But when the

793
01:02:39,320 --> 01:02:41,480
rich people lose their shirts, there's a chance for you

794
01:02:41,519 --> 01:02:48,440
to actually make money. I made most of my initial

795
01:02:48,519 --> 01:02:55,840
nut in housing during the foreclosure crisis. I use that

796
01:02:55,920 --> 01:02:59,119
to fund my first startup. If it wasn't for the

797
01:02:59,159 --> 01:03:02,599
two thousand and eight fine crisis, I would probably be,

798
01:03:03,000 --> 01:03:11,199
you know, working in some cubicle somewhere. So it was

799
01:03:11,239 --> 01:03:13,440
actually the two thousand and eight financial crisis that gave

800
01:03:13,480 --> 01:03:15,880
me an opportunity to make a bunch of money. Because

801
01:03:15,880 --> 01:03:20,519
a whole bunch of banks lost their shirt. So that's

802
01:03:20,559 --> 01:03:23,639
the way it's really just mindset.

803
01:03:24,960 --> 01:03:27,519
Speaker 6: I think that's the closest that you and I have

804
01:03:27,559 --> 01:03:30,119
ever gotten to a hopeful message in one of these episodes.

805
01:03:31,239 --> 01:03:35,039
Speaker 5: Right, I think that's a win. It was all over

806
01:03:35,039 --> 01:03:39,400
the place. But yeah, trying to discuss the economics of

807
01:03:39,440 --> 01:03:45,880
this country right now isn't fun. Same thing with all

808
01:03:45,920 --> 01:03:48,760
these people losing their jobs. There's mass amounts of people

809
01:03:48,800 --> 01:03:53,679
are very upset about layoffs. And I think a lot

810
01:03:53,679 --> 01:03:57,360
of the people that have gotten laid off, I mean,

811
01:03:57,440 --> 01:04:01,320
especially if you work in tech that you like, the

812
01:04:01,320 --> 01:04:03,920
outsourcing is going to come to an end very quickly

813
01:04:05,360 --> 01:04:09,400
because and a lot of people are factoring us in.

814
01:04:09,440 --> 01:04:12,480
But like, there's also going to be a lot of

815
01:04:12,559 --> 01:04:19,920
data breaches because in Indian and Calcutta, right, he doesn't

816
01:04:19,960 --> 01:04:23,199
know that you know an admin. He doesn't know the

817
01:04:23,239 --> 01:04:26,360
importance of like an ad the you know admin access.

818
01:04:26,920 --> 01:04:29,679
So if his cousin wants to give him one thousand

819
01:04:29,800 --> 01:04:34,159
dollars US dollars for admin access to like all of

820
01:04:34,199 --> 01:04:38,760
the bank accounts at XYZ Bank that just outsourced to India, right, Like,

821
01:04:38,800 --> 01:04:40,519
this is going to be a disaster for a lot

822
01:04:40,519 --> 01:04:43,679
of these companies, right, and they're going to, especially all

823
01:04:43,719 --> 01:04:45,599
the AI in tech companies are going to have to

824
01:04:45,679 --> 01:04:47,840
end up bringing it all the way all the way

825
01:04:47,880 --> 01:04:51,519
back home. Right. So this outsourcing thing is just really

826
01:04:51,599 --> 01:04:57,000
laying corporate problem solving that's going to get unwound. But

827
01:04:57,039 --> 01:04:59,079
I bet a lot of the people it may not

828
01:04:59,119 --> 01:05:01,719
seem this way now, but if you were some corporate

829
01:05:01,800 --> 01:05:09,239
drone at Facebook or you know, Deloitte or whatever, I

830
01:05:09,280 --> 01:05:11,400
bet you if I ask you in ten years from now,

831
01:05:11,400 --> 01:05:15,000
are you happy you got laid off? You'll probably tell

832
01:05:15,000 --> 01:05:20,880
me yes. Because everybody in our sphere jokes about all,

833
01:05:21,599 --> 01:05:24,719
you know, these bullshit jobs, how most of the jobs

834
01:05:24,719 --> 01:05:29,639
are bullshit jobs. Well, they're bullshit jobs that'll take like

835
01:05:29,800 --> 01:05:33,000
that will literally suck your life away from you, and

836
01:05:33,039 --> 01:05:37,679
you'll be an old man before you know it, right,

837
01:05:37,679 --> 01:05:42,199
But you'll you'd probably be too scared to basically try

838
01:05:42,199 --> 01:05:46,360
and do something else. So I think a lot of

839
01:05:46,400 --> 01:05:49,840
people are going to, by circumstances that are out of

840
01:05:49,840 --> 01:05:52,719
their control, be forced to do something that otherwise wouldn't

841
01:05:52,719 --> 01:05:59,960
have that seems impossible and scary, but they'll come out

842
01:06:00,280 --> 01:06:03,960
the other end very glad they did it. Like, are

843
01:06:04,000 --> 01:06:07,400
you going to be glad that you didn't spend ten

844
01:06:07,400 --> 01:06:11,039
more years in some soul sucking corporate hell whole with

845
01:06:11,119 --> 01:06:14,119
some screaming HR manager. I think we're going to see

846
01:06:14,159 --> 01:06:19,920
an explosion in entrepreneurism. I really do, because it's the

847
01:06:19,960 --> 01:06:21,880
only way people are going to be able to guarantee

848
01:06:22,440 --> 01:06:27,519
a lot of income security is if they manage their

849
01:06:27,679 --> 01:06:30,920
income themselves. And I think it's going to be great,

850
01:06:31,199 --> 01:06:32,480
and I think a lot of people are going to

851
01:06:32,519 --> 01:06:41,400
be a lot happier. So just be glad you got fired,

852
01:06:41,400 --> 01:06:46,559
I guess, even though it doesn't seem that way.

853
01:06:46,599 --> 01:06:47,679
Speaker 6: That's what I said.

854
01:06:49,159 --> 01:06:51,639
Speaker 5: Are you happy? Are You're actually a perfect example? Are you?

855
01:06:51,719 --> 01:06:56,239
Speaker 6: Are you kidding? I? Was it horrible at having real jobs?

856
01:06:57,199 --> 01:07:00,159
Is anybody who worked with me? Yeah?

857
01:07:00,199 --> 01:07:01,880
Speaker 5: Would you have ever done what you're doing now?

858
01:07:04,679 --> 01:07:07,679
Speaker 6: Decent chance? But now, to be perfectly honest, it was

859
01:07:07,679 --> 01:07:08,159
a decision.

860
01:07:08,119 --> 01:07:10,199
Speaker 5: Why I'd caught up with you and been like, hey,

861
01:07:10,239 --> 01:07:13,400
do you want to just go and be a content

862
01:07:13,440 --> 01:07:16,360
creator on the internet. You'd be like, fuck, no, dude,

863
01:07:16,400 --> 01:07:16,920
I have bills.

864
01:07:16,920 --> 01:07:19,559
Speaker 6: You said that hypothetically, like you didn't tell me to do.

865
01:07:19,519 --> 01:07:22,679
Speaker 5: That, so I told you to do it. When you

866
01:07:22,719 --> 01:07:26,760
were doing something you were not working at corporate job

867
01:07:26,840 --> 01:07:29,000
all the way, yet you were already halfway out the door,

868
01:07:29,039 --> 01:07:30,760
and you were already making at least some money off

869
01:07:30,800 --> 01:07:34,840
of this. It was you had significantly de risked my

870
01:07:35,159 --> 01:07:38,960
investment analysis. You took all the risk off of it.

871
01:07:39,320 --> 01:07:40,960
But I mean, are you happier?

872
01:07:41,559 --> 01:07:45,760
Speaker 6: Oh yeah, are you kidding? Even aside from okay, yeah, sure,

873
01:07:46,199 --> 01:07:49,760
Like I have a job that's not particularly like harder, backbreaking,

874
01:07:49,840 --> 01:07:53,199
Like it's not like I'm doing something physically strenuous, but

875
01:07:53,320 --> 01:07:56,400
being unemployed is great, or being sorry self employed is great.

876
01:07:57,599 --> 01:08:00,079
I would I could never go back genuinely for any.

877
01:08:00,320 --> 01:08:03,800
Speaker 5: I was listening to your talk with Lucas, and I

878
01:08:03,800 --> 01:08:05,519
think there's going to be there's a lot of people

879
01:08:05,559 --> 01:08:10,760
that would be very very scared, too scared to do

880
01:08:10,800 --> 01:08:15,159
something like what Lucas has done, but would always in

881
01:08:15,199 --> 01:08:18,520
the back of their head wish that they did. And

882
01:08:18,600 --> 01:08:20,800
I think a lot of people are going to find

883
01:08:20,880 --> 01:08:25,800
themselves where doing what Lucas did is going to be

884
01:08:25,880 --> 01:08:30,640
the most saying choice you have. And I think a

885
01:08:30,680 --> 01:08:32,720
lot of people are going to be good at something

886
01:08:32,760 --> 01:08:34,520
they never thought that they were going to be good at,

887
01:08:35,239 --> 01:08:38,119
and be very very interested in something that they never

888
01:08:38,119 --> 01:08:42,439
thought they would have been interested in most entrepreneurs. I

889
01:08:42,479 --> 01:08:47,840
know that, you know they the business that they own

890
01:08:47,920 --> 01:08:50,760
now looks nothing like the business that they started or

891
01:08:50,760 --> 01:08:53,560
that they set out to make. So I think a

892
01:08:53,560 --> 01:08:55,520
whole bunch of people are going to be doing things

893
01:08:55,560 --> 01:08:57,279
that they didn't think they were going to be doing,

894
01:08:57,439 --> 01:09:00,720
and they're going to be much happier. So I think

895
01:09:00,760 --> 01:09:04,359
everyone being forced out or checking out of corporate America

896
01:09:04,399 --> 01:09:06,199
may be the best thing that ever happens to us,

897
01:09:06,239 --> 01:09:11,840
both politically and economically. It'll be whatever comes out of

898
01:09:11,840 --> 01:09:13,520
this will be infinitely more resilient.

899
01:09:16,279 --> 01:09:18,439
Speaker 6: So Stormy, where could people find you?

900
01:09:19,319 --> 01:09:21,239
Speaker 5: I think just the Inquisition podcast man.

901
01:09:22,159 --> 01:09:24,159
Speaker 6: Yeah, I'll be sure to link that as well as

902
01:09:24,199 --> 01:09:24,680
your Twitter.

903
01:09:25,520 --> 01:09:25,640
Speaker 4: Uh.

904
01:09:26,079 --> 01:09:32,000
Speaker 5: Yeah, we give you a burden money. Prove my hypothesis correct.

905
01:09:32,600 --> 01:09:35,199
Speaker 6: Yeah, this is the best, the best shilling segment I've

906
01:09:35,199 --> 01:09:36,279
ever had. Yes, give me.

907
01:09:36,359 --> 01:09:40,399
Speaker 5: That money, right, give him more than a little bit,

908
01:09:41,159 --> 01:09:43,079
not a lot, but just more than a little bit.

909
01:09:43,640 --> 01:09:46,199
Speaker 6: Yeah, so I stopped calling you for for financial advice?

910
01:09:46,399 --> 01:09:47,760
Speaker 5: Definitely. I doubt that will happen.

911
01:09:49,600 --> 01:09:51,520
Speaker 6: Well, dude, this is a ton of fun. Man, I

912
01:09:51,560 --> 01:09:53,199
appreciate it. I'll see you on a good.

913
01:09:53,039 --> 01:10:28,199
Speaker 5: Soon, all right, I mean later. Marketing is hard, but

914
01:10:28,239 --> 01:10:29,279
I'll tell you a little secret.

915
01:10:29,319 --> 01:10:31,079
Speaker 1: It doesn't have to be. Let me point something out.

916
01:10:31,399 --> 01:10:33,600
Speaker 5: You're listening to a podcast right now, and it's great.

917
01:10:33,760 --> 01:10:35,720
Speaker 1: You love the host, You seek it out and download it.

918
01:10:35,720 --> 01:10:38,439
You listen to it while driving, working out, cooking, even

919
01:10:38,479 --> 01:10:39,720
going to the bathroom.

920
01:10:39,760 --> 01:10:43,079
Speaker 5: Podcasts are a pretty close companion. And this is a

921
01:10:43,119 --> 01:10:46,159
podcast ad? Did I get your attention? You can reach

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01:10:46,199 --> 01:10:50,079
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928
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929
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today