00:15:58.100but you know the other low-hanging fruit take for this is that you know try to so what the
00:16:06.260song is about it's listing all these things in the news you know the knockout game i he's kind
00:16:13.200of implying black lives matter rights there's a lot of riot imagery uh you know people acting
00:16:18.760to fool spitting in a cop's face is one of the lyrics and uh so you can go try that in a small
00:16:24.120town right you know the low-hanging fruit take for me if we're gonna just be serious for a second is
00:16:28.900i mean we do try that in small towns what happens is that you get arrested i mean most of the stories
00:16:35.500we hear of and he's talking about the good old boys try this around the good old boys who are
00:16:39.540raised up right yeah and then see what happens like well yeah that does happen and then you
00:16:45.040lynch them in the press and i'm glad i'm glad you brought that up yeah like the mcmichaels would be
00:16:51.700the example like yeah okay a black guy tried us he was going to abandon houses casing them for
00:16:57.800home invasions he tried that in the wrong town and two good two good old boys father and son
00:17:03.820confronted him and then fought him off and now they're in prison multiple life sentences i think
00:17:08.820they're in there for 750 years and the neighbor who simply videoed the entire thing who recorded
00:17:16.440also got 35 years it was a litigious lynching one of the three white men convicted of murdering
00:17:24.140ahmaud arbery travis mcmichael he received a second life sentence just moments ago over federal
00:17:30.260hate crime charges. McMichael, his father Greg, and William Roddy Bryan were found guilty in
00:17:34.960February of interference with rights, which is a federal hate crime, and attempted kidnapping
00:17:39.620in connection to the killing of 25-year-old black man Ahmaud Arbery. The difference is that this is
00:17:44.820a federal conviction, federal sentencing, and they are already serving time, life in prison,
00:17:50.740in a state court. And what was unusual about this hearing today was that it was mostly about where
00:17:55.620they would serve these life sentences as opposed to how long the sentences would be.
00:17:59.400The defense was arguing strenuously that going to state prison, that being in state prison for these two defendants, for the McMichaels and for William Bryan, for that matter, for all three of them, we expect the argument to come later this afternoon, is that it's dangerous for them.
00:18:15.640Travis McMichael's attorney said that him going to state prison was the equivalent of what she called a backdoor death penalty for him because there's so much hatred.
00:18:24.720She said there had been hundreds, thousands of threats directed against McMichael in state prison.
00:18:30.040And if he goes there, he probably won't survive.
00:18:32.660For their part, the government said essentially that these defendants deserve no special treatment, regardless of who they are and regardless of what's happened.
02:03:16.220We recognize the driving element of contemporary world politics is the new moral force of nationalistic universalism.
02:03:24.160We found a simplified balance of power operating between two inflexible blocks to be the harbinger of great good or great evil.
02:03:32.540We discovered the menace of evil and the potentialities of total war.
02:03:36.720Yet the element that makes total war possible, the mechanization of modern life, makes possible also the moral force that, through the instrumentality of total war, aims at total domination.
02:03:47.320He actually makes an interesting point in the book that I never considered before.
02:03:51.500See, a lot of people look at left versus right or east versus west, this whole one versus the other as a sort of reductive way that multipolarity is more natural and that sort of the one versus the other is unnatural.
02:04:10.500he makes a point that that might actually be the natural configuration of things and he was talking
02:04:16.100about how rome would have two emperors i just i never heard it explained before that what we think
02:04:23.960is just um you know a puppet show of one versus the other it's actually way more complicated it's
02:04:28.740actually not maybe the natural state of things is in a sense left versus right or one versus the
02:04:35.660other and that we're always going to find our way and that's kind of like the east versus west right
02:04:41.740now like the western it's always going to be and if it's made possible through mechanization
02:04:48.040technology we will always build ourselves towards one versus the other and that might be more natural
02:04:56.660than multi-polarity so when people say that multi-polarity is the natural state of things
02:05:00.540maybe not and maybe it's impossible maybe multi-polarity is in like the next coming
02:05:07.300generations just a dream and it's a dream being sold to you just to destroy america and maybe the
02:05:16.180world would be better off without america but you know the world would not be better off with russia
02:05:20.780in charge with china in charge you know and i think there there's enough or you know a centralized
02:05:26.580islamic bloc that you know is kind of decentralized right now but you know if you know american
02:05:34.320strategic dominance just totally retreats like europe's kind of fucked right now i don't know
02:05:40.680if anyone's noticed you know uh and he said like he ends the book in sort of a dour way
02:05:48.200where like he lists all the ways peace is impossible you can never achieve peace through
02:05:53.200economic means through military means he says you know the ideal diplomatic world he imagines a un
02:06:00.220where you know for for peace to actually exist it would it would involve uh he says we would need to
02:06:07.500be more empathetic and more willing to compromise on issues but he's like that's never going to
02:06:11.900happen he says peace itself can only ever maintain a status quo and if anyone ever has an issue with
02:06:18.700sass quote then that peace breaks so like again that was the takeaway from the book that
02:06:25.980really we always speak in a language of peace and of you know ending conflict but what we're
02:06:31.660really talking about is just maintaining a snapshot and that snapshot has to be reinforced militarily
02:06:39.900and that's as best as we can hope for i think like they're reading this book and reading this
02:06:46.300if you adhere to the the realist philosophy there really is no such thing as peace and there really
02:06:52.780is no such thing as you know anything outside of each each each group of people that can assert
02:07:01.580its sovereignty doing everything in its power to assert its sovereignty and to achieve anything
02:07:08.220like total peace you would need to destroy the idea of sovereignty which you would never do
02:07:13.340right so you can only like in a peaceful world the first group that tried to achieve its own
02:07:18.780sovereignty would dominate everyone so you know anyway that that's that's kind of the it's a very
02:07:25.400very long book it's around 700 pages and it goes through the entire history he's not very friendly
02:07:30.060to nationalism he thinks nationalism will ruin the world he also he also defines geopolitics
02:07:36.120in a different term he said he looks at geopolitics like the way i was describing heartland theory a
02:07:41.320couple episodes ago he's he does not like the idea that politics is defined by geography
02:07:47.980that's the geo in geopolitics so you know traditionally geopolitics just meant that
02:07:53.080the only thing that matters is geography he said no no it's about power so we use geopolitics to
02:07:58.840mean sort of the the collective state of all things political geopolitics is region its identity
02:08:07.300it's trade it's economics everything together but he was just like no no it's all bullshit
02:08:11.980nationalism's bullshit geopolitics is bullshit ideology is bullshit he thinks the only thing
02:08:17.400that matters is the search for self-interest through power which is true however i do think
02:08:23.360you need to connect that to the geography and you do you cannot discount ideology because people
02:08:32.680will still still fight and die for it and what we talked about the clash of um civilizations in
02:08:38.820the last episode that we seem to be conglomerating around broad civilizational aspects like we still
02:08:45.260are i think ultimately in a long enough term we will still gather towards there's the west
02:08:52.900and everyone who's not on the west that's good it's going to be like america and europe versus
02:08:59.260eurasia that seems to be like if you let it if you let it collectivize it will eventually
02:09:04.740end up like that like maybe that dual duality that that that constant conflict is the the natural
02:09:12.780end game unless we create artificial chaos unless we create artificial divisions that's an
02:09:20.420interesting way of looking at it the only way to achieve multi-polarity is to create divisions
02:09:25.980you know anyway what do you think about that that theory yeah yeah we'll see we'll see
02:09:34.660all right i know we've been going a bit over now we talked about a lot i'll let you go now
02:09:39.340no worries man all right take care talk to you soon bye
02:09:41.780and maybe i seem a bit confused yeah maybe but i got
02:09:55.840I am here with a very, very fascinating individual by the name of Sean Whelan.
02:10:08.440I've been recommended some of your writing, some of your work.
02:10:11.520And I think it's going to be of keen interest to the listeners of the show because we're going off of geopolitics soon into some very advanced financial stuff.
02:10:24.560and you are a very interesting voice in that regard.
02:10:28.260And I'm going to play the midwit in this exchange
02:10:32.180because finance is something I know a little bit about,
02:14:52.980doesn't have the meaning that it had before.
02:14:54.440All these things you want to work out ahead of time as opposed to afterwards.
02:14:59.160I'm curious, in your experience, have you noticed that there's any types of businesses that are more attractive for sale?
02:15:08.280Or do you work with every type of business?
02:15:10.260Or are there certain ones that are more reliable in this sort of sales situation?
02:15:16.540So I haven't narrowed down to a very specific niche in that sense.
02:15:21.100um the ones that tend to deal with physical things tend to be better positioned for that
02:15:30.260um real basic exit planning 101 the main issues that business owners face is dependency on the
02:15:38.080owner so if the whole business depends on you being there it's not exactly transfer
02:15:42.100transferable to somebody else um client concentration is a big one if more than
02:15:47.06015 or 20% of your client base is in one customer. That's usually way too risky for whoever the
02:15:53.280potential buyer is. And the third item is that your finances don't look like you've been bleeding
02:16:00.540it dry for personal reasons or that you've been running the whole family through the business for,
02:16:05.700which is often tax advantageous. There's a reason why people do that, but that tends to diminish
02:16:10.000the valuation because it makes the business a little cash starved. So that's also why it's
02:16:13.880important ideally a couple years out to start addressing these issues because some of these
02:16:19.020things can take a few fiscal quarters to actually turn around and present in the best light for a
02:16:24.940potential buyer. And I've got a question, and maybe this is unknowable or maybe this is too
02:16:31.120broad of a question, but have you noticed any trends over time? And by over time, maybe I mean
02:16:37.180the past 50 to 70 years. Have you noticed an increase of businesses choosing to sell
02:16:42.820to a buyer or a conglomerate over maybe passing it down generationally?
02:16:49.640So very succinctly, so a medium-sized business, if they're going to sell, usually it's not the
02:17:01.020kids who are going to buy it. Usually they don't have the money available. That is important,
02:17:07.600honestly, is it's better if you're going to sell your business to your kids, you need to actually
02:17:11.480sell it. There's a big problem of parents trying to hand it off to their kids, but they end up
02:17:18.440continuing to control it from behind the scenes. I'm sure there's some fans of Succession, the TV
02:17:23.160show out there, similar sort of dynamic. And that just creates a lot of family drama. And that's a
02:17:30.220whole other area of expertise that sometimes i'll have to bring someone in just to manage those
02:17:34.460family dynamics and a family business award-winning family drama and award-winning family dynamics
02:17:40.320um and so so okay so this actually gets into uh an interesting point um from like a reactionary
02:17:49.900politics perspective i think basically the same way that like modernity has uh dissolved culture
02:17:58.980generally, you tend to hear this advice. Okay. So the buzzword in the industry is generational
02:18:05.740wealth. A lot of people want to talk about, I'd love to be in a position of having general
02:18:09.400generational wealth. It's kind of a more civilized way of saying, fuck you money.
02:18:14.520But then there's also this criticism of that, that, well, everybody knows that,
02:18:19.740you know, then your kids are going to be spoiled and they're not really going to be able to
02:18:23.440take over the company. And by the third generation, they're all trust fund kids who can't even be
02:18:27.900bothered, it becomes like Arrested Development, another award-winning show. And there's some
02:18:35.380truth to that. But I think it's also true because of the predominance of this artificial culture
02:18:43.620that's been created of the typical talking points of atomization and deracination, that everybody's
02:18:50.980going to go out and be an individual, and you're going to go out and get this education through
02:18:54.060the university system, and then you can go off and do whatever you want. And that kind of attitude
02:19:01.620is why the family businesses are not cohesive in the way that like maybe Japan is kind of the
02:19:07.620counter example. There's a long history of the Japanese market almost never has these kinds of
02:19:14.060business transactions, either it stays in the family or it dies. So we have a compare and
02:19:19.560contrast there. And yeah, I think the idea of it being sold is kind of a, it's a modern thing and
02:19:28.600it's kind of an Anglo thing as well. There's an overlap with how Midwestern pioneers, whether
02:19:35.020they came from an Anglo culture or Germanic culture, approach the idea of buying and holding
02:19:39.660on to land very differently. One saw it as just this commodity or asset with a price attached to
02:19:45.580it. And for a certain, you know, everybody has their price, a certain price they'd be willing
02:19:48.540to sell and then more of the germanic culture who came over said you know they were massively
02:19:54.060overvaluing in the eyes of the the prospective buyers the value of the land because they saw
02:19:59.460more kind of like the the homestead or the hay mat of um the security of actually having that
02:20:05.400physical thing as opposed to just its dollar value so the the family businesses tend to work
02:20:10.380that same way but given the culture we're in it's pretty rare outside of like the cargills maybe um
02:20:16.760or the crown family and even they turned it into general dynamics um to really appreciate that kind
02:20:22.640of like dynastic business and it's true because i see many different sides to that because especially
02:20:29.320in our political milieu you'll have people saying like no one has these dynastic families anymore
02:20:33.860on one hand there is the more angle away which is like you know it should be stress tested like you
02:20:40.560shouldn't just be given everything it's it's good that you need to you know maybe pull yourself up
02:20:46.260by your bootstraps maybe that's where that comes from i actually do see the benefit to that
02:20:49.300they don't have these sort of ossified corpse corporations being carried forward at the same
02:20:54.160time you know always throwing people in at the deep end you know or or the drive that i see with
02:21:00.220certain boomers even my own family which is like ha ha i'm gonna spend all of my money i'm gonna
02:21:06.000sell all i'm gonna sell the family farm and i and you know what i'm just gonna jack it off
02:21:11.380right before i die as almost you know because you guys don't deserve it so there's like both
02:21:16.340ends of the spectrum and i'm like yeah and then there's other of course inputs as well but you
02:21:21.880know maybe the idea of having a dynastic business is too foreign you know we kind of you know we
02:21:30.060lionize these great american industrialist families but you know i think aside from like
02:21:36.660the rockefellers or the carnegie like what's the modern one you know what i mean like maybe like i
02:21:42.080i couldn't tell you if bill gates has any kids who are going to take over i assume he's going to take
02:21:46.900it to the grave if yeah if i remember correctly um you know that's why i mean among political
02:21:53.780reasons uh that's a big part of the the gates foundation purely from an estate planning
02:21:57.860perspective is um all of his kids have some small cushion but i think he told them early on that
02:22:05.100like, yeah, you're not going to get this huge inherited fortune. And, you know, from the left
02:22:10.280or more progressive side, I mean, there's arguments where people say, you know, there should be 100%
02:22:14.940inheritance tax or the idea of like inherited wealth is inherently evil. I think that the,
02:22:21.080you know, the desiccation of culture is really the critical variable there, that it's a lot like
02:22:28.600learning how to wield power that if you don't hand it down carefully and in a thoughtful way
02:22:36.780that tends to benefit from, uh, you know, a tradition, let's say, uh, it's, it's very easy
02:22:43.580to misuse it or, or to fumble it. Um, so I think, you know, no, no, but the counter narrative I've
02:22:50.140heard, you know, cause I've thinking about this time and time again, cause I'm in business and
02:22:54.480worked very closely with businesses and the conventional wisdom was always never get into
02:22:59.980business with your family never get into business with your friends and there's you know pros and
02:23:04.260cons to doing that but it seemed to be my entire life the dominant narrative was the safest people
02:23:10.500to go into business with are complete strangers and i'm like well that doesn't sound right either
02:23:15.420because i've seen people get fucked over really hard simply because they've got no connection at
02:23:21.260Yeah. I mean, I think, again, that's kind of part and parcel, same thing of, you know, high trust versus low trust society. Who do you know that you can actually count on?
02:23:32.660And, you know, the fact that we don't have these generational families so much anymore, that sense of, you know, loyalty or, you know, what's the word, filial piety doesn't, you know, has basically been weeded out by a lot of institutionalization, you know, beginning with public school.
02:23:57.080so yeah i it also becomes i think the blind leading the blind where that likely originated
02:24:04.880and probably has more to do with uh you know a father who didn't know how to hand it off
02:24:11.480then getting into power dynamic conflicts with the son trying to pass it off and um
02:24:17.260then everybody just gets frustrated and wants to wants to walk away um and i don't know man
02:24:24.120And there's probably an exploratory nature of that too.
02:25:44.100So that generational, and it's the same thing with the housing market, it's definitely going
02:25:48.120to have to go to someone. And this industry went from extremely bespoke to somewhat formalized
02:25:56.080over maybe the past 20 years, that they're realizing what their business is actually
02:26:01.020worth. That's probably the most significant asset that they own. And in order to be able to turn it
02:26:05.200over to somebody else, that that's been the trend. Now, whether you raise a good point,
02:26:12.880the younger generations being able to afford it is kind of a different matter. And we see that
02:26:17.440even with the housing market. This overlaps with some other topics I'm sure we're going to get into
02:26:22.260as well, but essentially it's a liquidity crisis. Housing is something that people are a lot more
02:26:26.600familiar with, so maybe that's a more illustrative example. The younger generations got into way more
02:26:32.420student debt. They're still carrying that burden. They were completely hoodwicked by academia.
02:26:36.980We should seize the endowments immediately and put tanks in Harvard Yard in order to correct
02:26:40.720that problem. But until that happens, as a one consequence of that is that the millennials and
02:26:47.960let's say the millennials are, you know, have entered their 30s and 40s and never had a starter
02:26:52.220home. So then they've never built up the capital in order to be able to trade up to a bigger home
02:26:57.400in order to have household formation. There's, of course, all kinds of other issues with household
02:27:01.360formation and ability to find a girlfriend, get married, have kids, what have you. All of that
02:27:06.180adds up to all of these boomers who have these McMansions or large houses who are now empty
02:27:10.840nesters and they're looking to downsize. Maybe they want to get that condo in Florida, but who
02:27:16.020are they going to sell that house to? And you see that, you know, the younger generations don't have
02:27:21.840the liquidity and cash for a market to be made to transfer from one stranger to another.
02:27:30.040And Neil Howe, who co-wrote the fourth turning and some others have pointed out that
02:27:33.520If that market can't settle, what's likely to happen is that the younger generations are going to take over as caregiver roles for the boomers and in exchange are going to be able to buy the house.
02:27:43.340So the younger generations are going to provide free long term care for their parents until they pass away.
02:27:48.640And in return, the kids are going to get the house's kind of remuneration for, you know, that necessary service that would otherwise be unaffordable to most people otherwise.
02:27:59.180That certainly reinforces a sense of social immobility, that it's more of a genetic lottery
02:28:06.420of, oh, I'm glad I was born to parents that were able to afford a big house and played
02:28:09.820their cards right when they were young, rather than having the opportunity for yourself to
02:28:16.560What's interesting is I read, I think it was in Bloomberg over the past week, and I had
02:28:21.780to double check this number because it sounded astounding to me, but I had myself checked
02:28:26.880by other people who know. There's something to the tune of 75, I think it's $75 trillion worth
02:28:34.880of wealth and assets currently held by the boomers. And I think this is what you're talking
02:28:40.660about with the gray tsunami, that the article was saying that there's going to be a massive
02:28:45.160transfer of wealth. Now, the question is where that transfer is, because some people hear
02:28:50.520transfer wealth, they think, oh, that's going to the next generation, whereas that transfer could
02:28:55.920be going to cruise lines or dialysis machines or whatever the fuck it might be so and i guess i was
02:29:03.020that's one story where you know they they pass it down a do you does that number sound right to you
02:29:10.260the 75 it might have been 45 but it's in the many tens of trillions of dollars uh i could look it
02:29:15.860up that's one of those factoids i'm sure it's probably the most significant um just kind of
02:29:20.420the inertia of history. I'm sure it's the largest turnover. In your mind, and this again might be
02:29:27.000speculative, do you foresee a significant chunk of that being passed down to the next generation,
02:29:33.140or do you kind of just see it being spent on luxury items and goods and whatever it might be?
02:29:39.900Because I know just anecdotally many boomers in my family and friends' families who've said that
02:29:46.420they are looking forward to just splurging it all before they go which is actually pretty easy to do
02:29:51.820if you're in a high-end care facility resort or whatever it might be yeah that that that part is
02:29:57.860very common uh boomers is i don't want to rag on boomers uh excessively but the um as the most
02:30:06.000selfish generation and that kind of like you know i got mine fuck you mentality um is certainly not
02:30:11.600doing them any favors. I point out it's sort of the opposite of that ancient wisdom of a society
02:30:18.320grows great when old men plant trees whose shade they shall never sit in. Instead, we have the old
02:30:24.280men, you know, stealing the food out from the younger generation so that they're not able to
02:30:29.580start families and build up their own lives. So we have the old stealing from the young instead
02:30:35.060of the old providing for the young, which is counter to how, you know, sustainability and
02:30:40.760persistence works. Mike Green is very good on this topic as well. He has other topics he usually
02:30:47.180talks about more, but that's a big one for him. Lending markets have almost entirely become
02:30:52.740collateralized. A lot of how boomers got their wealth was more on non-collateralized loans,
02:31:02.060even for purchasing homes. So it ends up being a feedback cycle of, well, if you don't already
02:31:07.840have assets to back loans in order to make investments that get you more assets. If you're
02:31:12.100never able to start that cycle, you're just stuck. And it's the boomer generation that have those
02:31:18.860assets to be able to get loans to continue that cycle. And they're, I hate to use the word like
02:31:22.620hoarding, but there is a high concentration that they're holding onto it. There is a tendency for
02:31:27.960a lot of them culturally, like you said, to want to spend it down in that way. The other issue is
02:31:33.820So much of that wealth is held in an asset bubble of these intangible securities, so primarily stocks and bonds. We can get deeper into this, but very succinctly, that's a bit of a Ponzi scheme.
02:31:47.700there's going to be a problem that as they're starting to spend that down, if markets actually
02:31:51.680settled naturally, there'd be massive devaluation as they're spending it down the same way that
02:31:57.340there's massive overvaluation as they were buying into it. Politically, that probably will not be
02:32:03.620allowed to happen, much like mortgage-backed securities were not allowed to settle to
02:32:08.000bargain basement prices. The government stepped in and took receivership and did a controlled
02:32:12.980sell-off in order to keep prices artificially high. There's a whole factor of the role that
02:32:18.020indexing has taken over in markets over the past few decades that plays a role in that. And
02:32:25.520in one form or another, whether the government is directly as a gatekeeper, the way they did with
02:32:30.780Maid Lane and the mortgage-backed securities, or whether they do it indirectly through groups like
02:32:34.840BlackRock, there will be some kind of gating or controlled sell-off. So lack of liquidity in order
02:32:42.500to keep prices artificially high so that boomers are able to generate the retirement income that
02:32:46.380they were promised from this social experiment of 401ks and IRAs, which began in 1974, 1975.
02:32:56.260Same time, you know, Nixon closed the gold window, same time that the NASDAQ was started up.
02:33:03.020So the first generation to really go through this, like we have not seen this done successfully yet.
02:33:08.260And I think I want to take a side by there because you mentioned a lot of things I would
02:33:12.480really like to drill down into many of them at once. But just to start, just to make this very
02:33:18.540real for people, I speak to a lot of people, especially people in my generation, millennials,
02:33:24.020who I think are secretly hoping for something akin to the Great Recession, the huge housing
02:33:31.920market collapse. They look around at all the real estate and they're thinking, when these boomers
02:33:36.740die off, all these houses are going to go on the market. I'm going to be able to do what I should
02:33:41.660have done back then everyone's got this sort of fomo of i'm i'm gonna wait until everything's for
02:33:47.280a dollar and part i would mean some others are thinking you know why would that precisely happen
02:33:54.860again that might not be the right thing to you know so that uh there's historical precedent for
02:34:00.800that um very naively in terms of market theory that would make sense um you know anyone who's
02:34:08.180the movie the money pit with tom hanks and what's her name from cheers uh that's exactly what that
02:34:13.300was about is these people had these huge mansions uh then the great depression happened and they
02:34:18.500sat around and then um the boomers were able to buy them up for a song but they required a lot
02:34:22.900of repair because they'd become dilapidated um as well as just a lot of other things working
02:34:27.700in their favor that they were able to buy into a low market uh which has since appreciated and
02:34:32.820to never come back down. And especially using these assets as a store of value, there's truth
02:34:38.480that the younger generations feel like they, this is sort of what I was saying about what Mike Green
02:34:42.260was saying too, that they've been excluded from participating because the prices have never been
02:34:46.480low enough to really buy in to get any significant appreciation. And it's political because
02:34:51.720boomers need to keep those prices artificially high in order to siphon off enough income for
02:34:56.860them to live off of as they were promised. Now, whether that will actually happen is a great
02:35:03.840question. As bad as the United States is keeping the system ossified, China, I think, is also kind
02:35:13.460of the canary in the coal mine on that. It's going to happen to them and they're worse off than it is
02:35:17.640here. So we can keep an eye on how they handle it. And that will probably be instructive as far as
02:35:24.860how the United States follows suit. Yeah. And just to let people know, that's something we bring up
02:35:31.440a lot as well. Look towards China. America and the West is not the only one experiencing
02:35:37.440very distinct demographic pressures and falling birth rates. A lot of the phenomena that we have
02:35:44.880in the West can be echoed throughout South America even. So we can kind of look around and see,
02:35:51.100like you said, see the future. And part of that too is it, so it is because of the ossification
02:36:02.800of rules and regulations preventing markets from naturally reverting, you know, or allowing natural
02:36:12.020price discovery to occur. More or less since 2008, we've just kind of been flying blind with
02:36:17.940any kind of real price discovery. It's completely formed by credit expansion rather than any actual
02:36:25.500productivity. China is kind of that same model too. I mean, that's the whole progressive
02:36:31.400technocratic model that I think all of modernity is following to some degree.
02:36:40.240That's kind of what the result of World War II is. And that's a topic we can come back to later
02:36:46.640for kind of the origin of publicly traded securities to begin with, with liberty bonds
02:36:50.760and creating a retail bond market. But as a result, it's very much like in the Soviet Union,
02:36:56.620you had the Brezhnev stagnation. There is this period in communism where they're like, okay,
02:37:01.720I guess we can't fulfill this promise of the automated space communism, but it's okay. And I
02:37:11.020guess we'll just settle for this and enjoy it. And that was basically Brezhnev's whole era. And
02:37:15.480it just slowly got worse and worse and worse. But it happened very gradually that people didn't
02:37:20.720really notice that everything, yeah, it stagnated. Of course, famously, Peter Thiel and Tyler Cohen
02:37:27.060and Eric Weinstein and others have kind of pointed to the West's own great stagnation,
02:37:32.720similar sort of phenomenon. You have the academics and the managerial revolution coming in,
02:37:37.460eliminating a lot of actual capitalism, price discovery, innovation, except for some very
02:37:42.900specific fields that slip through their grasp, like information technology, which are the only
02:37:47.500places that we've actually had any real growth in the past couple of decades. And a result,
02:37:51.900there's a similar level of stagnation. So instead of a price reset, the effects are going to be,
02:37:59.940I think, a lot weirder in that if you prevented prices from correcting, what would be all of the
02:38:07.240other side effects of that, much like how underground markets or black markets in the
02:38:15.280Soviet Union, people found a way to work around it. They stole paint from the factory they worked
02:38:19.820at and then sold it on the weekend to their friends or whatever. Which is interesting because
02:38:24.280I've heard both sides of that argument before as well, which is a lot of the more libertarian or
02:38:29.080even anarchist listeners of the show would love this sort of financial collapse scenario because
02:38:35.240like you had said, it's more natural and they were expecting it to happen. On the other hand,
02:38:40.200I've heard maybe more central planning fans happy that things are artificially stabilized. And I
02:38:46.920suppose this will sound like, again, midwit question, which would you prefer? Which do you
02:38:51.480think would be better for America if the prices were just allowed to naturally fall or the system
02:38:58.300we have now? I think it's kind of like the guy who's overweight or the guy that has to
02:39:05.160work out at the gym. It's like, you know, which way do you want to suffer? You know, I think
02:39:11.000that the price has to be paid one way or the other. I would prefer to see some actual price
02:39:23.520discovery emerge. There's a part of me that also, you know, unfortunately, I'm not king of the world
02:39:32.040that I get to decide this. It's more, from my perspective, I'm trying to figure out how to
02:39:36.680hedge my options to navigate whichever way it does go, rather than thinking about what my idealized
02:39:42.760state is, because I'm never going to be in a position to impose my idealized state.
02:39:46.800Well, that's a great answer. And I'm wondering if there's, with that in mind,
02:39:51.120what would you recommend the young listener or the young man who is in the situation,
02:39:58.580Maybe he doesn't have any sorts of assets, any sort of financial stability.
02:40:02.620What would you recommend they do to kind of insulate themselves or prepare for things the way you would?
02:40:12.160And maybe I'm getting ahead of myself because there are a few things we could get into about the securities markets, about these other things.
02:40:20.140I'm just trying to think how to tackle it on the one hand, since I'm entrepreneurial by nature, it's very easy for me to say, well, you should start a business.
02:40:26.320And, you know, there's this gig economy or hustle economy, and, you know, that's how you're going to have to learn how to survive.
02:40:34.120There's also the part of me that knows that, you know, that's less than 20 percent of the population, right?
02:40:39.300The bottom 80 percent are the NPCs who are never going to do that.
02:40:42.000And I think they're often misled by the Gary V's out there that, you know, oh, everybody can be this great business success.
02:40:48.900And everyone needs to quit their job right now.
02:40:51.320Right. And and they're just not cut out for it.
02:40:54.100And selling that to them is also disingenuous or abusive as well.
02:41:01.600So it's always seems to be two tracks.
02:41:04.820It's either quit your job, follow your dreams and anything else is slavery or you need to start credit maxing.
02:41:19.980Those are the two that I hear the most.
02:41:21.480uh and that's fair i think the follow your dreams advice is probably the worst of those two
02:41:29.500um it is helpful if you are passionate about whatever is going to make you money because
02:41:36.660it's a lot of work it's a you're grinding all day every day and unless you actually are interested
02:41:41.900in that thing it's very hard to find the motivation to do that long term and i'd like
02:41:45.960to just underline that for people because i've had a few individuals come to me and i've dealt
02:41:51.000with people like this who think like oh i see these people they make lots of money on this stupid
02:41:56.920business it's dumb i should start a dumb business i'm like don't underestimate how difficult it is
02:42:02.520to run a dumb business no business is easy because you're whatever it is you're doing it 15 hours a
02:42:07.980day so that's kind of where the passion comes in because i'm like you need to do you need to pick
02:42:13.580something where you're not going to blow your fucking brains out doing it and if you're doing
02:42:16.480it, where you're putting pug faces on mugs, you might blow your brains out after a week,
02:42:20.780even though it's, it's okay financially. And then there's the part of me that I just,
02:42:28.720you know, because we've been divorced from real price discovery for so long that, uh,
02:42:34.640one of my portfolio partners, Jason Buck, uh, he's listening to this. This is also maybe part
02:42:38.780of the answer too, but, um, he kind of has this postmodernist, we're all just entertaining each
02:42:42.960other perspective. And it's only when people have not known real scarcity for so long that anybody
02:42:51.700can have that outlook. And there is kind of this period of decadence. I should probably finish
02:42:58.820reading The Ancient City one of these days, but that flowering era of a civilization that happens
02:43:04.300right before senescence. And so a lot of this economic activity of why people become super rich
02:43:10.540and famous for seemingly no productive activity whatsoever is also baffling to navigate and
02:43:18.260difficult to deal with. So that's also part of the entrepreneurial question is people make money off
02:43:24.120of the dumbest things as well. Yeah. There's a few individuals I had known who take a very strong
02:43:31.400anti-ideological, but pro-financial approach to the point where they're like the best way to sort
02:43:37.880rank someone's you know uh genetic value is how much wealth they have you know how much money they
02:43:45.280have and if you're poor you're dysgenic and i'm like okay but then you have to explain only fans
02:43:50.680whores with mansions like there's a lot of examples of rich fools right uh and i think that's a
02:43:58.080consequence of that we you know this century of modernity the the easy targets are central banking
02:44:06.660and income tax. Thank you, Woodrow Wilson. But yeah, I mean, maybe this is a good segue to get
02:44:14.620into that. The third pillar that people are missing is the rise of publicly traded securities
02:44:19.000and publicly traded stocks. So the bond market is what underpins that. That's completely generated
02:44:25.200to provide the government with resources. It's a completely fugazi market. And then all of the
02:44:31.940rest of wall street is built on top of that so it's a it's a simulated system it is not tied to
02:44:39.160any kind of actual reality it it's this artificial bubble creation so yeah i would not put too much
02:44:46.760faith in you know it it's it's garbage in garbage out so that what's interesting is uh for people
02:44:54.060who track the market and we've covered a few financial books on the show before i think one
02:44:59.600that I found most interesting was we did the history of the stock market, but we also did
02:45:04.900Mandelbrot's the misbehavior markets. And what's interesting is a lot of the, and again, I might
02:45:11.700be telling you stuff you already know, or correct me if I'm wrong, but a lot of financial planners
02:45:15.280will treat the stock market as if it is this self-contained entity and just look for, you can
02:45:21.120look at the news, you can look at everything, but there's so many inputs. It's almost like you can
02:45:25.460just watch the market and find trends within trends. And as if it's this free floating
02:45:31.340entity divorced from reality. And, and in that sense, they're not wrong. And that's what needs
02:45:42.440to, that's what has to be managed is kind of, yeah, you're not going to be able to predict that.
02:45:48.640Um, now the issue there is the way, you know, most, if not nearly all financial planning is
02:45:57.620done. Um, Markowitz actually just recently passed away. Uh, he invented kind of the,
02:46:04.100or at least most of the groundwork of modern portfolio theory. And, you know, my own opinion
02:46:08.960on that is basically it's a marketing paradigm. Uh, even he himself did not use it. He just put
02:46:14.96050% in bonds. He said 50-50. I'm flipping a coin here. We have discussed this many episodes ago,
02:46:22.440but a modern portfolio theory, would there be a way to summarize that very briefly?
02:46:27.520So the people who invented it never traded a share of stock in their life. They're basically
02:46:33.460mid-20s college kids looking to write an academic paper. And they made a bunch of back of the
02:46:39.240envelope assumptions of assuming certain idealizations of the market. Could they then
02:46:44.160predict or model the risk return of investments. This is where all the
02:46:51.940quants come from or factor investing. It has a lot of overlap with the historical school in
02:46:59.860economics. I think a lot of times they're chasing ghosts or they're chasing their own
02:47:05.480reflections with this stuff. It's where you get the idea of 60-40 portfolios and the efficient
02:47:11.080frontier. The problem is, is all of these assumptions that go into it, and many of them
02:47:17.940are unfounded, or many of them are based on things that appeared to be self-evident truths
02:47:24.680just after the Bretton Woods post-World War II economy that are not necessarily, you know,
02:47:31.500universal or eternal truths. And as those assumptions break down, again, it's one of
02:47:37.980those garbage in garbage out scenarios. So things like, you know, bonds should be safe and stocks
02:47:43.960are risky. And there's certainly a lot of truth to that, or at least that the stocks are risky part
02:47:48.360before in the pre-war era, and arguably even now, stocks are a speculative investment.
02:47:56.620And it wasn't really until computerization and marketing in the adoption of modern portfolio
02:48:02.400theory in the 1970s allowed all of these financial firms to go out and be financial advisors to
02:48:09.020families and say, look, no, we've got this scientifically figured out. These are the
02:48:12.780numbers. And yet, simple things like, well, we don't really know how to measure risk. So we're
02:48:18.900just going to look at price variance and assume that, you know, people, volatility and price is
02:48:23.280going to be a good measure for risk. Volatility to the up end is good, though, right? If your
02:48:29.420stock shoots way up you must be doing something right but and it doesn't take that into account
02:48:33.580it's really poor proxy for risk um and especially then as we went into a uh declining interest rate
02:48:41.100environment obviously that's changed somewhat recently but when bonds had very low yield rates
02:48:47.260people were trading them speculatively expecting the next rate cut to come through and even now
02:48:52.140that they've shot up people are still trading in this fashion of well i'm going to buy bonds
02:48:55.740expecting the value to go up as soon as there's a rate cut which is the same speculative nature in
02:48:59.980which people used to buy stocks as far as well i'm assuming a company is going to be more profitable
02:49:03.980in the future than in the past so if you're trading both bonds and stocks in the same way
02:49:09.100and if you're not getting that steady income yield from bonds but you're just worried about
02:49:13.980capital appreciation well now the trading behavior and the price signals of the stocks and bonds are
02:49:19.500going to be in sync and stocks and bonds are correlated i think it's like 86 correlated
02:49:24.620don't quote me on that, but it's very significantly, which means you're not getting
02:49:28.360any real diversification at all. This is where anybody wants to do some additional research on
02:49:33.200this, or I could probably get them on the podcast. Jason Buck over at Mutiny Fund with his cockroach
02:49:38.700manifesto, a cockroach portfolio has really done a lot of great work on this, that all of that are
02:49:44.180offensive assets. People think they have this diversification. That's a complete illusion.
02:49:47.900And every time there's some kind of systemic crash, like 2008, stocks and all assets correlate in down markets, which means you're not getting any kind of protection at all from that.
02:50:00.180Daniel Parise is also excellent on this book I'd add to your reading list if you haven't read it already, is Getting Back to Business by Daniel Parise.
02:50:08.560He completely demolishes modern portfolio theory that it's it's I mean, this might be strong, but it's quackery.
02:50:15.480it's a way to present an illusion of rational predictable markets where they don't exist
02:50:20.840would there be any advocates of modern portfolio theory that you can think of to get people
02:50:25.860because uh as i'm hearing this i'm hearing pangs of you know the movies where i've heard this
02:50:32.080brought up or this is kind of a dogma in a lot of the financial movies and stuff so would there
02:50:38.720be any individuals that you can point out like these are the guys who are really into my portfolio
02:50:43.600theory uh i'll go so far as um because also this would be something that when people talk like oh
02:50:51.340in the future they're just going to have artificial intelligence to rank stocks and
02:50:56.460stuff like that it seems like this would be that would be the maximization of this sort of thing
02:51:00.600like just looking at the numbers and how they behave so that's a great point uh cory hofstein
02:51:05.360over at newfound research uh is great he's kind of the only quant that i actually respect because
02:51:10.720I think he does have this capacity for self-criticism, and yet quant analysis is still, and he also
02:51:17.340likes to think through these thought experiments as well.
02:51:35.100Indexing is really just algorithmic investing.
02:51:37.860There's no such thing as passive investing.
02:51:40.720And that modern portfolio theory kind of set the table and then indexing is this logical extreme conclusion of that mentality, this idea that markets can just be calculated, which when you get to that point, you kind of realize, well, that can't be, that makes no sense.
02:52:01.260This idea that it's just entirely predictive, that means that there is no actual price discovery.
02:52:06.460Like, why are you having a market at all if it's all just predetermined?
02:52:10.720Um, and, and I think that's kind of what's going to happen is big, big indexing has passed
02:52:17.060the 50% mark in markets, um, because most benchmarks, even for active fund managers
02:52:38.620um you know uh let me just ask you a question again this is probably going to pull the emergency
02:52:45.160break but when you say indexing can you uh summarize what you mean by that like someone is
02:52:52.080is indexing so uh you know john bogle popularized indexing um the idea so like the s p 500 uh you
02:53:03.300often hear this generic received wisdom of, well, you can't beat the market. You're just going to
02:53:09.160buy and hold. It's the cliches of it's time in the market, not timing the market. So I'm going
02:53:14.980to buy some ETF or index fund that is supposed to represent the top 500 by weighted market.
02:53:23.240Okay. This is what I was going to ask because I read a book a while ago that I believe was
02:53:28.120advocating just for this it was called the millionaire teacher and he the entire book
02:53:33.540is like 200 or so pages and the entire summary of the book was invest in index funds and if you
02:53:39.680invest in index funds in your 20s by the time but whatever age is you're a millionaire because the
02:53:45.280mark literally the entire book was well the market always goes up so just right in the market uh so
02:53:51.660that that should be the warning right there. You know, that in in a more cosmic sense,
02:53:59.320the market is very new. There's kind of this dubious history of, oh, well, market, you know,
02:54:06.980publicly traded companies or shares of stock go back to the Dutch East India Company in the
02:54:11.9801600s or whatever. That's all kind of BS. It's a it's a way of trying to extend the timeline to
02:54:20.140make it seem like this has been around for a lot longer than it is um yeah anytime whenever i read
02:54:26.880the books i think we might have done this um we've read this book devil take the hindmost
02:54:30.820oh yes yeah that's that's excellent yeah it's a good book but then you talk to some people it's
02:54:36.240like in a sense the stock market goes back it starts in the year 12 and i'm like okay well you
02:54:42.580know you might be trying to validate some modern ideas by saying you know this thing that we're
02:54:49.020doing the knights used to do it too i'm like i guess but not really so okay so now we're starting
02:54:55.300to zero in on uh where you know my forthcoming book starts to touch on and where my interests
02:55:00.840are really with this is um yeah sure you know markets and even commodities markets or hedging
02:55:06.980risk in that sense or or pooling investment um you know it's probably a timeless activity this
02:55:13.300This phenomenon of, let's say, corporate shares or these publicly traded markets, especially in concert with central banking and income tax and kind of this managerialist approach is relatively new.
02:55:32.320it emerged at the same time as those other things. Again, liberty bonds, as far as I can tell,
02:55:37.360are the origin of it. The legislation that created liberty bonds, originally just to fund
02:55:42.500America's entry into fighting the First World War, set the stage for all government debt. I mean,
02:55:51.800we just went through another debt ceiling crisis that came out of those laws. There have been
02:55:57.920defaults before. Before that, there was a civil war as well. But the Liberty Bonds really also
02:56:06.240created the beginning of the retail market. And then it's frankly not surprising that very shortly
02:56:12.660after, then in the 1920s, that's when you have this Wall Street boom culminating in, was it Black
02:56:20.720Friday in 1929 and this giant crash. And also to address your point of stock market only goes up
02:56:27.380Except for, I'd have to pull up the chart, but it's maybe three or four periods where it has either been in decline or flat point to point for between five to 25 years.
02:56:40.820And the Great Depression is the big example of 25 years.
02:56:43.680So modern portfolio theory also tends to assume in that same way of like supposed a spherical cow of uniform density that people have these infinite hold periods, which is just there's no way you're going to hold on to a security for 25 years waiting for it to finally bounce back.
02:56:59.280Or if you are, you probably never even needed that money to begin with.
02:57:02.480This idea that people are going to have to sell at some point in between at a loss, I think it's just unrealistic to the fundamentals of the human behavior involved.
02:57:12.300what's funny you say that because as you're explaining it it did occur to me that like yeah
02:57:16.180i never hear i never hear people holding on to money as if they need the money like you assume
02:57:21.380you're just gonna because that that is the wisdom that you would receive from these index people
02:57:25.560which is like yeah it might go down for 25 years but you're gonna be holding it until you're 80 i'm
02:57:30.580like well that's life doesn't really work that way right you're constrained to your you know
02:57:36.420god willing 80 or so years of life right at some point and like the boomers are facing now in a
02:57:42.200demographic crisis. At some point, you're going to have to sell. There's going to have to be a
02:57:45.500counterparty. Indexing also tends to give people this psychological illusion of like it's a
02:57:51.340redemption. This index fund or ETF is worth such and such amount. I say sell, and then it just
02:57:59.200magically turns into money. And they ignore that. Well, for every seller, there must be a buyer.
02:58:03.580There has to be somebody else on the other end of that trade willing to accept picking up what
02:58:07.660you're trying to get rid of. And we're back to that point of the younger generations really were
02:58:12.960emotionally scarred from the 2008 crash. A lot of them really think that the stock market is,
02:58:18.180you know, the casino or something that's not worth participating in. I know the counter
02:58:23.800criticism to this is, well, there's just so much institutional money there that they'll always find
02:58:27.720a way to absorb it. And yeah, coming back to whether BlackRock or these other companies are
02:58:33.560going to be able to extend these artificial markets or otherwise allow, facilitate a
02:58:40.840organized sell-off in order to maintain artificially high prices, that could be.
02:58:47.040Well, it's interesting that you mentioned BlackRock, because I know we've talked about
02:58:51.100them on the show before as well. And I know that BlackRock, their prime, I think over 50%
02:58:56.120of their assets are just in retirement funds or something to that effect. I was wondering,
02:59:01.080actually i'll say two things one uh just to your last point this is something i've noticed from
02:59:08.000boomers as well and just to say this we're not anti-boomer on the show i don't like participating
02:59:13.820in this intra-generational warfare right yeah that we see on our side uh but i have you know
02:59:21.080they're a product of their time they're a product of a very unique historical period all of us would
02:59:25.440all of us would be boomers if we were boomers. That's how I look at it. But at the same time,
02:59:30.660the way I hear them talk about their retirement funds, it does not rise above the complexity of,
02:59:37.520I paid into it, so I get money now. It's just money. It's free. But there's no understanding
02:59:41.580of the mechanisms of where that money goes, where it comes from, how it balances out. They just
02:59:45.920think they paid in, so they get free money now. And I think that's an interesting way. That's
02:59:52.220something that the younger generations are not afforded. They're maybe even extra paranoid about
02:59:58.160how the money floats around up there. But just leading into the next point, BlackRock, their
03:00:04.440heavy investment in retirement funds, what role do you see BlackRock in all of this? Just because
03:00:11.700people will hear that name and BlackRock has a lot of dirt on its name right now, but how do you
03:00:17.300see this shaking out with black rock involved yeah um so i think they're you know they're dirty
03:00:23.220but also uh yeah sometimes they you know they're they're not this exaggerated super villain or
03:00:30.520they're you know it's uh you know the banality of evil i think for them um jim records in in one of
03:00:38.480his books gets into you know i'm pretty sure i'd have to check fact check this but i'm pretty sure
03:00:43.920they're a primary dealer or at least associated with a primary dealer, they're in bed with the
03:00:49.980state financialization system. The question is, are they going to be the mechanism by which
03:00:59.980liquidity and markets are managed in order to keep those notional values artificially high?
03:01:07.600So again, to frame it, 401ks and IRAs, none of that existed before ERISA was passed in,
03:02:00.900you're going to be able to withdraw it for more than what it's worth. And you're going to stay
03:02:04.160ahead of inflation. And that staying ahead of inflation piece was also, I mean, that's the
03:02:08.280origin of it just after the First World War. That's when persistent inflation really started
03:02:13.240to kick in. It used to be, you know, you just put your money in the bank, you're going to get
03:02:18.080a 4% interest rate, and you're going to benefit from deflation in market prices due to increased
03:02:24.180efficiency of capital structure for maybe another 3% or 4% on top of that. So when you go to take
03:02:28.780the money out to buy something, it's going to be cheaper and you're going to get more for your
03:02:31.980money. And the introduction of inflation completely turns it around. And the reality is that most
03:02:37.040people are savers, not investors. So exactly to your point, all these people are participating
03:02:41.200in a system that they don't understand. I doubt maybe formally, but informally, I sincerely doubt
03:02:47.840most companies satisfy what's called their 404C requirement of 401ks, which is that their employees
03:02:52.680understand what they're doing when they're making investments of the investment selection inside of
03:02:56.380a 401k. Most investment selection side of 401ks are complete garbage. You know, there are ways
03:03:02.020to get access to brokerage now. But then again, frankly, just most people don't know what they're
03:03:07.020doing. And even the market that's available through that, it's predominantly stocks and
03:03:11.580bonds. And those are all offensive assets. You're really not getting any defense or hedging from
03:03:17.200it. They're all long on the economy. They're all assuming that the economy is going to continue
03:03:21.680to grow and do well. And they don't really do anything for you if the economy starts to
03:03:26.000contract in order to protect your, um, your savings and purchasing power. Um, so, and they're
03:03:33.360the first generation to go through this social experiment. Uh, you know, the pensions were mostly
03:03:38.060killed off. Um, and it remains to be seen that as they're making withdrawals, is there the market?
03:03:46.960One, is there the market liquidity there for somebody to be on the other side of the trade
03:03:50.000to actually buy what they're selling? They get like the housing analogy I made before. Um,
03:03:54.780And even if that's there, um, well, I was going to ask you, so a point you had made, um, that I found so fascinating was that the, this entire thing you're talking about was a way for what you call the managerial class to get its own financing and sort of seize the means of production, uh, as a softer form of communism.
03:04:18.680I think that was the line you had said. I found that so fascinating. So this is the way that it's achieved. So I like to think of it as the three legs of the stool. So everybody, most people are very familiar with the arguments against central banking and income tax. But then when it comes to publicly traded stock, people act like, oh, this is the height of hyper capitalism.
03:04:40.000and it was invented by uh yeah basically the managerial class who knew they couldn't directly
03:04:47.660seize uh the means of production like in a communist revolution but they could do it
03:04:52.980through financialization which was something that they controlled and there's that famous quote
03:04:56.380supposedly by lenin of um you know that central banking is what 80 of communization or something
03:05:02.180like that and where that gives power okay let me think so where that gives the power to the
03:05:09.760managers is, you know, they're going to be compensated in corporate stock. They're going
03:05:15.120to be in a position as managers to give themselves those golden parachutes. And as a result of,
03:05:20.880and then what was it in the eighties, they got rid of the rules against stock buybacks.
03:05:26.440Basically it's a, it's a financialization where they no longer have to worry about being
03:05:30.280profitable. What they need are the access to the lines of credit and financialization
03:05:35.220in order to get the share price or their notional value of their stock to go up,
03:05:40.000which is how they get compensated and all that anybody pays attention to.
03:05:43.660And so the owners are asleep at the wheel.
03:05:47.560As you said, well, as long as stock price goes up, they don't care.
03:05:51.100They assume something must be working if stock price goes up,
03:05:53.440but they're not looking under the hood of,
03:05:54.760well, this company isn't actually profitable anymore.
03:05:56.660It's zombie capital, but because the share price goes up
03:05:59.440and they assume those markets are always going to be liquid,
03:06:01.460that they're going to, they're going to get the value of the stock as it's written on their
03:06:06.140statements and that that system can be perpetuated to never correct or crash. Um, that remains to be
03:06:14.700seen kind of circling back to, uh, you know, us in China, whether that artificial bubble system
03:06:20.000can be maintained. Um, and it makes it very difficult for capital that is focused on making
03:06:27.700a profit to compete with the free money of politically aligned banking credit.
03:06:34.540Would that be the ESG stuff we hear about? Because that sounds like a, you know, I don't
03:06:40.280want to just put words in a moment. No. So my critique on that is, you know,
03:06:47.600that tends to be the boomer tier take because it's looking at a very narrow piece of a larger
03:06:54.160phenomenon esg is certainly part of it um they're also just covering their tracks for the fact that
03:06:58.660these companies aren't profitable so it's it's misdirection um that's it is because we had our
03:07:04.140own uh talk about esg because it's very much you know black rocks a boogeyman of course
03:07:08.340and it's also kind of a spooky name but uh we did a whole episode looking at esg not only as um
03:07:16.280a phenomena that any other day many people on what we call the distant right would like like
03:07:21.740Like they might, you know, do you hate the mechanism or do you hate who's controlling
03:16:34.620And if that price is not allowed to correct, and the whole reason it got distorted that way to begin with is because of the system that's already in place and is controlled by the most politically influential people in society, if they can help it, they're not going to let that system collapse anytime soon.
03:16:50.520So there's no corrective measure. Instead, much like the fall of communism in the Soviet Union, you're just going to get this ossification of things aren't resolving, you know, instead of being forced to actually fix a dysfunctional system, the dysfunctional system will just ride out until collapse.
03:17:10.800so and i had one question um and this might be a little late in the game but uh when many people
03:17:16.520hear the managerial class uh they might have read you know the managerial revolution and they'll be
03:17:21.780familiar with the managerial class as government officials in this instance with the managerial
03:17:27.080class be a different group of people or how would you define so um i would argue a bit so a big
03:17:33.480inspiration is carol roth uh just during or after the lockdowns that we went through wrote um the
03:17:39.800war on small business. And this is where you can see a very stark political class divide between
03:17:46.920the publicly traded mega companies and then the small businesses that wanted to stay in business.
03:17:52.680The big publicly traded companies don't want to compete with the small businesses. They don't
03:17:56.540take marching orders. The same people who are trained to go work in government agencies, the
03:18:00.800same people who are trained to go work in the C-suite or management of these publicly traded
03:18:05.340companies and it's revolving door back and forth. I mean, I think even generally liberal people
03:18:10.160will talk about the revolving door between, um, you know, working in the pharma industry and then
03:18:14.720working at the FDA and then going back to work in the pharma industry or, you know, working in the
03:18:18.740military and then working for a military contractor and then back in the military or what have you.
03:18:23.260So this is all the same pool of people regardless. Um, uh, I have, I ever get this one book out of
03:18:29.860me. The one I'd love to follow up on after that is I think if we actually took a full accounting
03:18:33.580of the American economy in general, it'd be more than 50% state controlled. When you start to add
03:18:41.400up UNICOR, which is the prison slave labor system, and that everything that is made like furniture
03:18:49.680and flak jackets and battle helmets and stuff for the military, there's laws that that has to be
03:18:55.620made by prisoners. So we're not doing any better than the Chinese, where they're getting the Uyghurs
03:19:01.760to make their solar cells. When you look at how government contracting works for how Humvees were
03:19:09.260invented and manufactured, the public-private partnership or public choice theory, just that
03:19:19.040interweaving between regulators and the commanding heights of the private industry. At some level or
03:19:26.960very little of it, less than half I would go on a wager, is actually determined by anything like
03:19:33.920market forces. I think we have far more command and control over the economy than we realize.
03:19:40.360It's just a lot more like Curtis Yarvin's piece on the two-stroke regime versus the four-stroke
03:19:45.760regime. There's just a little more elaboration on our part. Instead of it being pure, very obvious
03:19:51.740dictatorial communism, we go through these extra steps to create the illusion of a market and an
03:19:56.380illusion of democracy so that everybody goes along with it and thinks it's, oh, well, the market
03:20:00.260decided that, you know, which is what you heard with, you know, censorship on big tech platforms.
03:20:06.420Oh, well, big businesses can do whatever they want until Elon buys Twitter and then it's fascism.
03:20:13.120Yeah, it's very interesting you say that. And the way you describe it, I think,
03:20:15.980is attractive to a lot of people because it seems to cut across ideological divides that you'll hear.
03:20:22.540I can imagine nearly every political persuasion complaining about the, uh, the framework that
03:20:30.240we've just, the scaffolding of this system that we've just identified. No one's happy with the
03:20:34.620way this is. Yeah. Uh, so that goes back to the iron law of oligarchy or selectorate theory,
03:20:42.400which was kind of the reinvention of the very same idea. Um, you know, you know, when, uh,
03:20:48.480that the system is complete when, um, uh, what is it? When, uh, congressional, uh, persistence
03:20:56.040is at an all time high and congressional approval is at an all time low, you know, that everybody
03:21:00.620hates Congress, but nobody can vote them out. That's kind of an interesting, you know, okay.
03:21:04.920So the system's been captured and, um, you know, across the administrative state and then how
03:21:10.680that's done through publicly traded companies, which are all owned and controlled by the same
03:21:15.040people or who share the same mentality about how things should work. Uh, so, you know, it doesn't
03:21:20.980have to be an overt conspiracy. It's just a distributed conspiracy of people who think the
03:21:25.040same way. Uh, and, and that's the divide and conquer too. Uh, you know, you'll get the, you
03:21:31.080know, let's say in a very, um, uh, historic sense, maybe you get, uh, you know, conservatives or
03:21:38.460Republicans saying government is the problem and you get Democrats, Democrats are progressive
03:21:42.200of saying big business is the problem. Well, government and big business are the same people.
03:21:46.500So who are we? You know, the fact that we're pointing fingers at each other doesn't solve
03:21:51.420anything. We're talking about the same group that is the successful oligarchy in power.
03:21:57.380And also it's the ability to defend the status quo, which is something that we've been discussing
03:22:02.020more and more in our investigation in geopolitics. And then once you explain that the status quo,
03:22:07.200just it does not mean the ideal it just means maintaining whatever it is and if you find a
03:22:12.620system is very very good at protecting whatever the status quo is or any change any actual change
03:22:19.300is displayed as threatening the status quo that means that is a very very powerful system that's
03:22:25.360not designed for change at all right it's like uh uncle ted's uh systems uh greatest trick or
03:22:31.480whatever he called it um that yeah any kind of criticism ends up being absorbed into the system
03:22:36.320itself to, to nullify it. Um, and I think that that's been the resiliency of this modernist
03:22:43.500regime where prices don't matter. And they've, uh, tried to contain volatility, um, in order
03:22:51.640to keep their jobs, right? All these people are not, so another topic that I don't know if we
03:22:56.940have time to get into, uh, but I'm happy to, if you want, is that all of this in modernity gets
03:23:01.940down to high time preference, short time horizon, whether it's voting, managerial decision making,
03:23:09.000the fact that none of these things ever really get fixed, even though everybody complains about it.
03:23:12.880It's an entire system that's just geared to only being able to deal with things short term.
03:23:18.260Nobody has the power or the authority like a private owner does to take on large projects.
03:23:24.900So the high time preference, that's kind of the whole modernity project. It's
03:23:30.600the desire to be liberated from the discipline of scarcity. Um, so whether that's through
03:23:39.240democracy or communism or this managerialism, uh, it's that, you know, I want to be able to
03:23:47.160accomplish these great things and I don't, I don't want to have to worry about how I'm going
03:23:50.780to pay for it. Um, so, uh, that, that's kind of, uh, now I'm trying to think before the break,
03:23:58.240where I was going to go with that. But that ends up being what's incentivized. So like for a
03:24:04.800manager, for example, why you always hear about the people raiding the corporate pension or that
03:24:10.720woman who tried to do the woke marketing campaign for Bud Light and completely tanked it. And people
03:24:16.220are like, oh, I can't believe this would happen. Or even going back to, we're talking about Black
03:24:20.520Rock before as kind of a boogeyman. And another one of these boomer talking points that tends to
03:24:24.700come up is, oh, well, it's because they're the shareholders, because they own it, they're in
03:24:28.220control. And if BlackRock buys everything, then they're going to own us. The managers are the
03:24:34.240ones who actually have the control. The whole reason for, this does go back to Daniel Parise,
03:24:39.940in addition to demolishing modern portfolio theory, has a really great thesis on stocks used
03:24:45.800to have to pay a dividend in order to prove that they were worth holding onto. And then
03:24:50.720that completely evaporated. And now people are just worried about increasing share price. And
03:24:55.600actually part of modern portfolio theory is this idea that dividends and capital appreciation are
03:25:00.140fungible, which is not true. There's a major liquidity difference there, if nothing else.
03:25:08.000That they want to run these organizations and get paid and live a nice life, very much like
03:25:16.140the nomenclature, you know, to be a factory manager in the Soviet Union, running a business
03:25:20.720knowing, okay, well, I'm getting paid in shares, and the share price is going to go up, and I'm
03:25:24.240going to make this money. But they're divorced from the reality of whether their company is
03:25:27.940actually successful in any kind of like profitable market demand way. Which is why, you know, in our
03:25:33.980circles, you often hear the criticism that get woke, go broke doesn't really happen. You know,
03:25:39.200they may face a setback or two, but they eventually stabilize. And it's through share buybacks and
03:25:45.960financialization and being able to issue bonds and credit that these companies can do through
03:25:50.320public markets that, um, you know, they really don't need to be profitable. They just need the
03:25:57.080illusion of profits to sustain this system, but it's a closed loop. You know, they, they don't,
03:26:03.400they're completely divorced from what they do actually being useful, uh, as far as whether
03:26:09.380those people keep their jobs and they're happy to let these companies crash and burn as long as
03:26:14.140they get their golden parachutes, which is also kind of a left wing or progressive talking point
03:26:18.340is, you know, they're happy to screw these companies over and let them fail as long as
03:26:21.640they get to leave with their money. So it does boil down to that principal agent problem,
03:26:27.760just like you'll see in politicians. You know, politicians are going to sell their office in
03:26:31.960order to enrich themselves. And managers at publicly traded companies are doing exactly
03:26:36.440the same thing okay and do you see this do you see an end point of this at all with the the i
03:26:45.000guess this distinct managerial class having no regard for profitability like is there a terminus
03:26:50.960to this where it does collapse or does this just happen indefinitely where get the whole go woke
03:26:56.300bro go woke go broke thing not mattering does it ever start to matter uh you know that that great
03:27:03.780watchword of like, eventually, you know, it took 70 years for, you know, full total communism in
03:27:13.020the Soviet Union to fail. That's, you know, that's somebody's lifetime. That's several
03:27:16.920people's lifetimes probably there. The softer version of it could, you know, what's that
03:27:24.240Keynes line of, you know, markets can remain irrational longer than you can remain solvent.
03:27:29.580so i think that's that's kind of the difficulty there is if it's this very slow collapse um you
03:27:37.840know it may not even happen in our lifetime i'm sure in ancient rome people saw the same things
03:27:42.360as well you know it um it didn't hat rome didn't was wasn't built in a day and rome didn't collapse
03:27:47.760in a day it was a very long process uh until one day it just went right how'd you uh go bankrupt
03:27:53.420first slowly and then suddenly i i wonder um there's a lot of debate in our sphere about
03:28:00.920for example esg and the woke agenda um being purported by these these organizations like
03:28:08.320blackrock do you see that as just sort of a do they believe this is are they ideologically
03:28:13.260possessed or are they reactive or is this something they might just abandon one day or
03:28:19.260is it part of the plan or what do you, how do you think this all fits together?
03:28:26.280So all of the above, I think that, okay. So like the, the, the rule zero is whatever it lets them
03:28:36.320keep their job and position of authority and getting money out of this. So they'll do whatever,
03:28:42.140you know, helps their career advancement. Again, that, that principal agent problem,
03:28:46.980I think is probably the most paramount, uh, beyond that, uh, that distributed conspiracy
03:28:52.860concept, or, you know, they all go through the cathedral of, you know, they're told this is what
03:28:58.080smart, good people think, and this is what they believe, and this is what they should be working
03:29:02.360towards. Um, you know, some of them, they're not advocate, they're not the soldiers. They are the
03:29:08.980subjects similar to anyone else who goes through the schools in a sense. I mean, this is, I think
03:29:16.400this is the reality in which they're presented. And because it's an effective patronage system,
03:29:21.300this is what provides them with real material benefits. I mean, there's a reason why.
03:29:26.920Okay. So a compare and contrast is in the 1980s, how many members of the communist party really
03:29:33.180believed in communism itself and how many of them are like, well, this is just what you do
03:29:38.280in order to get a career. So my family doesn't have to eat shit. Um, you know, like this is
03:29:43.760just the process that we're in now. I'm sure some are true believers, and some are completely
03:29:48.460cynical, and most of them are probably somewhere in the middle, or I'm sure, you know, they're not
03:29:52.760sending their best. There's, you know, there's the whole bio Leninist phenomenon that probably
03:29:56.300very few of them are even that self reflective on the whole, like, they're not even questioning
03:30:00.040the nature of their reality. So yeah, I think a lot of that is just that's the world that they're
03:30:05.560presented. But the overall, if there is one unifying theme, it always seems to come back to,
03:30:12.400I don't want to have to deal with scarcity. I don't want to have to, um, compete for,
03:30:18.900you know, resources. And so I'm going to figure out some story, some narrative, some, uh, you know,
03:30:26.540uh, Sam Francis in, uh, one of his books, I'll have to remember which, um, I think PQ, uh, read
03:30:35.040it at one point as well, talks about, uh, there's the talkers and the doers, uh, that doctors used
03:30:40.820to be a doer profession and a lot of blue collar work is like if you build an airplane, either it
03:30:45.360flies or it crashes. It's very obvious whether you're doing your aeronautical engineering job
03:30:49.740correctly or not. But no offense to fellow marketers out there, but marketing or politics
03:30:55.700or a lot of bullshit jobs, there's always some spin control of, you know, oh, Indiana Jones 5
03:31:01.380didn't do well in the box office. So that's because, you know, the fans are racists or
03:31:06.840there's always some excuse and some spin and some reason why you can talk yourself out of getting
03:31:11.460in trouble and having the feedback of getting fired or not making money or whatever, or, you
03:31:16.220know, we'll just do another project to cover it up or whatever. So I think that, I think that tends
03:31:23.920to be the, I guess, yeah, it's the violinist argument is, you know, those who can't do teach
03:31:28.260the ones who are not suitable or capable of doing the things that actually materially make life
03:31:36.040better are then attracted to jobs where they can just BS their way through it. And I think that's
03:31:42.440all of academia and managerialism. That's why they're drawn to those jobs is because
03:31:47.680they fail upwards. Now, this might be, again, another speculative question, but it seems that
03:31:55.360with advanced industrialization and with AI and with all the stuff people talk about, there might
03:32:00.460be fewer and fewer of those practical jobs those doer jobs and a maximization of the talker jobs
03:32:09.540and then that middle area it seems that that's the only place that you know the people the jobs
03:32:16.260being outsourced there just aren't those jobs anymore so it seems like those bullshit jobs
03:32:20.140would be the only jobs left and this is something we joked about because i'm in canada and i lived
03:32:24.960in toronto for a while and this is a massive urban center one of the biggest cities in north america
03:32:30.740and it seems that everyone there just works either as a server or in some skyscraper and or
03:32:38.100in an agency of some kind and it's all people do is send emails to each other right and it's very
03:32:45.340very difficult if you ask these people to explain their job most people can't do it and that seems
03:32:52.420to be at that. That is a shared story, I think, across many urban centers. And I do wonder in the
03:32:58.220future, is this sort of managerial class the only type of career that will even exist? And maybe
03:33:04.240that's dystopian, but I just wanted to. So there isn't even a guy who wrote a book called Bullshit
03:33:08.480Jobs, and I'm pretty sure he's like a shitlib otherwise, but he's he's made that same observation.
03:33:14.400And I certainly kind of assume that's what I'm sure that's what they're telling themselves.
03:33:21.700I'm sure that's what when you go to a, you know, Davos conference that everybody's where, you know, AI is going to take over and we're all just going to have these intellectual jobs.
03:33:29.660And I think even from the beginning as academia at the turn of the beginning of the 20th century did not like these personal kingdoms of the Rockefellers and the Carnegie.
03:33:42.820So they said, no, we've as you know, as academic additions, we have to take over the management of these companies and get them to be publicly traded.
03:33:49.400And then everybody's going to be able to participate. And we're going to run them in a scientific way that's going to be for the, you know, the better betterment of everybody. You know, a big part of that, too, is, again, that violentist argument of they did not want to actually have to figure out how to solve real problems or do real things. They want the freedom to just sit around all day thinking big thoughts and get paid for it.
03:34:12.200Um, I think this is also the concern of Uncle Ted and most of his literature is, uh, it's like the board. It's this assimilation system. It's that you end up serving it instead of it serving you. And I mean, that we might go down that path for a while.
03:34:32.080I don't think it's sustainable in the same way that, you know, trying to look at the stock market
03:34:38.080as if it's some, you know, that it can be predicted or, oh, we'll just pre-calculate
03:34:43.420what the value should be or we can, that we can automate these things. Even the big AI craze now
03:34:49.760and, you know, I have friends who are involved in some very interesting AI projects and there's a
03:34:54.700lot that it can do. But even like using ChatGPT, everybody is so wowed by it. And the biggest
03:34:59.200takeaway I have from it is all it is doing is in a natural voice, summarizing things that other
03:35:04.680people have written. So there's no new information there. It's like, you know, trying to recall a
03:35:10.580memory and try to get something new out of it. You know, there's no new information there. You've
03:35:14.560already heard it before. And especially as that kind of AI presents this illusion of increased
03:35:22.220productivity, or now suddenly everybody's an expert. They're not an expert. They're just
03:35:27.660regurgitating what chat gpt tells them and chat gpt just tells them the things that other people
03:35:32.980have already written a lot about yeah i've seen this a few times i have a few uh friends who've
03:35:37.860like set up their own bots i have some deviation of chat gpt or maybe a bit more acutely designed
03:35:44.240it is just a glorified search engine and you can tell that when you give it a a very specific
03:35:51.060question and it says well it's complicated and just give it barfs out a bunch of hemming and
03:35:56.860hawing about an issue like it'll just give you the way ask it about kissinger let's get the
03:36:02.020wikipedia entry on kissinger right so um you know i think there's a valid point to the butlerian
03:36:08.700jihad of as soon as you have the machines doing the thinking for you the humans will stop doing
03:36:13.860the thinking and but they can't really think there's something missing there and again it's
03:36:20.560going to be another form of this stagnation that you're not getting any real growth or innovation
03:36:25.920um you know going back to some of these uh generational dynamics with younger people uh
03:36:32.100people grown up in the in the wake of the 2008 great financial crisis i noticed there's a huge
03:36:36.700emphasis on marketing and social media and sales funnels based on you know newsletters and instagram
03:36:43.260ads and what have you uh but if i try to talk to any of those people or almost all of them about
03:36:49.340you know building a better mousetrap innovating a better solution they'll look at you like you
03:36:54.840have two heads they're like well if that were possible someone would have done it already like
03:36:58.300the idea that oh maybe you're the inventor that invents flubber or something is alien to them they
03:37:04.040just cannot imagine and then uh mark fisher and nick land on the left get into this uh they
03:37:10.500identify that same phenomenon as the slow cancellation of the future it's this weird
03:37:14.140dead end of post-modernity of uh we're all just marketing and entertaining to each other but the
03:37:20.280idea of um you know that you could actually make something invent something do something new uh
03:37:27.520or in the film industry right everything's a remake of a remake of a remake i think they're
03:37:31.600making a third willy wonka movie um well what's interesting what's interesting there uh to tie
03:37:38.620into the larger point we're making is the phenomena of disney and disney almost as some
03:37:45.660simulacra of the stock market is that people are in love with the size of disney disney produces
03:37:52.780actual fucking garbage but if you ask a disney fan like they're just in love with the fact that
03:37:58.380the disney is such a big global corporation and that they are a citizen of it and they're just
03:38:05.300in awe of this entity regardless of the fact that it produces worse and worse products i've
03:38:12.360encountered this culturally as well which i think is also fascinating i've kind of had to like
03:38:17.920bump into it but yeah especially with the younger generations if it's not some mega company
03:38:24.680producing something it's like they don't think it's real uh it's almost like they are the first
03:38:32.320generation cognitively prepared for accepting a world where small business no longer exists
03:38:38.320You actually kind of saw this with boomers, and I made a comment on the show before that boomers were the first generation, and I still see this, where they believe literally everything they see on TV, to the point where if it's not on TV, it's not trustworthy.
03:38:54.320trustworthy like they'll ask you like and that means that they would fall for whatever was on tv
03:38:59.460way more easily and that was just a distinct thing we haven't really evolved past that we've just
03:39:05.280kind of changed what the the media is but with with this it's like oh it's big it's culturally
03:39:11.440relevant and one thing we talked about on the show and you might find this because you seem
03:39:16.380literate in this sort of media literacy a lot of this is discussed by marketers actually actually
03:39:23.260right but it's this idea that um people are in love with the story around a movie
03:39:31.080um like they they go into a movie knowing that the actors went through a contract negotiation
03:39:37.540like for example fast and furious the people go into see the new fast and furious movie knowing
03:39:43.260that there's a feud between vin diesel and the rock in real life and their hope they're hoping
03:39:49.020that a contract negotiation is visualized on screen in front of there is no magic to the movie
03:39:54.700the story of how the movie is made is part of the movie itself and what you are watching like
03:40:00.440people will get excited when they hear that a new like disney is going to be making this new
03:40:07.360brand of comic book like they're they're they got they're excited about reading news
03:40:13.100about a board meeting that went well. So this is like the commodification or something.
03:40:23.400Prude is right. There's this point where it's like, oh, man, I sound like a Marxist myself.
03:40:27.720But a fan culture, right? At first, fan culture was exciting for these businesses of, oh, they're
03:40:32.980going to do the marketing for us. And they have fan clubs and they're going to build up this
03:40:36.760excitement and we don't even have to pay them. That's great. And it went from, oh, this is a
03:40:42.260surprise bonus to this is now standard operating procedure. I got one for you. I know real people
03:40:47.960who use the term brand evangelist. How about that? That gets me in a hole that everyone since the
03:40:56.560rise of social media has just kind of nakedly accepted this idea of personal branding. And I
03:41:01.720get that, you know, yeah, you're going to have to sell yourself in the sense that persuasion is part
03:41:05.600of human interaction but uh that kind of split personality it's very like uh like the movie
03:41:14.240perfect blue or something it's very schizophrenic between um that now you have this front facing
03:41:21.360persona that you're inventing as opposed to uh you know like what's her name who's hannah montana
03:41:27.220or something like what is there the real person there or this is just a construction
03:41:30.820your entire mind becomes bifurcated the moment you make a linkedin profile
03:41:36.780like linkedin is the most miserable place a person can be except for you you seem to have
03:41:42.960a cool one i had to leave linkedin because i started fucking with people and that was like
03:41:47.500that's a hostile place for people who just wanted to fuck around oh so yeah i mean as a an aside
03:41:53.520linkedin is where all the real schizo posts happen it's amazing how it went from oh this is going to
03:41:59.220be a digital copy of my CV because I forget what years I worked from here to here, to then they
03:42:04.680tried to make it more like a Facebook competitor. They wanted to encourage social interaction.
03:42:09.420Well, as soon as you start encouraging social interaction, people can't help themselves and
03:42:12.800the real thoughts are coming out. And so now on this business professional network, yeah,
03:42:18.680you get the same kind of polemical output and marketing to go with it as you would anywhere
03:42:24.180else. And I'm fine with that too. I mean, if that leads to peaceful national divorce and
03:42:29.180polarization, you know, kind of like new founding or these other companies are trying to do a,
03:42:33.940you know, hey, we're just not going to agree. So let's at least identify who we are and split up
03:42:38.160instead of trying to be undercover and appease everybody. If that's an accelerant to that
03:42:44.320process, then good. I'm glad it's there. Now, before we go, I know I wanted you to talk about
03:42:51.840how you can help people professionally. I know you're working on a book on this topic. And I
03:42:57.360believe, like you said, you run a business where you handle things like this, if you wanted to
03:43:01.820talk about those briefly as well. Sure. So book, as soon as I get it out the door is
03:43:08.440about how the invention of publicly traded securities is the financial bootstrapping
03:43:15.080of the managerial revolution. So it integrates a lot of those criticisms that are very common about
03:43:21.340central banking and income tax and pulls in that missing piece of, oh, how come big business acts
03:43:27.140exactly the way that the government wants to during a lockdown and all the small businesses
03:43:30.800are the ones fighting it like that. That's the battle lines there. So a lot of detail that the
03:43:34.920history and how that manifests and kind of the consequences of that. And thank you for saying
03:43:39.280so earlier, what that means is as this publicly traded system that everyone, everyone's kind of
03:43:44.120become over dependent on grinds to a halt. Well, especially anybody who's had some success in their
03:43:50.080life and they've reached a point that they're going to make an exit of, you know, hopefully a
03:43:54.720million dollars let's say the minimum according to the government regulation is a million in
03:43:59.440investable assets to meet the accredited investor uh criteria that's where i can really start to
03:44:05.040help people who are the successful entrepreneurs looking to sell off their business they want to
03:44:10.800avoid having pay capital gains tax which will probably eat between 20 and 40 percent of that
03:44:14.800sale price otherwise most m a firms do not know how to do that this is another one of those examples
03:44:20.320of uh there's a better mousetrap out there and just people don't know about it so don't assume
03:44:25.440oh whoever i'm working with probably knows all the tricks of the trade they don't feel free to reach
03:44:29.760out to me um and getting them into a way to defend their their purchasing power regardless of what
03:44:38.000might come in the future uh yeah my firm also deals so that's kind of the cornerstone or the
03:44:43.280bread and butter of what our practice does uh this also works for real estate especially commercial
03:44:48.880real estate it can work for people who want to diversify a crypto position um yeah any highly
03:44:56.000appreciated significant asset uh we can work with but where that then dovetails with this content
03:45:03.440is looking beyond these publicly traded securities into other asset classes that actually provide
03:45:09.440real defensive positions um against whatever may come that that they're not tied to the market
03:45:17.280cycle the way that the traditional 60-40 index would? First of all, I have to get going right
03:45:22.420now, but I think we've covered everything I wanted to cover. And I just want to thank you
03:45:27.320very, very dearly for taking the time to sit down with me today. I found this all very,
03:45:31.300very fascinating. I think I'd like to have you back because we touched on a lot of topics that
03:45:36.900we could probably spend quite a bit more time on. And as we delve deeper in the upcoming episodes
03:45:42.460into the more financial side of things