In this episode of America First, host Nicholas J. Fuentes and host Alex Blumberg pick up where they left off last night covering the Silicon Valley Bank Collapse and the ensuing problems in other banks and the stock market. They also discuss the Biden administration's decision to allow more oil drilling in Alaska and the controversy over the polar bear and the Willow Drilling Project in Alaska. And of course, they talk about the latest Middle East deal between the US and Saudi Arabia and Iran and how that could have a big impact on the Middle East and the world economy. They also talk about how much of an idiot Biden is and why he should have been in office in the first place. Finally, they finish up the show with an update on the crisis in the financial markets and discuss the potential aftershocks from the crisis and what we can do to prevent a repeat of the financial meltdown of 2008 and the financial crisis that happened in 2008 and what happened in the early 2000s. Subscribe to America First to stay up to date on current events and all things going on in the world. America First is a show about the economy, finance, politics, and everything in between. Please remember that you are not alone and don t forget to subscribe and share this with your friends, family, family and fellow podcasters! to stay informed about all things economic, political, social, and environmental and environmental issues going on around the world! Subscribe, share, share and tweet us what you think! and what you're listening to us on your social media! We love you are listening to this podcast! - nicholas j.fuentes and we appreciate it! Thank you for listening and sharing it. - Nicky - P.S. - NICKY - the podcast is a big thank you! - NANCY J. FUENTHANDSOME: Thank you so much for listening to the podcast and we really appreciate it, it means a lot to us a lot! - PRAISE YOU! - EAT&T: nichole Subscribe? - THE FAST FOLLOWING US: , PODCAST: - FOLLOW US: INSTAGRAM - INSTA: INSTA - FACEBOOK - , AND PODCASTS: .COM - TWITTER - FOLLOW &
Transcript
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00:00:17.000We're covering tonight the same story we were so close to covering it last night and then we had a big
00:00:25.000Issue I was in the middle of a show last night and we had a major internet outage in my area, of course Right when I'm in the middle of the show internet goes out doesn't come back for an hour So we're basically just gonna pick up where we left off last night which is talking about the Silicon Valley Bank
00:00:49.000Collapse and the ensuing problems in other banks and in the stock market.
00:00:56.000And so I'm sure you've seen all about it.
00:00:58.000It seems like the disaster has been basically been averted for now.
00:01:04.000Some have said there may be aftershocks and I was actually getting at something last night when I opened the show and I introduced the topic which is that this itself is not maybe going to be the meltdown but it does indicate that there are bigger problems going on and that has to do with what the Federal Reserve is doing with the interest rates and this legacy of 20 years of free money
00:01:32.000He had near zero interest rates basically since the housing bust in 2006.
00:01:38.000And I think I talked a little bit about this when I introduced the topic as well.
00:01:43.000We were due for an economic meltdown in 2020.
00:01:48.000And 2020 was a result of the same factors that are causing a meltdown currently and which will cause a problem this year.
00:01:57.000But then the financial pain was deferred
00:02:01.000Because of the same kinds of policies the last 20 years, they just accelerated, which is the monetary and fiscal stimulus that came with the COVID relief packages.
00:02:11.000So we'll be talking about all that tonight.
00:03:02.000We'll also be talking tonight, if we have time, about this willow drilling project where the Biden administration is opening up more oil drilling in Alaska.
00:04:02.000So I haven't seen the polar bear thing in a minute but like I said the Biden administration they're opening up big drilling in Alaska and this is supposed to reduce our reliance on foreign oil.
00:04:16.000This is supposed to increase production and this is obviously a response to Russia
00:04:40.000To increase production to offset the rise in cost of energy because of the war and then there was another big development this weekend where China brokered a deal between Saudi Arabia and Iran another huge middle finger at the Biden administration in America from
00:04:58.000Saudi Arabia, so we'll probably cover that this week, but that's what this is about That's what the drilling is about and it's pretty amazing cuz all these Democrats are like hey, what's the deal?
00:05:09.000I thought we were like the party of climate change and Biden's going ahead.
00:05:41.000Listen, I don't support the Ukraine thing, I don't support the Capitol investigation, but he pulled us out of Afghanistan, there's more drilling in Alaska, like...
00:06:55.000What I'd like to start to do, and I don't know how this is going to work, but I watch these guys like Destiny or others and they really just stream all day.
00:07:15.000But I'm thinking I'd like to kind of get into a regular schedule.
00:07:18.000I don't know if I can do every day, but I was thinking it may be good for the show if I were live on Rumble and cozy doing like a daily stream.
00:07:30.000I'm doing it for like, I don't know, four hours, three hours, a few days a week.
00:07:36.000So I'm gonna try and get in the habit of that and just see how it goes.
00:07:40.000Because the Rumble thing is very promising only because, and I think their numbers are cooked a little bit, I'm not gonna lie to you, and I don't say that with any proof, it's not definitive, but I look at some of their numbers and it just doesn't seem right.
00:07:53.000It just seems like they're getting way more viewership than makes sense.
00:08:00.000Maybe it's real but I'm not the first person to say this.
00:08:05.000In any case though they do have a huge user base.
00:08:08.000I guess they have 150 million monthly active users and so I'd be foolish not to take advantage of that and try to drive some of that traffic over here and just to take advantage of it over there.
00:08:22.000So I think I'd like to roll out some more content but like I said I'd like to do something in the afternoon first
00:08:30.000And then I can get back in my regular routine of going live at 1 a.m.
00:08:33.000or whatever, as I like to do the late-night stuff also.
00:09:48.000And so a lot of this is just going to be explaining the vocabulary here and what's going on.
00:09:55.000Silicon Valley Bank is a mid-sized bank and they've been around since I think 1982.
00:10:15.000And this is a bank which caters to tech companies and specifically tech startups.
00:10:20.000And they're responsible for a very large percentage of the tech startups in America bank with this bank, Silicon Valley Bank.
00:10:29.000It's important to understand this because a lot of people are drawing comparisons between Silicon Valley Bank and some of the things that happened in 2008.
00:10:39.000And they're comparing it to like Bear Stearns and Lehman Brothers.
00:10:43.000And what's important to keep in mind is that Silicon Valley Bank is not a major financial institution like those.
00:10:53.000Like the financial system does not rest on Silicon Valley Bank in the same way it did on the institutions that failed in 2008.
00:11:01.000So there's a much lower risk of this bank failure affecting the economy at large.
00:11:08.000But that being said, and the reason for that is because Silicon Valley Bank has so much exposure to just one industry, just the tech industry, and it's also a smaller institution.
00:11:22.000That being said though, because it has so much exposure to the tech industry, it tells us something about the tech industry.
00:11:30.000If Silicon Valley Bank is having trouble, this is owing to management decisions made at Silicon Valley Bank which are very specific and which a lot of other financial institutions don't have this in common.
00:11:43.000So there are a lot of unique decisions that were made, you could say mistakes, and also the tech industry is telling us something about the rest of the economy.
00:11:59.000Failing is not going to bring down the whole economy because it's not that big.
00:12:03.000It's not that important It's very unique in terms of its balance sheet, and we're going to get into what that means They have a lot more problems for example than say JP Morgan or Citibank or some or Bank of America, you know one of the big four
00:12:20.000But, that being said, because their clientele is tech, and because they failed, partially because of their own decisions, partially because of the tech industry, it tells us something about tech, and tech tells us something about the economy.
00:12:39.000Like I said, Silicon Valley Bank failed last week in about 72 hours.
00:12:45.000And this all started last Wednesday when they tried to raise 2 billion dollars to cover a shortfall.
00:12:53.000They sold all these assets that they had been holding at a loss and then they tried to raise capital to make up for the shortfall.
00:13:00.000They were trying to raise 1.8 billion dollars.
00:13:03.000On the news that they needed to raise this money to make up the shortfall, Teal Capital panicked and some other major depositors panicked and they started pulling their money out.
00:13:46.000By Friday they were not able to pay out all of the depositors that were pulling their money out of the bank.
00:13:52.000And so the FDIC came in, they shut down the bank, they've taken it over, and now they're going to be firing the management, they're going to restructure the leadership, and then they're probably going to sell the bank to another firm like maybe JP Morgan.
00:14:07.000I think Elon Musk expressed interest in buying the bank.
00:14:11.000And so that's what happened last week.
00:14:14.000Because of the failure of this bank, other smaller banks like Signature and First Republic began to experience the same problem.
00:14:23.000Where depositors at those banks, which are also located, I believe, in California, and also have more exposure to the tech side, and crypto in particular, depositors at those banks began to line up around the block and try to pull their money out.
00:14:38.000And that created liquidity problems at those banks and that caused those banks to drop in the stock market and then based on fear about those banks, other banks started to have the same problem.
00:14:49.000And so that's in very, that's in very simple terms what has gone on in the past week, what's been going on since last Wednesday.
00:14:58.000And the word for this is it's a bank run and if you've never heard of that or you have heard that a bank run is when people think that well they lose confidence in the bank's ability to pay them their money people deposit their money in the bank
00:15:14.000And when you see a bank like this fail, which is a larger bank, and it's an important firm, it's not, like I said, it's not a major intermediary for the financial sector, but it is an important bank.
00:15:26.000When people see a bank like that fail, they lose confidence in the banking system, they pull their money out, and banks don't have enough money to pay all of their depositors.
00:15:37.000They only have to keep a certain percentage of the money that is deposited in the bank in cash on hand available to pay out.
00:15:46.000They use a lot of the money that they have that's deposited there to invest.
00:15:50.000And we got into that a little bit last night.
00:15:52.000So a bank run just means people lose confidence in the bank.
00:16:18.000We'll go through the specifics of what happened at Silicon Valley.
00:16:22.000And so this is really a game of confidence.
00:16:25.000The Silicon Valley bank episode snowballed into a broader crisis of confidence in the banking sector where people were thinking that the banks were going to fail.
00:16:35.000They would not be able to get their money.
00:16:37.000So they panic and they pull out their money and it creates a self-fulfilling prophecy.
00:16:43.000So the Biden administration comes in and they did a good job yesterday and they reassured everybody by saying that they would make everybody at Silicon Valley Bank whole.
00:16:55.000All the depositors would be able to have access to all their cash.
00:17:00.000Now other kinds of people that have money in the bank would not be paid back.
00:17:04.000So shareholders are going to lose money, bondholders are going to lose money, but depositors are going to be made whole.
00:17:11.000The Biden administration came in with the FDIC and said that they would insure up to the $250,000 FDIC insurance for deposits and they would even go beyond that.
00:17:24.000And even if depositors had more than the ordinary limit is $250,000, but the FDIC came in amid this crisis of confidence on Friday and said, we'll make everybody whole.
00:17:35.000Even if you had more than $250,000 in the bank, we will pay you everything that is owed, even if Silicon Valley Bank does not have the money to do so.
00:17:46.000And that comes out of a separate fund.
00:17:51.000And then they came in on Monday and they said the same thing about First Republic and about Signature Bank and that seemed to ease everybody, that seems to make everybody relax and there wasn't a problem today.
00:18:04.000But I want to get into what happened at Silicon Valley Bank in particular.
00:18:08.000So there's sort of like two things going on here and the first thing is the Silicon Valley Bank failure which raises a lot of questions like how did that bank fail?
00:18:18.000And there's a lot of reasons for that, and there's a few angles there.
00:18:23.000And then there's the ensuing panic that followed, which happened then at these other mid-sized banks.
00:19:08.000And it explains this is the most popular theory of what happened there and we'll go through it and explain it.
00:19:15.000And so it says quote in 2021 Silicon Valley Bank saw a massive influx in deposits which jumped from 61 billion dollars at the end of 2019 to 190 billion dollars at the end of 2021.
00:19:25.000And so I got this far yesterday in explaining this.
00:19:34.000And so, to understand what's going on here, you have to understand how a bank works and how a bank makes money.
00:21:06.000And so that's a very basic explanation of a bank's balance sheet.
00:21:10.000Is a bank, like Silicon Valley or any other, they receive cash, they owe interest on that cash, but they can take the cash and invest it in other things like stocks, bonds, other asset classes.
00:21:27.000And their job is to go out and make a higher rate of return and then they can pay that to the depositor.
00:21:31.000So, what happens here is that in two years Silicon Valley deposits go up from $60 billion to $190 billion.
00:21:42.000And we talked about why that was yesterday.
00:21:44.000That happened because of the massive stimulus that happened during the COVID pandemic.
00:21:51.000The Federal Reserve and the Federal Government injected $6 or $8 trillion in liquidity into the economy after they shut down the entire country.
00:22:02.000They shut down the country in March, the stock market collapsed, and then in order to keep the economy afloat they injected $2 trillion in government spending and $6 trillion in quantitative easing, meaning they printed money.
00:22:18.000And so they poured basically free money into the economy to keep everything afloat.
00:22:25.000And that's what drove this big boom in the tech industry.
00:22:28.000If you look at the stock market during the pandemic, it was tech companies that were the big winners, particularly the big five.
00:22:37.000The big five are Microsoft, Amazon, Apple, Facebook, Google, and other tech companies as well.
00:22:46.000So Silicon Valley Bank is a tech startup bank.
00:22:50.000Federal Reserve injects six trillion dollars in quantitative easing and printed money into the economy.
00:23:08.000It says, quote, as deposits grew, Silicon Valley Bank could not grow their loan book fast enough to generate the yield they wanted to see on their capital.
00:23:17.000As a result, they purchased a large amount, over $80 billion, in mortgage-backed securities with the deposits for their hold-to-maturity portfolio.
00:24:01.000If you've looked in anything about 2008 you've heard about this.
00:24:05.000A mortgage-backed security is what happens when a bank takes a lot of mortgages and packages them together and then sells it as a stock to an investor.
00:24:16.000And so it's essentially like the bank is an intermediary between the homebuyer and the investor.
00:24:24.000And so it's like the investor is loaning the homebuyer the money.
00:24:27.000If the bank goes in and they loan a couple hundred thousand dollars to a homebuyer and the homebuyer's got to pay back the bank however much money
00:24:44.000The bank will take all these mortgages and sell these obligations to an investor and then essentially instead of the homebuyer paying the bank back, they're paying the investor.
00:24:56.000And the investor buying the mortgage-backed security, it's like they're giving the homebuyer the money for the house.
00:25:04.000And so the bank then just becomes a middleman between a group of homebuyers, a group of people that have a mortgage, and an investor.
00:25:14.000And that's a little complicated but the point is that it's a very safe investment.
00:25:17.000Housing is a safe investment if the banks are doing their job right and they're giving mortgages to people that are going to be able to pay them and if the credit rating agencies are doing their job and they're rating the risk appropriately.
00:25:31.000And so this is a very safe investment that is going to pay dividends to an investor.
00:25:39.000Silicon Valley Bank they get all these deposits they don't know where to put them so they go out and they spend over 80 billion dollars on these mortgage-backed securities a very safe investment but one that pays a low yield I think it pays 1.75% over 10 years.
00:25:56.000So they buy these mortgage-backed securities and the maturity is 10 years meaning that in 10 years they're gonna get all their money back plus 1.75%
00:26:07.000And they put this in their hold to maturity portfolio, meaning that they don't intend to trade these things.
00:26:13.000They're not trying to, they're not buying these securities so that they could sell them and make a quick buck.
00:26:19.000They're buying these mortgage-backed securities to hold to maturity, meaning hold them for the entire 10 years, hold them where they're going to turn a profit.
00:26:32.000So it goes on it says 97% of these mortgage-backed securities were a 10 plus year duration with a weighted average yield of 1.56%.
00:26:41.000So this 80 billion dollars and this again they're awash with cash they've got to invest this stuff so they can make money they pour it into mortgage-backed securities
00:26:54.000But they've got to hold them for 10 years.
00:26:57.000They're tying up over $80 billion in this investment, which they need to hold for 10 years to make any money on them.
00:27:06.000So everything they're buying, 97% of what they're buying, they cannot sell for 10 years.
00:27:13.000And they're only going to make 1.56% on average.
00:27:17.000It says the issue is that as the Fed raised interest rates to 2022 and continued to do so through 2023, the market value of these securities plummeted.
00:27:29.000This is because investors can now purchase long-duration risk-free bonds from the Fed at a 2.5 times higher yield.
00:27:38.000So, again, these securities, you're supposed to hold them for 10 years to make money, but the market value of them fluctuates.
00:28:47.000So, it goes on, it says, this is not a solvency problem as long as Silicon Valley Bank maintains their deposits, since these securities will pay out more than they cost eventually.
00:29:00.000In other words, as long as Silicon Valley Bank can hold these mortgage-backed securities for 10 years, then there's no problem with solvency.
00:29:11.000The mortgage-backed securities are worth more than what they paid for them, if they're held to maturity.
00:29:18.000And so, if they keep these for 10 years, then they're worth more than what they bought them for, and that means that they're not insolvent.
00:29:26.000That means that they don't have more liabilities than they have assets.
00:29:30.000If, on the other hand, their liabilities grow because depositors are pulling their money out and they're forced to sell these mortgage-backed securities on the market today, well, they'll lose money on them.
00:29:42.000And if they lose money on them, then they're not going to be able to pay back their depositors and their assets will be less than their liabilities.
00:29:49.000Then the bank would be insolvent, which is exactly what happened.
00:29:55.000It says, however, yesterday afternoon, Silicon Valley Bank announced that they had sold $21 billion of their securities at a $1.8 billion loss and were raising another $2.25 billion in equity and debt.
00:30:10.000This came as a surprise to investors who were under the impression that Silicon Valley Bank had enough liquidity to avoid selling their portfolio.
00:30:23.000A lot of tech companies were pulling their money out of Silicon Valley Bank.
00:30:27.000That forced Silicon Valley Bank to sell these mortgage-backed securities for a huge loss.
00:30:33.000Not a huge loss, nothing detrimental, but they lost money on the deal.
00:30:38.000So then they go to, they go to people and they say, well we need to raise two billion dollars to make up the shortfall.
00:30:46.000We had to sell all these securities for cash so we could pay out our depositors who are leaving and now we need to raise money to make up the difference of what we lost so that we could stay solvent.
00:30:58.000And once people saw the news that that was happening then they started to pull their money out because they said that Silicon Valley Bank is unable to pay their depositors, it's a failing bank, stock price collapsed, and it became this death spiral.
00:31:11.000And in 72 hours they were not able to pay back their depositors.
00:31:55.000Other banks do not have that kind of exposure like that.
00:31:59.000So there are questions about how this bank is being managed and I know some people have pointed out that it was being managed by women.
00:32:07.000That if you look at who was making these kinds of decisions, it was all women.
00:32:11.000It was all women that were selected for diversity.
00:32:13.000And there was one profile of a woman who was in a high up position and she's got in her bio that she's like an LGBTQ, queer, whatever, lesbian.
00:33:29.000The bank keeps a fraction of that money in reserves, and then most of the money they go out and invest.
00:33:37.000And the purpose of that, of course, is so that they can pay interest, and that's to grow the economy, and that's to encourage investment, and so on.
00:33:45.000So what happens when everybody starts to pull their money out is Silicon Valley Bank has to sell so they can come up with the cash.
00:33:54.000So the question then is, well why did everybody pull their money out?
00:33:56.000Why did all the depositors pull their money out of the bank?
00:34:00.000If the deposits tripled from 2019 to 2022 and then they took all this money and they invested it, why then would suddenly their fortunes reverse and they'd have to pay out all these depositors and be forced to sell at a loss and then raise more money?
00:34:15.000And that has a lot to do with what's happening with the interest rate.
00:34:20.000The initial reason for all the deposits coming in from 2019 to 2021 was because of near zero interest rates.
00:34:29.000And when the interest rate is low, that means that you can borrow money for free.
00:34:34.000And when you can borrow money for free, everybody borrows money.
00:34:38.000Interest rates have been nearly zero since 2006.
00:34:43.000Which means that you can borrow money and you know if you had a mortgage before 2022 or 2021, rates were very low.
00:34:50.000Meaning that you could borrow tons of money and it's very cheap to borrow money.
00:34:56.000And that means that if you borrow a lot of money and then you invest it and you make a fortune, that means it's very low risk to borrow money.
00:35:04.000So a lot of people are borrowing money and they're investing it very frivolously.
00:35:10.000If it's cheap to borrow money, then you'll be more risky with your investments.
00:35:15.000If it's expensive to borrow money, you'll be more conservative with your investments.
00:35:19.000So why did Silicon Valley Bank's deposits triple from 2019 to 2022?
00:35:25.000Silicon Valley Bank is in the startup business.
00:35:29.000All their clients, for the most part, are tech startups and tech companies.
00:35:34.000So clearly, all these tech companies, and this is just true broadly, the tech companies are booming and exploding during this period.
00:35:42.000That's why they're putting all this money in the bank, because it's cheap to borrow money.
00:35:47.000People are borrowing money and they're pouring it into tech companies, which are notoriously very risky investments.
00:36:54.000And all this money that was pouring into tech companies, in other words, all the waste, all the inefficiency, all these risky investments, is no longer possible.
00:37:05.000Now that it is somewhat expensive to borrow money, now people are not just throwing it around at businesses like the next food delivery app, they're not throwing it at the next dating app, or the next whatever.
00:37:18.000They're playing much more conservatively and putting it into profitable businesses that actually have a chance of succeeding and so on.
00:37:26.000And so that's really the real story here.
00:37:29.000That's the real significance of what happened at Silicon Valley Bank.
00:37:34.000It is a bank run and it caused these problems that these other mid-sized banks
00:37:41.000It's not going to cause a major financial meltdown, but it raises questions about what's happening in the tech industry, and the tech industry raises questions about what's happening in the economy.
00:38:10.000It's all built on the federal government printing money, giving it away for free,
00:38:16.000And what that creates is just a lot of waste and inefficiency.
00:38:20.000And now we're having this problem where we're really between a rock and a hard place.
00:38:24.000We saw the consequences of that policy in the last year.
00:38:27.000What happened after 15 years of printing money?
00:38:32.000What happened after we doubled the money supply in 2020 through the COVID relief packages and the quantitative easing from the Federal Reserve?
00:39:24.000They manipulate how they calculate the consumer price index.
00:39:27.000They take money or they take items out of the basket of goods.
00:39:31.000They simply change how they calculate the supply of money.
00:39:34.000There's all kinds of ways that they can hide it.
00:39:37.000But it got to a point where it was essentially irrepressible in the last year and a half that the money supply had grown too much and as a consequence prices would rise.
00:40:10.000When the Federal Reserve raises interest rates, then when there's not as much money flowing around, what happens when depositors pull their money out of Silicon Valley Bank?
00:40:20.000Silicon Valley Bank doesn't have the money to pay all of them.
00:40:23.000And then the bank suffers a bank run, and then the FDIC gets involved, and then it spreads to other banks.
00:40:29.000And so this is something that we're going to see more of in the future.
00:40:33.000And we really are faced with these two options where either the Federal Reserve will maintain high interest rates, in which case people are going to get crunched like this.
00:41:43.000All these people that deposited their money, it's gone.
00:41:46.000And what happens when a major tech startup which employs people and has a facility and has capital, what happens when its cash, its deposits, disappear overnight?
00:43:11.000The less money you make, the more real it is, the more apparent it is.
00:43:19.000You will have to choose if you're living paycheck to paycheck making a low income you'll have to choose between whether you're going to pay for your entertainment or you're going to pay for clothes you're going to pay your mortgage bill or your electricity bill or you'll have to make choices you'll have to
00:43:36.000You have to make an economic decision based on the fact that you don't have as much money or purchasing power as you used to.
00:43:44.000And so that's an economic contraction in another way.
00:43:48.000It's the same thing, but it's just happening in a different way.
00:43:52.000In a liquidity crunch, it's going to be very acute.
00:43:58.000Meaning that the people that are going to lose, the people that are going to not be able to buy stuff are the people that have their money in Silicon Valley Bank.
00:44:05.000And the people employed by the people that have their money in Silicon Valley Bank.
00:44:14.000It's a very acute and severe austerity.
00:44:18.000If inflation goes up by 10%, there is a much more dull austerity that happens across the board, where people are going to have to cut back on their consumption.
00:44:29.000Because they can't borrow any more money, and they're making the same amount of money, but they're going to have to economize on the consumption.
00:44:38.000They're going to have to economize on their buying decisions.
00:44:41.000They can't buy everything that they want anymore.
00:44:45.000And so those are the two paths that we have and either of them are good.
00:44:48.000Either you're going to have high inflation or you're going to have these kinds of hiccups which could spiral out of control.
00:44:57.000This one didn't but it can in the future without intervention from the government like what you saw this past week where the government moved in and effectively nationalized the banking industry
00:45:11.000By taking over Silicon Valley and insuring all the deposits and then moving in on these other banks that looked like they were going to fail.
00:45:19.000So it's two very bad options and ultimately we have just got to rebuild our wealth as a country.
00:45:28.000The underlying problem here is that as a country we're just insolvent between what we have promised to the elderly, the debt that we already have on the books,
00:45:41.000The fact that we're not making anything in this country anymore and that has a lot to do with our trade policies and immigration policies also.
00:45:55.000It's just not even in the cards that we're going to balance our budget, meaning that the government isn't making enough money to pay for what it has, and it will never be able to in the foreseeable future.
00:46:04.000Forget about making enough money to pay for what it needs, and then paying down the debt.
00:46:11.000There's a $30 trillion debt, and we can't even stop digging the hole, let alone begin to start filling it in.
00:46:21.000It's not even in the cards that we're going to get the deficit under control at any point in like 50 years.
00:46:29.000And the deficit is adding to the debt, for people that don't know, let alone before we begin paying down the debt, subtracting from the debt.
00:46:38.000And then you got the problem with the currency.
00:46:51.000The value in the economy comes from the goods and services that are produced.
00:46:56.000It comes from the productivity of the economy.
00:46:59.000So, when people think about the economy, they think in terms of dollars, it should really be thought of in terms of what the country actually produces and the value of what it produces.
00:47:10.000And so a lot of people, like poor people, think about money in terms of, man if I could just get money to like be an influencer, or if I could just get money to do something, it's like, that's not, that's actually not creating value.
00:47:25.000Like, you will have buying power, you'll be able to consume a lot, but consume a lot of what?
00:47:33.000So a really wealthy country, a really wealthy person,
00:47:38.000Is somebody that is making valuable things.
00:47:42.000And what are the most valuable things?
00:47:45.000The most valuable things are food, energy, building materials, water, things like that.
00:47:55.000We're not making a lot of that stuff anymore.
00:47:58.000Our country doesn't, is not really a rich nation.
00:48:01.000We think we're a rich nation because we have a lot of purchasing power, because we have a lot of dollars.
00:48:07.000But how long is that really going to last?
00:48:10.000There was a really interesting that happened last year, interesting phenomenon, when we put all these sanctions on Russia and everybody said that the Russian economy was going to collapse.
00:48:22.000We cut them off from international trade and the Russian economy is going to go belly up from this.
00:48:28.000And here we are over a year later and Russia's doing fine and we're the ones having the problem.
00:49:11.000They're able to make the things that they need.
00:49:13.000And the things that they can't make, they can buy from other countries by selling the things that every other country needs, which are the things they happen to make.
00:49:37.000But the question is, how robust is our economy going to be if it only traffics, if it only makes those types of things and does services?
00:49:46.000It's a country that's basically a big tourist hub where countries like China and India and Indonesia and Vietnam and others, they make stuff
00:49:57.000And that's where the value in the world comes from, and then they come here as tourists and they spend their money.
00:50:04.000And so, all the value in America then, when you think about it that way, when you look at other, when you look at particularly the interior of the country, what industries do they have in the interior anymore?
00:50:36.000Everything that we have seems to come from somewhere else.
00:50:39.000And the only reason we have money is because the people that are out there making things trade the value of their labor over here for services, for experiences, for tourism.
00:50:52.000They move over here and it's education and it's software and it's things like that.
00:50:57.000So, this liquidity crunch is exposing the fundamental weakness of our economy, which is that we don't have an economy.
00:51:07.000We have a financial system where a lot of money is earned and spent and traded and passed around and packaged up into different financial instruments, but
00:51:19.000America is no longer a productive country anymore.
00:51:23.000And when the country is not making value anymore, that's when you start to get austerity in the form of either inflation or these kinds of crises, crisis to crisis, like with Silicon Valley Bank.
00:51:37.000So, that's the real significance here.
00:51:40.000And the simple fact is, this is a problem of corruption.
00:52:10.000Just borrow money, ship the factories overseas, take advantage of the arbitrage, take advantage of the exchange rate.
00:52:20.000And where's the idea of building real things in America, making real jobs, making real things, making real value, making our country actually wealthy?
00:52:33.000Is the next generation going to be wealthy?
00:52:36.000Even if they have jobs, even if they have an income, are they going to be wealthy?
00:54:14.000I mean we're going to get to the point where we're borrowing more money than we're spending from what we make in revenue.
00:54:22.000And you compare that to other countries that are building things like the Line in Saudi Arabia, and they're building the Burj Khalifa, and they're building entire cities, and they're catering to the rich, and it's luxury, and
00:54:37.000They're building airports and, like, actually futuristic new things and real infrastructure.
00:54:58.000It's just an entire thing waiting to collapse.
00:55:00.000The only way to turn it around is to basically at some point there's got to be a hard stop, there's got to be real financial pain, and then we have to build real things.
00:55:10.000It really does come down to like personal sacrifices.
00:55:14.000It comes down to people have got to take a loss for the sake of the long term, for the sake of the wealth of the country.
00:56:45.000I said I would probably run out of time anyway, because the Silicon Valley Bank is a big thing.
00:56:50.000And I hope I don't know I mean maybe there's gonna be some economics people that are gonna come in and say actually that's not technically right or no you don't understand listen I'm not an economics major I'm not I'm not like a finance expert but but that's the gist of what's going on here to the best of my ability so you know if it was it was technically not perfect let me know if there's any economics people weigh in let me know if I did a good job I want to hear in the super chats
00:57:18.000If I did a good job or not here, but that's my understanding of it.
00:57:24.000I haven't been into economics in a long time.
00:57:31.000When I was libertarian, I was really into the Austrian school of economics and the Chicago school and that kind of thing.
00:57:41.000But I haven't revisited it in a long, long time.
00:57:44.000But here's the fundamental thing, which I think anyone would agree on, is that when people think about money, they have the totally wrong concept.
00:59:14.000And so there are a lot of products like, for example, an iPhone where, you know, an iPhone does a million different things and it's a very technical and complicated process and so on.
00:59:27.000But there's fundamental things that everybody needs like energy, food, water, materials to build homes, materials to build buildings, transportation, infrastructure, that sort of thing.
00:59:40.000And so a country that's rich is a country that's building things.
00:59:45.000It's a country that has the materials it needs to build the things that it needs.
01:01:24.000So, a real nationalist vision for the economy is that we need to harvest the raw materials that we have in America.
01:01:34.000We need to control the countries that have the raw materials that we need, but don't have.
01:01:42.000And we need all of these strategically
01:01:46.000Important products to be made here from beginning to end.
01:01:50.000Or if there are intermediary steps that cannot be performed here, they should be performed in countries that are allied and where it's not detrimental.
01:02:00.000Because right now, what would happen if China took over Taiwan?
01:02:06.000Where would we get the semiconductors?
01:02:11.000If we were in a trade war with China, where would we get so many of the critical minerals and other strategic resources that are found the majority on planet Earth inside of China?
01:02:24.000Or in African countries that China has bribed and paid off by buying them new government buildings and paying for all kinds of bells and whistles for their country?
01:03:12.000So, it's a scary prospect that Russia, China, Iran, Central Asia are all coming together because that's where they make things, that's where the raw materials are from.
01:03:27.000China is bringing Africa together under their suzerainty.
01:03:34.000And what are we going to be left with?
01:03:35.000We're going to be left with a whole lot of nothing.
01:03:37.000We're going to be left with a lot of influencers, and OnlyFans stars, and DoorDash drivers, and Uber drivers.
01:03:46.000Not going to have a lot of cars though.
01:03:47.000Not going to have a lot of food or furniture.
01:03:50.000Not going to have a lot of anything anymore.
01:03:58.000But that, to me, that's the fundamental.
01:04:00.000That's the fundamental of what I see here.
01:04:03.000We just print money and print cash and cash does not create value.
01:04:10.000You can print money and yeah, if the Federal Reserve creates money out of thin air and then it goes into the economy and it is spent and invested, yeah, the GDP has to go up.
01:04:29.000If the Federal Reserve creates $8 trillion in one year and they eject that into the economy and then that money is spent and invested and is used to purchase imports, the GDP necessarily has to go up in a numerical amount.
01:04:52.000But that doesn't mean that we got richer.
01:04:54.000It doesn't mean we got more productive.
01:07:16.000If we're just getting further and further and further in debt, how is the country rich?
01:07:22.000It's not rich, and we're not doing well.
01:07:25.000And whether the contraction comes in the form of inflation, or deflation, whether it's liquidity crunch, or we lose the purchasing power of the dollar,
01:07:37.000The reality is going to become very apparent soon.
01:07:41.000So... And over there in China, you know what they have?
01:07:45.000They have a billion and a half people.
01:07:48.000And they have a billion and a half people that are getting educated in serious educational institutions.
01:07:55.000They have a billion and a half people that are learning manufacturing.
01:08:00.000Our American companies are going over there and teaching them.
01:08:05.000Because a lot of these factories, you can't just set it up and throw people in there.
01:08:24.000The existing capital and infrastructure is being degraded.
01:08:29.000This is a big problem in the long term.
01:08:31.000And yeah, the Chinese are slobs, okay?
01:08:34.000They spit indoors, and they chew with their mouths open, but they do have a serious educational infrastructure over there.
01:08:44.000And whether you want to call it tyrannical, or communist, or fascist, or whatever, Xi Jinping has lifted 800 million people out of poverty.
01:08:55.000800 million people, and a lot of them into the middle class.
01:09:02.000And things are getting materially better for the people there.
01:09:07.000They went from farmers, now they have jobs.
01:09:09.000Now they have real jobs in the cities.
01:10:28.000all right let me see let me just get this up and we'll take a look okay let's and i'm gonna read uh any super chats we got last night i'll i'll take those as well okay
01:10:50.000Britney sent $400 for Mio and Britney.
01:11:21.000Yeah, it's so funny cuz so many of the streamers hate them.
01:11:25.000I don't know why But there's a few streamers on here that just hate politically provoked and I am just so transparently paid off Everybody's like politically provoked isn't even content and everyone watches it.
01:11:39.000You let an eager on the platform and she's Jewish And I'm like what?
01:15:04.000I was very impressed, because I'm thinking, what's this gonna... No offense, but I'm thinking, like, a lot of people, they say they're gonna write a book.
01:25:47.000When I find myself at the bottom of a canyon, which frequently happens, I can imagine all the scenarios when I'll need to rock climb my way out of a dilemma.
01:28:59.000All these people are always training for something like like they're going to the Olympics or like And a lot of these guys it's like you're 5'10.
01:29:12.000Do you know that a guy who's like 30 pounds heavier than me or like 3 inches taller than me is just gonna beat the fucking shit out of me no matter what?
01:30:58.000I think about, like, these immigrants.
01:31:00.000I think about, like, a Chinese immigrant man who's, like, an old guy, and he's, like, short, and he's just, like, the world is his oyster, and he's not in the gym lifting, he's not running around or rock climbing, he's just, like, an old school guy.
01:31:14.000I just want to be, like, an old school guy.
01:31:16.000You know, I just, I strive to just be old school.
01:38:14.000Half-eyed kiff you'll agree with this, but I think it makes more sense to view trans as more of an addiction than a delusion, where the drug is having a female experience, likening it to porn addiction.
01:38:29.000Two halves in the same way a porn addict knows he isn't having sex with the women on screen, a tranny knows he isn't and will never be a real woman, but loves the feeling of being perceived as or treated like a woman.
01:38:48.000I haven't talked to enough trans people to really get it, but like with all these perversions, there is like a fundamental mismatch between the interior experience and the reality.
01:40:34.000If Republicans get their war against the cartels in Mexico, won't that inadvertently cause millions of Mexicans to flee to America as legitimate refugees?
01:45:43.000It was the Christians who believed in a rational creator slash lawgiver that discovered the laws of physics and it was the Catholics that created the first universities.
01:46:54.000Nick is Harry and Sneeko is Ron and Brit is Harmony and Yee is Dumbledore and Charlie Kirk is Draco and Lauren Southern is Ginny and Netanyahu is Voldemort and reply to this post or your mother will D.
01:47:31.000It's interesting how both Spencer and Destiny seem to recognize that religion is necessary, but they only look at it from a utilitarian perspective.
01:50:50.000Yeah, someone says harassment architecture Listen I like Mike Ma.
01:51:00.000I'm gonna come out and say it unpopular opinion wasn't the biggest fan of the writing But that's just me Who are we yeah, that's pretty good by Sam Huntington.
01:53:24.000I Kind of want to meet him now too because now now I'm into that I was always like never watch that show so I never was like I Was very cynical about it, but now that I'm watching that's pretty good.
01:57:36.000Maybe Tucker is secretly being based and is saying all he hears are dogs barking when woman speaks so he just smiles and is like this is my dog.
01:57:51.000There is the most beautiful race and it's probably Nordic.
01:58:06.000People They're just different I just don't there there is like a real Like I actually do relate more to people that are like Mediterranean and people that are Nordic I straight up.
01:58:20.000That's just true We're just more similar like I'm a big believer in race because you just see it everywhere and No, but I like them
01:59:11.000Yeah, listen, like I said, we're not in favor of cruelty or hatred or anything, but we're just not down with that stuff.
01:59:19.000That stuff is immoral, it shouldn't be.
01:59:21.000We're not out there telling people to kill themselves, just like I wouldn't tell a feminist to kill herself, or I wouldn't tell a criminal to kill themselves, or anybody for that matter.
02:00:01.000That's not what we're about, you know.
02:00:05.000we think that stuff is unacceptable and has no should have no quarter in a decent society but but that that sort of thing is just not the path that's not the way to get there so it's one thing to say it online as a joke whatever but
02:00:25.000You know, but that kind of thing is just wrong.
02:00:27.000We want to attract people with our magnanimity.
02:01:14.000So, now it's one thing to be self-righteous, set in justice, or things like this, but when I see these kinds of people, I feel... I'm not gonna lie, there is a disgust aspect of it, like when I see this Dylan Mulvaney type stuff.
02:01:37.000But you want to see these people get better, you know, it's it's only because It's such a sad and degraded existence and they're promulgating that to people they're promulgating that especially young people so That's my view on it Boo sent $3 I wish that you could make your own version of Christianity called like Nick Fuentes Christianity where you make the rules and Beardson and Vita and stuff are like high priests and command the army
02:03:31.000Yeah I am excited for it and I don't know it's always a struggle living in the shadow of your former accomplishments but we'll see I'm with Charles back on board I have high hopes for it the three of them is it's great synergy so we'll see