Could All Debt Actually Just Be Canceled？
Episode Stats
Length
1 hour and 4 minutes
Words per Minute
184.08513
Summary
In this episode of Money Misfits, Simone and Malcolm discuss the growing problem of consumer debt in the United States. They discuss the possibility of a debt crisis, and what it means for the future of our society.
Transcript
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
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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?
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Should you bother? Like, should you just max out your debt?
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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
00:02:16.340
guys remember, cause we covered it on the show, but there was this thing where like dumb people
00:02:20.540
in America thought there was a free money hack. Yes. The check fraud hack. Free money hack was,
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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.
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And now, and then they all found out like, Oh wait, like the bank recorded that transaction.
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I just now owe this much money. Some glitch in the chase banking app where you can deposit a large
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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
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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,
00:03:29.260
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
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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
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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
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they don't actually understand the fundamentals of any of this. They don't understand what fire
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means. They don't understand really what house hacking means. They have no understanding of how much
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anything costs. Like it's weird. Cause it's the poor man version of that meme where I can't,
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I don't even know the TV show, but that woman's like, I don't know. How much can a banana be?
00:04:39.420
$10. I don't have time for this. I mean, it's one banana, Michael. What could it cost? $10?
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You've never actually set foot in a supermarket. Have you? I don't have time for this,
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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
00:05:19.820
fricking pampers. That's like the, that's the. They have subscriptions to like multiple streaming
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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.
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They haven't bought more cars since we have known them in like the two years we have known them
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than we have bought in our entire lives by like a factor of two. I know, I know, I know, I know.
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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
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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.
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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.
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41% of buy now, pay later. 41% made a late payment this year.
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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.
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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,
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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
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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
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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
00:16:16.940
people want. I just being like, yeah, you should consider dying. And basically all systems are going
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
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
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
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.
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
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
00:30:00.360
because maybe you don't realize this either is you can just take, we buy bulk cheese powder,
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,
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
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
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
00:33:04.020
like, this does not happen in Japan. Well, like, actually that's, that's the thing. It's well,
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.
00:35:22.740
Do we just select the woman we desire? I will take the large black one.
00:35:27.100
Did you have some kind of a book with photos of the women available to us?
00:35:41.920
But that was the oil. That was the oil. And then as soon as the oil prices crashed,
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.
00:36:04.880
And they basically cut all of that because, you know, more money for the people, whatever,
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.
00:36:19.540
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.
00:36:34.940
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
00:37:08.920
Oh, anarcho-communism cannot effing run an oil refinery.
00:37:13.960
Anarcho-communism cannot run a semiconductor fab.
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
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
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.
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
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
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
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
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.
00:56:50.160
You look gorgeous. You just look better by the day. And then, oh my gosh, when your hair turns white,
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.
00:57:09.100
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.
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
00:57:36.540
white. I think, I don't know. I don't know. We'll see.
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,
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
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
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,
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
00:59:51.960
are trash talking and being funny and witty and that it doesn't hurt their husbands. Um, and they
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
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
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.