Based Camp - Could All Debt Actually Just Be Canceled？

00:00:00.000 Hello, Malcolm. I'm so excited to be speaking with you today because we're going to be talking

00:00:05.500 about debt jubilees and debt in general because we live in Cloud World timeline where debt is

00:00:12.000 getting really weird. U.S. consumer debt levels, they're currently at record highs. I mean,

00:00:16.860 it's no surprise to anyone, right? Both in nominal and in inflation-adjusted terms.

00:00:21.680 Hold on. Our fans may not know what a debt jubilee is. So Simone and I have an ongoing

00:00:26.560 sort of debate on the show where she believes that eventually debt levels within the general

00:00:32.060 populace or within the government are going to get so high that they're just going to declare

00:00:37.780 sort of bankruptcy, either society-wide or government-wide. And if you're like, that could

00:00:43.480 never happen, which is my general take on this, Simone points out actually a number of countries

00:00:48.540 have already done this. Yeah, Malcolm, nah, Simone, yeah, huh. And I'm going to get into it.

00:00:52.740 Something that's happened a bunch of times historically. And so we're going to investigate

00:00:56.320 when it's happened historically, what triggered that and what does that mean? Is the probability

00:01:01.040 of it happening here? And what does that mean for society that this is even like hanging around as

00:01:07.560 an option? Yeah. And we're going to look at consumer debt and we're going to look at national

00:01:10.460 debt because both are really important and both affect everyone in terms of like, what should your

00:01:15.480 savings strategy be? What should you be investing in? What should you not if you have money?

00:01:20.500 Should you bother? Like, should you just max out your debt?

00:01:23.720 And this is coming from the woman who purposely makes us have no debt, even on our houses.

00:01:27.500 I'm allergic to debt. I can't be owed anything. If someone pays me a compliment, I have to pay it

00:01:32.620 back right away because I can't even deal with that. You understand. Like I'm phobic. I'm sure

00:01:38.540 there's some Latin word for it. But yeah, anyway, I learned that there was some like Latin word for

00:01:43.560 mirror divination this morning. So I got to find the one for, for phobicness of debt of debts. But

00:01:50.980 anyway, like speaking of debt, like just bad toxic consumer debt is insane right now. The average

00:01:58.000 credit card debt among cardholders in the United States, this is like their unpaid balances.

00:02:02.700 But it was true around 7,321 in the beginning of 2025. That's, that's up almost 6% from 24.

00:02:11.760 No, what showed me that our relationship with debt is completely unraveling is, I don't know if you 0.97

00:02:16.340 guys remember, cause we covered it on the show, but there was this thing where like dumb people 0.60

00:02:20.540 in America thought there was a free money hack. Yes. The check fraud hack. Free money hack was, 0.84

00:02:27.040 is they would put in bad checks, like just write checks that were bad. And then in their banks,

00:02:32.800 like auto cash thing, and it would give them cash. And they thought they had just gotten free money.

00:02:39.120 And now, and then they all found out like, Oh wait, like the bank recorded that transaction.

00:02:43.300 I just now owe this much money. Some glitch in the chase banking app where you can deposit a large

00:02:48.800 check that is bad. And then you have a short time limit to actually withdraw the money in cash from

00:02:54.380 the ATM before the check is cleared. And I guess absolute idiots. They're doing this on their own 1.00

00:02:59.580 accounts. And then you have other people who are doing this on their own account. That has their

00:03:05.820 first and last name, their phone number, their social security number, their place of work.

00:03:12.860 Why do I have 11,000 missing from my bank account? Is this like humorous to you guys? Like you,

00:03:18.300 yes, they will use these. There's no way.

00:03:29.260 Yeah. Yeah. Yeah. No. Like, and that, that is, that is the culture we live in today. Yeah. Social

00:03:34.780 media really doesn't help that. And there's some great viral Caleb hammer clips where people are like,

00:03:41.420 Oh, well I'm gonna, you know, retire early and travel a ton. And you know, he, at that point,

00:03:47.580 this is for the show financial audit on YouTube has gone through all their finances. He knows how

00:03:51.660 much they're in debt. He knows how much they've saved. And he's like, dude, you have no money

00:03:55.420 saved. Like, how do you think this is going to work? How much money do you think they need? And

00:03:58.380 they're like, Oh, I'm just going to like, you know, house hacking something, something. And they just

00:04:03.020 start using a bunch of buzzwords. And it's just clear that like their entire financial strategy

00:04:06.620 is based on TikToks that are not even like well-founded. It's really disturbing. I'll send

00:04:11.420 you a clip. Oh my God. I love this house hacking. Of course. Yeah. But like, and like literally even

00:04:16.460 the way that they, they use the language implies that like, they're just putting in buzzwords and

00:04:22.220 they don't actually understand the fundamentals of any of this. They don't understand what fire

00:04:26.060 means. They don't understand really what house hacking means. They have no understanding of how much

00:04:30.700 anything costs. Like it's weird. Cause it's the poor man version of that meme where I can't,

00:04:36.220 I don't even know the TV show, but that woman's like, I don't know. How much can a banana be? 1.00

00:04:39.420 $10. I don't have time for this. I mean, it's one banana, Michael. What could it cost? $10?

00:04:46.380 You've never actually set foot in a supermarket. Have you? I don't have time for this,

00:04:49.820 but it's like, this is on both ends of the spectrum. You know, like, I don't know how much

00:04:53.340 could it be to travel around the world all the year, like $30,000. Right. We've seen this because we

00:04:59.740 have friends who live off of welfare, who are close friends of ours and help take care of our kids

00:05:05.180 partially. And they get way more expensive stuff than we get. Like, like pretty much wherever we

00:05:11.180 are buying something and they are buying something, what they buy is dramatically more expensive than

00:05:15.900 what we buy. Like they buy. Yeah. Now we get the bargain basement BJ's diapers and they get 0.69

00:05:19.820 fricking pampers. That's like the, that's the. They have subscriptions to like multiple streaming

00:05:25.500 services, which I just find like obscenely luxurious. They, yeah. Like literally when we want to watch,

00:05:32.860 when we wanted to watch K-pop demon hunters on Netflix, we, we, we had to log into my dad's

00:05:37.420 account and then get him to like call in and give us a code because he was maxed out on all his shares.

00:05:41.740 They haven't bought more cars since we have known them in like the two years we have known them

00:05:47.420 than we have bought in our entire lives by like a factor of two. I know, I know, I know, I know.

00:05:54.940 What are you going to do? But again, like that's, that's why we need to have these conversations

00:05:58.860 about money and figure out what we're doing. Because again, like while they're able to do that,

00:06:03.660 also assistance that they receive from the government is not going to last. Like this money

00:06:07.740 is going to run out or I mean, technically it may not run out, but it's purchasing power is going to

00:06:13.580 erode so much that it is not going to matter anymore. So again, let's get back to it. So credit

00:06:19.020 card debt, obviously really high and credit card debt is a key thing to look at because of the high

00:06:23.420 interest rates where it sort of balloons to this point where basically you're never going to repay it.

00:06:27.420 You know, when you're just rates like 30%, you're never going to repay that debt. It's just going

00:06:30.940 to be there with you forever. And people are using buy now, pay later services like Klarna and Afterpay

00:06:37.020 at record levels and increasingly they're paying late, which is also telling. One lending tree study

00:06:43.340 found that, or survey found that 41% of buy now, pay later users made a late payment in 2025,

00:06:49.820 up from 34% the prior year. So we're going from a third.

00:06:52.940 41% of buy now, pay later. 41% made a late payment this year.

00:06:56.620 Oh my God. I remember back when like early in my finances days, when I was building up my credit,

00:07:01.660 I used to have this like existential fear of ever missing a payment.

00:07:05.180 I always had automatic payments always on every card you've ever had.

00:07:09.500 And I, I, I haven't even until very recently been able to stomach the idea of an automatic

00:07:14.300 payment. I would just every single week pay the card off. Cause I was like, I'm not waiting.

00:07:17.820 How could I have? No, but recently, I don't know. Automatic payment has gotten better or

00:07:22.620 something like that, but I don't, I remember there was a couple of cases in the past where

00:07:25.740 I actually did miss payments and it freaked me out. Oh my God. Yeah. This is years ago.

00:07:31.340 I have a near perfect score right now. I know. Yeah. Our scores, I don't think I've ever been higher,

00:07:36.060 which is weird because I thought that when we, we completely paid off our mortgage that,

00:07:39.980 that has dinged me. I'm, I, my score has gone down for a tie because we paid off our mortgage,

00:07:45.340 which means we don't have as many lines of credit. Yeah. But that also, I mean, like you

00:07:48.540 only need a really good credit score if you're, you expect to take on a ton of debt.

00:07:53.180 So get to the juicy stuff. Come on. Right. But anyway, so I'm just, I'm framing this a little

00:07:57.500 bit and, and, and I'm just pointing out that people are beginning to view debt payoff and the

00:08:02.140 concept of capitalism and even just faith in fiat currency with increasing skepticism,

00:08:07.900 loan defaults and late payments are on the rise. Democratic, socialists, political figures like

00:08:12.620 Zoran, mom, Donnie are gaining serious traction. The betting odds have about 95 to 96%. Now he's

00:08:19.260 even citing them in his speeches now. Cause he's just like, don't ask me, ask the people putting

00:08:25.660 money on this. And even our governments are spending like someone with zero expectation of,

00:08:30.300 of paying off their debt. So us social security is likely to falter in 2032 to 2034. It's in less

00:08:36.380 than 10 years. The UK is set to experience a social security crisis in the early 2030s as well.

00:08:42.620 And this matters because something's got to give. And in the past, this has involved various forms

00:08:47.340 of debt jubilee, even though you say that this just doesn't happen. So what we're going to discuss

00:08:51.820 and what I've, what I've researched is this situation with consumer debt today,

00:08:55.020 the situation with government debt today, because I think people don't really realize it,

00:08:58.540 or they need to be reminded how unsustainable debt has been dealt with historically,

00:09:02.380 how this could go poorly, because there are times when people tried to

00:09:06.860 sweep it under the rug and it doesn't go well. And then how this could go well,

00:09:11.580 and how individuals might prepare, like how maybe we should rethink our investing strategies

00:09:16.700 based on all this. So yeah, this is, this is important. So US consumer debt is really high.

00:09:23.660 We're at an all-time high reaching 1.21 trillion in Q2. That's, that's just, it's, it's, it's getting,

00:09:29.340 people are using a lot of debt. Credit card interest rates are 22, 24% this year. And that's,

00:09:35.420 that's compared to around 15% last year. So not only do people have tons more debt than before,

00:09:40.460 or a lot more debt than before, but like the interest rates are higher, meaning they're way

00:09:43.820 less likely to be able to pay it off. Right? So we're getting sort of, we're reaching terminal

00:09:47.900 velocity here. Delinquency rates for credit cards and other non-housing debts have increased to levels

00:09:52.860 well above the pre-pandemic norms. In Q2 of this year, about 4.4% of all debt was in some phase

00:09:59.820 of delinquency, which is quite high. You know, it seems like, oh, just 4%, like that's, that's pretty high.

00:10:04.540 And Klarna, that's the buy now pay later company reported a 17% increase in consumer credit losses

00:10:10.460 in Q1. That's about $1.36 million. So it's, it's, it's, it's not good. Student loan delinquencies are

00:10:18.940 also rising. And this is a form of debt in the United States. It's harder to evade using bankruptcy

00:10:24.540 or well, sort of impossible to evade using bankruptcy. And this is, especially after during

00:10:30.460 the pandemic, there were a lot of like sort of, we'll just put this on pause things. And a lot

00:10:34.620 of people thought that it was just going to be canceled, but yeah, no, it's not going to be

00:10:38.860 canceled. In March 25, just 35% of federal student loan borrowers made their most recent payments

00:10:45.580 on time. So basically two thirds of people just didn't make their student debt payments on time

00:10:54.380 and the rest were at risk or already in serious delinquency or default. So as much as I at first

00:11:00.540 was like, well, this it's never been worse. This is, this is actually terrible. Do you think that we're

00:11:04.860 at an all-time low point or do you think that's not the case? I think, what do you mean an all-time

00:11:10.220 low point? Like, are we in more serious debt doo doo today than we have at any other point in our lives?

00:11:17.340 I, I guess. No, it was actually worse before, around the time we graduated from college.

00:11:24.220 So U S consumer debt has, has reached nominal record highs in 25, but adjusted for economic

00:11:30.700 growth. It remains below pre 2008 financial crisis peaks. It's even declined slightly in recent

00:11:36.700 quarters. So I can sort of show you like, and this also tracks with bankruptcy trends as well.

00:11:42.300 I can show you the Google trends for bankruptcy and it peaked around 2008 with that housing crisis.

00:11:51.340 So we were actually, you know, as much as things are bad now, they're not at an all-time bad. I think

00:11:57.340 things are just a little bit different. Like by now, pay later services did not really exist then.

00:12:02.060 People didn't have the same kind of absurd, absurdist.

00:12:04.700 Yeah. These numbers don't look high now at all. Come on, Simone. This looks like we're

00:12:08.220 relatively normal. If anything, we're at like a low point.

00:12:13.180 The we're, yeah, it's, it's, it's interesting. Yeah. I mean like this, I'm putting this here because

00:12:18.140 I thought that we were at an all-time bad point and, and this surprised me. So I do want to point

00:12:25.020 it out here, but I also at the same time think that the, the mental attitude toward debt combined

00:12:30.380 with our collective pessimism around capitalism and the ability to get jobs at all at this point

00:12:37.660 still makes it different and more dangerous than it was in the past. And we're going to get into it,

00:12:42.780 but in the past, every time there have been debt jubilees with consumer debt or what you could call

00:12:47.900 consumer debt, like with average people, it hasn't been because technically they're in more debt and

00:12:54.700 they can't pay it back. It's because technically they're showing extreme signs of unrest. And that's

00:13:00.300 what I'm feeling. That's the, that's the sentiment and the, the zeitgeist right now. Okay. Okay. So

00:13:06.620 that matters more. Explain to me how this has happened before, because right now I'm still thinking,

00:13:10.700 okay, people took out dumb debt, but my thought is still, but companies own this tech debt,

00:13:16.380 pension plans own this debt. Nobody's going to like, how can you convince them? How can you just

00:13:21.580 take that money from them? Right? Like, well, and I mean, yeah, so another, another argument against

00:13:26.300 my point in, in favor of yours is that bankruptcy in the U S is, I don't know how this, it's incredibly

00:13:33.340 soft on people. Basically you've bad credit for 10 years and non-essential assets can be frozen,

00:13:39.020 but you're still like, you can have a car. You're allowed to keep like most of your stuff,

00:13:44.860 like not luxuries, but like you actually don't lose that much. And I think a lot of people,

00:13:50.300 the attitude is just, Oh, I'm just going to declare bankruptcy bankruptcy. The United States actually

00:13:55.500 has an, I would say an incredibly generous and lenient policy towards bankruptcies, which I think put us in

00:14:02.300 a form of like pseudo communism already. It's like communism. It's like capitalism was like gutter

00:14:08.140 rails in keep like, like your life is like, not, you're not like in debt or slave or whatever, like

00:14:16.380 used to happen. Right. You know, you don't even have to go like live in the slums if, if you declare

00:14:23.020 bankruptcy, right? Like, it's just sort of like, okay, all of the really expensive stuff you own

00:14:28.620 that isn't part of your like daily life. That you're not going to hide well at that.

00:14:33.180 Or that you don't hide well. Yes. Yeah. I mean, you notice how many people are declaring bankruptcy

00:14:38.700 with like a ton of stuff in crypto cold wallets somewhere. You know what I mean? Yeah.

00:14:42.700 Which is, it's, it's, it's kind of messed up. And that's why, again, I'm pointing to

00:14:47.100 the sentiment more than the actual numbers. And it's still really worries me. But what worries me

00:14:55.340 more is government inability to pay debt obligations. So like I said, US social security

00:15:02.140 projected to be insolvent by late 2032. That's really freaking soon. UK state pensions are it's

00:15:09.660 pay as you go. And it's generally funded from current taxes. So there are major concerns about

00:15:14.380 the sustainability of the defined benefit, both private and public pension plans and the adequacy

00:15:20.140 of future benefits. And, and remember like what, what the per capita GDP in the UK is worse than the,

00:15:27.820 that of the poorest state in the US, right? Yeah. Yeah. For people who don't know this,

00:15:32.540 the per capita GDP of the UK is, is lower than I think it's Mississippi or Alabama. I don't remember.

00:15:39.020 Yeah. And so that's, that's scary. And other Western countries also face sustainability crises

00:15:47.500 in, in the early 2030s. So, you know, okay, we're maybe like five years away from starting to see

00:15:55.420 bad things happen, but it's, it's getting there. Canada's currently better position actually due to

00:16:00.220 early reforms. Cause they had a crisis a little earlier on, but I don't know. They're also like,

00:16:05.100 oh, you can't get the medical care you want. Why don't you consider made? Why don't you just end

00:16:10.460 your, end your pathetic existence? So I don't know. I feel like they solved it, but not in the way that 1.00

00:16:16.940 people want. I just being like, yeah, you should consider dying. And basically all systems are going 0.97

00:16:26.140 to require some form of benefit reduction or tax increases or later retirement ages just to remain

00:16:32.540 sustainable. So we also just need to be aware of the fact that, okay, while you're saying yes, Simone,

00:16:38.140 the governments or the U S is already on this like quasi communist system where people just kind of

00:16:43.980 fall back, you know, they declare bankruptcy and they go on government assistance and everything's fine.

00:16:49.020 And it's like, yeah, that's fine right now, but it's not going to stay that way. So let's,

00:16:53.980 let's just take a break and look at the past for a second and see how this has gone well and see how it's

00:16:58.140 gone poorly. Historical Jubilees are interesting and I just didn't know about them, but basically like

00:17:04.860 people, rulers have repeatedly canceled debts without consent from creditors to end, evade,

00:17:10.620 or calm rebellion, turmoil, class conflict, revolution, or societal breakdown. Like any,

00:17:15.420 any sort of form of like, oh my gosh, we'll just like make it disappear. In ancient Mesopotamia,

00:17:22.620 king kings of Sumer, Babylon and neighboring areas regularly or periodically canceled debts for

00:17:29.980 peasants and small landlords often at the start of their reigns. So you'd like come in as a new

00:17:35.020 king and be like, don't you love me? You don't have to pay your debts anymore, which doesn't seem that

00:17:40.700 dissimilar from like campaign promises made by politicians. Well, if you're a king or something

00:17:45.660 like that, it's a little different. And there's a lot of reasons you might do this that you wouldn't,

00:17:49.820 if you were a democracy. So when you're a king, you're basically being like, what's less likely

00:17:56.300 to kill me? You know, the bankers or the citizens, right? Especially if I'm about to do a pogrom or

00:18:03.100 something like that, it's like the bankers, right? Like they're, they're way less of an active danger

00:18:09.340 to me. And especially if I'm canceling debts on like big rich people debts too. Right. So like,

00:18:15.420 like, I think that there was less participation in debt marketplaces in that time where now if you

00:18:22.460 cancel debts, it's granny social, you know, retirement pension that you're actually robbing 0.57

00:18:28.540 rather than, you know, some, some, you know, secluded minority, ultra wealthy population.

00:18:34.960 Yeah. Who is like pretty easy to take out, you know, cause you didn't care about them.

00:18:39.160 So let's jump forward though, to, to ancient Greece where so long. So so long. Yeah. So long. He's like

00:18:45.880 the early democracy guy, right? Yeah, I guess. Yeah. So yeah. So long was one of the pioneers of

00:18:51.380 democracy if I'm remembering correctly. I'm thinking back to this great courses lecture, but all I can

00:18:57.040 really remember is the cadence and accent of the woman, the female professor's voice and not what

00:19:01.640 Solon actually is famous for, which is really annoying, but yeah. Solon's Psysecthia in 594 BCE

00:19:09.400 involved forgiving personal debts. He banned debt slavery and he wiped out mortgage debts in Athens.

00:19:15.640 And this was originally considered really controversial, but it was eventually credited

00:19:20.460 with preventing revolution and laying the foundations for Athenian democracy. So credit

00:19:24.980 eventually did resume as societal structure stabilized. And this is, I think one of the earlier examples of

00:19:30.800 both democracy being either enabled or protected by this action, but also about how like, well,

00:19:38.620 well, this does initially lead to a crisis of like people being willing to, to give debt,

00:19:45.040 which is essential for innovation and growth and capitalism in general.

00:19:48.840 Yeah. Like it's very, very important to make democracies and society work.

00:19:53.820 Mm-hmm. It basically like greed and opportunity will bring it back with time. If, if basically the,

00:20:02.920 the, the, the, the, the Jubilee is executed in the name of creating a stable society instead of just

00:20:10.920 sweeping something under the rug. And I want to highlight this as a core, in my view, separation

00:20:17.220 point between the success cases and the failure cases. There are the failure cases where people do this

00:20:22.860 out of greed, or I just don't want to deal with it, or just give me the power or vote me in.

00:20:28.580 Yeah. And it goes really sideways. And then there are the people who are like, guys, this is

00:20:33.900 really going to suck. Like, I, I don't know how to tell you this, but we have to do it for the good

00:20:38.600 of our future. And then it goes really well. If, if initially. So tell me those cases, when, when has it

00:20:45.000 worked out other than ancient Greece, where again, it's not really analogous because you're not taking it

00:20:49.160 from granny. Yeah. So the, this is Japan, Japan, because Japan has actually done this a ton,

00:20:56.600 like a lot. Like how many times has Japan done this? Why does anyone lend money in Japan?

00:21:01.620 I know. I know because we Japanese, because they are a collectivist culture that takes care of their

00:21:09.080 own. And they're also, I would argue they're very future oriented. They're very responsible and they do

00:21:15.300 care about the collective good in a way that's like very deep set and cohesive that you just don't

00:21:21.080 really see in more diverse, competitive, and less cohesive cultures. So this first happened

00:21:27.140 in medieval Japan during the Kamakura and Muromachi periods that the shogunate issued edicts known as

00:21:35.780 tokusei, like literally virtuous government or benevolent rule, which effectively functioned as

00:21:42.660 debt jubilees. They were decrees that canceled debts often in response to peasant uprising given

00:21:48.360 by like, and this was typically driven not by like irresponsibility, but just bad stuff happening

00:21:54.180 like famines or epidemics or, or it's in some cases, exploitative lending practices. And this,

00:22:01.400 this dated actually even earlier back to the roots in like the Nara and Haiyan periods. That's like

00:22:06.780 7, 710 to 1185, but it became more prominent in the 13th to 15th century. So again, this is going

00:22:14.820 like way back and they did it a lot. The most famous early example is the Ainin Tokuseri of 1297 issued by

00:22:25.600 the Kamakura shogunate. It annulled all debts contracted before that year, allowed vassals to reclaim

00:22:32.060 pond lands without repaying the loans. And it canceled interest on older debts. And it was

00:22:37.040 motivated by the need to bolster the military strength and basically protect Japan against

00:22:42.780 Mongol invasions and to address widespread debt burdens among the warrior class. So this wasn't 0.64

00:22:48.040 like, Oh, do it because I want to become, you know, like I want to be secure as a shogun, or I want to

00:22:53.460 like take out this one group that I hate. It was like, Oh man, the Mongols are coming and our warrior 0.85

00:22:59.280 class, like they've lost their lands due to like bad debt. Yeah. Let me like, we need to protect

00:23:06.240 our land. So like, maybe we should rebuild a more stable society. So we don't get totally wiped out

00:23:11.640 by the Mongols. Like everyone else is, which is, is really, really interesting. So, so there were

00:23:17.260 more, but I'm going to, I'm going to skip forward to the one that I think is the most scary that I'm

00:23:23.500 like, Hmm, I could see this kind of happening, especially given the trends that are happening in our

00:23:28.080 government now, or like not in our government, but like sort of the, the vibe shift taking place

00:23:32.800 with regard to skepticism around capitalism and what politicians are getting popular for.

00:23:37.220 So this is the one I'm like, Ooh, so this is world war post-World War II currency reform and debt

00:23:43.380 resolution in Japan in 1946. After Japan's defeat in world war II, the government faced massive sovereign

00:23:49.920 debt about 267% of national income by March, 1945. And this was Japan, Japan. Yeah. 0.90

00:23:57.200 The interesting thing about this is it happened in part due to demographic collapse. And so we're

00:24:05.480 looking at a scenario that's very similar to what the rest of the globe might be going through in the

00:24:10.220 near future. Yeah. Well, and this is, you're also going to see this with the next one that happened

00:24:14.320 more recently as, as part of what's come on. So when Japan did this, did they do it for all kinds

00:24:21.260 of debts? Like was, no, hold on. No, this is no, this is way scarier. This is way scarier than a debt

00:24:26.340 Jubilee, but Oh, economics. You're thinking about the economics reform. This is, this is different and

00:24:31.820 this is more violent. So, right. So we have massive sovereign debt. We have hyperinflation. We have

00:24:37.220 economic ruin. You know, they got nuked. Like it was, this was a really bad time for the Japanese

00:24:42.480 people. They needed to rebuild and they basically had like no ability to do so because like nothing

00:24:47.660 was worth anything. Everything's broken. Everyone's starving. Like this is horrible.

00:24:52.380 So while this wasn't explicitly a Jubilee, the 1946 financial emergency measures effectively wiped out

00:24:59.580 much of the real value of debts through currency reform and wealth confiscation. So this isn't just

00:25:04.920 currency reform. It's wealth confiscation, which is 100% starting to bubble up in various state

00:25:13.480 non-national legislatures. It always goes really bad. Like have you, are you familiar with the

00:25:17.980 California bill that was proposed or that's, that's going to be voted on this election? I can't remember

00:25:23.280 exactly what percentage of it it is, but it's this bill that's like, Hey, shall we just, you know,

00:25:30.000 we have some financial troubles? Shall we just like have all billionaires in California pay 5% of their

00:25:36.820 net worth? And this includes just like the value of their stocks, like not even like their cash.

00:25:42.260 Yeah. To help us pay off this debt. It's just a one-time thing. And like, like the guys on the

00:25:49.300 all in podcast who are all billionaires and like, I think one or two of them is still in California.

00:25:53.140 Most of them got out obviously. And this is, this is effective like beginning 2026 if it's passed.

00:25:59.040 So, you know, they're all just going to like move out in a second if this gets passed and they're

00:26:04.680 all like, well, why would people not vote to pass this? Like the vast majority of people are not

00:26:08.440 billionaires and they don't care. And like the billionaires just handle the problem. But this

00:26:12.780 is an example of legislation that is already being voted on right now in the United States. I'm just

00:26:17.380 like, Hey, why don't we just confiscate the wealth of the, of, of wealthy people? And that, again,

00:26:22.260 this is part of what this Japanese measure was. So here's what exactly happened to Japan in 1946

00:26:27.320 on February 16th and 1946, the government announced surprise measures, surprise measures. Okay.

00:26:34.340 Surprise measures. So you don't get a chance to leave first. Yeah. They didn't get the warning

00:26:38.520 that the all in podcasters got. Um, all bank accounts were frozen. All the end notes were

00:26:44.840 invalidated unless deposited. So if you're holding a dollar doesn't work anymore. Um, and a new yen

00:26:52.300 was introduced at a one-to-one exchange rate withdrawals were severely limited, initially

00:26:57.280 300 yen per household head plus 100 yen per member later, 100 yen per month per person,

00:27:05.500 barely enough for survival. So just to be clear, again, your money doesn't work anymore. All the

00:27:11.300 cash you have is broken. Only the stuff you have in banks is still valid with now a different kind

00:27:17.480 of yen, but you, you, you're only allowed to withdraw the tiny amount, barely enough to survive.

00:27:24.380 Okay. And then, so this was followed because this is just the beginning by a massive one-time

00:27:31.100 property tax in autumn of 1946, levying up to 90% on assets, including blocked deposits. So not only

00:27:41.120 were your bank accounts frozen, you couldn't even pay it because you couldn't take out the money.

00:27:45.220 Yeah. I mean, I mean, I mean, you had, you know, maybe you had a thousand yen in your account. Now

00:27:49.660 you can only take out, you know, 300 plus 100 per additional family member. Oh, but by the way,

00:27:54.500 we're going to tax 90% of it, which, you know, just so, you know, yeah, it doesn't even, it doesn't

00:27:59.880 even Thanos away. It's, it's not even decimated because it's, it's the inverse of decimated.

00:28:05.560 This happened in 1946. Yeah. People don't know how bad it was in Japan during this period. One of the 0.99

00:28:11.120 fun things I learned recently, actually, is, you know, a lot of people, they criticize the U S or

00:28:16.060 like the U S doesn't have any of its own native foods, you know, like they'll be like French fries

00:28:20.500 don't count. Cause they were invented here. Like burgers don't count. Cause they were invented here.

00:28:24.300 And I'm like, well, they've definitely been modified since then. But I'd point out here,

00:28:28.400 what a lot of people don't know is if you're going by that definition of where a food was invented,

00:28:34.300 in which nation gets to own the food. Ramen is an American food because ramen is only popular in

00:28:42.340 Japan because American aid efforts delivered it to Japan in large amounts and heavily subsidized

00:28:48.640 it for a period. So many Japanese people during this period of intense poverty grew up eating tons

00:28:53.400 of ramen. Yeah. And isn't that funny that like, even now ramen is kind of, it's, it's like a shorthand

00:28:58.560 for eating poor person food. Yeah. And, and that's what it was. Which I've done, you know, I've, I've,

00:29:06.180 I've had the, you know, two, two pencils for my chopsticks to eat ramen. That doesn't sound safe.

00:29:14.040 Well, I didn't have other chopsticks at the time. That's what you're going to find. Oh boy. Yikes.

00:29:22.760 Not to take our, our, our ramen deviation too far guys, but so there's this, like I learned,

00:29:29.560 I discovered when, when I traveled to Malcolm to Seoul with Malcolm, this thing where they it's

00:29:36.260 ramen, but macaroni and cheese and it's freaking the best thing in the world. And then Malcolm and I

00:29:42.160 found this amazing Asian food store close to us where I could buy that stuff, but it's really,

00:29:47.440 it's like $5 per packet. Whereas, you know, obviously you can get like 16, 20 ramen packets

00:29:54.300 for like $5. And I discovered that, and I'm an idiot for not realizing this, but I'm saying this 0.95

00:30:00.360 because maybe you don't realize this either is you can just take, we buy bulk cheese powder, 0.97

00:30:04.440 like the kind that you get in mac and cheese, but we just buy it in bulk. Who's your farms on Amazon.

00:30:09.420 And you can just put that in, in the ramen. Like you drain most of the liquid out of it. I still put in

00:30:16.060 the, the chicken or beef or whatever. You could put mac and cheese cheese on ramen. It's freaking

00:30:21.620 amazing. Oh, ah, it's like all I want right now. So good. I am also craving popcorn though. I'm

00:30:31.400 craving. I'm so hungry. I'm so, I'm, I'm always hungry anyway, whatever. But anyway, right. So

00:30:37.560 right. Your bank account is frozen. The money doesn't work anymore. Just when you think it can't

00:30:42.940 get any worse because you're on, on like this really limited budget as imposed by the government

00:30:46.960 now, 90% of the money in your bank account evaporates, but this is also property tax. So

00:30:51.440 like, you're also like your, any of your assets, your property, your, you know, real estate property,

00:30:55.720 et cetera, is being taxed as well. These tax revenues are being used to repay the government

00:31:01.360 bonds and interest. So the government's actually being good on that stuff. And then war related

00:31:06.060 compensations because Japan, you know, we nuked them and stuff, but now there's still, 0.96

00:31:10.500 you know, there are punitive damages that Japan is expected to pay to, to both companies and

00:31:15.080 citizens were offset by these special taxes. And, and so. Well, you know what I like about this in

00:31:21.680 Japan's context, why I could sort of understand it, even if I was a rich person, I'd be like,

00:31:27.080 okay, my country sort of went all in on a war with another country. I, as a citizen of this country

00:31:34.560 have to bear the cost of losing that war. Yeah. Yeah. Yeah. And I mean, I feel like the Japanese 0.99

00:31:40.620 people of all like are more likely to collectively be like, yeah, we're going to have to take this for

00:31:46.340 the team. You know, like this, this, this sucks. Also like one thing that makes this a little bit 0.98

00:31:51.280 worse is that one, by the time this happened, hyperinflation was already so bad that it had

00:31:56.900 eroded the real value of many debts, even before the reform. And we're talking like prices rising,

00:32:01.460 rising over 500% annually. Oh, wow. So, I mean, like to a certain extent, a lot of this was absurd

00:32:07.160 anyway, but it's still like scary and bad. And again, we're, we're likely to face hyperinflation

00:32:12.420 before we also experience similar reforms to this. So I, I'm still like, I don't know, you know,

00:32:18.400 history doesn't repeat itself, but it rhymes. And this is a form of rhyming that I feel like I'm

00:32:22.420 starting to, I'm, I'm, I'm hearing the beginning of this little, this little couplet,

00:32:27.420 this little limerick, I'm getting worried. So what happened was basically government debt

00:32:32.860 drastically reduced because they actually got the funds from it from 446 billion yen in 1948 to 316

00:32:39.920 billion yen in 1950. And that's this tamed to the hyperinflation and enabled post-war reconstruction.

00:32:45.760 It paved the way for the Japanese economic miracle of rapid growth in the fifties to eighties.

00:32:51.440 Like this, that, that would not have happened had this sacrifice not been made. The public did

00:32:57.180 suffer massive wealth loss. This problem doesn't happen. I love the, the racist black guy when he's 0.99

00:33:04.020 like, this does not happen in Japan. Well, like, actually that's, that's the thing. It's well, 0.91

00:33:13.400 I mean, well, but anyway, so, so what happened, right? So like one, we had this massive economic boom.

00:33:18.760 It was basically a form of forced wealth redistribution seen as a domestic default,

00:33:25.060 but it, it provided lessons for a modern fiscal fiscal policy. And there was no significant

00:33:29.980 inflation spike after these controls. It eroded trust in financial institutions, but only temporarily.

00:33:37.060 Because again, like when, when these kinds of things, as soon as people start making money again,

00:33:41.940 the, the, the face and financial institution seems to immediately return.

00:33:46.220 No, it's, that's the thing is like greed is, greed is very powerful, especially when couched in

00:33:53.520 functional institutions. And this is a good time for us to switch to two examples in which this went

00:33:59.720 really poorly. When, when these, these mechanisms, these like do over buttons, we're going to,

00:34:07.780 we're going to jump forward to that. We're going to, we're going to jump forward to Abenomics

00:34:10.860 after we look at how this doesn't work well. And essentially it's when you respond, but into a bad

00:34:17.060 system. And we don't want that. So the classic examples are Zimbabwe and Venezuela. In both

00:34:24.060 examples, governments saw drops in revenue caused by different things, but they were politically unable

00:34:29.460 to cut spending. Does that sound familiar? So they printed more money to pay for things. And that caused

00:34:35.860 hyperinflation. So in Venezuela, there was a drop in income, but it was related to huge drops in,

00:34:42.040 in their oil revenue, their oil revenue dropped. Like basically that was well, oil revenue was 95%

00:34:48.120 of its foreign currency earnings. And I think a lot of the younger audiences who listened to this

00:34:53.900 podcast don't realize that like Venezuela used to be famous for being rich. Even on shows that

00:34:59.840 Malcolm and I grew up loving to watch like Parks and Rec. There's this whole arc in like the show

00:35:05.100 where this Venezuelan delegation comes, like they become sister cities with some city in Venezuela

00:35:11.000 and they're all insanely rich and they all have like mansions and servants.

00:35:15.940 We are quite tired from our trip. Could you have your servant collect our bags, please?

00:35:20.220 What did he call me? Tom, please. It's a different culture. Okay. 0.51

00:35:22.740 Do we just select the woman we desire? I will take the large black one. 1.00

00:35:27.100 Did you have some kind of a book with photos of the women available to us?

00:35:30.500 If not, I will also take the sexy black one. 1.00

00:35:33.260 And Malcolm had all these like rich Venezuelan 0.98

00:35:36.560 classrooms and boarding schools and stuff.

00:35:39.160 Yeah. But they're not anymore.

00:35:41.920 But that was the oil. That was the oil. And then as soon as the oil prices crashed,

00:35:46.360 especially post-2014.

00:35:47.540 It wasn't just the oil prices crashing. The core reason Venezuela became so poor

00:35:51.800 is they stopped reinvesting in the refineries. And so the refineries basically degraded.

00:35:57.580 You need to be constantly reinvesting in making sure that these oil refineries like work well.

00:36:04.760 Yeah.

00:36:04.880 And they basically cut all of that because, you know, more money for the people, whatever,

00:36:09.200 whatever, whatever.

00:36:10.200 Yeah.

00:36:10.400 And through corruption. And so all of the parts of the refineries broke.

00:36:14.520 So they're producing, if I remember correctly, like 6% of the oil they used to.

00:36:17.880 Oh my gosh.

00:36:19.540 Like very little oil anymore. Like they're basically working with,

00:36:23.460 because the refineries, they didn't even build them, right? Like the refineries were built by

00:36:27.320 private companies. They just stole them, socialized them, right?

00:36:32.300 This is why you don't want to socialize something.

00:36:34.760 Yeah.

00:36:34.940 When you don't like actually own something yourself. And when you're not going to be,

00:36:39.080 you know, immediately responsible for the cost of that, like you don't need to go to the

00:36:42.320 shareholders who are going to say, Hey, you haven't been reinvesting in the refinery.

00:36:48.000 Those things begin to break down and everyone suffers as a result, which is why communism

00:36:52.200 and socialism works so, so poorly at the time. And this, this is when people are like, Oh,

00:36:57.920 well then just completely give like ownership of everything, you know, make it completely

00:37:02.680 regional, make it completely whatever. Right. Like, like, like, like completely, what are

00:37:07.580 those anarcho-communists, right?

00:37:08.920 Oh, anarcho-communism cannot effing run an oil refinery.

00:37:13.080 No, right.

00:37:13.960 Anarcho-communism cannot run a semiconductor fab.

00:37:17.680 No.

00:37:18.080 Anarcho-communism, no, I'm sorry. It just can't. It cannot run any of the things that your daily

00:37:24.720 life relies on, right? Anarcho-communism basically requires an agrarian society, which we do not 0.98

00:37:31.500 have. And if we move to, we don't want it. I don't want it. You guys can do you. I mean,

00:37:38.260 like I'm okay with that on like a local homestead level, but that's not what is necessary anyway.

00:37:45.040 So like, yeah, basically they're like, okay, we have no more money, but we can't stop the social

00:37:49.820 spending. Let's just print a ton of money. And that led to super inflated prices, shortages of

00:37:57.080 goods. It discouraged local production. It encouraged black markets. It eroded business and 1.00

00:38:02.160 investor confidence. Now look at Venezuela. Not, not great. And then in Zimbabwe, basically following

00:38:08.020 popular, but economically disastrous land distribution. And see, this is another example.

00:38:13.240 It's like, you, you think like, oh, well then all wealth distribution is good per the earlier

00:38:17.840 Japan example I gave. No, it's sometimes really bad. So following the wealth distribution that took

00:38:23.460 place in Zimbabwe, food and export revenues collapsed and governments, the government was

00:38:28.600 totally unwilling to, to reverse course or lose power. It financed itself by printing currency and

00:38:35.980 hyperinflation resulted. So I just want to point out like, there are good ways to do it and there

00:38:40.700 are bad ways to do it. And the good way to do it is like everyone taking a hit for the

00:38:44.240 betterment of the country because they're willing to fight on the same page. But when you have a

00:38:48.360 divided populace or government or just a selfish government, you don't get that. So what happened

00:38:54.260 with, with Japan? Oh, and actually look, here's one more example though. Cause it's, it's not just

00:38:59.200 the Japanese that this, like the one really ancient example, but by the way, this is, this is pretty

00:39:03.580 interesting. I was just looking at the anarcho-communism, like how, how could, cause I decided to ask

00:39:08.140 Grok, like, okay, for me, right? Like how could anarcho-communism run a fab? Basically the answer

00:39:14.500 is you wouldn't have any technology that required microchips in anarcho-communism because the problem

00:39:21.380 is, is, is anarcho-communism cannot manage large investments. Like a fab requires like 10 to 20

00:39:27.400 billion dollars. And I know that people are like, we don't need billionaires. Well, you need billionaires

00:39:32.460 if you want cell phones. Okay. You need people who can risk and say, I want to risk 10 to 20 billion

00:39:38.520 dollars. Yeah. And you can't get that by crowd funding from people with, you know, savings of

00:39:44.640 like a hundred thousand dollars each or something. No, no, no, you just can't. They wouldn't even be

00:39:49.900 able to get the expertise. It's like, you wouldn't be able to get the funding for the years of labor and

00:39:53.900 study to make it work. Oh. And then they're talking about even the global supply chain, because you know,

00:39:57.860 you typically require, you know, one part of the fab is designed in one place. And then it's

00:40:02.740 produced in another, you wouldn't be able to get that either. No, no, definitely not. Absolutely

00:40:07.200 not. But the other form of, I would say like Japanese style, like this is social cohesion at

00:40:13.140 work. This is people taking a hit for the betterment of their society is, can you guess? It's a kind of

00:40:19.280 biblical example. Jerusalem. I know this, right? Yes. The biblical Jubilee every 50 years, debts were

00:40:26.580 canceled. Slaves were set free and lands were restored to their original owners. And this was

00:40:30.640 practiced from around 1400 to 500 BC. Debt forgiveness was granted to fellow Israelites. 0.99

00:40:37.840 Not anyone else. Let's be clear. Fellow Israelites. No, hold on. Hold on. This is actually a really good

00:40:44.440 way to do debt. Yes. Yes. So I'll explain why it's good, because people might be surprised that I've

00:40:49.960 been so against it up until now. I think this is a good way to do it. Yes. So the reason why it's a good

00:40:54.980 way is because all debts that are made have this priced into them. Yeah. You know it, you know,

00:41:02.620 the way I look at it is this is the same way that anyone views giving a loan to like a family member.

00:41:09.180 It's like, you know, I know cousin Jed probably isn't going to pay it back or may ever pay it back.

00:41:14.920 Like great. If he does, if he doesn't, I've planned for this and I'm okay with it because he's family.

00:41:20.560 Right. That's what this is. So the way you would do this, if you were going to do this,

00:41:26.040 is you would say starting this year, any debts made after this year, they get forgiven at the

00:41:32.880 Jubilee mark. Any debts from before this year do not get forgiven at the Jubilee mark because that way

00:41:39.320 that can be priced into every debt given that there's going to be this Jubilee. But what people

00:41:45.020 probably don't consider was in an existing system, why this could be so dangerous and why you'd probably

00:41:50.180 want staggered Jubilees based on a random factor. Like so. Right. Because if you're like year 49 out

00:41:55.800 of 50. Yeah. Because if it's year 49 out of 50, nobody's making any debts anymore. Society grinds

00:42:03.020 to a halt. Right. You know, you, you need to, you need to have a system for handling that. Maybe the

00:42:09.560 way that you could handle that is, Oh, okay. Here's how I handle it. Okay. Stagger the way the Jubilees

00:42:14.840 work. So the Jubilee, I say, we're going to have a Jubilee in 50 years. Any debt made from today

00:42:21.360 until the day of the Jubilee is wiped out at the, sorry, any debt made from today to 25 years from

00:42:30.040 today is wiped out at the Jubilee. But at that 25 year mark, then you get into the next Jubilee period

00:42:37.500 where any debt made from that 25 year mark to the end of the Jubilee, it's wiped out at the next 50

00:42:43.300 year Jubilee. So you never have a period where there is more than 25 years before the Jubilee

00:42:49.600 on the debt associated with that period. Now, of course, biblical thinkers wouldn't have come up

00:42:55.440 with this idea, but that could actually work really well. And I think be a very effective thing for

00:42:59.740 society. Yeah. Okay. I like that. Yeah. So then let's, let's jump back ahead as we wrap this up to

00:43:08.440 the Abenomics Japan functional debt Jubilee, but it's a little more complicated than that.

00:43:15.660 And it really only works in Japan and doesn't cause hyperinflation and stagnation because you have

00:43:24.700 basically a high domestic savings rate. Like you have people who are very responsible and they just

00:43:29.500 save their money and you have cultural and political stability, which, you know, like not everyone's

00:43:36.940 great at that. So most countries would risk much greater instability if they tried this approach.

00:43:44.080 And this is another reason why I feel like, you know, techno feudalism and our future is more like

00:43:49.180 group, like the Israelites and then the techno puritans and the, whatever is like the, the racist white

00:43:55.840 national it's returned to land group, like everyone taking care of their own, because that's how these,

00:44:01.120 like these solutions work. But what basically happened in Japan is that they, they managed this

00:44:06.840 enormous public debt over 250% of GDP. That's a lot of debt through a quasi Jubilee mechanism without

00:44:15.240 formal cancellation of their debt. And the way that they work is they use debt buybacks as a way to

00:44:21.260 prevent market collapse and to maintain low borrowing costs for the government. Most countries avoid this

00:44:27.180 because of the risk of inflation, devaluation and loss of an investor confidence, which can destabilize

00:44:33.800 their economies. But the problem basically is that Japan has their, their bank of Japan, like their,

00:44:42.340 their central bank has been buying large amounts of Japanese government debt. So they're buying their

00:44:47.660 own debt and they now own around 40% of their own debt. And by purchasing the government bonds and then

00:44:56.040 holding them, they, they owe the debt to itself, which is interesting. And this prevents market

00:45:02.640 turmoil. So the, the bond market has experienced surges in yields, basically interest rates due to

00:45:08.660 their lack of private investor demand for long-term bonds and government calls for more spending and

00:45:14.380 then worries about the huge debt to GDP ratio. Higher yields mean higher costs for the government to

00:45:21.020 service its own debt. And the bank of Japan stepped in to stabilize these yields and prevent borrowing

00:45:25.820 costs from spiraling out of control because without intervention yields on government bonds would

00:45:31.320 have probably kept rising. And then this would have forced the government to pay much more to

00:45:35.520 finance its deficit, making a debt spiral where the interest payments would consume much more of

00:45:40.020 the public budget, which is what people are really afraid of happening in the United States, for

00:45:43.660 example. So with an aging population, obviously in its slow growing economy, what you were pointing out

00:45:48.120 to with demographic lapse, which is why everyone has to be watching out for this. Japan relies.

00:45:52.860 So I can understand this better. So they did not, for example, like pay off normal people

00:45:58.460 debts. No, no, no, no. Now this is, this is with regard to national debt, which is the much

00:46:02.880 bigger risk here. And they didn't, they did not default on national debt. They didn't default

00:46:07.440 it. They just bought it back. And then now they own a little less than half of all of their

00:46:13.360 national debt to keep the interest rates low so that they can afford to, to keep it there.

00:46:18.980 And they didn't cancel anything. By the way, the US, the Democrats have talked about like

00:46:24.040 actually canceling our national debt, which would be really bad if that happened.

00:46:28.800 Yeah. And, but the, the weird thing about this and why I'm like, this is just so, I don't

00:46:32.460 understand, like, I can't fully wrap my head around it, to be honest, because the interest

00:46:35.740 paid on this debt by the government is fun, funneled back to the government. Like they're paying

00:46:41.020 themselves interest. So this means the government is not really, it's not burdened by the debt

00:46:46.680 servicing costs in any meaningful economic way. Um, and then, but what essentially they did was

00:46:52.320 they, they prevented a conventional debt crisis, but this also meant that Japan experienced very

00:46:57.980 slow economic growth and deflationary pressures for decades. And that is the big risk of a policy

00:47:04.820 like this is both inflation and stagnation, which I think is kind of, it's one of the reasons why you

00:47:10.220 don't really see Japan being anymore. This source of breakaway innovation and success that it used 1.00

00:47:16.880 to be like when you and I were really little, Japan was like the place where like all the robots came 0.69

00:47:23.160 from, you know, and it's not that anymore. And I think a lot of that is actually downstream

00:47:27.440 of this policy, which created stagnation. I mean, you can sort of create like zombie companies from this

00:47:33.600 because it also allowed companies to maintain, like to continue existing. Like it didn't kill

00:47:38.800 companies that were inefficient because they were still able to get cheap debt, right? Of company

00:47:43.220 debt. It just got rid of government debt. Well, but it still made interest rates low.

00:47:47.620 Oh, so because they had really low interest. Yeah. So they were able to continue servicing

00:47:51.240 their debt and continue to survive instead of just like die when they probably should have.

00:47:55.020 And that's sort of where the stagnation comes in through. But so let's just say that like what we

00:48:00.020 can expect and what I keep talking about and what you, you agree with too, is that as the 2030s hit

00:48:05.820 and as countries, at least like the United States that can kind of get away with this,

00:48:10.780 have to contend with it, they're not going to, like from the way that politicians get voted into

00:48:15.960 office, no one's going to get voted into office saying, I'm going to end your social security

00:48:20.900 benefits, even though social security is going to go and solve it, right? Like no one is getting

00:48:24.440 voted into office for that. Like in France, when it was like proposed that we raised the retirement age,

00:48:29.560 even young people came out and were like, I don't support it, which is crazy. So like,

00:48:33.860 obviously that's going to not happen. So what's going to happen is governments are just going to

00:48:37.260 print more money, just like Zimbabwe, Venezuela, you know, like a lot of these countries and we're

00:48:42.520 going to see inflation. So what we should avoid is basically any sector that, I mean, one, like

00:48:51.160 is subject to inflation, but then in terms of like, I think maybe more people declaring bankruptcy in the

00:48:56.620 future, just because they're like, I can, and people are starting to take on more unsustainable

00:49:01.080 debt. People should just avoid any sector that relies on consumer debt. Like, so financial

00:49:06.860 services, consumer finance and fintech consumer discretionary, because obviously like once you

00:49:13.040 do declare bankruptcy and you can't like, well, my, my take on this is we're not at a uniquely high

00:49:18.660 period of debt right now. Yeah. Isn't that interesting? Just for bankruptcy. Yeah. Outside

00:49:22.700 of government debt, which is uniquely high, but the government wouldn't default on the debt

00:49:28.080 because that's going to like damage all the old people who are the ones who control who gets 0.99

00:49:33.600 elected and everything like that. Yeah. So I see that as being fairly unlikely unless some like

00:49:38.480 radical socialist gets into power. And then if it's on personal debt, I think a debt jubilee

00:49:42.960 in the United States is virtually impossible. I feel like we almost have an ongoing debt jubilee

00:49:49.240 just because we have bankruptcy. As long as bankruptcy exists, because what happened when they were actual

00:49:53.820 regular debt jubilees is like, nah, man, you were a slave, like get your debts. You're a slave. But

00:50:00.260 no, it's more, it's more now that I'm like, after doing all this research and realizing, oh, actually

00:50:05.040 this probably isn't going to happen on a consumer level. We have to be concerned about the government

00:50:08.700 level. What we need to avoid is, is stuff that exposes you to government stuff. So, I mean, okay.

00:50:13.560 Assuming the government doesn't go crazy or whatever, the safest investments are the defense sector,

00:50:18.660 companies with minimal debt exposure and strong cashflow and internal, international funds that

00:50:24.680 are less like, although I honestly, I wouldn't even do international because I wouldn't do international

00:50:29.040 right now. I kind of also though, I like the Ron Swanson approach. Just bury your gold. Yes.

00:50:35.960 And also crypto. That's why I take gold. Or did I? He's like, I have gold buried all over my,

00:50:43.180 or do I? But that's, I think everyone's going to be like, I believe in crypto or do I? But like

00:50:49.700 Bitcoin is at an all-time high. I mean, Ethereum is kind of all over the place, but it's, it's also

00:50:56.200 now like close to its all-time high. As you can probably tell, this episode was recorded ages

00:51:00.420 ago because it's Christmas. And obviously we're not recording episodes around Christmas because that

00:51:05.560 would be insane. Although it was really fun to be going viral right now. What a lot of people are

00:51:12.380 missing about the viral clip is it was recorded back when Simone was pregnant. So ages ago. And

00:51:17.420 as soon as she stepped on that question and that line of reasoning, I was thinking, how do I argue

00:51:23.660 that she's wrong in a way that isn't so completely destroying of her position that the clip doesn't

00:51:30.720 get aired? And, and frankly, I thought I had failed. I thought there's no way she's going to air

00:51:34.680 this. I just too concretely debunked the position she had, but apparently not. So I am very fortunate

00:51:40.860 for that, but that's why my arguments come off as somewhat nerfed. Do you want to sell our Ethereum?

00:51:46.780 Did we sell, we, we have some Ethereum. Yeah. But what, what are you asking?

00:51:52.860 I'm asking if you think we should sell it? Oh, should we sell it? Maybe the last time we

00:51:57.100 sold it all, we got a, we got a car just from like, yeah, I don't know. Maybe when we need

00:52:03.360 the, the big sprinter van for our kids. We should do an inventory of what crypto we have

00:52:07.440 and where in the near future. Stresses me out. I know. I hate money, but yeah, I mean,

00:52:15.400 I, I kind of, I think when it comes to like the Japanese approach of like, we're now like,

00:52:20.900 especially if we're coming to this, like capitalism is bad. Let's redistribute wealth.

00:52:27.280 Crypto is going to be one of the really big things of like the way that people will.

00:52:32.040 Because it's what the government is going to have a harder time taking. Yeah. Be like, I don't know.

00:52:35.720 I lost it. And there's going to be a lot of last crypto around the time.

00:52:42.140 The thing about crypto is you can build it into the blockchain that a debt mechanism works. So

00:52:48.160 you're not really reliant on laws or the governments to ensure that somebody pays back

00:52:52.200 their debt. The blockchain itself can make it and pay back their debt. You could, but I'm just,

00:52:56.360 I'm just referring to like, what are ways aside from literally burying gold in your yard? I mean,

00:53:01.520 gold is at all time highs too now where you could more effectively shield your money from governments

00:53:06.580 that are like money, please. Money, please. Money, please. And I, one worries about these things,

00:53:17.100 man, I'm just like going hard on Parks and Rec. Yeah. This, this episode. Yeah. Basically the TLDR is

00:53:23.140 yeah. Debt consumer debt right now is actually not as bad as I thought. Malcolm is kind of right.

00:53:28.200 We basically debt Jubilees, at least in the United States already, because we have bankruptcy and

00:53:33.620 bankruptcy is just to get out of jail free card right now, but where things are unsustainable

00:53:38.220 is when it comes to social programs in the 2030s. And this isn't even factoring in dependency ratio

00:53:45.140 cascades when we have more old people and like net tax drains and we have net tax contributors in 0.69

00:53:50.420 countries with demographic collapse, just making this so much worse. So things are going to get

00:53:55.140 weird. We're likely to face hyperinflation. We're likely to face like a crisis of capitalism and people

00:54:01.260 turning to socialism. And who knows if AI is going to be sufficient to help us through all that.

00:54:05.860 And so we need to expect that and just, just be ready for it. And maybe the more self-sufficient you

00:54:13.360 are, the better, because basically only cohesive societies where everyone's in to go on like

00:54:18.260 things together, like in Japan or like in Israel, probably that's, they'll be fine. America.

00:54:26.920 Like we're not, we're not known for our social cohesion. No, I think it would go over terrible.

00:54:33.020 I think we're Venezuela in a few years. If we do some sort of debt Jubilee here.

00:54:36.540 Yeah. So unfortunately I would love if California passes that law and a bunch of tech billionaires

00:54:43.020 move. I mean, I kind of don't know how they couldn't pass that law. Like how are people

00:54:48.240 not going to vote for that? You know? So anyway, I'm watching it closely. It reminds me of that

00:54:53.360 freedom tunes one where it's like, you, you don't have a million dollars. You don't have a hundred

00:54:57.440 million dollars. Like why do you care? Why do you care? And he's like, well, it'll crash the economy

00:55:02.620 if we do. And they're like, you don't have a hundred. Do you hear this guy thinks he has a hundred

00:55:06.580 million dollars? Oh my God. I just, yeah. I, anyway. My concern is that forcing the best

00:55:15.280 performing stockholders to sell off 25% of their earning shares would completely crash

00:55:20.240 the market forever. You don't got a hundred million. No, you don't know you don't got a hundred

00:55:26.460 million. No, you don't got a hundred million. Okay. The best case scenario, best case. It raises

00:55:36.220 enough to fund the government for less than three days. I love you. Economists say this

00:55:42.280 is a bad idea. And then they're like, do those economists have a hundred million dollars?

00:55:45.780 Oh my God. We're all doomed. I don't know what's going to happen, but money's worth it.

00:55:52.880 Love you to death Simone. Love you too. Okay. Well, I usually only listen to podcasts except

00:55:59.380 for Malcolm and Simone, but I always watch that, but we put a lot of effort into the visuals

00:56:03.200 for the podcast. You do. Stop giving me credit. Credit belongs where credit is due.

00:56:10.420 I'm just waiting a bit to see if that, there it is. Where was it?

00:56:17.340 It was behind something, not far from where I normally put it. And for people who ask about

00:56:22.620 camera quality, the camera that I'm plugging in, the one that we like more is actually like

00:56:27.060 half the price of the other camera. It is just so hard to find.

00:56:37.280 But it's food. Thank you.

00:56:43.900 It is important to eat. Yeah.

00:56:46.120 And I think I look good now, right?

00:56:50.160 You look gorgeous. You just look better by the day. And then, oh my gosh, when your hair turns white,

00:56:56.060 I don't know what I'm going to do with myself.

00:56:58.900 By the way, for people who don't know, my family, I don't know why our audience would know this,

00:57:02.720 but a trait that we have is our hair turns like actually white.

00:57:06.720 You become silver foxes. Oh my gosh.

00:57:09.100 And it doesn't decrease in volume or anything. Yeah. It's just gets a very voluminous white hair,

00:57:16.120 which I already have quite a bit of that you just, you know, it gets drowned out by my other hair.

00:57:20.040 There's more, there's more than before, but I mean, you're not anywhere close to going all white. 0.56

00:57:24.360 You've got such a long way to go. So I have a lot to look forward to.

00:57:28.680 But you like that look, the all, the all white look?

00:57:30.780 It's so pretty. I wish I had all white hair. I'm never like my, my family never really goes 0.97

00:57:36.540 white. I think, I don't know. I don't know. We'll see. 0.70

00:57:41.460 Anyway, how did people respond to the episode today?

00:57:44.480 They liked it. What I found to be really comforting was there, you know,

00:57:48.860 a lot of married couples listened to our podcast and a lot of women chimed in to say, yeah, 0.97

00:57:53.640 early in my wife days, I too was sassy or dismissive or, you know, openly made fun of my

00:58:00.480 husband in public. And then I saw that it really hurt him and I stopped and I'm glad. And then there

00:58:06.400 were also husbands who were like, yeah, my wife used to do this. And I pushed through. And after 0.65

00:58:11.660 a lot of talking about it, it finally worked. So like, I think a lot of the functional couples

00:58:15.420 who listened to this podcast have been in this position. And I think, you know, we're, we're all

00:58:20.660 just being raised in this culture where a lot of really normal or sorry, toxic things are normalized.

00:58:26.760 And it's encouraging to know that people, when they see how logically this really hurts others

00:58:32.700 is they get over it and they're able to push it. It's about wives sassing their husbands. And I

00:58:37.040 think only by watching this podcast, can you escape the nightmare that you will live in. If you don't

00:58:43.360 watch this podcast, aren't exposed to this, cause then you get normal celebrity culture.

00:58:48.880 Well, there was this one other anecdote that someone posted. I don't know if they were married or not

00:58:52.900 that I thought was really a great, I guess, analogy or just way to, to frame this differently too,

00:58:59.540 for women that I might present, which is he was talking about playing a game like Fortnite or

00:59:06.180 some kind of like first person shooter group game with his little brother. And he kept calling him

00:59:11.400 like just trash talking him in the chat, just like calling him stupid and stuff. And his brother at one 1.00

00:59:17.020 point, you know, wrote back and all caps, I'm not stupid, like in a really defensive way.

00:59:21.440 And he realized that like this, this actually hurt his brother's feelings. And he, he never,

00:59:28.080 never would have called his brother stupid if he actually thought his brother was stupid. You know, 1.00

00:59:32.600 like he, he didn't even believe what he was saying in any way. And he didn't think that his brother

00:59:36.900 would have interpreted this as a real accusation or something offensive, but he did. And I think what's

00:59:45.460 going on with this sassy woman or like belittling husbands in public thing is women think that they 1.00

00:59:51.960 are trash talking and being funny and witty and that it doesn't hurt their husbands. Um, and they 1.00

00:59:58.880 don't realize that in many cases, their husbands are being wounded just like this little brother

01:00:03.400 and that they're really hurting them. And that's what one of the wives pointed out too,

01:00:07.280 like she used to do it in public and then she, she'd like saw how her husband reacted and that it

01:00:11.660 just made him really sad and she felt really bad about it. So she stopped and, and that's, yeah.

01:00:17.240 So anyway, the comments were, were good. Really. I mean, of course then we, we had all the men who

01:00:22.500 were like, well, this is, you know, it started cause men stopped backhanding their wives, but like

01:00:27.160 that's, those are very boring, boring comments. I love just the shock, shock, shock, shock, dog.

01:00:35.180 You know, one person pointed out since Alec Baldwin was got it, got his hat tip in, in that episode

01:00:40.320 that the year that he accidentally shot someone on, on the production crew on, on set of, on a film

01:00:47.920 set that that was kind of the viral Halloween costume, but someone came to a party dressed as

01:00:52.840 Alec Baldwin with a, with a prop gun. Oh my God. And like the new version of that costume this year

01:00:59.640 is, is Hassan and Kaya, which that's just, that, that is the costume of the year. Maybe, maybe Twitch

01:01:08.280 and Emeru. Another, another great themed costume. So that's, that's wild. And another funny thing

01:01:16.080 about the whole, somebody was pointing out that like, it's so weird that we live in a society

01:01:19.840 where you have Hassan, who is like this incredibly rich Nepo baby who lives this incredibly wealthy 1.00

01:01:25.280 lifestyle. Who's like chief socialist of like the internet. And then you have Asmogold who is like

01:01:31.460 chief capitalist of the internet. He's not even like a capitalist. No, he really supports social

01:01:36.760 programs. That's my favorite thing about him. He's like, listen, like I had this period where

01:01:40.680 I was on the dole and I just like sat at home and played video games all day. And now I gladly pay

01:01:45.160 my taxes to support a new generation of men to sit at home and play video games all day. Like he pays 0.70

01:01:50.620 it forward. And that is my, that is the best take on, on that, that I've ever heard. I love that that's

01:01:57.360 actually how he lived that lifestyle was just living on welfare. He like, he owns it. He knows exactly

01:02:02.620 what he did on welfare. He knows where his welfare checks go. Like, I really don't like

01:02:07.160 the takes on welfare of like, well, these people are bettering themselves. These people are saving

01:02:12.380 the world while receiving their welfare checks. Like, no, like that, that doesn't, that's very

01:02:17.300 disingenuous as, and that's just another great example of why and how Asmogold is just, he's so

01:02:23.740 beloved now because he's so authentic and he says it like it is, and he doesn't sugarcoat anything

01:02:29.480 and he has fun. So yeah, but enough glazing Asmogold. Shall we get into the podcast?

01:02:36.260 Yeah, we can get into the podcast. I love you. Love you. Love you. All right.

01:02:39.540 Very excited for this one because you, you prepped me for it this morning and I was like,

01:02:42.980 oh, that's actually an interesting take. I thought it was going to be boring. So I put it off forever.

01:02:46.860 Oh, I mean, this is different from, it's part of my money series. This is different from the

01:02:51.560 what is money one, which I'm still outlining, but I still think it's interesting and I still

01:02:56.260 think we need to talk about it. So, and I still think you'll find some parts of it

01:02:59.400 that are interesting. Oh yeah. Cause yeah, you wanted to know about the Japan stuff.

01:03:02.580 Yeah. I mean, like when I heard you talking about this, I was like, oh, this is basic

01:03:06.080 information I need to know for like informational literacy. Yeah. Yeah. And I, I mean, I want

01:03:10.320 to hear what your takeaways are from it too, because this matters from an investing standpoint.

01:03:14.260 All right. Tell me about the presents. Guys, tell me.

01:03:20.280 And Indy, I think you got Titan. That is a really cool present.

01:03:35.460 You sound really excited.

01:03:56.140 And what about you? You got a panda bear?

01:04:03.880 Well, Tinian, this dinosaur, yeah.

01:04:08.320 And what?

Based Camp - December 25, 2025

Could All Debt Actually Just Be Canceled？

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