Valuetainment - Episode 464： Economist Destroys China

00:00:00.000 I'm Patrick Bedevi, host of ITEM, and today I'm sitting down with an economist, Daniel

00:00:25.760 DeMartino Booth, who calls out what China did with coronavirus, an act of war, and let's

00:00:32.300 just say she goes into talking about the feds, gold, investments, future.

00:00:37.880 This is one you don't want to miss.

00:00:39.620 My guest today, Daniel DeMartino Booth.

00:00:42.160 Daniel, thank you for coming out and being a guest.

00:00:43.740 It's great to be here.

00:00:44.920 So when we get into this, a couple things.

00:00:47.980 I've seen your stuff with your book.

00:00:49.620 I've seen your interviews.

00:00:50.600 I've seen a lot of the talks you've given.

00:00:52.060 Listen, you can go extremely technical and speak the language of folks who are in that

00:00:58.520 world, and then you can also go simple.

00:01:01.520 Today, let's try to speak to the audience of middle to simple to get a lot of us educated

00:01:07.560 on what's going on.

00:01:08.320 Obviously, some of the people that are on here are experts in this area, but most of us want

00:01:12.560 to learn a little bit more on what you know.

00:01:14.040 So having said that, we've not seen a time like this in a long time.

00:01:17.820 What is your biggest concern today when you see all this stuff going on?

00:01:20.820 Well, so my mother grew up in South Texas with her grandparents who survived the Great

00:01:27.340 Depression.

00:01:28.620 So she's one of the few Americans left who remember what it means to save before you

00:01:36.200 spend.

00:01:37.040 It is not part of the American culture anymore.

00:01:40.600 But nor in more than 100 years have we needed to be of this mindset, or so at least we thought.

00:01:47.020 There's always been access to credit.

00:01:49.740 There's always been a mortgage.

00:01:52.020 There's always been a car loan.

00:01:53.960 There's always been a credit card if you're kind of running straight down the middle.

00:01:58.240 But I think what the coronavirus is going to revive is kind of our founding fathers,

00:02:06.180 their philosophy.

00:02:08.120 You know, if you don't plan ahead, then you'll fail to be—if you don't prepare, then you're—you

00:02:13.260 fail to be prepared.

00:02:14.420 This is Ben Franklin.

00:02:15.500 I'm paraphrasing him.

00:02:17.120 But what we're finding out with this economic shock of the coronavirus is that so few Americans

00:02:23.240 are prepared.

00:02:24.780 So few Americans have a rainy day fund set aside in order to weather them one or two or three

00:02:30.900 months.

00:02:31.700 And that's problematic.

00:02:34.200 And it gives me great hope at the same time because I think we're going to return to some

00:02:40.840 of our more frugal roots in this country, which has vast implications for the U.S. economy.

00:02:47.900 How do we get here, though?

00:02:49.340 I mean, you know, obviously, you know, the coronavirus is a form—some call it white swan,

00:02:56.300 some call it black swan, because we have experienced some kind of a pandemic before, so we can't

00:03:00.140 necessarily call it a black swan like a 9-11 maybe was a black swan.

00:03:03.740 But how do we get to this point where our habits are so much leaning towards debt and

00:03:10.660 constantly being in debt?

00:03:11.660 How do we get to this point?

00:03:12.500 Well, I think it's been something that has been encouraged by Federal Reserve policy and

00:03:19.340 by politicians in America for generations plural.

00:03:23.400 You know, we came out of the 1980s after the stock market crash, which was really just kind

00:03:28.460 of a blip in a longer economic cycle.

00:03:31.320 But we came out of that with most of our leaders saying, borrow and spend, borrow and spend.

00:03:38.140 Things really got cranked up kind of in the 80s with the yuppies and the baby boomer generation

00:03:44.920 coming out and spending more than they earned.

00:03:49.000 You know, they were the first generation to take on as much debt as they did.

00:03:52.820 And we kind of saw this hockey stick of increase in credit card debt for the first time that

00:03:57.460 was accepted across the country.

00:03:59.440 And, you know, towards the end of the dot-com era, I mean, it's hard to even think back to

00:04:05.940 1999, 2000, when everybody was trading stocks and insider trading, excuse me, day trading.

00:04:11.920 And you couldn't go in a taxi cab in New York without the taxi driver saying, this is, I

00:04:16.480 got a hot stock tip for you.

00:04:17.780 You have a hot stock tip for me.

00:04:19.360 That kind of imploded.

00:04:21.620 And Alan Greenspan, to resolve this, took interest rates to artificially low levels and

00:04:28.940 kept them there for a long time.

00:04:31.200 At the same time, you had financial innovation are the words that they use.

00:04:36.160 And all that means is opening up the debt box to where, you know, what were we saying

00:04:41.200 at the height of the last housing boom?

00:04:43.200 If you can fog a mirror, you can get a mortgage.

00:04:45.640 There were people's dogs who were getting, you know, credit card applications in the mail.

00:04:50.500 I remember late on in the credit boom, I had a six-month-old son, my firstborn, receive

00:04:56.040 a credit card application in the mail.

00:04:59.020 Six-month-old son got a credit card application in the mail.

00:05:02.220 Yes, in the mail.

00:05:02.920 And that was kind of the apex of people using their homes as ATMs.

00:05:07.860 This was, you know what, Jane and Johnny and Maria, they can all go to whatever college

00:05:14.160 they want to go to because I'll just take the money out of the house to send them.

00:05:18.140 We can go take the Disney vacation we can't afford.

00:05:20.600 I'll take the money out of my house and send them.

00:05:23.260 So the mortgage bubble kind of took debt in America to a whole new level.

00:05:30.900 And then that imploded.

00:05:32.020 And we find ourselves over a decade later, and now in the current iteration, in the current

00:05:39.440 cycle, we've bought more car than we can afford to drive.

00:05:44.140 Buying a $60,000 pickup, you don't blink an eye because maybe it's a seven or an eight-year

00:05:50.400 loan term.

00:05:50.980 And as Americans, I think we've kind of lost our way because we don't look at what we earn

00:05:58.040 compared to what we can afford.

00:06:00.420 We look at whether we can make the payment and just get by.

00:06:04.560 And that type of mindset is what has left an entire, the largest economy in the world

00:06:10.880 as vulnerable as it is, as this black swan, white swan, call it what you want.

00:06:17.000 But that's what's left us so vulnerable, is that we've just done what we need to do

00:06:22.100 to just get by, paycheck to paycheck to paycheck, and not set aside anything.

00:06:26.700 And now we find ourselves with record mortgage forbearance and people walking away from this

00:06:32.600 and that debt because they have absolutely no choice.

00:06:34.800 How do we get here on the sense of, when I'm asking this next question, because it's the

00:06:38.220 same thing I asked before, how do we get here in the sense of, is this our fault, the

00:06:42.800 people's fault, or is this the decision maker's fault on making it loose?

00:06:47.120 Kind of like the following, you know, you are living in a family and your dad lowers

00:06:51.440 the standards and he lets you do whatever you want to do.

00:06:53.640 Your parents let you kind of do whatever they want to do.

00:06:55.700 And then a kid goes out and says, you know what, I'm going to go try to smoke weed.

00:06:58.940 And this other girl, she introduced me to this drug.

00:07:01.420 And I'm going to go out there and party, stay till two o'clock in the morning.

00:07:04.100 You're 16 years old because no one cares.

00:07:05.980 But is it our fault or is it the decision maker's fault that we got here?

00:07:09.740 I think placing blame is short-sighted because I think the blame has to go around.

00:07:16.500 I think that policymakers, and the reason I wrote FedUp in the first place, is that at

00:07:21.600 the highest level, especially if you're economically vulnerable or if you're not, you don't know

00:07:26.560 everything that there is to know about finance.

00:07:28.220 It's not as if they teach it in high schools, much less colleges, as a requirement.

00:07:32.100 So Americans aren't financially literate by the design of our educational system.

00:07:35.960 So you get the politicians and you get the heads of the Federal Reserve and they encourage

00:07:43.280 this.

00:07:43.920 So you're saying, well, that's a leader and a leader is telling me how I should run my

00:07:47.820 budget.

00:07:48.340 And so they must be right.

00:07:50.240 Ben Bernanke, you know, at the height of the housing bubble was saying that there's no way

00:07:56.560 that home prices decrease on a nationwide basis.

00:07:59.160 Well, that's not true.

00:07:59.780 It did happen during the Great Depression.

00:08:01.740 But you're being told by people who sound really smart that you're making the right

00:08:05.780 decision.

00:08:07.160 And at the same time, though, you have to go back and say, you know you're living from

00:08:13.780 paycheck to paycheck.

00:08:15.240 You realize it.

00:08:16.460 You know if you're not setting any money aside for a rainy day.

00:08:20.120 You know if you're sitting in a car dealership and you're being sweet-talked by the finance

00:08:25.420 manager.

00:08:25.840 You know that it might not be $600 a month that you can really afford.

00:08:30.740 It might be more like $450 a month.

00:08:32.700 And you tell yourself, but they're going to let me do it.

00:08:36.440 And so I will.

00:08:37.940 So I think you have to say that it was encouraged at the highest levels and shame on them.

00:08:46.040 But by the same token, I think households have deluded themselves for a while as well because

00:08:51.400 we have become an instant gratification society.

00:08:54.480 And that's a multi-generational statement, by the way.

00:08:58.460 I mean, you've got an entire generation of baby boomers living in way more house than they

00:09:03.140 need.

00:09:04.200 Right now, their children may need it and may be moving back in with them.

00:09:07.820 But I'm not trying to pin this on the millennials, per se, who are experiential and spend all of

00:09:14.320 their disposable income on great vacations and the latest iPhones.

00:09:18.240 Now, I think this carries across multiple generations.

00:09:21.860 And I think that millennials learned a lot from their parents who also lived beyond their

00:09:26.920 means.

00:09:28.060 So generationally, so you're not saying this is a government thing.

00:09:33.240 This is not us.

00:09:34.040 Because you know how you travel and you go places.

00:09:35.940 I always travel when I go places.

00:09:37.460 I ask the driver, so tell me about your house.

00:09:40.060 What's a house go for here?

00:09:41.240 This much?

00:09:41.760 How much do you finance your house?

00:09:42.960 What do you mean?

00:09:44.180 How much is your finance, you know, how much you finance your house?

00:09:47.240 I didn't finance my house.

00:09:48.860 You're at the Caribbean's.

00:09:49.720 What do you mean you didn't finance your house?

00:09:51.080 You can't finance stuff here.

00:09:52.720 What does that mean you can't finance stuff here?

00:09:54.840 If you buy a house, you have to buy it cash.

00:09:57.660 Yep.

00:09:58.180 What do you mean you have to buy it cash?

00:09:59.380 So if you don't have, yeah, like my house right here, $50,000, my wife's parents and

00:10:06.680 my parents helped us, and we bought this house.

00:10:09.020 So you don't have any payment on it.

00:10:10.280 We don't have any payment on it, right?

00:10:12.120 So that's very normal for a lot of people in different countries.

00:10:15.700 That's right.

00:10:16.040 Where in the U.S., it's kind of like, well, you know, I can buy that house and finance

00:10:19.960 at 95% or 90% or, back in the days, Nina, 100%, you know, and my payment's only going

00:10:25.680 to be $2,000 a month, and I'm financing a $250,000 house.

00:10:30.000 That part, to me, is if we allow that to be the norm, well, the people are going to take

00:10:36.160 advantage of it, okay?

00:10:37.800 So, you know, the chicken and the egg story, I'm curious to know who started this standard

00:10:42.340 because there has to be somebody held accountable to this here.

00:10:46.020 I run a company.

00:10:47.360 If in our company a mistake happens or we take a hit, all the, you know, points, you know,

00:10:53.280 everything's going to be pointed at me.

00:10:54.780 They're going to say, well, he's the CEO.

00:10:55.980 What'd you do?

00:10:56.340 How come you didn't make the right decision?

00:10:57.540 Right.

00:10:57.840 How come you didn't go raise more money at a time?

00:10:59.560 Well, you know, if a crisis was going to happen, that we could maintain our status and

00:11:02.860 all this other stuff.

00:11:03.700 Fair enough.

00:11:04.380 I'm the CEO.

00:11:05.500 Someone has to be held liable for this.

00:11:08.680 Yep.

00:11:09.080 You're an economist.

00:11:10.080 You're an expert.

00:11:10.700 I know I read your stuff.

00:11:12.560 You try to be as diplomatic as possible because you're trying to respect your peers and the

00:11:16.060 industry you're a part of.

00:11:17.620 Who started this?

00:11:18.780 I'm trying to figure out who is liable for starting this mess.

00:11:22.240 So, you know, I would say that it goes back to a Democratic or a Republican administration.

00:11:28.180 But the truth is, when the Community Reinvestment Act came about, first of all, let's go back

00:11:34.780 a little bit further.

00:11:35.920 We're in Texas.

00:11:36.700 The savings and loan scandal happened here.

00:11:38.760 Remember, in the aftermath of this great crisis where Texas was the epicenter, you had homes

00:11:45.600 clear at fire sale prices.

00:11:47.660 So you had mass foreclosures, but you also had people come in who were going to live in

00:11:52.440 the homes and buy them on the cheap.

00:11:54.900 And then the market cleared.

00:11:56.600 And it was ugly and it was messy, but the market cleared.

00:11:58.940 Contrast that with politicians really enjoying saying that owning a home is the American dream.

00:12:11.820 Now, you can cross that from Clinton to Bush all the way on through Obama.

00:12:15.720 But the thing is, they were telling Americans that owning a home was the American dream.

00:12:23.560 What they were really saying was mortgaging yourself up to the eyeballs with the assistance

00:12:28.480 of a federal agency.

00:12:30.280 Then you get to feel wealthy.

00:12:32.600 You're not actually wealthy.

00:12:33.680 You've actually become an indentured servant to this great big mortgage market, which is

00:12:38.400 the largest debt market on planet Earth, larger than the U.S. Treasury market.

00:12:42.900 I mean, it's multiples of the size of the U.S. Treasury market.

00:12:47.520 And politicians found out that people enjoyed feeling wealthy, even if they weren't.

00:12:54.800 And again, we were not a country founded on the ideals of debt equals prosperity.

00:12:59.880 No, no, you save, you invest, you prosper.

00:13:05.080 And having Fannie Mae and Freddie Mac and the FHA extend, extend, extend, increase eligibility

00:13:14.680 for mortgages.

00:13:15.840 I mean, when the Vietnam War ended in San Antonio, Texas, you know, my parents borrowed money

00:13:21.900 from the parents.

00:13:23.540 And with the help of a VA loan, they barely got a mortgage.

00:13:26.780 And it was known for their generation that they were supposed to strive to pay that mortgage

00:13:32.220 off before they retired.

00:13:33.980 You certainly don't go into retirement with mortgage debt.

00:13:38.040 And yet, here we are in America today, and the majority of retirees still carry mortgage debt.

00:13:44.660 Think about that.

00:13:45.540 You're in retirement and financially vulnerable.

00:13:47.680 It's crazy to even think about that.

00:13:48.320 I know it makes it, but it is what it is.

00:13:51.560 And it's the culture that we have accepted.

00:13:54.640 And we've been told by our leaders that it's the way it should be.

00:13:58.860 Who's questioning them?

00:14:00.920 Oh, I think right now Mother Nature is questioning them.

00:14:03.420 I think right now the coronavirus is questioning them.

00:14:05.680 I think that there is going to be a severe cultural backlash where families feel the pain enough to say and make decisions on their own if they're encouraged to take on debt.

00:14:20.860 Sure, we're going to go back to our ways in some sense of the word.

00:14:25.920 But there are predictions right now that unemployment could surpass that of what we saw during the Great Depression.

00:14:32.600 I mean, these are unfathomable numbers that we're considering in America.

00:14:39.200 During, at the apex, at the height of the Great Depression, one in four Americans were out of work.

00:14:45.440 In two weeks' time, two weeks' time, we had 9.95, nearly 10 million jobless claims in America.

00:14:53.980 In two weeks' time, we got to one in 16 Americans.

00:14:57.080 And what we know from studying Google Trends, you can track any word on Google Trends.

00:15:05.440 Right now, if you track unemployment insurance, it's really popular, especially in Texas and in New York and in other states where there's been a tremendous backlog.

00:15:14.920 Florida is going to be coming up big time because they have such an antiquated unemployment insurance system that people can't get through to file the unemployment insurance claims that they need to right now.

00:15:26.640 But what we know from studying Google Trends is that the third wave was even bigger than the first and the second waves as other states went into shutdown.

00:15:35.460 So we haven't seen the worst of what we're going to see in terms of the ranks of Americans who are unemployed.

00:15:42.200 They took a survey just overnight.

00:15:44.940 Seventy-five percent of Americans have seen their income cut by at least 25 percent.

00:15:51.940 In other words, even people who are keeping their jobs aren't making the same amount.

00:15:56.440 They're not working the same hours.

00:15:58.960 Maybe one of the two breadwinners lost their job.

00:16:02.960 You've got your kids at home, online schooling, and you're trying to do your job even if you are working remotely.

00:16:10.080 You may as well be on your roof trying to get your job done and form a sentence.

00:16:13.400 I'm a writer.

00:16:14.080 I mean, I mostly write and conduct research.

00:16:17.220 And things work out really well for me around 4 or 5 a.m. when the whole house is asleep.

00:16:22.720 But this is a cultural shift is what I'm trying to say.

00:16:26.060 This is unlike anything generations have seen since those who survived the Great Depression.

00:16:33.820 So Mother Nature is holding these people accountable with coronavirus, a.k.a. coronavirus, which...

00:16:40.700 And I'm not saying it's revenge or anything of that nature.

00:16:43.080 I'm just saying it's shining a very bright light.

00:16:46.300 I totally get it.

00:16:48.840 It's highlighting a lot of the things that they've been doing that we haven't been prepared for.

00:16:53.720 And now, hey, you're being held accountable.

00:16:55.120 What are we going to do now?

00:16:55.900 I get that part.

00:16:57.180 When we read, you know, the articles that say unemployment is projected by the end of second quarter to be at 30%,

00:17:04.120 and just kind of you read it, you're like, yeah, it's going to be at 30%.

00:17:06.860 You know, you're looking at the news.

00:17:08.800 It's going to be at 30%.

00:17:09.940 It's going to be at 30%.

00:17:11.140 And so let me skip the channel, and I'm going to go to this next one.

00:17:14.780 30% is 30%.

00:17:16.760 What does that really mean if you were to unpack, and here's what I mean by unpack 30%.

00:17:22.760 If we were to unpack 30%, consequences, so ripple effect.

00:17:26.640 If we go to 30%, 75% is minus 25% of income right now of Americans.

00:17:32.420 One out of four was unemployed back in the Great Depression.

00:17:34.840 30% means 1 in 3, 0.3.

00:17:36.980 So we're going to go into some tough times.

00:17:39.560 What is the ripple effects?

00:17:40.820 And what industries, what happens to people, economy, safety?

00:17:44.760 Where does that go?

00:17:45.600 What could that look like?

00:17:47.360 So you're asking the key question here, because for as large as the fiscal stimulus is,

00:17:55.220 and we've already got $2 trillion out there,

00:17:57.940 the Federal Reserve is going to lever up by a multiple of $10, $450 billion

00:18:03.820 so that they can keep a lot of businesses still in business,

00:18:07.680 some of which may or may not deserve to go out of business, but we'll get to that.

00:18:10.820 But the fact is, from what we know today,

00:18:16.380 the stimulus checks aren't going to hit until when a lot of Americans have been out of work for six weeks or more,

00:18:24.340 the time the actual stimulus money hits their accounts.

00:18:27.820 Six weeks.

00:18:29.000 Well, it was three weeks from the time of the signing of,

00:18:32.320 when Congress passed the legislation and it was signed into law.

00:18:35.700 And by then, there were plenty of Americans who had been in shutdown for two or three weeks.

00:18:39.840 So there have been a lot of people who have been trying to get by on God knows what.

00:18:43.980 That's why you've seen wealthy restauranteurs in major cities open their restaurants back up on their own dime

00:18:51.800 to feed people who don't have food.

00:18:55.220 We're talking about bread lines that you read about in history class in middle school.

00:19:00.080 People who don't have food.

00:19:02.320 And let's stick with restaurants for just a second.

00:19:05.340 The percentage of restaurants that are never going to return, never, is tremendous.

00:19:12.700 What do you mean by that?

00:19:14.040 Never going to return?

00:19:15.780 Never going to reopen.

00:19:17.220 Never going to be able to find the financing.

00:19:19.240 Your average restaurant has two or three days of cash flow on hand.

00:19:22.840 A great restaurant maybe has one or two weeks of cash flow on hand.

00:19:29.900 But they've been asked by the government to keep all of their employees employed

00:19:33.580 and wait for the Small Business Administration loans to come through

00:19:38.060 and float them through to the end of September.

00:19:40.660 A lot of business people in America did the math and said,

00:19:44.240 this isn't going to work and I can't tell you that the demand is going to be there

00:19:48.560 at the end of the second quarter, best case scenario.

00:19:53.460 I don't, you can't tell me that as many Americans are going to go out and spend the way they used to.

00:19:59.380 You can't tell me that as many Americans are going to go to concerts,

00:20:03.080 go to the movies, go to sporting events,

00:20:06.080 go to music festivals, get on planes.

00:20:12.380 You know, something of this magnitude.

00:20:15.760 I mean, there's a headline that hit today.

00:20:17.260 There are more New Yorkers who have died as a consequence of the coronavirus

00:20:22.280 than what died on 9-11.

00:20:25.300 You know, I was in New York at the time.

00:20:28.580 I worked on Wall Street at the time.

00:20:30.260 It's something that reshaped my life and the way I viewed the world.

00:20:34.960 Now, magnify that.

00:20:37.860 Spread that across a nation.

00:20:40.680 We're going to change the way we spend.

00:20:43.380 And if we change the way we spend,

00:20:45.000 we're not going to need to tap into as many services as we once did as a nation.

00:20:52.320 So what I'm trying to say is,

00:20:54.480 let's say we get to 30% unemployment.

00:20:58.480 And let's say the worst of the virus has passed.

00:21:01.340 That doesn't mean the economy is going to heal overnight.

00:21:04.400 It might take years.

00:21:07.560 And that's what people are not factoring in.

00:21:10.540 Because if you have something of such magnitude

00:21:13.540 that it changes the way you view the world

00:21:15.520 and it changes the way you view spending.

00:21:18.820 2019 was an extraordinary year in American history.

00:21:24.040 Business investment had clamped down appreciably.

00:21:27.300 We had a trade war going on in the background.

00:21:29.380 There was a global economic slowdown.

00:21:33.020 China and the United States weren't,

00:21:35.700 there weren't Chinese people coming in and buying U.S. homes.

00:21:38.360 So there were a lot of things that didn't occur in 2019.

00:21:43.640 To offset it was the American consumer, was the U.S. household.

00:21:48.960 Consumption is typically two-thirds of the U.S. economy.

00:21:51.900 That's the way it's been year in and year out for a very long time.

00:21:55.140 In 2019, consumption was 90% of the U.S. economy.

00:22:01.020 As the Federal Reserve did everything they could to elevate the stock market,

00:22:05.180 keep risky asset prices up, keep people feeling wealthy

00:22:08.120 because they look at their 401ks,

00:22:10.080 and spend.

00:22:11.720 And spend and spend and spend beyond their means.

00:22:14.020 90% of U.S. gross domestic product in 2019 was consumption.

00:22:19.800 I can't tell you when we're going to get back to a normal world

00:22:24.620 of two-thirds of the U.S. economy being consumption

00:22:28.180 because of the massive shock that this is placing on U.S. households.

00:22:32.940 And the way that they're going to perceive money going forward

00:22:36.800 is going to be a tremendous change.

00:22:40.540 So you're saying even after this, we go back to business as usual,

00:22:45.980 the recovery is not going to be immediate.

00:22:47.660 Because you have two camps right now, right?

00:22:49.800 One camp is saying the moment this thing clears up,

00:22:55.580 we're going to have, the economy is going to go back to $30,000,

00:22:58.200 Dow is going to hit $30,000, everything is going to go back to business as usual,

00:23:01.620 people are going to go back out, and they're going to do what they're doing.

00:23:04.120 You're saying no.

00:23:05.200 It's going to take a while for us to recover from this.

00:23:07.380 Your argument on it taking a while for it to go back to recovering from this,

00:23:12.380 is it based on the fear people now have that's going to take a while

00:23:17.240 to recover from still the concerns of being around too much traffic,

00:23:20.960 where we're not going to go back in the habit of going to sporting events, games.

00:23:24.200 Are you saying the habits and the fears of people is going to take us to go back to business as usual?

00:23:28.960 Are you saying more the financial decisions we're making right now

00:23:32.540 of these businesses going out of business is going to take us to recover?

00:23:35.740 Which part are you kind of saying?

00:23:36.880 Is there more mindset or is there more business?

00:23:38.360 Well, you've described waves one and waves two.

00:23:42.300 There's going to be an initial reticence and fear among people

00:23:46.460 in terms of being in densely populated events, whatever they may be.

00:23:52.440 So that's your initial fear factor.

00:23:54.760 But what I'm speaking of is what comes behind this,

00:23:58.440 is a realization on the part of your average working American

00:24:02.940 that they need to save more in the future.

00:24:07.620 That they will never again wake up and say,

00:24:10.920 why am I feeding my family ramen?

00:24:14.160 Why didn't I think to, why didn't I set money aside in my last life?

00:24:19.460 Is that a good thing?

00:24:20.920 Oh, I think it's eventually going to be a great thing.

00:24:24.400 But it is going to mean that the coming recession,

00:24:28.020 the recession that we already know that we're in,

00:24:29.620 is going to be more protracted and drawn out than what many are right now assuming as a base case.

00:24:36.860 This could almost be like a filtering process to take us back to the habits that work.

00:24:40.780 You know, are you saying almost to,

00:24:44.100 you know how you talk to the generation that came from the depression,

00:24:47.860 they're always a little bit paranoid.

00:24:50.120 They're always a little bit more worried.

00:24:51.620 That's right.

00:24:51.900 You know, they are always a little bit more like cautious.

00:24:55.240 You know, when you talk to people older,

00:24:56.840 they're always a little bit more paranoid because they've experienced a lot more things.

00:25:00.220 Are you saying that this generation may pick up a little bit of the habit

00:25:04.580 and a mindset of the great depression generation of being more paranoid than before?

00:25:09.040 Because if that's the case, I actually don't think that's a bad thing.

00:25:12.020 I don't think it's a bad thing.

00:25:13.460 And I think that it's long overdue in this country,

00:25:15.960 but it's going to change the way the economy operates on a fundamental level.

00:25:20.600 You're going to perceive if you right now are stretching your dollar to fill up your grocery cart,

00:25:26.940 when this is all said and done, even if your income goes back to what it was before,

00:25:31.560 you might not be saying,

00:25:33.100 I want the high-rise at Disney and the full package for the family.

00:25:37.740 You might get in the car and drive somewhere and go camping.

00:25:41.440 If you're at the store, you might not say,

00:25:44.240 you know what, I'm going to buy that lovely pork tenderloin.

00:25:46.960 You might buy the pork chops.

00:25:49.620 You might be more frugal in the way you approach everyday purchases

00:25:53.800 because you were forced into being frugal because of this,

00:25:58.240 because you were forced to overnight make a budget and live within it.

00:26:02.080 How different is that than 08?

00:26:04.240 Because even in 08, if you remember,

00:26:05.720 guys were buying condos in Vegas for $700,000, a million dollars.

00:26:09.980 Oh, you know, just put another one.

00:26:11.160 I'll buy another one.

00:26:11.880 I'll buy another one.

00:26:12.580 And everybody had an S500.

00:26:14.640 Everybody had a nice car, Porsche, Ferrari.

00:26:16.580 Then when 08 happened, market tanked 39%.

00:26:18.860 We're like, I'll never do this again.

00:26:20.720 So we kind of went back to good habits for two or three years,

00:26:23.200 and then we went back to our bad habits again.

00:26:25.640 How different is this from that?

00:26:28.640 The difference is that the government then was able to come in with many programs,

00:26:34.940 mortgage modifications.

00:26:36.500 Don't get me wrong.

00:26:36.960 There were 10 million foreclosures in the United States.

00:26:39.620 It was a tremendous hit.

00:26:41.820 But there were still many mitigation programs at the time.

00:26:46.560 And the Federal Reserve had actual traditional tools.

00:26:51.320 The Federal Reserve was able to take interest rates from 4.5% down to the zero bound.

00:26:56.700 They were able to inject stimulus into the economy,

00:26:59.820 whereas today they're starting at the zero bound.

00:27:02.740 The country had never known what a printing press was.

00:27:05.720 The country had never known what it was for the Fed to try and inflate financial markets,

00:27:10.820 which they successfully did.

00:27:12.920 They were able to come in and keep zombie companies alive

00:27:15.860 that otherwise would have gone out of business in a regular business cycle.

00:27:19.280 We did have our wrists slapped, but the Federal Reserve came riding to the rescue and said,

00:27:25.020 no, no, we're here.

00:27:27.040 We're here to back you.

00:27:28.420 Go back to your spending ways.

00:27:31.060 Maybe you can't get that mortgage you wanted.

00:27:33.840 But by golly, we're going to take interest rates down to the zero bound.

00:27:37.380 We're going to have private equity investors come swarm into neighborhoods,

00:27:41.540 buy up homes that otherwise would have gone to millennial,

00:27:46.060 first-time homebuyers for fire cell prices.

00:27:48.560 That didn't happen.

00:27:49.460 You had investors swarm in because anybody that had deep pockets could borrow more

00:27:54.580 with interest rates at 0%.

00:27:56.960 You had the government borrow to kingdom come,

00:28:01.160 so you had a very quiet expansion of the social safety net.

00:28:05.120 So you ended up keeping a large percentage of the U.S. economy,

00:28:08.420 of the U.S. workforce, excuse me, on the sidelines.

00:28:12.140 Years later, we ended up with a lack of skills in the U.S. workforce,

00:28:19.040 but part of that was also because so many Americans were able to stay out of the workforce

00:28:25.400 and even access credit.

00:28:28.980 All I'm saying is we have companies that are still in business today

00:28:32.880 because the junk bond market opened wide back open.

00:28:36.640 We have a lot of the rot from the last financial crisis

00:28:40.240 that we were able to basically refinance, if you want to think about it that way.

00:28:44.800 Kick the can down the road.

00:28:46.300 Not eliminate or clean up, just refinance.

00:28:48.240 Not eliminate, not clean up.

00:28:49.640 Keep the overcapacity in the system.

00:28:52.760 Keep more people employed than they otherwise would have been throughout the crisis,

00:28:56.180 but you don't come out better and stronger for it.

00:28:58.540 You just feel like you have because you've taken on that much more debt.

00:29:04.200 So that leads to a lot of different questions.

00:29:06.700 We're going to go to negative interest rates

00:29:08.520 because if you're going from four and a half to zero,

00:29:10.440 where are you going to go from zero to what?

00:29:12.720 That also brings me to quantitative easing,

00:29:14.760 which we'll touch about here in a minute,

00:29:16.020 and obviously the Fed, which we'll get to 100%.

00:29:17.920 But before we get there, I have a complete different thing

00:29:21.780 that I was curious what you would say.

00:29:23.800 So pre-coronavirus, take coronavirus off the table, right?

00:29:27.000 I'm at a Goldman Sachs event where the chief investment officer is speaking,

00:29:32.940 and she's eloquently giving a message of how they foresee the economy being,

00:29:36.960 and here's what's going to happen.

00:29:37.980 We're not too concerned about the coronavirus.

00:29:39.660 This was at the beginning stages, second week of January, to give them credit.

00:29:44.580 It wasn't like it was second week of February, second week of January.

00:29:47.720 We're not really thinking this is going to get out of control.

00:29:50.120 The R-naught score is not that high.

00:29:52.900 It's not going to spread.

00:29:54.020 But take coronavirus out.

00:29:57.300 Go to 2019.

00:29:58.440 We're in July, okay?

00:30:01.000 U.S.-China trade war is still going on.

00:30:03.240 Venezuela is still going on.

00:30:04.480 Go a little later in December.

00:30:06.740 Saudi Arabia and Russia is going on.

00:30:09.040 You know, we have the wall going on.

00:30:11.240 We have election going on.

00:30:12.400 We have the divisiveness between Republicans and Democrats going on.

00:30:17.420 We have 129 months of economic expansion going on.

00:30:21.660 The greatest ever.

00:30:22.400 We've never had 129-month economic expansion.

00:30:25.180 So if coronavirus doesn't happen, set that aside.

00:30:29.560 We don't have anything that comes out of Wuhan.

00:30:31.480 We're good to go.

00:30:32.540 There is no coronavirus today.

00:30:33.920 Are we going to get to where we are today, regardless of coronavirus?

00:30:39.300 Or did coronavirus have to happen for us to be in shambles that we are today with the

00:30:44.160 $2.2 trillion stimulus and they're projecting another $10 trillion that's going to come out

00:30:48.380 possibly in the next month or two?

00:30:50.160 So what's the difference?

00:30:52.100 So I think the difference is magnitude and speed.

00:30:55.020 We knew by looking at the data that things were getting very, very stretched.

00:30:59.380 And we saw that if you took out fleet sales, for example, I'll just take one example, car sales.

00:31:05.680 If you took out what the car rental agencies and what corporations were buying for their own fleets,

00:31:12.600 if you took that out, you saw four years in a row of declining retail car sales in America.

00:31:20.160 If you looked at the employment sector, we got our last clean read pre-coronavirus this morning of job openings.

00:31:31.420 We were seeing weakening on every front of the job market prior to the coronavirus hitting.

00:31:37.800 This was a very slow-moving slowdown, but it was definitely a slowdown.

00:31:43.280 If we looked at data out of Germany, if we looked at data out of China,

00:31:48.260 which pre-coronavirus was growing at a 30-year low, Germany was slowing as well.

00:31:56.800 So, and this is, again, this is all pre-coronavirus.

00:32:00.120 So would the Federal Reserve have been able to float the financial markets through the election

00:32:06.740 because they were so aggressively keeping interest rates at artificially low levels

00:32:14.940 and they were so aggressively growing their balance sheet, even though they were calling it not QE.

00:32:20.560 Could they have floated the U.S. economy through the U.S. election?

00:32:24.380 Possibly. Possibly.

00:32:25.920 But we knew, those of us who worry about these things, knew that the bubble was getting to be so big

00:32:34.260 in the corporate debt market and the bubble was getting to be so big in the stock market

00:32:39.740 that the littlest thing, and I've been saying this for probably a year now,

00:32:44.460 that we are one financial shock shy of the Federal Reserve having to come in guns blazing

00:32:52.280 and give a whole new meaning.

00:32:55.900 One of my clients said the Federal Reserve didn't come in with a bazooka.

00:33:00.200 They came in with a neutron bomb.

00:33:02.260 I agree.

00:33:03.220 But that was what was required because when you try and buy time,

00:33:08.320 and time as a factor of time gets more expensive, that's what happens.

00:33:12.700 You inflate bigger bubbles.

00:33:14.900 And we walked into this huge coronavirus event more indebted as a world

00:33:22.480 and more indebted as a country, more indebted as a corporate sector,

00:33:27.260 74% of U.S. GDP, almost $16 trillion corporate debt,

00:33:32.920 non-financial corporate debt in America.

00:33:34.740 Never seen these levels.

00:33:36.100 Consumer debt, higher than it's ever been.

00:33:38.480 Remember what we talked about earlier.

00:33:40.340 If you're a Joe Q homeowner and the mortgage company says,

00:33:45.120 no more, no mas, you may not take equity out of your home,

00:33:49.740 cash-out refinancings are over.

00:33:52.640 And yet as a society, we're still told we better get that four-year degree,

00:33:57.240 so now we have $1.6 trillion of student debt on our hands

00:34:00.140 because something had to pay for it, so student debt's paid for it.

00:34:04.040 And now we've seen credit card debt get back up to over $1 trillion.

00:34:08.820 And now we've seen car loans get back up to well over $1 trillion.

00:34:14.240 So yes, we don't have the same amount of mortgage debt in America as we did in 2006, 2007.

00:34:20.920 But boy, we've met up for it big time in other areas.

00:34:24.760 So whether you're talking about the world, over $250 trillion of debt,

00:34:29.560 the U.S. government, corporate America, or U.S. households,

00:34:36.660 we've all been up to our eyeballs and drowning in debt.

00:34:40.280 Again, that led to 15 questions, but let me ask one of them just out of curiosity.

00:34:44.360 The world has $250 trillion of debt, which a lot of it is credit,

00:34:48.420 but we only have around $50 trillion of currency.

00:34:51.100 How is that possible?

00:34:53.040 You know what I'm asking, right?

00:34:54.280 We have $50 trillion of coins and currency.

00:34:57.220 We have a quarter trillion dollars, $250 trillion of debt.

00:35:01.020 How does that work out?

00:35:01.560 We have a lot of good faith based on the prowess of the U.S. printing press.

00:35:05.860 I mean, the United States maintains reserve currency status.

00:35:09.340 That's fake money, though.

00:35:10.340 That's not real money.

00:35:11.200 That's fake money.

00:35:12.100 That's $200 trillion of fake money.

00:35:13.660 Oh, you're really?

00:35:16.760 I know.

00:35:17.640 But it's all based on faith.

00:35:19.600 How long is it sustainable, though, to go at that pace?

00:35:23.320 In theory, and if you listen to what you're being told,

00:35:28.120 everything's going to be okay.

00:35:31.560 Trillions and trillions and trillions of dollars.

00:35:33.520 With the United States in the lead, the United States by far,

00:35:36.260 vis-a-vis any other country, is taking on more debt to address the coronavirus

00:35:39.780 than anybody else on the planet, including China.

00:35:42.260 That's saying something.

00:35:43.540 And we're being told that it's all going to be fine

00:35:46.200 because you can just have the Federal Reserve,

00:35:49.300 which is what they're going to do this year,

00:35:52.020 finance all debt that's being taken on,

00:35:55.240 put all of it on their balance sheet.

00:35:57.720 We came into this with the Federal Reserve's balance sheet

00:36:00.160 somewhere in the neighborhood of $4 trillion.

00:36:02.040 It is likely that we will get into double digits, $10 trillion.

00:36:06.420 It's a scary thought.

00:36:07.200 You know, I'm looking at all this stuff,

00:36:09.480 and to me everything's a leader's bulletin,

00:36:10.860 and I think someone's going to come out the winner here from coronavirus.

00:36:13.600 I do think...

00:36:15.440 This is showing us that we need a strong leader.

00:36:18.180 Oh, I think behind closed doors,

00:36:20.460 and I'm going to go to an empire that I'm looking at

00:36:23.300 that it's going to be crazy for me to give them credit,

00:36:25.900 but strategically, I think they have been poised for this to come up.

00:36:29.960 So here's some data here.

00:36:31.440 China's national debt is $5.2 trillion.

00:36:34.020 That's what they have, right?

00:36:35.000 And their GDP, their debt to GDP...

00:36:37.640 By the way, before I get into this,

00:36:38.600 how much do you as an economist look at the debt to GDP ratio?

00:36:44.040 Is that a big factor?

00:36:45.120 Do you look at that as a big factor or not really?

00:36:47.000 It's not a big concern.

00:36:48.680 Oh, I think it's a huge concern.

00:36:49.820 It is.

00:36:50.240 And now that we know that it's truly Milton Friedman behind me,

00:36:53.320 I always adhered to his philosophy

00:36:56.780 that there is no such thing as a free lunch.

00:36:59.560 You can buy time.

00:37:00.920 I mean, God knows we've seen a lot of time purchased, bought,

00:37:05.260 but we haven't seen it paid for.

00:37:06.680 So yes, I think that there will be ramifications.

00:37:09.140 Okay.

00:37:09.760 So when you're saying that as an economist,

00:37:11.620 you do look at nations and say Japan's at 221% debt to GDP ratio,

00:37:16.840 they're about to have a massive recession taking place.

00:37:20.260 It's going to take them a couple decades to recover.

00:37:22.220 Do you go to extreme measures when you see numbers like that?

00:37:24.800 Or it's not a measure point that you look at and say that's a very big factor?

00:37:28.180 Well, it really is a country-by-country basis.

00:37:30.660 And I don't want to – I'm not trying to back out of the question,

00:37:33.140 but internally in Japan, they own their own debt.

00:37:36.400 Their fate's not necessarily tied to other countries.

00:37:39.560 Which means?

00:37:40.160 They're not beholden to the kindness of strangers,

00:37:43.580 unlike the United States where Japan owns a trillion dollars of U.S. Treasury debt.

00:37:47.220 China owns over a trillion dollars of U.S. Treasury debt.

00:37:49.640 But we assume that we can take on as much debt as we possibly can imagine

00:37:54.840 and that our borrowing costs will never go up because we just assume that we're number one.

00:38:01.100 To elaborate what you just said, is that in a sense of saying, you know, we're married,

00:38:06.020 we have a family, the Bed-David family only borrows money from Bed-David family.

00:38:10.440 Okay, that's Japan.

00:38:11.680 But U.S., the family here borrows money from anybody, strangers, whoever that can.

00:38:16.240 Is that a good way of putting it?

00:38:17.620 We're Japan versus U.S. because we'll borrow from anybody?

00:38:20.540 And we also borrow from ourselves.

00:38:22.700 And the Treasury issues it and the Federal Reserve buys it.

00:38:26.720 So then if that's the case, let me give you this number and tell me what you think about this.

00:38:30.240 China's in debt, 5.2 trillion.

00:38:32.140 Brazil's at 2 trillion.

00:38:34.280 Japan's got 9 trillion.

00:38:35.660 And if you look at the debt-to-GDP ratio, Japan's at the top of 221.

00:38:38.820 Greece, 179, which we pretty much know why.

00:38:41.080 Portugal, 138.

00:38:42.000 Italy, 138.

00:38:43.320 Belgium, 115.

00:38:44.440 U.S., 106.

00:38:45.840 Spain, 106.

00:38:47.080 UK, 86.

00:38:48.580 France, 98.4.

00:38:50.000 Germany, 62.

00:38:50.980 You ready for this number?

00:38:52.420 Russia, 17%.

00:38:53.720 And they bought 400 tons of gold the last couple of years.

00:38:58.220 A lot of these nations that have their gold have been sitting on the same amount of gold for a while.

00:39:02.320 But Russia's been coming up on the gold leaders' bulletin.

00:39:05.800 Why are they at 17%?

00:39:07.500 Their debt, by the way, Russia's debt is $217 billion.

00:39:10.620 I don't have it written anywhere here.

00:39:12.360 Well, because you don't have any billions on your page.

00:39:14.100 You only have trillions.

00:39:14.760 Trillions.

00:39:15.340 Russia's only at $217.3 billion as of February of 2020, I believe.

00:39:21.240 Are they looking at this saying, we're going to make a vertical move in the next couple of years

00:39:26.740 because we're a little bit more responsible than others?

00:39:28.800 Or no, that doesn't mean anything.

00:39:30.240 So people ask me all the time, because if you study the way people think, and I'm talking about without naming any names,

00:39:39.460 the socialists say that we can print as much money as we want.

00:39:43.100 Let's say that our debt right now is $25 trillion.

00:39:46.200 Let's round up, given what we know we've just spent as a nation.

00:39:49.460 But the socialists, the universal basic income say that you can easily double it.

00:39:54.820 And because we have a reserve currency status, and because we have not seen inflation in generations,

00:40:02.480 we're going to get away with it, and our borrowing costs are never going to rise.

00:40:06.200 And as long as our borrowing costs never rise, and inflation never rears its ugly head,

00:40:09.860 then we can borrow to kingdom come.

00:40:12.720 And when these things work, they work until they don't work.

00:40:16.040 But at some point, if the rest of the world begins to push back,

00:40:19.640 let's say certain countries emerge stronger from this global recession than others.

00:40:29.300 It tends to be, if you're going to make a move, it tends to be he who has dry powder,

00:40:37.140 the least amount of debt, the most hard assets,

00:40:41.900 is able to assume more leverage and power than they otherwise would,

00:40:47.120 based on looking at the size of the country's economy.

00:40:49.640 In other words, to your point, Russia has not weakened their balance sheet.

00:40:55.340 They've strengthened it.

00:40:58.160 And their long-term planners, China's a long-term planner as well.

00:41:01.800 China has a ton of debt, but China also has been a lender to many nations

00:41:08.400 with natural resources throughout the world,

00:41:11.280 and quietly been colonizing a big portion of the world,

00:41:14.600 and they happen to have an ally in Russia.

00:41:16.520 So you can connect many dots.

00:41:18.440 No doubt about it.

00:41:19.100 Theoretically.

00:41:19.820 No doubt about it.

00:41:20.480 But all of this debt we're taking on does weaken our position on the global stage.

00:41:25.580 I think you're saying theoretically because you're being diplomatic,

00:41:27.920 but I think that it's more than theoretically.

00:41:29.600 By the way, China's number, if you can verify this, Kai,

00:41:32.440 I just want to verify this.

00:41:33.520 If I'm saying this, if I'm incorrect, please let's correct it.

00:41:35.700 I believe China's debt-to-GDP ratio is 50.5%, which is also low with Russia.

00:41:45.080 Of all the names I said, they're low with Russia.

00:41:47.200 So it's interesting how the position is taking place.

00:41:50.420 I will push back a little bit, though, because if you add up all of the different sources

00:41:54.920 of debt in China, boy, they're 300 or above 300%.

00:41:59.880 If you—

00:42:00.800 If you—

00:42:01.300 Corporate debt, household debt, and the fact that there's a lot of state debt

00:42:05.180 that runs around in places that isn't really identified.

00:42:08.400 If you did that with us, where would we be?

00:42:10.000 If we're right now 106, if you apply the corporate debt and everything,

00:42:12.920 where would we probably be?

00:42:13.900 We're in the upper 200s.

00:42:15.380 So they're still higher than us if you take everything in place.

00:42:18.680 Yes.

00:42:19.480 Okay.

00:42:19.960 China is still higher than us if you're considering all forms of debt.

00:42:24.280 That's good to know.

00:42:24.860 So now, $123 trillion, U.S. collective liabilities that we have.

00:42:29.240 How do we pay that off?

00:42:30.220 I mean, this whole thing about debt, how do you pay off $123 trillion?

00:42:34.060 I don't think there's any kind of an assumption about paying it off.

00:42:37.220 I think there's an assumption about carrying the debt.

00:42:40.360 How long is that debt going to be carried?

00:42:42.040 I mean, it's hard to say.

00:42:43.360 Look, this is—you know, there are so many—

00:42:49.480 The next generation of constitutional lawyers is going to be very busy.

00:42:55.040 States cannot declare bankruptcy.

00:42:57.300 It is against the Constitution of the United States for the state of Illinois,

00:43:00.760 for example, to declare bankruptcy.

00:43:03.580 And we know from what we've heard out of Illinois initially

00:43:06.300 that they're going to stop making some payments,

00:43:08.660 that there's the potential for the first time since the Great Depression

00:43:11.860 for a state to default on its debt.

00:43:15.140 But the federal government is not legally able to come in and bail out Illinois, theoretically.

00:43:20.480 They're breaking a lot of laws in D.C. right now,

00:43:22.700 so I'm sure that they would just pass a special legislation of some kind and come in and do it.

00:43:26.880 But that would be questioned constitutionally.

00:43:29.240 What the Federal Reserve is doing right now is also going to be questioned constitutionally

00:43:34.020 because the Federal Reserve cannot buy corporate bonds.

00:43:38.540 But by setting up a separate vehicle through the Treasury Department,

00:43:42.940 a special-purpose vehicle,

00:43:44.440 takes me back to my days of studying Enron off-balance sheet financing.

00:43:49.620 That's what the government's doing right now.

00:43:51.220 And by acceding control to the Treasury,

00:43:55.420 the Federal Reserve has lost its independence.

00:43:58.920 If you want to take the argument to an extreme,

00:44:02.340 if Donald J. Trump is Steven Mnuchin's boss,

00:44:05.340 then Donald Trump is running the Federal Reserve right now.

00:44:08.320 And that's legal.

00:44:09.580 That's law.

00:44:10.260 Because there's $4.5 trillion that's going to be directed

00:44:15.280 via the Federal Reserve and the Treasury.

00:44:21.320 And Donald Trump has said that he will not answer to anybody,

00:44:23.980 even though he has behaved and he's appointed an inspector general

00:44:28.040 from his administration.

00:44:30.580 But there are things happening in America right now.

00:44:34.060 And you started asking me about entitlement spending,

00:44:36.500 and that's what brought public pensions to mind so quickly,

00:44:38.560 and that's what brought the state of Illinois to mind so quickly.

00:44:41.520 There's an assumption that there will never be a price to be paid.

00:44:45.480 But if you think about what the average American household's about to go through,

00:44:52.360 there are the makings of a third political party in this nation

00:44:56.100 to question what is going on.

00:44:59.680 It's very easy to see,

00:45:01.660 because right now there's a large percentage of the U.S. population that has no voice.

00:45:07.240 This has been said for a while.

00:45:08.560 No, you're really thinking we can have a third,

00:45:10.420 because everybody's been saying third political party, third political party.

00:45:13.540 And by the way, it'd be a great thing to have a third one.

00:45:15.480 But we've never had critical mass.

00:45:17.540 But you and I are talking about 30% of Americans being out of work.

00:45:22.960 Critical mass right there.

00:45:24.820 You've never had the critical mass.

00:45:26.940 But you've never had this many Americans

00:45:31.080 who are going to be focused on who is and is not representing their best interests.

00:45:36.900 How do you tell between the bullshit?

00:45:38.640 I mean, everybody can say they have you as their best interest.

00:45:42.220 How do you tell that apart?

00:45:43.800 Because behind closed doors, who's really leading these guys?

00:45:49.060 You said Trump.

00:45:49.660 Let me read something to you.

00:45:50.680 A tweet he sent out back on September 11th.

00:45:55.180 The Federal Reserve should get our interest rates down to zero or less.

00:45:58.720 And we should then start to refinance our debt.

00:46:00.960 Interest could be brought way down.

00:46:03.100 While at the same time substantially lengthening the term,

00:46:06.300 we have the great currency power and balance sheet.

00:46:09.080 And U.S., the U.S. should always be paying the lowest rate, no inflation.

00:46:12.660 It is only the naivete of Jay Powell and the Federal Reserve

00:46:16.100 that doesn't allow us to do what other countries are already doing,

00:46:19.720 a once-in-a-lifetime opportunity that we are missing because of boneheads.

00:46:24.860 This is 9-11-2019.

00:46:26.480 This is pre-coronavirus to understand that we're going from four and a half to zero.

00:46:30.660 He did not know that we're going to need more for that.

00:46:32.940 You read that.

00:46:33.520 You hear me say that.

00:46:34.300 What do you think about it?

00:46:35.740 Well, he's using the example of the country of Germany

00:46:38.500 that is effectively paid to take on sovereign debt.

00:46:44.240 Of course, Germany is also very frugal,

00:46:46.540 and their balance sheet could stand up to ours any day.

00:46:51.000 But if you think about a bank,

00:46:54.120 let's take this to its most simple terms.

00:46:57.580 A bank is in business to borrow at a very low rate

00:47:02.520 and lend out money at a much higher rate.

00:47:05.920 And the difference between those two rates

00:47:07.460 is where they make money and why they're a bank,

00:47:10.320 why they stay in business.

00:47:12.860 If you take interest rates to a negative level,

00:47:16.660 a bank has no reason to be a bank anymore.

00:47:19.100 The bank should just close its front doors and go away.

00:47:21.720 That's what you're talking about

00:47:22.780 if you're talking about negative interest rates in America.

00:47:25.440 That's how impossible it would be.

00:47:29.000 That's how crippling it would be.

00:47:30.740 That's why the Japanese bank stock index

00:47:34.260 is down 90% from its highs,

00:47:37.700 because the Japanese banking system

00:47:39.400 has been crippled by negative interest rates.

00:47:42.240 That's why the European banking system,

00:47:45.120 that index, since negative interest rates were imposed,

00:47:47.480 is down 40%.

00:47:49.140 Negative interest rates

00:47:51.760 are very much not.

00:47:55.320 They're anti-American.

00:47:56.240 They're unpatriotic.

00:47:58.680 They should never even be considered.

00:48:02.300 And to Jay Powell's credit,

00:48:03.640 and those are not words that I use often,

00:48:05.980 he has pushed back against negative interest rates

00:48:08.880 because he understands the Pandora's box

00:48:12.120 that that would open,

00:48:13.360 with all due deference to our president.

00:48:16.020 Let me ask you a question.

00:48:17.820 President Trump obviously has never been a China fan.

00:48:21.480 Not in the last decade he's not been a China fan.

00:48:23.320 He's tweeted about it.

00:48:24.020 He's talked about it.

00:48:24.620 He's openly said China's not a friend.

00:48:25.960 He's not an ally.

00:48:26.600 So we know that, right?

00:48:28.400 And I think we actually know that.

00:48:30.380 Yeah, we know that.

00:48:31.320 So the question I want to ask is,

00:48:33.680 has he been a fan of the Fed

00:48:35.960 pre-becoming a president?

00:48:38.340 As somebody who's in real estate,

00:48:40.180 that's how he's made his wealth.

00:48:41.580 Okay.

00:48:42.040 Is he a fan of the Fed

00:48:44.040 or did he always have issues with the Fed?

00:48:46.220 Because I'm going somewhere with this.

00:48:48.060 Has he been a pro or you don't know?

00:48:50.540 If you don't know the answer,

00:48:51.480 it's fine if you don't.

00:48:52.260 No, no.

00:48:52.440 When he was campaigning,

00:48:54.780 he was very open and adamant about saying

00:48:57.540 that the Federal Reserve was inflating a stock market bubble

00:48:59.940 with artificially low interest rates.

00:49:02.620 That's what he said on the campaign trail.

00:49:04.680 So that's a matter of public record.

00:49:06.500 So let me ask you this question.

00:49:07.640 Is there a possibility,

00:49:09.880 even a possibility,

00:49:11.760 that he is wanting to do whatever he can

00:49:15.600 if it's even possible to bankrupt the Fed,

00:49:19.700 the Reserve, Federal Reserve?

00:49:22.100 To bankrupt the Fed.

00:49:23.420 I mean, you can't bankrupt the Fed.

00:49:25.640 You can always bail the Fed out if you're Treasury.

00:49:28.700 I know you can,

00:49:29.520 but to get it to a point where we're getting away from it.

00:49:31.040 But is he trying to break the Fed?

00:49:32.140 That's what I'm saying,

00:49:32.940 to go to a point where,

00:49:34.160 hey, we learned our lesson,

00:49:35.820 now we have to get away from it.

00:49:37.020 Is there any possibility that's the direction he's going?

00:49:39.720 Well, again,

00:49:40.520 the Federal Reserve purchasing corporate bonds

00:49:42.940 is in direct violation of the Federal Reserve Act of 1913.

00:49:47.720 That law has been thrown away with the stimulus package

00:49:51.640 because through a special purpose vehicle,

00:49:54.360 the Federal Reserve can,

00:49:55.740 through BlackRock,

00:49:57.600 a massive firm,

00:49:59.880 buy corporate debt

00:50:01.240 and put it on the Treasury's balance sheet.

00:50:04.680 If, again, you take this argument to the extreme,

00:50:07.600 the financial markets have been nationalized.

00:50:12.980 And if you take the argument to the extreme,

00:50:15.200 to the extent that the Treasury is answerable

00:50:17.100 to the administration,

00:50:19.760 Donald Trump has broken the Fed.

00:50:22.520 And this is something that is

00:50:24.220 extremely difficult to get your head around.

00:50:28.140 I need to get out more.

00:50:29.300 Well, I think we all need to get out more.

00:50:30.460 We can agree on that right now.

00:50:31.880 We're all going to be happy when we can get out more.

00:50:33.880 But even before the coronavirus,

00:50:35.360 I needed to get out more.

00:50:36.120 So I know what the Federal Reserve Act says.

00:50:38.580 And when I was inside the Fed for nine years,

00:50:41.240 in the heat of the financial crisis,

00:50:43.060 it was debated as to whether we could buy corporate bonds.

00:50:45.680 And the answer was no.

00:50:48.600 And yet, somehow,

00:50:50.440 because this crisis is

00:50:52.580 as severe and swift as it is,

00:50:58.680 we have said,

00:51:00.020 we're going to set the law aside,

00:51:02.400 look the other way,

00:51:03.320 and find a workaround

00:51:04.380 and find a workaround

00:51:04.400 so that we can make sure

00:51:05.660 that we don't have a full-blown meltdown

00:51:08.640 in the corporate debt market.

00:51:10.780 By the way,

00:51:12.600 that was facilitated by Federal Reserve policy,

00:51:15.540 keeping interest rates too low for too long.

00:51:17.740 You would not have had a doubling

00:51:18.920 of U.S. corporate bonds

00:51:21.520 to $10 trillion

00:51:22.840 if the Fed had not repressed interest rates

00:51:26.440 in the first place.

00:51:27.420 So one of my heroes

00:51:30.200 in the world of finance

00:51:31.720 is Jim Grant,

00:51:32.880 and he's always said it best.

00:51:35.000 You can talk about

00:51:35.880 Alan Greenspan

00:51:37.440 not imposing margin requirements

00:51:39.720 in 1996

00:51:40.580 when he said

00:51:41.580 the words irrational exuberance,

00:51:43.580 recognizing we had a stock market bubble.

00:51:45.200 He could have done something about it then.

00:51:46.680 He decided not to.

00:51:47.840 Alan Greenspan, again,

00:51:48.860 was informed in 2003.

00:51:51.120 People are getting home loans

00:51:52.080 who shouldn't be.

00:51:53.180 The subprime mortgage thing

00:51:54.320 is going to blow up.

00:51:55.220 He could have made

00:51:57.360 mortgage requirements more stringent,

00:52:00.720 lending standards more stringent.

00:52:02.160 He chose not to.

00:52:03.860 So Jim Grant has always said

00:52:05.200 that the Fed is both arsonist

00:52:06.700 and firefighter,

00:52:08.020 and that is exactly

00:52:10.440 the same exact case today.

00:52:12.400 So you break the Federal Reserve Act,

00:52:15.500 you annihilate Fed independence

00:52:17.100 so that you can come to the rescue

00:52:19.180 of the corporate bond market

00:52:20.600 that wouldn't need rescuing

00:52:22.700 had it not been for Fed policy.

00:52:25.220 This is an old strategy of wars.

00:52:28.220 It's a Hegelian dialectic.

00:52:30.600 You know, this is the Hegel philosopher

00:52:32.060 would talk about

00:52:32.880 create the problem,

00:52:34.700 you know,

00:52:35.520 blame it on somebody else,

00:52:37.200 then be the one that comes

00:52:38.840 and offers a solution.

00:52:39.940 You'll be the hero.

00:52:40.740 Oh my gosh,

00:52:41.500 thank you so much

00:52:42.160 for coming and saving us,

00:52:43.240 but you're the one

00:52:43.880 that originally...

00:52:44.920 It's very deceptive.

00:52:45.760 Now, the question you said,

00:52:46.980 if that's the case,

00:52:48.060 Trump broke the Fed,

00:52:49.600 was that intentional

00:52:50.900 or accidental?

00:52:52.140 That's the real question.

00:52:54.060 Well, I will say

00:52:55.980 that the...

00:52:59.240 I will say that Wall Street was...

00:53:02.980 You knew that Wall Street

00:53:04.460 had its pacifier taken away

00:53:05.760 and there was huge whining

00:53:09.180 among the babies on Wall Street

00:53:10.480 saying,

00:53:12.040 we've got a problem here

00:53:13.700 in the corporate debt market.

00:53:14.700 We've got a meltdown.

00:53:15.460 We might have systemic risk,

00:53:16.760 which is risk you can't contain,

00:53:18.600 which is risk that

00:53:19.960 the Federal Reserve

00:53:20.560 could not do anything about

00:53:21.620 and we've got to come up

00:53:22.860 with a solution for this

00:53:23.780 right now.

00:53:24.760 So you might could say

00:53:26.460 that the need was there.

00:53:28.200 I think a lot of people

00:53:29.340 who would be otherwise known

00:53:31.000 as capitalists

00:53:32.060 would disagree with you

00:53:33.160 and they would say

00:53:35.120 if they borrowed too much

00:53:36.660 and they couldn't afford

00:53:37.720 to service their debt,

00:53:39.260 then let them go out of business.

00:53:41.940 So I think that you will be told

00:53:44.040 that the need was there,

00:53:45.200 but I think that's a red herring.

00:53:47.500 So let's talk about my friends

00:53:49.000 who are the capitalists

00:53:49.840 that will say

00:53:50.460 if you borrow too much debt,

00:53:52.580 let them go out of business.

00:53:53.460 Do you have a problem with that?

00:53:54.680 Because the way you said it,

00:53:55.580 it seemed like you do

00:53:56.340 have a problem with that.

00:53:57.540 No, I'm saying that

00:53:58.220 Wall Street has a problem with that.

00:53:59.700 Wall Street has a problem

00:54:00.540 with allowing the too big

00:54:01.620 to fail companies

00:54:02.340 to go out of business.

00:54:03.140 Of course they do.

00:54:03.860 Okay, I'm fine with that.

00:54:05.440 Sure.

00:54:05.620 I totally, we're on the same page there.

00:54:07.340 Because they get to do deals

00:54:08.560 regardless.

00:54:09.660 100%.

00:54:09.940 But if you take half,

00:54:11.200 you know,

00:54:11.740 they don't want all their

00:54:12.900 corporate clients to go away,

00:54:13.920 these big investment banks.

00:54:14.780 They want them to stay in business

00:54:15.760 by being bailed out.

00:54:16.900 But then here's the problem.

00:54:17.840 So what kind of a habit

00:54:18.680 are you teaching

00:54:19.240 if it's a constant bailout?

00:54:21.520 If I know my dad's

00:54:22.760 going to bail me out

00:54:23.480 every time I go do some stupid,

00:54:24.860 he's going to come

00:54:25.300 and pay the $1,000 bail

00:54:26.440 and I'm going to go home

00:54:27.820 and say,

00:54:28.060 yeah, don't worry about it.

00:54:28.760 Just don't do it again, man.

00:54:29.560 What's wrong with you?

00:54:30.260 And I know I'm going to do it again

00:54:31.180 and he's going to bail me out.

00:54:32.340 What the hell am I learning?

00:54:33.460 What lesson am I learning?

00:54:34.980 Not a lot.

00:54:35.800 I mean,

00:54:36.300 if you look at the cash flow

00:54:37.800 of major American airlines,

00:54:39.500 96% of it went into share buybacks

00:54:42.200 and we've just wholesale bailed them out.

00:54:45.920 96% went into the buybacks,

00:54:48.100 but right now with the $2.2 trillion,

00:54:50.440 wasn't there a clause

00:54:51.040 that they can't do any buybacks

00:54:52.140 if they took any money?

00:54:53.640 That was part of the discussion

00:54:54.940 that we're having.

00:54:55.400 That was part of the discussion.

00:54:56.780 We will wait and see.

00:54:58.960 There's also part of the discussion

00:55:00.100 about not laying people off

00:55:01.240 until a certain date and time

00:55:02.400 and not paying executives

00:55:04.940 more than some exorbitant amount.

00:55:06.600 Who holds the Fed accountable?

00:55:08.380 You know,

00:55:08.820 the whole thing with the audit,

00:55:09.760 how the audit never took place.

00:55:10.800 Who holds them accountable?

00:55:11.900 I mean,

00:55:12.300 we had Jeb Hensarling.

00:55:13.360 He was in Congress at the time.

00:55:14.800 He left.

00:55:15.620 There's very little appetite

00:55:16.640 during crises

00:55:17.580 to hold the Fed accountable.

00:55:20.580 This won't come until

00:55:21.760 after we're past this

00:55:24.040 and the people realize

00:55:25.780 what's been done.

00:55:27.140 But right now,

00:55:28.980 Congress needs the Fed badly.

00:55:32.400 They need the Fed

00:55:33.260 to keep the stock market up.

00:55:36.300 They need the Fed

00:55:36.980 to keep these companies

00:55:38.080 in business.

00:55:39.260 They need these companies

00:55:39.980 to keep their employees.

00:55:41.400 But they can't address

00:55:42.260 the entire problem.

00:55:43.600 And now the great debate

00:55:44.640 is whether or not

00:55:45.200 the Fed's going to come in

00:55:46.120 and cross the final Rubicon.

00:55:48.980 What I'm writing about this week

00:55:50.320 asks one simple question.

00:55:53.440 Will the Federal Reserve

00:55:54.440 buy junk bonds

00:55:55.780 doing something

00:55:57.560 that no central bank

00:55:58.480 in the world has done?

00:56:00.680 Will they go that far?

00:56:02.400 Will they bail out companies

00:56:03.660 that are completely insolvent?

00:56:06.600 Isn't that a form

00:56:07.340 of quantitative easing, though?

00:56:09.020 Well, it's a form

00:56:09.660 of quantitative easing.

00:56:11.420 But in theory,

00:56:13.540 even under

00:56:14.160 extraordinary circumstances,

00:56:16.180 you're not supposed

00:56:16.860 to bail out

00:56:18.200 an insolvent institution.

00:56:20.060 I give you Lehman Brothers.

00:56:22.040 That was what Ben Bernanke

00:56:23.000 went on national television

00:56:23.980 and explained.

00:56:25.220 They were insolvent,

00:56:26.100 therefore we couldn't

00:56:26.680 bail them out.

00:56:27.700 AIG was solvent,

00:56:28.840 therefore the next day

00:56:29.480 we did bail it out.

00:56:30.920 How many laws

00:56:31.600 are being broken right now?

00:56:33.580 You know what I'm saying

00:56:34.440 when I'm saying this?

00:56:35.100 I'm not an attorney,

00:56:35.920 but I've lost count.

00:56:36.920 Okay, so,

00:56:38.960 oh my gosh,

00:56:41.320 you know,

00:56:41.660 the longest time,

00:56:42.580 you know,

00:56:42.840 Milton Friedman,

00:56:43.380 one of his hiccups

00:56:44.060 was that he had a challenge

00:56:45.460 with another economist

00:56:46.320 was the fact

00:56:46.860 that he felt

00:56:47.580 you can allow capitalism

00:56:50.620 do its part

00:56:51.180 without any laws.

00:56:52.000 And then later on

00:56:52.460 he came back and says,

00:56:53.260 no,

00:56:53.400 if there's one thing

00:56:53.880 we definitely need,

00:56:54.520 we need laws.

00:56:55.180 Maybe we don't need

00:56:55.860 a lot of lawyers,

00:56:56.820 but we definitely need lawyers

00:56:58.900 because China,

00:56:59.820 I think back in 2004,

00:57:01.620 they had only four,

00:57:03.800 in 1994,

00:57:04.880 I think they only had

00:57:05.400 four law schools

00:57:07.380 and only 2,000 lawyers

00:57:09.320 in China back in 1994,

00:57:10.900 so there wasn't

00:57:11.340 a lot of laws.

00:57:12.100 Right.

00:57:12.580 So it doesn't seem

00:57:13.340 like a lot of the laws

00:57:13.960 And they were poisoning

00:57:14.700 their rivers.

00:57:15.660 Yeah,

00:57:16.040 and they were poisoning

00:57:16.820 their rivers,

00:57:17.380 of course.

00:57:17.740 And now,

00:57:18.060 going back to this

00:57:19.020 when we're talking

00:57:19.580 about the whole Federal Reserve

00:57:20.520 to go a little bit

00:57:21.520 deeper into it,

00:57:22.360 what have they ever

00:57:23.380 gotten right?

00:57:24.140 Because if you look

00:57:25.040 at internet tech boom,

00:57:27.680 late 90s,

00:57:28.360 oh my gosh,

00:57:29.120 look how many billionaires

00:57:30.100 that was going up,

00:57:30.920 S&P was going up,

00:57:31.780 you know,

00:57:31.940 the mortgage,

00:57:33.000 oh look at this stuff,

00:57:33.880 this is just amazing stuff,

00:57:35.100 interest rates,

00:57:35.780 you know,

00:57:36.200 this is great,

00:57:36.960 don't worry about it,

00:57:37.540 it's going to be alright,

00:57:38.320 Bernanke,

00:57:38.900 what have they ever

00:57:40.200 gotten right?

00:57:41.840 So there are two people

00:57:43.540 who are my heroes,

00:57:44.560 William McChesney Martin,

00:57:45.920 he went through

00:57:46.600 multiple administrations,

00:57:48.820 was famously thrown up

00:57:50.200 against a wall

00:57:50.760 by LBJ,

00:57:51.980 and refused to back down

00:57:53.420 to one president

00:57:54.940 after another,

00:57:55.980 probably the most

00:57:58.560 independent Federal Reserve

00:58:01.000 chairman of all time.

00:58:02.880 He was the one

00:58:03.500 who famously said,

00:58:04.940 it is the Fed's duty

00:58:06.320 to pull,

00:58:07.160 to take away the punch bowl

00:58:08.540 in the middle of the party,

00:58:10.120 in a congressional testimony.

00:58:11.580 And then you had

00:58:13.560 great big Paul Volcker

00:58:15.660 who defied,

00:58:17.160 defied Reagan,

00:58:19.360 mutiny on his own board,

00:58:21.500 and was tossed out on his ass

00:58:23.040 and replaced by Alan Greenspan.

00:58:25.540 And since then,

00:58:27.100 basically whatever investors

00:58:29.100 have won it,

00:58:30.000 investors have gotten.

00:58:31.320 And since then,

00:58:32.280 the inequality divide

00:58:33.200 in America

00:58:33.720 has gapped out.

00:58:35.020 And so I guess

00:58:38.640 since Paul Volcker,

00:58:39.340 not much has gone right

00:58:40.640 at the Federal Reserve.

00:58:42.360 And you've had

00:58:43.020 two independent chairmen

00:58:44.320 in its history.

00:58:46.060 Two.

00:58:48.700 How scary is it

00:58:49.680 to go against the Fed

00:58:50.600 if somebody's running

00:58:51.480 for something

00:58:52.040 and you're being

00:58:52.500 too vocal about it?

00:58:54.020 You know,

00:58:54.200 I mean,

00:58:54.520 Ron Paul tried to do it.

00:58:55.600 I'll say,

00:58:55.820 I think Ron Paul,

00:58:56.560 he also had another book

00:58:57.540 he wrote that had to do

00:58:58.340 with the Feds,

00:58:58.860 right?

00:58:59.060 I think he had,

00:58:59.520 I don't know what the title was,

00:59:00.860 but he was also talking

00:59:01.820 about something

00:59:02.280 with the Feds

00:59:02.840 and he got a lot

00:59:04.840 of pushback

00:59:06.260 and he had a lot

00:59:07.100 of independents

00:59:07.600 that came out.

00:59:08.220 You know,

00:59:08.400 libertarians and independents

00:59:09.340 were all for him

00:59:10.020 to kind of get him going,

00:59:11.260 but he couldn't create

00:59:13.140 all the momentum

00:59:13.740 down to the end.

00:59:16.360 Can you really go

00:59:17.620 to the top

00:59:18.340 and go against

00:59:19.700 that system?

00:59:21.640 You've got a lot

00:59:22.280 of enemies.

00:59:24.060 And I've met Ron,

00:59:26.220 but I was never

00:59:28.000 the opinion

00:59:28.740 that we should have

00:59:30.380 ended the Fed.

00:59:32.280 I mean,

00:59:33.540 we're closer

00:59:33.900 to being in banana republic

00:59:34.820 than we ever have been.

00:59:37.280 But if you,

00:59:38.860 if you contemplate

00:59:40.280 what China has done

00:59:41.280 with our intellectual property

00:59:42.500 and then you extrapolate

00:59:45.360 that type of espionage

00:59:48.000 and trickery

00:59:50.080 into what they would do

00:59:51.560 if our financial system

00:59:52.880 was unprotected,

00:59:54.400 good Lord,

00:59:55.900 they would take over

00:59:56.620 the economy by force.

00:59:58.740 So I've never been

00:59:59.760 of the opinion

01:00:00.160 that we should have

01:00:00.700 no Federal Reserve.

01:00:02.620 I've just been

01:00:03.300 under the opinion

01:00:04.140 that if you can't have

01:00:04.980 a Wayne McChesney-Martini

01:00:05.960 or a Paul Volcker

01:00:06.900 running it,

01:00:07.340 then they should be fired

01:00:08.340 and that they should be,

01:00:10.280 they should be forced

01:00:12.440 to be independent.

01:00:14.880 It's actually

01:00:15.680 in the Federal Reserve Act

01:00:17.240 that you are supposed

01:00:17.960 to have a Federal Reserve Board

01:00:19.320 that is from individuals

01:00:21.720 who are from a diversity

01:00:22.960 of industries

01:00:24.040 and geographies.

01:00:25.880 You're not supposed

01:00:26.500 to pack it full

01:00:27.120 of a bunch of PhD academics

01:00:28.860 who've never had to have

01:00:30.620 a payroll in their life

01:00:31.800 and only have theoretical

01:00:33.720 models that they put

01:00:35.020 in place and say,

01:00:35.860 I know,

01:00:36.180 we should take interest rates

01:00:37.060 to zero

01:00:37.500 and see how much

01:00:38.520 that screws savers

01:00:39.420 because they have pensions

01:00:41.140 for life

01:00:41.600 because they're academics.

01:00:42.340 Why do you have a problem

01:00:43.320 with that?

01:00:44.080 Why do you have a problem

01:00:45.460 with the whole 17

01:00:47.360 out of the 17,

01:00:48.200 I think you said,

01:00:48.780 10 are PhD,

01:00:49.640 2 are lawyers.

01:00:51.460 What's the biggest

01:00:52.280 challenge there?

01:00:53.440 Do you think

01:00:53.820 we'd have better Fed policy?

01:00:55.680 I'll throw a question

01:00:56.360 back at you

01:00:57.400 and be Socratic.

01:00:58.120 Do you think

01:00:58.460 we would have better

01:00:59.100 Fed policy

01:00:59.760 if the people

01:01:00.820 making Fed policy

01:01:01.900 understood what it was

01:01:02.980 to be on the receiving

01:01:03.740 end of it?

01:01:04.720 You don't have to sell

01:01:05.520 me on that.

01:01:06.260 I'm asking,

01:01:07.120 why is this

01:01:08.020 continuously happening?

01:01:09.560 Because for me,

01:01:10.240 you can also make

01:01:11.140 the argument

01:01:11.560 if you go in there

01:01:12.140 to say,

01:01:12.480 how could you be

01:01:12.860 the commander-in-chief

01:01:13.500 of America

01:01:15.100 and you've never

01:01:16.700 served the military?

01:01:18.180 That's kind of tough

01:01:18.800 for me.

01:01:19.160 I mean,

01:01:19.420 we don't have...

01:01:20.040 Tough for me, too.

01:01:20.540 And when's the last time

01:01:21.280 we had a president

01:01:21.860 that served in the military?

01:01:22.880 That's right.

01:01:23.500 It's been a long time.

01:01:24.520 That's right.

01:01:24.860 How could you be

01:01:25.480 the commander-in-chief

01:01:26.180 if you've never

01:01:26.660 served the military?

01:01:27.600 You have to know

01:01:28.080 what sacrifice means

01:01:29.000 in order to sacrifice

01:01:30.440 the lives of others.

01:01:31.160 Which one are you

01:01:31.640 more comfortable with?

01:01:33.900 Look,

01:01:34.300 I'm a huge patriot.

01:01:35.560 Okay.

01:01:36.400 My boys go to a military academy.

01:01:38.540 I mean,

01:01:38.920 I see exactly

01:01:40.260 where you're going.

01:01:41.820 And again,

01:01:42.840 I think that

01:01:43.460 the Federal Reserve Act

01:01:44.140 was written

01:01:44.600 in good faith

01:01:47.020 and that we should have

01:01:48.620 pension fund managers,

01:01:50.760 prior successful

01:01:51.900 pension fund managers,

01:01:52.880 and there are a few.

01:01:54.080 The state of Indiana,

01:01:54.900 the state of Utah,

01:01:56.200 they're actually

01:01:56.720 properly met,

01:01:57.940 despite interest rates

01:01:58.980 being at the zero bound

01:02:00.880 and too low,

01:02:01.480 they're not taking

01:02:02.060 excess risk

01:02:02.740 with grandma's pension.

01:02:04.680 There are

01:02:05.620 Joe Q CEOs

01:02:07.400 who have not spent

01:02:08.780 all of the money

01:02:09.480 on share buybacks,

01:02:10.520 despite the temptation

01:02:11.620 being there

01:02:12.480 and Federal Reserve

01:02:13.400 policy saying,

01:02:14.680 don't invest in the future.

01:02:16.280 You're going to make

01:02:16.980 a lot bigger bonus

01:02:18.240 and your stock price

01:02:19.940 is going to go

01:02:20.280 a lot higher

01:02:20.920 if you buy back

01:02:21.840 your shares instead.

01:02:22.660 And by the way,

01:02:23.120 money's free,

01:02:24.120 borrow at will

01:02:24.760 and do so.

01:02:26.040 But you need to have

01:02:26.900 people who understand

01:02:28.380 the consequences

01:02:30.160 of Federal Reserve policy

01:02:32.300 making Federal Reserve policy.

01:02:35.480 And Jay Powell

01:02:35.960 was actually

01:02:36.420 kind of a good candidate

01:02:38.140 for that.

01:02:39.380 And he's buckled

01:02:40.280 completely under the pressure.

01:02:43.500 It's funny you say that.

01:02:44.700 You know,

01:02:44.920 yesterday we had a meeting

01:02:45.700 with my CFO

01:02:46.340 and our board

01:02:46.760 was asking me,

01:02:47.480 so when are we applying

01:02:48.880 to get the money

01:02:49.880 from the stimulus

01:02:50.940 because we can apply for it.

01:02:52.800 And I'm sitting there

01:02:53.720 and I'm saying,

01:02:54.480 how much is it going to be?

01:02:55.580 They give me the number.

01:02:56.360 What's the buyback?

01:02:57.260 What does it look like?

01:02:57.980 I'm like, you know what?

01:02:58.540 We don't really need it.

01:02:59.480 Why do we apply for it?

01:03:00.620 Let somebody else

01:03:01.220 get it that need it.

01:03:02.620 We decided

01:03:03.820 to kind of get our finances

01:03:04.960 in order to not have

01:03:05.820 to worry about a time like this.

01:03:06.940 So I don't have to go

01:03:07.500 and apply for

01:03:08.160 getting the five

01:03:09.300 or ten million dollar check

01:03:10.240 they're going to send us.

01:03:10.740 My hat's off.

01:03:11.280 Okay, I'm going to give it

01:03:11.900 to somebody else.

01:03:12.500 Not me.

01:03:12.780 I don't need to be billed out for it.

01:03:14.420 But I just think

01:03:15.520 this approach

01:03:16.220 we're taking a loan

01:03:17.100 for a loan

01:03:17.760 for a loan

01:03:18.420 for a loan

01:03:19.080 for a loan.

01:03:19.860 I mean,

01:03:20.140 when does it ever end?

01:03:21.180 So the argument

01:03:22.140 then becomes

01:03:22.740 about the taxpayer

01:03:23.540 who's pissed off

01:03:24.340 and saying,

01:03:25.080 let me get this straight.

01:03:26.300 You can constantly

01:03:27.200 bail yourself out

01:03:28.300 and you can constantly

01:03:29.040 go print money

01:03:29.680 with this quantitative easing.

01:03:30.760 Why the hell do I have to pay taxes?

01:03:32.780 Why do I pay taxes?

01:03:34.160 And I know this goes

01:03:35.940 to your argument

01:03:36.500 of the socialism

01:03:37.180 but why do I pay taxes?

01:03:38.580 It's slightly different

01:03:39.580 than the concept of socialism

01:03:41.760 because socialism

01:03:42.380 is to give me stuff

01:03:43.820 but why do I pay taxes?

01:03:46.200 That's right.

01:03:46.880 For my big 40th birthday lunch

01:03:48.580 at the time

01:03:50.140 that I had lunch

01:03:50.700 with Richard Fisher

01:03:51.340 who was my boss

01:03:52.060 there were riots

01:03:52.680 in the streets of Athens

01:03:53.500 and we ended that lunch

01:03:56.220 with me saying,

01:03:57.140 what's your greatest concern?

01:03:58.020 And his answer was,

01:04:00.700 I worry that Fed policy

01:04:02.400 is going to eventually

01:04:03.740 land us in the same spot

01:04:05.640 as where Greece

01:04:06.600 finds itself back then

01:04:08.260 with riots in the streets.

01:04:10.020 Now, take my example

01:04:11.460 of the state of Illinois.

01:04:13.420 You're a Chicagoan.

01:04:16.360 Your 401k has been decimated

01:04:18.840 because you're one

01:04:20.580 of millions of Americans

01:04:21.620 who've been told

01:04:22.400 to keep your money

01:04:23.640 in the stock market

01:04:24.480 no matter what.

01:04:25.380 and there's no other

01:04:28.020 school of thought.

01:04:28.680 You've got countless

01:04:31.040 investment advisors

01:04:32.240 all giving the identically

01:04:33.800 same advice

01:04:34.640 to all of them.

01:04:35.600 So you're Joe Q 401k holder

01:04:37.380 and you're pissed off

01:04:38.540 and you've lost

01:04:39.620 a good chunk

01:04:40.660 of your savings

01:04:41.620 and you know

01:04:42.200 you're going to have to tack

01:04:43.100 at least another decade

01:04:44.120 onto your work life

01:04:45.120 to make up

01:04:46.200 for what you've lost.

01:04:47.840 Now, the city of Chicago

01:04:50.060 has just bailed out

01:04:51.220 its pension again.

01:04:52.620 So you're told

01:04:53.480 that your property taxes

01:04:54.680 and your state income taxes

01:04:56.020 are going to have to rise

01:04:57.300 to pay for it.

01:05:00.000 Let's just say

01:05:00.760 Social Security

01:05:01.300 and Medicare

01:05:01.720 run out of money.

01:05:02.740 So you're also told

01:05:03.560 by the great people

01:05:04.500 in Washington

01:05:04.960 that your federal taxes

01:05:05.980 are going to have

01:05:06.420 to go up as well.

01:05:08.720 So you're bailing out

01:05:09.940 the pensioners.

01:05:11.480 You're bailing out

01:05:12.340 the federal government.

01:05:13.980 You're bailing out

01:05:14.840 corrupt state politicians

01:05:17.020 and unions

01:05:17.800 who have given

01:05:19.420 way too much

01:05:20.260 more than they could

01:05:21.420 ever afford to pay for

01:05:22.620 and your next door neighbor

01:05:24.040 is a fireman

01:05:25.000 who's living great

01:05:26.280 and he's set for life.

01:05:29.920 These are the seeds

01:05:31.100 of social unrest

01:05:32.680 in this country.

01:05:35.420 You can only drive

01:05:37.220 so big of a wedge

01:05:39.580 between the haves

01:05:40.260 and the have-nots.

01:05:42.140 Especially when you're

01:05:42.980 gutting out the middle class

01:05:44.000 in the process.

01:05:46.460 If you make

01:05:47.340 very, very little

01:05:48.400 in America today

01:05:49.840 and I'm talking about

01:05:50.940 today

01:05:51.480 25%

01:05:53.820 of Americans

01:05:55.120 who qualify

01:05:55.820 for unemployment insurance

01:05:56.920 are going to make

01:05:57.920 more money

01:05:58.720 in the second quarter

01:06:00.140 than they would

01:06:00.860 if they had not

01:06:01.500 lost their job.

01:06:03.140 That's how big

01:06:03.940 unemployment

01:06:04.300 that's how big

01:06:05.540 the stimulus bill is

01:06:06.580 by tacking

01:06:07.000 Say that one more time.

01:06:07.880 Say that one more time.

01:06:08.740 So the stimulus bill

01:06:09.500 tacks on $600

01:06:10.560 for every American.

01:06:14.860 What they get paid

01:06:15.660 by collecting

01:06:16.580 unemployment insurance.

01:06:18.280 So 25% of Americans

01:06:20.140 who are going to be

01:06:20.800 out of the workforce

01:06:22.020 are going to make

01:06:23.260 more in the second quarter

01:06:25.240 April, May, and June

01:06:26.460 than they would have

01:06:27.540 had they kept

01:06:28.160 their job.

01:06:30.260 So if you make

01:06:31.300 very little

01:06:32.080 in America today

01:06:33.300 you're going to get

01:06:36.120 through this.

01:06:37.920 If you're worth

01:06:38.860 a ton of money

01:06:39.800 you'd long since

01:06:41.520 gone to cash.

01:06:42.420 Let's get honest.

01:06:44.000 If you're part

01:06:44.600 of that 1%.

01:06:45.400 If you're in the middle

01:06:47.580 you're screwed

01:06:49.680 and you're pissed

01:06:50.960 and you're a taxpayer

01:06:52.280 and that's why I say

01:06:54.520 this could be

01:06:55.820 such a ground roots

01:06:58.660 source.

01:07:02.580 This could be

01:07:03.480 a generational change

01:07:04.860 that brings about

01:07:05.880 I'm looking at

01:07:07.340 Abraham Lincoln

01:07:07.920 I'm inspired

01:07:08.920 that brings about

01:07:10.560 a genuine change

01:07:12.080 in how we approach

01:07:13.220 our leadership

01:07:14.040 in America.

01:07:16.560 And I'm all for it.

01:07:18.520 I'm not all for

01:07:19.420 American families

01:07:20.080 hurting at all.

01:07:21.140 Don't get me wrong.

01:07:22.560 But we have gone

01:07:24.280 through multiple

01:07:25.760 iterations of gutting

01:07:27.280 out our middle class.

01:07:28.980 You can't do that

01:07:29.840 for too long.

01:07:30.320 You lose loyalty.

01:07:32.000 You can't.

01:07:32.760 I mean you want me

01:07:33.280 to pay taxes.

01:07:33.920 I don't have a problem

01:07:34.420 paying taxes.

01:07:35.060 But I mean do something

01:07:35.680 with the money I'm giving you

01:07:36.680 and actually deliver

01:07:37.440 on your promises

01:07:38.140 instead of taking care

01:07:39.720 of money.

01:07:39.740 But what if you don't

01:07:40.300 want to do universal

01:07:41.240 basic income

01:07:41.880 and impose socialism?

01:07:43.060 What if you actually

01:07:43.680 hold dear to your

01:07:44.940 American ideals

01:07:46.420 and you want to work

01:07:47.980 hard for a living?

01:07:49.240 Then you're even

01:07:49.760 more pissed off.

01:07:51.000 That's the community

01:07:51.800 I'm talking about.

01:07:52.540 I'm not talking about

01:07:53.280 the community of

01:07:53.940 send me free money.

01:07:54.620 I'm not talking

01:07:54.960 about free money.

01:07:55.860 I'm talking about

01:07:56.520 hey, instead of talking

01:07:57.680 about $1,000

01:07:58.780 universal income

01:07:59.740 Andrew Yang policy

01:08:01.460 that became a hit

01:08:02.440 in the Democratic

01:08:04.240 presidential campaign

01:08:05.660 that was going on

01:08:06.320 I'm talking about

01:08:07.520 rather than that

01:08:08.540 what about if you do

01:08:09.500 something that is

01:08:10.160 not paying taxes

01:08:11.180 for a certain amount

01:08:12.540 what for?

01:08:14.200 I mean I'm not

01:08:14.720 anyways that's a whole

01:08:15.560 different conversation

01:08:16.260 I don't want to go

01:08:16.780 to the other part

01:08:17.280 but who owns it?

01:08:19.060 But bear in mind

01:08:19.580 to your point

01:08:20.480 before you move on

01:08:21.480 the Federal Reserve

01:08:22.860 monetizing the U.S. debt

01:08:24.140 is what enables

01:08:24.900 all of this.

01:08:26.220 So I appreciate

01:08:27.320 their role.

01:08:28.140 I understand that

01:08:29.320 but also at the same time

01:08:30.580 I want to

01:08:32.720 I want to make sure

01:08:34.480 that if I am getting

01:08:35.660 to work

01:08:36.300 and I'm working

01:08:36.880 I'm the middle guy

01:08:38.080 not the middle

01:08:38.860 or the top

01:08:39.380 I'm talking

01:08:39.800 the person in the middle

01:08:40.580 the middle person

01:08:41.380 is like

01:08:41.620 oh I can't wait

01:08:42.120 to get these checks

01:08:42.720 it's going to be great

01:08:43.140 life's going to be

01:08:43.600 better than what

01:08:44.020 I was getting paid

01:08:44.580 to 25%

01:08:45.320 making less than

01:08:45.920 $15 an hour

01:08:46.720 so you know

01:08:47.780 how that number

01:08:48.180 is going to work

01:08:48.580 the guys at the top

01:08:49.400 they're like

01:08:49.680 listen I'm going to be fine

01:08:50.400 everything's going to be cheap

01:08:51.140 I'm going to buy

01:08:51.540 stuff on sale right now

01:08:52.560 I'm going to make

01:08:53.080 more money today

01:08:53.760 than ever before

01:08:54.420 those guys are fine

01:08:55.640 the middle guy

01:08:56.360 that's doing his part

01:08:57.360 her part

01:08:57.880 that's the person

01:08:58.940 that I can understand

01:08:59.720 why they're pissed off

01:09:00.540 why they would want

01:09:01.220 to see some kind

01:09:01.860 of reforms taking place

01:09:02.860 by the way

01:09:03.500 who owns

01:09:04.360 the Federal Reserve

01:09:05.740 who are the main

01:09:06.300 shareholders

01:09:06.740 right now Donald Trump

01:09:08.440 but that's post legislation

01:09:10.800 that's decision maker

01:09:12.120 that's decision

01:09:13.860 I'm talking about

01:09:14.840 the Goldman Sachs

01:09:17.140 I'm talking

01:09:17.580 there is an answer

01:09:18.780 to this question

01:09:19.420 there is truly

01:09:20.800 an answer to this question

01:09:21.540 and boy

01:09:22.240 I'll be waiting

01:09:22.960 for the hate mail

01:09:23.520 when I worked

01:09:24.300 at the Dallas Federal Reserve

01:09:25.220 my email address

01:09:26.620 ended in .org

01:09:27.940 there are banks

01:09:31.400 that own

01:09:31.960 the 12 district

01:09:33.540 Federal Reserve

01:09:34.220 banks

01:09:34.880 are owned by banks

01:09:36.840 in the sense

01:09:37.320 that they get paid

01:09:38.560 a dividend

01:09:39.100 from what

01:09:40.880 the district banks

01:09:41.860 make

01:09:42.160 up to 6%

01:09:43.420 and then

01:09:45.420 whatever money

01:09:46.000 the bank has

01:09:46.860 if it's a district bank

01:09:47.840 whether it be

01:09:48.300 San Francisco

01:09:49.080 or Dallas

01:09:49.700 or Atlanta

01:09:50.220 then they have to

01:09:51.540 pay the operating costs

01:09:52.760 to operate

01:09:53.960 an individual

01:09:54.800 district bank

01:09:55.840 and after that

01:09:57.540 every single penny

01:09:58.860 that is remaining

01:09:59.980 is remitted

01:10:00.800 to the U.S. Treasury

01:10:01.860 that is why

01:10:03.380 my email address

01:10:04.320 ended in .org

01:10:05.360 not .com

01:10:06.860 because we were

01:10:08.360 a quasi

01:10:08.920 private public

01:10:10.300 enterprise

01:10:11.060 Jay Powell's

01:10:13.580 email address

01:10:14.980 ends in .gov

01:10:16.880 the Federal Reserve

01:10:18.660 Board in Washington

01:10:19.540 D.C.

01:10:20.120 is a bona fide

01:10:21.320 formal

01:10:22.320 federal agency

01:10:24.000 that is not

01:10:26.580 owned

01:10:27.200 by the banks

01:10:28.360 there's a gray area

01:10:30.820 there's a gray area

01:10:32.700 and this is

01:10:33.060 this is up for

01:10:33.700 everybody in tin hats

01:10:34.680 here you go

01:10:35.400 let's plow it

01:10:36.660 down the middle

01:10:37.100 the government

01:10:38.880 employees have

01:10:39.540 permanent votes

01:10:40.220 on the federal

01:10:40.680 open market committee

01:10:41.520 the district bank

01:10:43.620 presidents

01:10:44.200 rotate in

01:10:45.740 every few years

01:10:46.720 they do not

01:10:47.380 have a permanent

01:10:47.980 vote on the

01:10:48.640 federal open market

01:10:49.400 committee

01:10:49.820 so they have

01:10:50.780 less power

01:10:51.360 the Federal Reserve

01:10:52.400 Bank of New York

01:10:53.260 however

01:10:53.900 the president

01:10:55.140 of the Federal Reserve

01:10:55.800 Bank of New York

01:10:56.500 is also the

01:10:57.380 vice chairman

01:10:58.060 of the federal

01:10:58.480 open market

01:10:58.940 committee

01:10:59.220 he has a

01:10:59.820 permanent vote

01:11:00.920 the only one

01:11:02.200 of the districts

01:11:02.620 who has a

01:11:03.000 permanent vote

01:11:03.600 on the federal

01:11:04.000 open market

01:11:04.440 committee

01:11:04.800 and has the

01:11:06.280 quasi

01:11:06.620 public

01:11:07.120 private

01:11:07.600 ownership

01:11:08.420 which brings

01:11:09.100 in the banks

01:11:10.300 that sit on

01:11:10.860 the board

01:11:11.240 that you're

01:11:11.580 getting to

01:11:12.180 so there is

01:11:13.460 a gray area

01:11:14.960 there

01:11:15.460 and the New York

01:11:16.160 Fed does have

01:11:16.920 extraordinary power

01:11:18.320 compared to

01:11:19.320 any other district

01:11:20.340 and that power

01:11:21.620 over the years

01:11:22.420 and prior to the

01:11:23.080 crisis

01:11:23.380 was corrupted

01:11:25.620 which is documented

01:11:27.560 and the reforms

01:11:28.780 that should have

01:11:29.260 been made

01:11:29.760 subsequent to the

01:11:30.580 crisis

01:11:30.900 have not been

01:11:31.960 and if you want

01:11:33.420 to get angry

01:11:33.740 about something

01:11:34.140 get angry about

01:11:34.720 that

01:11:35.000 but understand

01:11:35.580 that the bulk

01:11:36.240 of the power

01:11:36.740 seat

01:11:37.060 is a government

01:11:37.960 agency

01:11:38.500 or the Treasury

01:11:39.880 would not have

01:11:40.340 been able to

01:11:40.740 step in

01:11:41.180 like it has

01:11:41.980 this is like

01:11:48.480 we need a drink

01:11:49.140 right now

01:11:49.560 I was going to

01:11:50.480 say that

01:11:50.860 I can read his face

01:11:51.700 that's exactly

01:11:52.160 something like

01:11:53.160 old-fashioned

01:11:53.840 is what we need

01:11:54.460 right now

01:11:54.820 you need something

01:11:56.120 stronger than a

01:11:56.760 mimosa

01:11:57.060 let me say that

01:11:57.740 much

01:11:58.020 okay

01:11:59.180 so how much

01:12:00.960 do you

01:12:01.440 if you're an

01:12:02.360 economist

01:12:02.820 and you do this

01:12:03.980 full-time

01:12:04.360 you've been in it

01:12:04.900 for a while

01:12:05.840 this is your

01:12:06.340 career

01:12:06.540 by the way

01:12:06.760 I'm in finance

01:12:07.920 I'm just

01:12:08.500 sure

01:12:09.000 and by the way

01:12:09.960 you said

01:12:10.220 something about

01:12:10.760 you start

01:12:11.240 off in finance

01:12:11.780 I think you

01:12:12.440 worked in

01:12:12.760 hedge fund

01:12:13.100 at one point

01:12:13.700 I think you

01:12:14.160 did

01:12:14.420 I worked

01:12:15.340 with hedge

01:12:15.660 funds

01:12:15.800 I worked

01:12:16.300 at a

01:12:16.500 traditional

01:12:17.020 investment

01:12:17.500 bank

01:12:17.840 I watched

01:12:18.920 what investment

01:12:19.540 banks do

01:12:20.000 from the inside

01:12:20.740 out

01:12:20.880 I do

01:12:21.840 I start

01:12:22.600 off with

01:12:22.840 Morgan

01:12:23.060 and Stanley

01:12:23.360 and Stanley

01:12:23.380 Dean

01:12:23.600 what

01:12:23.760 a day

01:12:24.100 before

01:12:24.360 9-11

01:12:24.760 that's

01:12:25.040 kind of

01:12:25.200 how

01:12:25.320 my

01:12:25.680 career

01:12:25.960 got

01:12:26.220 started

01:12:26.580 in Glendale

01:12:27.600 California

01:12:28.080 I was

01:12:28.300 supposed to

01:12:28.600 go to

01:12:28.760 New York

01:12:29.080 and then

01:12:29.340 they said

01:12:29.620 I was short

01:12:30.100 the S&P

01:12:30.640 500

01:12:31.140 on 9-11

01:12:32.580 you what

01:12:34.520 I was

01:12:35.120 I personally

01:12:37.120 had a short

01:12:37.960 position in the

01:12:38.640 stock market

01:12:39.220 prior

01:12:40.180 how

01:12:40.500 well I felt

01:12:41.960 that the market

01:12:42.420 was very much

01:12:43.240 overvalued

01:12:43.760 and was still

01:12:44.640 going to come

01:12:45.080 down

01:12:45.420 so and my

01:12:46.640 clients were

01:12:47.160 very defensively

01:12:47.860 postured also

01:12:48.560 for that very

01:12:49.080 same reason

01:12:49.500 going into

01:12:49.900 9-11

01:12:50.280 my birthday

01:12:52.300 was on

01:12:52.720 9-17

01:12:53.380 the day

01:12:54.200 the stock

01:12:54.860 market reopened

01:12:55.820 and I closed

01:12:56.880 out my position

01:12:57.480 as quickly

01:12:58.360 as I possibly

01:12:59.120 could

01:12:59.360 because I felt

01:12:59.880 like I had

01:13:00.200 the blood

01:13:00.460 of Americans

01:13:01.080 on my hands

01:13:01.700 for having

01:13:02.020 profited from

01:13:02.700 it

01:13:02.900 small story

01:13:04.380 strange but

01:13:04.980 true

01:13:05.120 wow

01:13:05.580 what timing

01:13:06.680 talk about

01:13:07.380 time

01:13:07.620 oh my gosh

01:13:08.180 craziness

01:13:09.060 right

01:13:09.380 so

01:13:10.200 how much

01:13:11.940 do you read

01:13:12.360 into these

01:13:12.820 conspiracy theories

01:13:13.720 that you

01:13:14.220 hear about

01:13:15.380 with the

01:13:16.160 feds

01:13:16.580 with the

01:13:17.000 creature

01:13:17.640 of Jekyll

01:13:18.140 Island

01:13:18.500 any of that

01:13:19.000 stuff

01:13:19.160 how much

01:13:19.460 do you go

01:13:19.860 how deep

01:13:20.380 do you go

01:13:20.640 have you ever

01:13:21.120 read the book

01:13:21.680 or no

01:13:22.160 yes

01:13:22.700 you have to

01:13:23.200 read the book

01:13:23.680 you're in the world

01:13:24.240 the six names

01:13:26.140 they own the

01:13:26.600 quarter of the

01:13:27.180 wealth of the

01:13:27.700 world etc etc

01:13:28.720 and Woodrow

01:13:29.240 Wilson saying

01:13:29.960 what he said

01:13:30.500 I get it

01:13:31.120 I get it

01:13:31.600 I get it

01:13:31.960 I get it

01:13:32.380 and back in

01:13:33.360 1907

01:13:34.140 when we had

01:13:36.040 a financial

01:13:36.480 crisis

01:13:36.940 and when

01:13:38.340 JP Morgan

01:13:38.980 brought all

01:13:39.660 of the biggest

01:13:40.040 bankers together

01:13:40.720 in his parlor

01:13:41.420 and said

01:13:42.100 I'm not going

01:13:43.140 to be alive

01:13:43.560 forever

01:13:43.900 we're no longer

01:13:45.660 an emerging

01:13:46.120 economy

01:13:46.660 we are

01:13:47.980 advancing to

01:13:49.040 become a

01:13:49.380 developed

01:13:49.720 economy

01:13:50.160 and like

01:13:51.260 our

01:13:51.660 developed

01:13:52.100 economy

01:13:52.520 peers

01:13:52.960 we need a

01:13:53.700 central bank

01:13:54.200 because I can't

01:13:55.780 keep bringing you

01:13:56.480 all together

01:13:56.920 to bail out the

01:13:57.540 financial system

01:13:58.120 every time there's a

01:13:58.720 crisis

01:13:59.040 so that was

01:14:00.860 the genesis of

01:14:02.560 the need for a

01:14:03.420 central bank

01:14:03.900 was JP Morgan

01:14:05.280 saying I'm going to

01:14:06.580 die one day

01:14:07.300 we need a

01:14:08.700 independent central bank

01:14:10.740 like the Bank of

01:14:11.780 England

01:14:12.060 we've evolved

01:14:13.920 as an economy

01:14:14.600 we need a

01:14:15.400 central bank

01:14:15.900 because of

01:14:19.600 how the

01:14:20.420 Federal Reserve

01:14:20.900 was born

01:14:21.520 and when

01:14:22.220 it was born

01:14:23.140 much more

01:14:23.680 importantly

01:14:24.480 it was born

01:14:26.640 headed into

01:14:27.400 a war

01:14:28.240 that exacerbated

01:14:29.840 an over

01:14:30.480 indebted

01:14:31.120 a globally

01:14:31.960 over indebted

01:14:32.860 situation

01:14:33.440 and brought

01:14:34.400 about

01:14:34.900 hyperinflation

01:14:36.500 in Germany

01:14:37.400 and another

01:14:39.960 excuse me

01:14:41.380 a Great Depression

01:14:42.160 in between

01:14:42.900 that took the

01:14:43.820 world down

01:14:44.360 with it

01:14:44.740 and brought

01:14:45.180 about a war

01:14:46.040 I want you to

01:14:46.460 think about

01:14:47.560 that

01:14:48.320 and where we

01:14:49.560 are today

01:14:50.200 but because of

01:14:51.380 the backdrop

01:14:52.640 with which

01:14:53.820 the Federal Reserve

01:14:54.820 came into being

01:14:55.720 and the fact that

01:14:56.480 it had to go into

01:14:57.100 DEFCON 1

01:14:57.800 almost immediately

01:14:58.800 means that

01:15:01.260 the original

01:15:02.700 people who

01:15:04.180 conceived it

01:15:05.060 were bankers

01:15:05.920 and had

01:15:06.320 extraordinary powers

01:15:07.360 since then

01:15:08.320 the Federal Reserve

01:15:09.060 has become

01:15:09.660 a very boring

01:15:10.600 boring

01:15:11.800 boring

01:15:12.800 place

01:15:13.360 are there conflicts

01:15:14.740 of interest

01:15:15.060 at the New York Fed

01:15:15.720 do big banks

01:15:17.100 have more say

01:15:17.580 than they should

01:15:18.180 in terms of

01:15:18.800 being regulated

01:15:19.560 yes they do

01:15:20.640 without a doubt

01:15:21.700 unquestionably

01:15:22.640 but the Federal Reserve

01:15:23.560 of today

01:15:24.080 is

01:15:25.200 bad for America

01:15:26.580 which is my

01:15:27.160 subtitle

01:15:27.860 because

01:15:28.560 the people

01:15:29.780 who are in charge

01:15:30.700 of the Federal Reserve

01:15:31.480 don't have

01:15:32.300 Americans best interest

01:15:33.640 at heart

01:15:34.640 they've put us

01:15:37.440 in a precarious

01:15:38.200 position financially

01:15:39.280 such that

01:15:40.460 if there was ever

01:15:41.880 an economic shock

01:15:43.080 their policies

01:15:44.740 will have left us

01:15:45.780 so much weaker

01:15:46.980 than we need it

01:15:48.280 to be otherwise

01:15:49.400 and that's

01:15:50.920 a hell of a lot worse

01:15:52.220 than any conspiracy theorist

01:15:53.640 up in the middle

01:15:54.280 of the night

01:15:54.660 dreaming about a Rothschild

01:15:55.780 running the world

01:15:56.560 because a lot more people

01:15:58.660 are going to get hurt

01:15:59.460 because you've had

01:16:00.480 academics running

01:16:01.520 one of the most

01:16:02.440 powerful institutions

01:16:03.540 in the world

01:16:05.040 how deep have you

01:16:06.840 studied this

01:16:07.440 how deep have you

01:16:08.560 gone and who have

01:16:09.420 you had these

01:16:10.200 conversations with

01:16:11.240 for you to get

01:16:11.940 100% certain

01:16:12.880 to know that

01:16:13.580 there is none

01:16:14.520 of this Rothschild

01:16:15.520 any of that kind

01:16:16.200 of stuff

01:16:16.460 or you just

01:16:16.860 kind of haven't

01:16:17.280 put a lot of

01:16:17.760 time into it

01:16:18.320 or I just

01:16:18.700 was kind of

01:16:19.140 working there

01:16:19.480 for nine years

01:16:20.020 and spent a lot

01:16:21.480 of time

01:16:21.680 at the New York Fed

01:16:22.240 and I saw

01:16:23.420 with my own eyes

01:16:24.000 what was happening

01:16:24.580 I know that

01:16:25.120 but I'm talking

01:16:25.640 inception

01:16:26.220 how it got started

01:16:27.220 I'm talking

01:16:27.760 that part of it

01:16:29.060 I mean

01:16:29.960 that part of it

01:16:30.980 again

01:16:31.340 so if

01:16:32.540 for everybody

01:16:33.860 who can hear me

01:16:34.820 read the Lords

01:16:35.980 of Finance

01:16:36.560 read one book

01:16:38.260 if you don't read

01:16:38.780 any other book

01:16:39.440 read the Lords

01:16:40.120 of Finance

01:16:40.500 and it starts off

01:16:42.660 kind of in 1913

01:16:43.680 1914

01:16:44.200 and it takes you

01:16:45.940 through

01:16:46.440 some of the biggest

01:16:48.300 mistakes that were

01:16:49.120 made at the Fed

01:16:50.340 and other people

01:16:52.300 running the world

01:16:54.340 at the time

01:16:55.180 in Germany

01:16:55.920 for example

01:16:58.280 and at the Bank

01:16:59.220 of England

01:16:59.700 and at the

01:17:01.480 Banque de France

01:17:01.960 it walks you

01:17:02.740 through it

01:17:03.120 and that is

01:17:04.140 a much more

01:17:04.920 valid history

01:17:06.000 if you will

01:17:06.760 than the Creature

01:17:09.240 of Jekyll Island

01:17:09.780 which brings a lot

01:17:11.280 of history

01:17:11.740 to the fore

01:17:12.440 but doesn't apply

01:17:13.560 to the world

01:17:13.960 we live in today

01:17:14.800 but if you want

01:17:15.680 to understand

01:17:16.180 how the Federal

01:17:17.020 Reserve evolved

01:17:17.760 to become

01:17:18.300 this powerhouse

01:17:19.220 that it is

01:17:19.760 read a different book

01:17:20.940 do yourself a favor

01:17:21.680 read the Lords

01:17:22.300 of Finance

01:17:22.700 and then you won't

01:17:23.980 ever sleep at night

01:17:24.760 again because of

01:17:25.360 the parallels

01:17:25.820 that it draws

01:17:26.280 between now

01:17:26.900 and then

01:17:27.400 Fair enough

01:17:28.740 okay

01:17:29.260 a couple things

01:17:30.780 just a real cool

01:17:32.040 question here

01:17:32.580 since we've covered

01:17:33.160 a lot of different

01:17:33.720 things already

01:17:34.380 cryptocurrency

01:17:35.260 any opinions

01:17:36.120 on cryptocurrency

01:17:36.760 is it

01:17:37.500 you know

01:17:38.180 you have a whole

01:17:38.880 big camp right now

01:17:39.880 saying this is

01:17:40.360 exactly why we know

01:17:41.460 we were going to

01:17:41.980 go to cryptocurrency

01:17:42.680 this is the time

01:17:43.500 to buy

01:17:43.900 you know

01:17:44.720 XRP

01:17:45.420 Ripple

01:17:45.900 what's your

01:17:46.320 opinions on cryptocurrency

01:17:47.120 so I think

01:17:47.780 cryptocurrency

01:17:48.180 is a modern day

01:17:49.620 reflection

01:17:50.100 of the disgust

01:17:51.740 that we have

01:17:52.440 in a lack

01:17:53.500 of discipline

01:17:53.960 in monetary

01:17:54.400 policy making

01:17:55.060 it is this

01:17:56.560 generation's

01:17:57.660 gold

01:17:58.260 and

01:17:59.800 my issue

01:18:01.600 with it

01:18:02.100 is that

01:18:02.900 it is much

01:18:03.780 more convertible

01:18:04.580 as opposed

01:18:05.140 to physical

01:18:05.540 gold

01:18:06.040 cryptocurrency

01:18:07.120 is much

01:18:07.780 more adaptable

01:18:08.760 on a sovereign

01:18:10.140 level

01:18:10.480 so you've already

01:18:11.680 had the Bank

01:18:12.360 of England

01:18:12.740 you've certainly

01:18:13.440 had Venezuela

01:18:15.000 Russia

01:18:15.680 and China

01:18:16.460 they were at

01:18:17.000 the forefront

01:18:17.480 of coming out

01:18:18.240 and saying

01:18:18.500 we're going

01:18:18.780 to have

01:18:19.020 sovereign

01:18:19.460 cryptocurrency

01:18:20.520 so that we

01:18:21.100 can monitor

01:18:21.760 what everybody

01:18:22.240 buys in our

01:18:23.020 societies

01:18:23.500 it's going

01:18:23.920 to be yet

01:18:24.220 another

01:18:24.620 instrument

01:18:25.080 that we

01:18:25.420 have

01:18:25.700 on top

01:18:26.280 of facial

01:18:26.680 recognition

01:18:27.200 but you've

01:18:28.280 also had

01:18:28.580 the United

01:18:28.980 States

01:18:29.300 also step

01:18:29.860 in and say

01:18:30.320 yes there

01:18:30.840 will be

01:18:31.180 a federal

01:18:31.720 cryptocurrency

01:18:32.720 at some

01:18:33.640 point

01:18:34.060 so as long

01:18:35.580 as you

01:18:36.480 have that

01:18:37.460 ability

01:18:37.860 to make

01:18:38.600 it go

01:18:38.920 from something

01:18:39.520 that is

01:18:39.860 in the private

01:18:40.400 realm

01:18:40.680 to being

01:18:41.060 something

01:18:41.300 that is

01:18:41.600 sovereign

01:18:41.940 I think

01:18:42.980 that that

01:18:43.280 takes away

01:18:44.000 its

01:18:44.560 convertibility

01:18:46.000 to gold

01:18:47.120 if you will

01:18:48.700 so pro

01:18:50.240 yes

01:18:50.780 put a

01:18:51.520 couple of

01:18:52.740 jobs

01:18:52.960 in there

01:18:53.320 or

01:18:53.620 I'm

01:18:54.120 very

01:18:54.540 neutral

01:18:54.920 on

01:18:55.280 are you

01:18:55.880 in

01:18:56.140 cryptocurrency

01:18:57.400 I own

01:18:57.860 gold

01:18:58.140 but I do

01:18:58.740 not

01:18:58.880 own

01:18:59.000 cryptocurrency

01:18:59.380 so let's

01:19:01.160 talk about

01:19:01.460 gold

01:19:01.700 what's your

01:19:02.360 opinions

01:19:02.620 today

01:19:02.880 on gold

01:19:03.360 so gold

01:19:05.920 surprised a lot

01:19:07.040 of people

01:19:07.500 because it got

01:19:08.280 hit initially

01:19:09.100 when financial

01:19:09.700 markets

01:19:10.180 had their

01:19:11.660 initial setback

01:19:12.560 and that

01:19:14.340 I would like

01:19:14.700 to clarify

01:19:15.200 was more

01:19:15.940 a function

01:19:16.420 of margin

01:19:16.980 calls

01:19:17.400 you're talking

01:19:18.000 about recently

01:19:18.680 I'm very

01:19:19.280 recently

01:19:19.580 yeah I went

01:19:19.980 from 53 kilo

01:19:21.400 down to

01:19:22.040 47k

01:19:22.980 46k

01:19:23.720 yes

01:19:24.020 yes

01:19:24.340 okay

01:19:24.660 now it's

01:19:25.660 coming back

01:19:26.280 as the printing

01:19:27.360 presses worldwide

01:19:28.240 get revved up

01:19:29.140 and people are

01:19:30.440 like they're not

01:19:31.000 going to stop

01:19:31.640 they're already

01:19:32.460 talking about

01:19:33.000 the second

01:19:33.340 the third

01:19:33.620 the fourth

01:19:33.940 stimulus bill

01:19:34.560 so they're

01:19:35.020 just going to

01:19:35.360 print to

01:19:35.680 kingdom come

01:19:36.180 and so is

01:19:36.540 the rest

01:19:36.800 of the world

01:19:37.220 and which

01:19:38.440 country can

01:19:38.900 roll out

01:19:39.440 with the

01:19:39.680 biggest

01:19:39.920 stimulus package

01:19:40.860 so

01:19:41.600 now you're

01:19:43.140 seeing gold

01:19:43.620 play its

01:19:43.960 traditional

01:19:44.360 role

01:19:44.820 of

01:19:46.020 the protector

01:19:47.080 of

01:19:47.640 the hard

01:19:49.580 asset value

01:19:50.280 a store

01:19:51.300 of value

01:19:52.020 now you're

01:19:52.600 seeing gold

01:19:53.020 come out

01:19:53.620 and rise

01:19:54.360 and I would

01:19:54.980 suspect that

01:19:55.420 that should

01:19:55.720 continue

01:19:56.160 as they try

01:19:57.260 and piss

01:19:57.980 all over

01:19:58.320 the US dollar

01:19:58.860 by printing

01:19:59.620 to kingdom

01:20:00.040 come

01:20:00.360 and you're

01:20:02.120 foreseeing

01:20:02.480 it grow

01:20:02.920 for what

01:20:03.980 foreseeable

01:20:04.500 future

01:20:04.780 like 5 years

01:20:05.400 10 years

01:20:05.840 15 years

01:20:06.340 because

01:20:06.620 if you go

01:20:07.340 to the last

01:20:07.700 30 years

01:20:08.340 the last

01:20:09.040 30 years

01:20:09.560 if you put

01:20:09.980 it against

01:20:10.320 Dow Jones

01:20:10.820 Dow Jones

01:20:11.360 crushed gold

01:20:12.000 in the last

01:20:12.280 30 years

01:20:12.700 and the last

01:20:13.080 15 years

01:20:13.740 it's beaten

01:20:14.260 Dow Jones

01:20:14.800 and S&P 500

01:20:15.880 so are you

01:20:17.300 talking

01:20:17.740 10-20 years

01:20:19.520 well I won't

01:20:20.860 say 10-20 years

01:20:22.300 because my

01:20:22.700 crystal ball

01:20:23.040 is not that

01:20:23.420 good

01:20:23.680 but I would

01:20:24.940 certainly say

01:20:25.700 if you're

01:20:26.560 talking about

01:20:26.880 the next

01:20:27.160 5 years

01:20:27.620 or so

01:20:27.960 I would

01:20:28.300 certainly

01:20:28.720 think that

01:20:29.180 that was

01:20:29.460 going to

01:20:29.720 be the

01:20:29.940 case

01:20:30.140 because

01:20:30.420 everybody's

01:20:31.080 of the

01:20:31.300 opinion

01:20:31.540 that the

01:20:31.920 stock

01:20:32.120 market's

01:20:32.460 going to

01:20:32.620 come

01:20:32.780 roaring

01:20:33.020 back

01:20:33.400 and that

01:20:34.220 the Fed's

01:20:34.520 going to

01:20:34.660 be able

01:20:34.860 to save

01:20:35.220 the day

01:20:35.560 I'm not

01:20:36.300 so sure

01:20:36.900 which means

01:20:38.400 that if

01:20:39.580 I'm not

01:20:40.020 so sure

01:20:40.380 and we're

01:20:40.580 going to

01:20:40.700 need more

01:20:41.080 stimulus

01:20:41.500 then gold

01:20:41.860 is going

01:20:42.080 to be

01:20:42.300 more

01:20:42.600 attractive

01:20:43.040 as a

01:20:43.380 factor

01:20:43.600 of time

01:20:44.020 another

01:20:44.600 crazy

01:20:45.060 conspiracy

01:20:45.940 theory

01:20:46.380 I'll

01:20:46.560 throw

01:20:46.720 out

01:20:46.860 you

01:20:46.960 see

01:20:47.100 what

01:20:47.240 you

01:20:47.340 think

01:20:47.500 about

01:20:47.700 it

01:21:12.080 way

01:21:12.300 because

01:21:12.940 I'm

01:21:13.380 Christian

01:21:13.660 at heart

01:21:14.000 and I

01:21:14.200 like to

01:21:14.520 think

01:21:14.700 that

01:21:14.840 nobody

01:21:15.040 would

01:21:15.200 want

01:21:15.360 to

01:21:15.520 kill

01:21:15.700 people

01:21:16.020 I

01:21:16.460 will

01:21:16.640 say

01:21:16.820 this

01:21:17.000 much

01:21:17.280 and if

01:21:17.980 you're

01:21:18.100 listening

01:21:18.360 write it

01:21:18.720 down

01:21:18.980 in late

01:21:19.680 November

01:21:20.120 word had

01:21:21.500 already gotten

01:21:21.940 off of the

01:21:22.340 mainland

01:21:22.660 that there

01:21:23.340 was a

01:21:23.580 virus in

01:21:24.020 Wuhan

01:21:24.300 on January

01:21:25.080 the 15th

01:21:25.680 the US

01:21:26.100 trade bill

01:21:26.720 was signed

01:21:27.380 phase one

01:21:28.560 December

01:21:29.420 the 15th

01:21:29.920 excuse me

01:21:30.300 December

01:21:30.580 the 15th

01:21:31.060 I had a

01:21:31.380 whole month

01:21:31.740 off

01:21:31.920 December

01:21:32.200 the 15th

01:21:32.780 six weeks

01:21:33.460 later

01:21:33.760 the trade

01:21:34.400 truce

01:21:34.640 was signed

01:21:35.060 with an

01:21:35.460 out clause

01:21:36.100 a very

01:21:37.220 clever

01:21:37.520 out clause

01:21:38.260 that the

01:21:39.080 Chinese made

01:21:39.660 sure was

01:21:40.160 in there

01:21:40.540 that said

01:21:41.500 if there

01:21:42.100 was any

01:21:43.340 kind of

01:21:43.840 act of

01:21:44.280 God

01:21:44.840 pandemic

01:21:45.740 then they

01:21:47.720 didn't have

01:21:48.340 to make

01:21:49.440 good on

01:21:50.180 what they

01:21:50.480 had committed

01:21:50.980 to buy

01:21:51.740 from the

01:21:52.320 United States

01:21:53.080 within days

01:21:55.540 they announced

01:21:56.020 the first

01:21:56.400 coronavirus

01:21:56.940 so

01:21:58.600 did the

01:21:59.920 Chinese know

01:22:00.420 damn well

01:22:00.800 that this

01:22:01.120 thing was

01:22:01.380 running around

01:22:01.800 the world

01:22:02.120 for six

01:22:02.600 weeks

01:22:03.100 before they

01:22:04.540 shut down

01:22:04.980 Wuhan

01:22:05.320 yes they

01:22:06.380 did

01:22:06.580 is that

01:22:06.820 criminal

01:22:07.160 yes it

01:22:07.960 is

01:22:08.160 does it

01:22:08.520 deserve

01:22:09.040 to go

01:22:09.440 in front

01:22:09.760 of a

01:22:10.000 world

01:22:10.300 tribunal

01:22:13.160 yes it

01:22:13.940 does

01:22:14.560 because we

01:22:17.260 know

01:22:17.620 that it

01:22:18.800 was the

01:22:19.140 unfettered

01:22:19.820 travel

01:22:20.320 that made

01:22:21.120 this thing

01:22:21.600 a global

01:22:22.100 phenomenon

01:22:22.560 that was

01:22:23.300 impossible

01:22:23.700 to contain

01:22:24.260 six weeks

01:22:25.480 they knew

01:22:25.840 but they

01:22:26.340 wanted that

01:22:26.760 out clause

01:22:27.260 and then

01:22:27.900 they under

01:22:28.260 reported

01:22:28.660 what happened

01:22:30.320 in Wuhan

01:22:31.120 which a

01:22:32.820 toddler

01:22:33.200 could tell

01:22:34.240 you based

01:22:34.900 on what

01:22:35.240 happened in

01:22:35.920 Italy

01:22:36.280 based on

01:22:37.200 what's

01:22:37.500 happened in

01:22:38.120 Germany

01:22:38.480 and in

01:22:39.000 France

01:22:39.340 and now

01:22:39.780 in the

01:22:40.040 UK

01:22:40.300 with Boris

01:22:41.480 Johnson

01:22:41.840 in the

01:22:42.120 ICU

01:22:42.640 there's no

01:22:44.300 way in a

01:22:45.040 city the

01:22:45.460 size of

01:22:46.100 New York

01:22:46.960 11 million

01:22:47.940 people

01:22:48.480 that there

01:22:50.640 were so few

01:22:51.200 cases

01:22:51.600 it's impossible

01:22:52.760 with similar

01:22:53.800 density to

01:22:54.660 New York

01:22:55.040 so the

01:22:56.420 World Health

01:22:57.020 Organization

01:22:57.560 should be

01:22:58.000 held accountable

01:22:58.760 for not

01:22:59.600 holding China

01:23:00.420 accountable

01:23:00.900 to providing

01:23:01.840 good valid

01:23:02.780 data

01:23:03.160 so that

01:23:03.820 the rest

01:23:04.200 of the

01:23:04.420 world

01:23:04.600 could

01:23:04.780 prepare

01:23:05.160 for

01:23:05.780 fewer

01:23:06.060 people

01:23:06.420 to

01:23:06.620 die

01:23:06.980 and

01:23:08.240 that's

01:23:08.460 what

01:23:08.540 you're

01:23:08.700 talking

01:23:09.020 about

01:23:09.440 to me

01:23:10.420 these

01:23:10.760 are

01:23:11.060 equivalents

01:23:12.420 to acts

01:23:12.880 of war

01:23:13.420 on the

01:23:14.020 part

01:23:14.260 of

01:23:14.580 China

01:23:14.900 and

01:23:15.780 then

01:23:16.220 equally

01:23:17.420 whether

01:23:18.200 you're

01:23:18.380 talking

01:23:18.640 about

01:23:18.940 NPR

01:23:19.540 or

01:23:20.620 Fox

01:23:21.500 News

01:23:22.000 most

01:23:23.980 major

01:23:24.320 media

01:23:24.620 outlets

01:23:25.000 on both

01:23:25.580 sides

01:23:26.000 of the

01:23:26.260 aisle

01:23:26.520 came out

01:23:27.300 and reassured

01:23:28.020 the United

01:23:28.340 States

01:23:28.700 that it

01:23:28.960 was just

01:23:29.380 the

01:23:29.560 flu

01:23:29.800 within

01:23:32.160 24

01:23:32.640 hours

01:23:33.060 of

01:23:33.580 South

01:23:33.900 Korea's

01:23:34.300 first

01:23:34.500 case

01:23:34.760 being

01:23:34.980 reported

01:23:35.400 the

01:23:35.860 United

01:23:36.080 States

01:23:36.380 first

01:23:36.620 case

01:23:36.840 was

01:23:37.000 reported

01:23:37.320 and

01:23:38.780 what

01:23:38.980 we

01:23:39.160 did

01:23:39.420 was

01:23:39.880 dither

01:23:40.240 we

01:23:41.160 sat

01:23:41.460 on it

01:23:41.740 for

01:23:42.080 six

01:23:42.360 weeks

01:23:42.620 and

01:23:42.820 tried

01:23:43.080 to

01:23:43.220 reassure

01:23:43.520 the

01:23:43.660 public

01:23:43.880 that

01:23:44.080 nothing

01:23:44.400 was

01:23:44.600 happening

01:23:44.940 somebody

01:23:46.080 should

01:23:46.300 be

01:23:46.460 held

01:23:46.660 accountable

01:23:47.100 for

01:23:47.920 that

01:23:48.580 because

01:23:49.380 somebody

01:23:49.780 in the

01:23:50.160 United

01:23:50.420 States

01:23:50.700 intelligence

01:23:51.220 community

01:23:51.920 has

01:23:53.200 to

01:23:53.340 have

01:23:53.500 known

01:23:53.700 what

01:23:53.840 was

01:23:53.960 truly

01:23:54.200 going

01:23:54.460 on

01:23:54.680 in

01:23:54.820 Wuhan

01:23:55.040 we

01:23:55.740 don't

01:23:55.860 have

01:23:55.960 a CIA

01:23:56.260 for

01:23:56.440 nothing

01:23:56.720 and

01:23:57.460 yet

01:23:57.620 we

01:23:57.780 told

01:23:58.200 Americans

01:23:58.800 for

01:23:59.200 six

01:23:59.460 weeks

01:23:59.740 while

01:24:00.200 South

01:24:00.580 Korea

01:24:00.940 was

01:24:01.440 testing

01:24:01.820 everybody

01:24:02.400 and

01:24:02.920 shutting

01:24:03.200 the

01:24:03.400 country

01:24:03.700 down

01:24:04.060 that

01:24:05.720 it

01:24:05.800 was

01:24:05.900 just

01:24:06.060 going

01:24:06.180 to

01:24:06.220 be

01:24:06.300 the

01:24:06.420 flu

01:24:06.580 so

01:24:07.700 there

01:24:07.820 are

01:24:07.900 a lot

01:24:08.160 of

01:24:08.260 responsible

01:24:08.700 bodies

01:24:09.220 right

01:24:09.660 now

01:24:09.900 that

01:24:10.140 have

01:24:10.260 taken

01:24:10.540 us

01:24:10.700 to

01:24:10.800 the

01:24:10.940 point

01:24:11.180 where

01:24:11.340 we're

01:24:11.500 at

01:24:11.840 inside

01:24:13.180 the

01:24:13.420 country

01:24:13.820 and

01:24:14.980 in

01:24:15.320 China

01:24:15.740 and

01:24:17.120 they

01:24:17.260 need

01:24:17.700 to

01:24:17.860 be

01:24:18.000 held

01:24:18.320 accountable

01:24:19.060 so

01:24:20.220 you

01:24:20.360 don't

01:24:20.500 even

01:24:20.680 have

01:24:20.860 to

01:24:21.000 get

01:24:21.280 on

01:24:21.480 the

01:24:21.580 discussion

01:24:22.140 as

01:24:22.340 to

01:24:22.460 whether

01:24:22.700 or

01:24:27.460 you

01:24:28.380 don't

01:24:28.540 even

01:24:28.680 have

01:24:28.880 to

01:24:28.980 go

01:24:29.120 that

01:24:29.320 far

01:24:29.700 if

01:24:30.320 we

01:24:30.480 find

01:24:30.840 that

01:24:31.100 in

01:24:31.320 future

01:24:31.740 investigations

01:24:32.420 then

01:24:33.660 that

01:24:34.120 needs

01:24:34.380 to

01:24:34.520 be

01:24:34.700 prosecuted

01:24:35.400 but

01:24:36.320 if

01:24:36.680 we

01:24:36.900 just

01:24:37.260 ascertain

01:24:38.440 what

01:24:39.920 is

01:24:40.120 known

01:24:40.640 and

01:24:41.640 a

01:24:41.780 known

01:24:42.120 hushed

01:24:42.860 up

01:24:42.980 secret

01:24:43.340 that

01:24:44.720 the

01:24:44.880 Chinese

01:24:45.200 knew

01:24:45.440 for

01:24:45.620 six

01:24:45.880 weeks

01:24:46.200 about

01:24:46.580 the

01:24:46.760 virus

01:24:47.100 before

01:24:47.420 saying

01:24:47.820 anything

01:24:48.160 on

01:24:48.340 the

01:24:48.440 global

01:24:48.660 stage

01:24:49.180 to

01:24:50.140 get

01:24:50.260 a

01:24:50.360 trade

01:24:50.560 deal

01:24:50.720 signed

01:24:51.080 somebody

01:24:52.700 needs

01:24:53.000 to

01:24:53.160 look

01:24:53.280 into

01:24:53.420 that

01:24:53.700 because

01:24:55.320 countless

01:24:56.260 lives

01:24:56.560 have

01:24:56.660 been

01:24:56.800 lost

01:24:57.060 as

01:24:57.460 the

01:24:59.140 damages

01:24:59.680 are

01:25:00.080 in

01:25:00.200 the

01:25:00.320 tens

01:25:00.600 of

01:25:00.740 trillion

01:25:01.040 dollars

01:25:01.460 we're

01:25:02.340 not

01:25:02.480 talking

01:25:02.800 about

01:25:03.060 small

01:25:03.400 here

01:25:03.660 if

01:25:03.820 that's

01:25:04.020 the

01:25:04.140 case

01:25:04.500 no

01:25:05.640 we're

01:25:05.940 not

01:25:06.240 and

01:25:06.840 we're

01:25:06.960 talking

01:25:07.260 about

01:25:07.600 people

01:25:08.040 losing

01:25:08.520 their

01:25:09.420 family

01:25:09.760 members

01:25:10.080 and

01:25:10.200 we're

01:25:10.320 talking

01:25:10.620 about

01:25:10.920 trillions

01:25:11.680 of

01:25:11.820 we're

01:25:12.300 talking

01:25:12.520 about

01:25:12.760 suicides

01:25:13.380 in

01:25:13.500 the

01:25:13.620 future

01:25:13.900 we're

01:25:14.100 talking

01:25:14.340 about

01:25:14.520 economic

01:25:14.980 hardship

01:25:15.500 all

01:25:17.020 of

01:25:17.140 this

01:25:17.260 could

01:25:17.400 have

01:25:17.500 been

01:25:17.640 mitigated

01:25:18.180 had

01:25:18.420 China

01:25:18.900 been

01:25:19.240 honest

01:25:19.880 and

01:25:20.420 had

01:25:20.540 the

01:25:20.660 World

01:25:20.860 Health

01:25:21.120 Organization

01:25:21.680 made

01:25:22.120 China

01:25:22.480 accountable

01:25:23.400 because

01:25:24.720 at first

01:25:25.080 they said

01:25:25.400 it's

01:25:25.600 not

01:25:25.800 it's

01:25:26.000 not

01:25:26.160 anything

01:25:26.400 to

01:25:26.640 worry

01:25:26.820 about

01:25:26.980 when

01:25:27.140 WHO

01:25:27.520 first

01:25:27.540 came

01:25:27.720 out

01:25:29.480 and

01:25:29.600 said

01:25:29.840 we

01:25:30.980 don't

01:25:31.120 need

01:25:31.240 to

01:25:31.340 stop

01:25:31.580 everything

01:25:31.740 let me

01:25:32.160 ask you

01:25:32.460 who do

01:25:32.700 you trust

01:25:33.500 the least

01:25:33.920 Iran

01:25:34.700 Russia

01:25:35.140 or China

01:25:35.680 China

01:25:38.420 China's got

01:25:39.800 more economic

01:25:40.280 power

01:25:40.720 because of

01:25:42.740 that or

01:25:43.120 because they

01:25:43.660 don't have

01:25:43.960 a free

01:25:44.280 press

01:25:44.700 and because

01:25:45.140 we can't

01:25:45.560 really know

01:25:45.900 what the

01:25:46.160 hell

01:25:46.280 is going

01:25:46.620 on

01:25:46.780 over

01:25:46.920 there

01:25:47.120 well

01:25:47.300 that's

01:25:47.500 just

01:25:47.620 a

01:25:47.760 kicker

01:25:48.040 but

01:25:48.180 you

01:25:48.280 don't

01:25:48.400 really

01:25:48.560 know

01:25:48.660 what's

01:25:48.840 going

01:25:49.000 on

01:25:49.180 in

01:25:54.720 and

01:25:56.100 you

01:25:56.200 can't

01:25:56.460 tell

01:25:56.620 me

01:25:56.780 that

01:25:56.920 in

01:25:57.000 the

01:25:57.120 cold

01:25:57.340 of

01:25:57.460 winter

01:25:57.660 that

01:25:57.860 Russia

01:25:58.080 has

01:25:58.280 as

01:25:58.380 many

01:25:58.540 cases

01:25:58.840 as

01:25:59.020 it's

01:25:59.180 reporting

01:25:59.540 but

01:26:00.280 at

01:26:00.440 last

01:26:00.680 check

01:26:01.060 China

01:26:01.700 is

01:26:01.820 17%

01:26:02.380 of

01:26:02.540 global

01:26:02.800 GDP

01:26:03.140 they

01:26:05.140 can

01:26:05.300 throw

01:26:05.440 more

01:26:05.620 money

01:26:05.820 around

01:26:06.040 than

01:26:06.180 anybody

01:26:06.460 else

01:26:06.860 and

01:26:07.840 you

01:26:08.100 just

01:26:08.260 mentioned

01:26:08.480 two

01:26:08.660 of

01:26:08.740 their

01:26:08.840 allies

01:26:09.300 by

01:26:09.840 the

01:26:09.920 way

01:26:10.140 so

01:26:10.720 that's

01:26:11.120 why

01:26:11.260 I

01:26:11.360 asked

01:26:11.540 it

01:26:11.640 the way

01:26:11.860 I

01:26:11.960 did

01:26:12.120 and

01:26:13.000 the

01:26:13.100 largest

01:26:13.360 contiguous

01:26:13.780 land

01:26:14.060 border

01:26:14.260 on the

01:26:14.480 planet

01:26:14.760 between

01:26:15.320 Russia

01:26:15.720 and

01:26:15.940 China

01:26:16.220 I

01:26:16.900 worry

01:26:17.440 about

01:26:17.680 these

01:26:17.900 things

01:26:18.240 because

01:26:18.560 I

01:26:18.760 have

01:26:18.920 four

01:26:19.340 children

01:26:19.660 but

01:26:19.960 China

01:26:21.260 right

01:26:21.460 now

01:26:21.580 can

01:26:21.740 throw

01:26:21.900 around

01:26:22.180 the

01:26:22.580 most

01:26:22.960 because

01:26:23.220 they've

01:26:23.440 got

01:26:23.540 the

01:26:23.660 biggest

01:26:23.860 pocketbook

01:26:24.420 it's

01:26:26.320 going to

01:26:26.460 be

01:26:26.560 very

01:26:27.080 interesting

01:26:27.580 what

01:26:27.860 happens

01:26:28.220 the

01:26:28.340 next

01:26:28.520 6

01:26:28.700 12

01:26:28.920 18

01:26:29.140 months

01:26:29.500 very

01:26:30.380 because

01:26:31.200 if

01:26:31.940 China

01:26:32.700 comes

01:26:33.060 out

01:26:33.320 guilty

01:26:33.620 for

01:26:33.840 having

01:26:34.020 done

01:26:34.240 something

01:26:34.680 the

01:26:36.260 trade

01:26:36.820 relationships

01:26:37.640 that

01:26:38.060 happens

01:26:38.500 with

01:26:38.760 that

01:26:38.980 and

01:26:39.140 travel

01:26:39.600 do

01:26:39.800 you

01:26:39.900 let

01:26:40.120 anybody

01:26:40.600 come

01:26:40.900 in

01:26:41.020 I

01:26:41.160 mean

01:26:41.300 it's

01:26:41.880 the

01:26:42.800 consequences

01:26:43.440 could

01:26:43.680 be

01:26:43.800 do

01:26:44.240 you

01:26:44.640 do

01:26:44.760 any

01:26:45.040 due

01:26:45.260 diligence

01:26:45.660 on

01:26:45.860 looking

01:26:46.080 at

01:26:46.260 5G

01:26:46.680 or

01:26:46.840 not

01:26:47.040 at

01:26:47.180 all

01:26:47.340 5G

01:26:47.840 is

01:26:47.980 not

01:26:48.140 something

01:26:48.420 that

01:26:48.720 you

01:26:49.380 have

01:26:49.480 strong

01:26:49.720 opinions

01:26:50.080 on

01:26:50.400 my

01:26:51.900 opinions

01:26:52.280 on

01:26:52.460 5G

01:26:52.860 are

01:26:52.980 so

01:26:53.160 strong

01:26:53.500 that

01:26:53.640 I

01:26:53.740 would

01:26:53.920 never

01:26:54.160 let

01:26:54.420 myself

01:26:55.340 or

01:26:55.580 anybody

01:26:55.860 that

01:26:56.060 I

01:26:56.080 know

01:26:56.280 buy

01:26:56.520 a

01:26:56.660 Volvo

01:26:56.900 connect

01:26:57.960 those

01:26:58.180 dots

01:26:58.440 because

01:27:00.280 I

01:27:00.380 don't

01:27:00.480 want

01:27:00.680 China

01:27:01.220 listening

01:27:01.540 to

01:27:01.660 me

01:27:01.760 while

01:27:01.900 I

01:27:02.020 drive

01:27:02.200 a

01:27:02.340 car

01:27:02.720 I

01:27:03.960 trust

01:27:04.260 China

01:27:04.560 when

01:27:04.720 it

01:27:04.800 comes

01:27:04.960 to

01:27:05.100 5G

01:27:05.660 as

01:27:06.580 much

01:27:06.780 as

01:27:06.900 I

01:27:07.000 would

01:27:07.140 trust

01:27:07.340 buying

01:27:07.580 a

01:27:07.720 Volvo

01:27:07.960 owned

01:27:09.320 by

01:27:09.500 China

01:27:09.760 so

01:27:11.600 I

01:27:11.740 think

01:27:11.880 it

01:27:11.980 is

01:27:12.100 a

01:27:12.200 matter

01:27:12.360 of

01:27:12.480 national

01:27:12.780 security

01:27:13.240 do

01:27:14.200 you

01:27:14.320 social

01:27:14.620 media

01:27:14.900 a lot

01:27:15.600 a lot

01:27:16.460 way

01:27:16.780 too

01:27:16.920 much

01:27:17.180 how

01:27:17.360 about

01:27:17.500 TikTok

01:27:17.780 my

01:27:18.860 daughter

01:27:19.180 daughter

01:27:20.280 okay

01:27:21.060 you

01:27:21.820 know

01:27:21.960 the

01:27:22.080 story

01:27:22.280 behind

01:27:22.500 TikTok

01:27:22.760 as

01:27:23.000 well

01:27:23.140 okay

01:27:23.520 got

01:27:24.320 it

01:27:24.520 listen

01:27:25.220 I'll

01:27:25.440 turn

01:27:25.600 it

01:27:25.720 over

01:27:25.840 to

01:27:25.980 you

01:27:26.060 final

01:27:26.340 thoughts

01:27:26.700 what

01:27:26.960 do

01:27:27.260 you

01:27:27.440 imagine

01:27:28.300 the

01:27:28.500 families

01:27:28.840 watching

01:27:29.240 right

01:27:29.520 now

01:27:29.800 and

01:27:29.960 they're

01:27:30.140 kind

01:27:30.340 of

01:27:30.460 listening

01:27:30.940 to

01:27:31.140 this

01:27:31.380 and

01:27:31.500 you

01:27:31.680 shared

01:27:32.400 a lot

01:27:32.660 we've

01:27:32.900 covered

01:27:33.100 a lot

01:27:33.500 what

01:27:35.360 words

01:27:36.000 of

01:27:36.220 reassurance

01:27:36.980 or

01:27:37.220 preparation

01:27:37.940 or

01:27:38.240 anticipation

01:27:38.880 what

01:27:39.500 could

01:27:39.720 you

01:27:39.840 share

01:27:40.020 with

01:27:40.180 the

01:27:40.320 rest

01:27:40.540 of

01:27:40.680 us

01:27:40.920 the

01:27:43.100 Great

01:27:43.300 Depression

01:27:43.660 in

01:27:43.860 America

01:27:44.240 was

01:27:46.060 one of

01:27:46.300 the

01:27:46.420 darkest

01:27:46.680 chapters

01:27:47.120 in

01:27:47.320 US

01:27:47.520 history

01:27:47.840 but

01:27:49.660 it

01:27:49.800 also

01:27:50.240 brought

01:27:50.580 out

01:27:50.980 the

01:27:52.320 best

01:27:52.860 in

01:27:53.420 Americans

01:27:53.920 Hershey

01:27:54.600 Pennsylvania

01:27:55.160 exists

01:27:56.100 because

01:27:56.980 Hershey

01:27:57.840 himself

01:27:58.520 employed

01:27:59.240 Americans

01:27:59.920 construction

01:28:00.520 workers

01:28:00.900 who were

01:28:01.440 out of

01:28:01.680 work

01:28:01.960 to

01:28:02.440 build

01:28:02.720 the

01:28:02.920 city

01:28:03.160 this

01:28:03.820 is

01:28:03.940 a

01:28:04.060 time

01:28:04.300 that

01:28:04.420 as

01:28:04.540 Americans

01:28:04.960 we

01:28:05.220 can

01:28:05.360 come

01:28:05.540 together

01:28:05.980 and

01:28:06.680 not

01:28:07.160 talk

01:28:07.660 about

01:28:07.960 helping

01:28:08.360 our

01:28:08.580 neighbor

01:28:08.820 but

01:28:09.380 help

01:28:09.720 our

01:28:09.900 neighbor

01:28:10.160 truly

01:28:11.320 give

01:28:13.000 them

01:28:13.160 what

01:28:13.320 they

01:28:13.480 need

01:28:13.800 this

01:28:14.700 is

01:28:14.840 a

01:28:14.960 time

01:28:15.240 for

01:28:15.460 America

01:28:15.820 to

01:28:16.060 shine

01:28:16.420 and

01:28:17.740 I'm

01:28:18.620 involved

01:28:19.040 in a

01:28:19.300 fundraiser

01:28:19.860 where

01:28:20.300 we're

01:28:20.580 procuring

01:28:21.120 masks

01:28:21.600 to

01:28:22.020 get

01:28:22.200 them

01:28:22.460 to

01:28:23.020 frontline

01:28:23.460 workers

01:28:23.980 and

01:28:25.260 I'm

01:28:25.820 watching

01:28:26.180 people

01:28:26.660 open

01:28:27.060 up

01:28:27.420 whether

01:28:28.140 it's

01:28:28.380 food

01:28:28.820 to

01:28:30.020 their

01:28:30.540 fellow

01:28:30.800 Americans

01:28:31.440 this

01:28:32.220 is

01:28:32.660 our

01:28:32.940 finest

01:28:33.580 finest

01:28:34.440 hour

01:28:35.260 and

01:28:36.420 this

01:28:36.660 will

01:28:36.820 make

01:28:37.020 us

01:28:37.180 stronger

01:28:37.520 for

01:28:37.880 it

01:28:38.080 in

01:28:38.680 the

01:28:38.900 end

01:28:39.240 if

01:28:39.500 we

01:28:39.640 open

01:28:40.000 our

01:28:40.300 hearts

01:28:40.720 and

01:28:41.800 if

01:28:41.960 we

01:28:42.100 have

01:28:42.280 the

01:28:42.400 ability

01:28:42.800 our

01:28:43.240 wallets

01:28:43.780 to

01:28:44.000 those

01:28:44.340 in

01:28:44.580 need

01:28:44.920 and

01:28:45.180 see

01:28:45.600 our

01:28:45.880 way

01:28:46.140 through

01:28:46.560 what's

01:28:47.360 to

01:28:47.600 come

01:28:47.880 I

01:28:48.520 appreciate

01:28:48.820 you

01:28:48.980 for

01:28:49.120 coming

01:28:49.320 out

01:28:49.620 this

01:28:49.980 has

01:28:50.120 been

01:28:50.280 incredible

01:28:50.820 hopefully

01:28:51.780 in the

01:28:52.020 future

01:28:52.260 we'll

01:28:52.460 invite

01:28:52.700 you

01:28:52.820 back

01:28:53.020 and

01:28:53.200 you'll

01:28:53.500 be

01:28:53.600 willing

01:28:53.800 to

01:28:53.940 come

01:28:54.080 back

01:28:54.280 and sit

01:28:54.520 down

01:28:54.700 with us

01:28:54.960 and talk

01:28:55.280 about

01:28:55.440 different topics

01:28:56.040 as it's

01:28:56.340 formulating

01:28:56.780 extremely

01:28:57.720 insightful

01:28:58.320 I think

01:28:58.940 extremely

01:28:59.380 fair

01:28:59.880 on the

01:29:00.900 way you

01:29:01.160 gave

01:29:01.360 your

01:29:01.640 feedback

01:29:02.220 and

01:29:02.680 point

01:29:03.080 of

01:29:03.240 view

01:29:03.460 and

01:29:04.060 there

01:29:04.180 was

01:29:04.340 so

01:29:04.580 much

01:29:04.780 to

01:29:04.940 take

01:29:05.180 away

01:29:05.460 again

01:29:05.860 thank

01:29:06.220 you

01:29:06.340 for

01:29:06.480 coming

01:29:06.720 out

01:29:06.900 and being

01:29:07.080 a guest

01:29:07.340 on

01:29:07.460 Valuetainment

01:29:07.880 thank

01:29:08.400 you

01:29:08.540 thank

01:29:08.760 you

01:29:08.840 for

01:29:08.960 what

01:29:09.080 you

01:29:09.200 do

01:29:09.380 thank

01:29:09.920 you

01:29:10.100 thanks

01:29:10.640 everybody

01:29:10.940 for

01:29:11.200 listening

01:29:11.520 and by

01:29:11.840 the way

01:29:12.020 if you

01:29:12.200 haven't already

01:29:12.680 subscribed to

01:29:13.360 Valuetainment on iTunes

01:29:14.760 please do so

01:29:15.980 give us a five star

01:29:17.320 write a review if you haven't already

01:29:18.980 and if you have any questions for me that you may have

01:29:21.140 you can always find me on Snapchat

01:29:22.760 Instagram

01:29:23.560 Facebook or YouTube

01:29:24.960 just search my name

01:29:25.900 Patrick

01:29:26.360 David and I actually do respond back

01:29:28.960 when you snap me

01:29:29.840 or send me a message on Instagram

01:29:31.660 with that being said

01:29:32.520 have a great day today

01:29:33.560 take care everybody

01:29:34.260 bye bye

Valuetainment - May 08, 2020

Episode 464： Economist Destroys China - Calls Coronavirus An Act of War

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