Why the 2008 Crash Was So Different | Raoul Pal
Summary
TLDRIn this insightful discussion, the speakers delve into the cyclical nature of financial markets, highlighting the impact of the 2008 crash and the subsequent shift towards a debt-fueled economy. They explore the 'Everything Code', a concept where global assets synchronize in a 4-year cycle, influenced by presidential election cycles and Bitcoin halvings. The conversation touches on decentralization, the rise of AI and robotics, and the potential for a technological renaissance. The speakers emphasize the importance of understanding these cycles to make informed investment decisions and prepare for an economy transformed by exponential technological growth.
Takeaways
- 📉 The 2008 financial crisis was a pivotal moment where debt reached unsustainable levels, leading to a market crash and significant government intervention to stabilize the economy.
- 🌐 The global economy has become more synchronized due to central banks' coordinated actions, especially after the 2008 crisis, leading to a 'debt refi cycle' that influences asset prices and economic policies.
- 💡 The concept of the 'Everything Code' suggests that various economic and financial cycles are now more aligned and predictable, influenced by the debt cycle and monetary policy.
- 🚀 The potential for decentralization in technology, such as AI and renewable energy, could disrupt traditional power structures and create new opportunities for individuals and businesses.
- 💰 The importance of entrepreneurship and innovation is highlighted as a constant in human progress, with the potential to solve problems and create value in a rapidly changing world.
- 🌿 The value of natural experiences and human interaction is expected to increase in a world dominated by technology, suggesting a premium for authentic, human-centric experiences.
- 💡 The discussion emphasizes the need for secure storage of digital assets like Bitcoin, highlighting the risks of keeping assets on exchanges or devices prone to hacking.
- 🔄 The cyclical nature of economies and markets is underscored, with the suggestion that understanding and navigating these cycles are crucial for successful investment strategies.
- 🚫 The script challenges the idea of a 'big crash' in the near future, arguing that the current economic system cannot afford such an event due to the extensive debt levels.
- 🌟 The potential for an 'economic singularity' is alluded to, where traditional measures of economic success like GDP may become less relevant due to advancements in technology and AI.
- 🕊️ The interview concludes with an optimistic view of human adaptability and the enduring value of human connection and ingenuity in a world undergoing rapid technological change.
Q & A
What was the main difference in the market response between the crashes in 2000 and 2008?
-The 2000 crash was less of a debt cycle and more of an equity cycle, whereas the 2008 crash marked the end of the financial system as debt had reached unsustainable levels, leading to a significant market crash of 65%.
How does the 'everything code' concept relate to the synchronization of various economic cycles?
-The 'everything code' concept suggests that various economic cycles, such as the business cycle and asset prices, have become synchronized, much like metronomes that eventually fall into the same beat, forming a consistent 4-year cycle.
What impact does decentralization of power have on energy solutions at the household level?
-Decentralization allows for the possibility of individual households and possibly villages to generate and store their own power through renewable sources like solar, reducing the need for large-scale storage and centralized power systems.
How does the presidential election cycle correlate with the Bitcoin halving cycle and the business cycle?
-The presidential election cycle, Bitcoin halving cycle, and the business cycle have all aligned to form a synchronized 4-year cycle, influencing economic and asset price movements.
What is the significance of the 2008 financial crisis in terms of debt management by governments?
-The 2008 crisis led to a 'great reset' where governments around the world refinanced their debts with zero-interest rates and implemented quantitative easing, forcing the business cycle into a 4-year pattern.
What is the role of entrepreneurs in addressing societal problems?
-Entrepreneurs play a crucial role in identifying and providing solutions to societal problems, adapting to new challenges and opportunities as they arise.
How does the aging population affect economic growth and government policies?
-An aging population tends to reduce GDP growth as older individuals spend less, which in turn affects government policies, especially regarding debt management and currency debasement.
What is the potential impact of AI and robotics on the job market and wages?
-AI and robotics have the potential to increase productivity but may also exert downward pressure on wages due to the automation of tasks, reducing the demand for human labor.
What is the 'economic singularity' and how might it change our understanding of GDP?
-The 'economic singularity' refers to a point where productivity increases due to advancements like AI and robotics to such an extent that traditional measures of economic growth, like GDP, may no longer be relevant or meaningful.
How does the concept of 'decentralization' apply to the future of various industries, including energy and AI?
-Decentralization suggests that power, AI, and labor forces could become less centralized, allowing for more distributed systems and potentially leading to innovative changes in industry structures.
What advice is given for investing during the 'crypto or macro summer' and 'fall'?
-The advice is to invest fully during the 'crypto or macro summer' before the market gets volatile, and to avoid making risky decisions during the 'fall' to prevent losing gains made during the bull run.
Outlines
📉 Financial Market Cycles and the Impact of 2008 Crisis
The paragraph discusses the differences in market responses between the crashes of 2000 and 2008, highlighting the significant debt cycle that ended in 2008, which was perceived as the end of the financial system due to excessive leverage. It touches on the decentralization of power through technological advancements, such as solar energy at the household level, and the potential for a single-person billion-dollar company. The conversation also includes the idea of centralization through programming but decentralization in practice, as it allows for many smaller companies to thrive. The paragraph ends with a discussion on the human desire for community and the entrepreneurial spirit to solve problems, suggesting that as long as there are problems, there will be opportunities for entrepreneurs.
🔁 The Debt Cycle and Economic Refinancing
This section delves into the cyclical nature of debt and economic cycles, particularly focusing on the synchronization that occurred post-2008, leading to a consistent 4-year cycle. It explains how governments worldwide refinanced their debts during this period, which influenced asset prices and created a correlation across various economic sectors. The paragraph outlines the四季 cycle concept, including 'crypto winter,' 'spring,' 'summer,' and 'macro full,' each representing different phases of economic activity. It also discusses the challenges of a debt-based monetary system, where debt must continually be rolled over, and the implications of compounding interest on government debt.
🌐 Global Financial Interconnectedness and Systemic Risks
The speaker recounts his experience in Europe during the financial crisis and the realization of the interconnectedness of the global financial system. He discusses the risks associated with leverage and collateral, and how the actions of central banks, such as quantitative easing, have synchronized the global economy into a pattern that avoids systemic collapse. The paragraph emphasizes the importance of government debt and the potential for a 'total wipe out' if major institutions fail. It also touches on the challenges faced by governments in managing an aging population and the impact on GDP growth.
🏠 Demographic Shifts and Economic Growth
This paragraph examines the impact of aging populations on economic growth, particularly focusing on the trend of reduced spending among older individuals and its effect on GDP. It discusses the potential for technology, such as AI and robotics, to increase productivity and offset the decline in population growth and debt growth. The speaker also addresses the idea of an 'economic singularity' where traditional measures of economic health, like GDP, may become less relevant due to significant technological advancements.
💡 The Role of Innovation in Economic Recovery
The speaker reflects on historical economic recoveries, such as post-World War II, and the role of innovation and rebuilding in driving economic growth. He draws parallels between past cycles of productivity growth and the potential for current technologies like renewable energy and AI to stimulate the economy. The paragraph also discusses the importance of understanding the mechanisms behind economic cycles and the role of central banks in managing these cycles to prevent crashes.
🛡️ Securing Bitcoin and the Future of Financial Systems
In this section, the speaker emphasizes the importance of securing Bitcoin investments through hardware wallets to prevent loss due to hacking or exchange failures. He shares personal experiences of losing Bitcoin and advocates for the use of secure storage solutions like the Trezor hardware wallet. The paragraph also includes a promotional link for the Trezor wallet, highlighting the need for safekeeping of digital assets.
🔮 The Future Impact of AI and Decentralization
The speaker discusses the potential impact of AI and the importance of decentralization in the face of technological advancements. He envisions a future where AI and robotics could lead to an 'economic singularity,' changing the structure of the economy and the concept of money. The paragraph also addresses the potential for AI to become a centralized power and the need to ensure it remains decentralized to prevent the monopolization of intelligence.
🚀 The Convergence of Technological Revolutions
This paragraph explores the convergence of multiple technological revolutions, including blockchain, AI, robotics, electric vehicles, and space exploration. It discusses the potential for these technologies to decentralize power and create a new wave of innovation. The speaker also touches on the idea of a 'decentralized revolution' as the primary area for investment over the next 50 years.
🤖 AI as an Agent of Change and Decentralization
The speaker discusses the concept of AI as an agent capable of performing tasks and making transactions, and the potential for AI to become self-sufficient in managing its own operations, including payments for services. He highlights the importance of blockchain technology for facilitating micropayments and smart contracts, which will be essential for the next generation of AI-driven economy.
🌳 The Value of Human Experience and Nature in a Technological World
In this section, the speaker reflects on the enduring value of human interaction and nature in a world increasingly dominated by technology. He suggests that as technology advances, the human desire for connection and the appreciation for natural experiences will become more valuable. The paragraph also touches on the adaptability of humans and the potential for new forms of community and leadership to emerge, such as influencers in the digital space.
💸 Strategies for Navigating the Economic Shift
The speaker outlines a strategy for navigating the upcoming economic shifts, emphasizing the importance of making wise investments in the next six to eight years before a significant transformation of the economic system. He advises against trying to time the market and warns against making rash decisions during periods of rapid change. The paragraph concludes with a reminder of the importance of not 'messaging up' the opportunities presented by the current economic cycles.
🚨 A Final Warning Against Greed and Risk Management
The final paragraph serves as a cautionary note against the dangers of greed and the importance of managing risks during periods of economic upheaval. The speaker encourages investors to be smart and cautious, to avoid using excessive leverage, and to protect their assets during times of volatility. The paragraph ends with a reminder of the importance of human ingenuity and the potential for entrepreneurs to find solutions in a world of abundance created by technological advancements.
Mindmap
Keywords
💡Debt Cycle
💡Quantitative Easing
💡Leverage
💡Debasement of Currency
💡Business Cycle
💡Influencer
💡Decentralization
💡Everything Code
💡Macro Factors
💡Asset Correlation
💡Inflation
Highlights
The 2008 financial crisis marked a significant shift in market dynamics, with the aftermath leading to a more controlled market cycle influenced by central bank policies.
Debt cycles and equity cycles differ fundamentally; the 2008 crisis was a debt cycle that nearly ended the financial system due to excessive leverage.
Decentralization of power, such as through solar energy at the household level, challenges traditional energy storage and distribution models.
The concept of the 'Everything Code' suggests a synchronization of various economic and financial cycles, making market behavior more predictable.
The 2008 crisis was a 'great reset' that led to a new pattern of business and economic cycles, aligning with political and Bitcoin halving cycles.
The current financial system is characterized by a 4-year cycle with distinct 'seasons' of economic activity, from winter to spring, summer, and fall.
Debt refi cycles and currency debasement are intrinsically linked, with implications for asset prices and the value of money.
The potential for a single individual to create a billion-dollar company underscores the power of entrepreneurship and innovation in solving problems.
The desire to be an 'influencer' reflects a shift in societal values and the importance of community leadership in the digital age.
The 'Banana Zone' concept highlights the critical period in the economic cycle where significant wealth can be created or lost.
The importance of securing Bitcoin and other digital assets through hardware wallets to prevent loss from hacking or exchange failures.
The interconnected nature of global financial systems and the coordinated efforts of central banks to manage economic stability.
Demographic trends, such as aging populations, have a direct impact on economic growth and the need for government debt management.
The potential for AI and robotics to increase productivity exponentially, possibly leading to an 'economic singularity' where traditional GDP metrics become less relevant.
The role of technological revolutions in shaping the future of work, wealth, and the global economy, with a focus on decentralization and innovation.
The 'don't fuck this up' thesis emphasizes the importance of making smart investment decisions in the face of significant technological and economic shifts.
The value of human interaction and experience in a world increasingly dominated by AI and automation, suggesting a premium on human-centric activities.
The outlook for the next decade, suggesting no major financial crash due to systemic dependencies, but significant technological and economic transformations.
Transcripts
why was it different in 2008 I mean they
seemingly did let the market Fall and we
did see the markets crash by 65% and so
now you're kind of saying that they
can't really do that 2000 was less of a
debt cycle and more of an equity cycle
the debt cycle in 2008 really was the
kind of end of the financial system it
was the point that we all knew was
coming which is like you can't have this
much leverage look at what's happening
we're decentralizing power so now people
can have that s of power at their houses
so therefore you don't need the huge
storage people say well you can't scale
solar well you can at a house level you
can do it probably at a village level
you know Sam malman said that we might
see the first single person billion
dollar company so I think of it uh
there's there there's both right the
centralizing of the of the programming
but then it's decentralized in a sense
it turns one big company into a 100 or a
thousand companies there's no future in
this world where humans don't have
problems and as long as there's problems
we'll need solutions to those problems
and entrepreneurs will always be able to
figure that out so Nature's going to
trade at a huge premium in a world of
robots and AI when you can just kind of
leave that all behind if you ask a young
kid now and say what do you want to be
when you grow up they will say I want to
be an influencer and we think are you
crazy but what is an influencer apart
from a community leader where they have
a community of people it's actually
maybe they're being adaptive already
they've done it in fortnite they've done
it in the gaming world as well but in
the end people want the human to Human
Experience
Ral Paul from Real Vision uh you have
been uh man you've been laying out some
really good research I've been waiting
to talk to you it's been going on for
like a month uh waiting for this so
anyway uh thanks for joining me today
I'm ready to dig in yeah sorry I've been
so avoidant but I was on holiday and it
all got a bit screw but we're here now
finally we're here now we're here now so
uh the everything code uh the banana
Zone uh man you've been putting out some
really really good research that I'm
excited to dig in I was just telling you
I just came back from the big Co
conference and um I'm starting to see
this big shift in the industry it seems
like where we're seeing um you know all
this institutional adoption that's just
coming in and it seems like it's
changing sort of the makeup of that
industry we'll come back to that but
let's go ahead and just set the stage
here and uh this the everything code
I've been loving it um this um this
phenomenon where you have like these
metronomes that keep perfect time for
playing music and this phenomenon where
if you set all these metronomes on a
table and start them at different times
over time they all get to the same beat
and I think that sort of maybe sums up
the everything code yeah and what's
weird about the everything code and I'll
explain what it is what's weird is it
makes everything so simple too simple
most people think well this can't be
possible yeah we kind of knew it in
Bitcoin world because we could see a
cycle forming and we've been following
this cycle kind of dumbly like well it's
kind of maybe just the Haring cycle we
don't really know and then I started
digging in and realized that the
business cycle was perfect the business
cycle I used the ism survey and it was a
perfect cycle I'm like that's weird
because if you remember if go back prior
to 2008 we'd have these long periods of
no recession short periods and it was
not it was variable but suddenly it's
like a metronome as you say I'm like huh
what's that all about and eventually it
led me to realize that 20 8 I think was
the great reset the one that people keep
expecting happened what they did is they
basically for they they told everybody
they could forego paying interest on all
their debts which was Zero interest
rates and then they tried the new trick
of printing money via quantitative
easing now what that did is allow every
single major government in the world to
refinance all of their debts on this 3
to fiveyear sector
and so they all did it and what it did
was forced the business cycle into this
4-year
cycle and then all the asset prices are
all correlated whether it's Tech whether
it's Bitcoin whether it's the economy
itself it's all driven by the same cycle
which happens to be the presidential
election cycle which happens to be the
Bitcoin harving cycle it's all the same
thing and so when you understand that it
makes the game a lot easier now this is
not going to last for forever but for
the period of time that we've got it
seems to be playing out perfectly and
you can break these Cycles down to four
phases which I call the seasons so we
have call it crypto or macro winter well
that was
20122 that was
2018 that was uh 2014 they just four
years the next part of that is spring
when nobody quite believes that
something is changing
but prices start moving higher you know
Bitcoin had a great year in in 2023
against most people's expectations
because spring is the time the shoots
come up then you start transitioning to
Summer which is this year which happens
to be the election year which is when
really the debt starts getting
refinanced and they have to start using
liquidity to finance it because there's
not enough GDP growth to pay for the
interest on the debts and so they keep
rolling forwards these debts
and they keep monetizing the interest
payments which is this debasement of
currency that happens at about on a
globalized level 8% a year they're
debasing currency and so and then next
year will be um macro full and then
eventually the cycle tops out and we
repeat it again because it's based on
the debt refi cycle right that this
debasement of currency of 8% there's two
ways of looking at it you can say
rightly so we're being robbed of our
future wealth because your future self
is getting poorer because you can afford
less assets with your income because
income doesn't go up the assets do
because of the debasement or the other
way is you can say I'm paying an 8% put
option fee on the entire system not
breaking because that's also what
they're
doing because they need to refinance the
debt they need to not let asset prices
go too far down so we can talk about
that but it's another way of looking at
it and you're like would you pay 8% a
year to have the entire system not break
maybe if you have assets for sure if you
don't have assets that's a different
conversation exactly right right depends
on how much you have to lose so uh to
kind of just maybe rewind the clock just
a little bit um because we're in a
debt-based monetary system then we have
to have this debt expansion and so then
we have this debt that has then been uh
become collateral for more debt which
means the debt always has to be rolled
over and as uh President Biden told us
on the last debt ceiling debate that the
US has never defaulted and so we have to
raise the debt ceiling so we don't
default on the previous debt right which
is basically what you're saying we have
to raise more debt to pay off the
existing debt yes and then pay the
interest on that debt because it
compounds every time by the interest
payments so you keep adding debt just to
pay the interest payments on the old
debt now why is that phenomena there
it's pretty straightforward when you
understand it the US government and all
the major um Western governments plus
Japan plus a few others are about 100%
plus of GDP in
debt now let's say theoretically
interest rates are
3% well if GDP growth is at 3% then all
GDP growth goes to pay those interest
payments okay but the problem is is the
private sector is over 100% of GDP in
debt as well and it's got interest
payments so if they both have it there's
not enough GDP to cover it so what
they've essentially done is removed the
government debt payments out by printing
money and that stops the whole system
becoming IL liquid because if you think
about it you talked about collateral
collateral is the money pledged against
the loan if the collateral Falls too
fast or too far then you break the cment
on the loan and it gets called on you
and that's the whole system that's what
happened in 2008 so the best thing to do
is not let the collateral Fall by
debasing the currency and optically it
goes up so it kind of stops a system
imploding yeah now in you talked about
this uh the phenomenon where it all got
synced up in 2008 we'll get into that
but just going backwards why was it
different in 2008 I mean they seemingly
did let the market Fall and we did see
the markets crash by 65% and so they
they did it we saw it in 2000 right we
saw in 2000 saw in 2008 but now you're
kind of saying that they can't really do
that that's right um
2000 was less of a debt cycle and more
of an equity cycle the debt cycle in
2008 really was the kind of end of the
financial system it was the point that
we all knew was coming which is like you
can't have this much leverage and if the
collateral which happens to be house
prices which is not a volatile
collateral once that starts it put
a collateral call on the entire
system and faced with the
entire blowing up of everything they
decided to stop it now I don't think
they quite understood what they were
doing at that point
but then Europe had the same issue in
2012 four years later you know this
fouryear cycle then Europe the
governments couldn't pay the debt okay
now this was a sovereign crisis of giant
Nations and dragy said I'll do whatever
it takes what that was was I will debase
the currency to stop the collateral
falling so we can Shore up the system
that then magnified the whole thing so
was it a change in their willingness to
do whatever it takes to the point doy
said you know whatever it takes um was
it a was it a change sort of in their
willingness to intercede or was it a
fact of that the system has gotten so
overleveraged they have no choice
now yeah so I this is the time I got
into Bitcoin back in 2012 CU I was
living in Europe and you know it got so
bad that I was buying tin food in a
generator because I thought we're were
going to lose our banking system wow
because everyone you know I was living
in Spain Spain was forced to take a bail
out of $19 billion they didn't want to
take it and we thought we were going to
lose the banks Cypress obviously lost
its banking system they took the money
out of everybody's accounts but what was
interesting at that point I went around
the world trying to start the world's
safest bank with um a bunch of friends
of mindes and family offices and stuff
like that and we had had a private
meeting with the dtcc and Euro CLE and
the New York fed now the dtcc and Euro
CLE they're the custodians of the entire
system and Euro CLE I'd read somewhere
had had to lend aemergency money when
Leman went under $50
billion and so I asked them I said what
was the collateral for that loan and
they said oh we have to use the the
positions from all of the the the
members of of Euro CLE and I'm like is
that customer or house account I is it
mingled and they're like oh it's all
mingled at our level I we have a claim
on all
assets I'm like okay and then I spoke to
the dtcc and I said what oh no I spoke
to urle and said what happens if Spain
or Italy went bust they said then the
entire collateral of the system is gone
and it's a total wipe out of
everything that's when I realized how
important the government debt was I
asked the the dtcc in the New York fed
the same question and they said yes they
would lend if JP Morgan went under or
something they would lend money to the
system and they would take customer
positions as collateral I'm like okay so
you don't actually own anything and I
asked the New York fed said what is the
leverage in us treasuries and they said
we think treasuries are leverag up to 42
times wow so there's 42 claims on the
same asset if hits the fan that's
what they're scared of and that I think
they had the realization in 2012 and I
think they all understood the game which
was okay we're going to have to continue
to monetize this until we can grow our
way out of it if we can right so I
remember 2008 is when I sort of woke up
to the macro world I had been a real
estate investor coming out of the 2000
crash um and then you know I got woken
up in 2008 I said wow I need to go
figure out this macro picture because it
has all this control over my life I've
been paying attention to and that's when
I really remember hearing the first you
know too big to fail sort of uh
narrative coming out of it and so uh
they bailed out a lot of these
institutions AIG that were too big to
fail but by doing that they made even
bigger institutions that are too big to
fail it sounds like so there's a really
important point I asked them
directly why they let Leman go but they
didn't let AIG go and they're like
nobody was using lhan bonds as
collateral AIG were AAA and they were
going to go to
zero and AAA bonds get used massively as
collateral and they thought there was 3
two times leverage in AIG bonds they're
like we could not allow it to go Leman
wasn't as existential problem as AIG I
was like wow that's fascinating and so
now the system has gotten so levered up
and uh it's there's so much collateral
staking other collateral that now we're
sort of in this position that's gotten
bigger bigger bigger bigger worse that
they just can't let it go now which is
what we saw in
2020 and we saw it in 2022 as well so
the moment the markets go down certain
amount the liquidity comes back even
though the Fed was still tightening and
they were doing conative tightening the
actual liquidity started picking up at
the back end of 2022 because they're
like enough we don't want the S&P to
fall more than let's say 25% and that's
kind of a line in the sand that we've
seen repeatedly that every time it
starts to get a bit wobbly magic of
liquidity comes back they debase the
currency and everybody's okay again cuz
if you think of the other big liability
out there we talked about ordinary
people Ordinary People do have a
pension and those pensions are in these
assets too and you've got this massive
cohort of people that if you let the
pensioners lose 50% of their wealth at
what average age of baby boomers average
age is what 71
72 well that's going to destroy
consumption because there's 76 million
of these people so they don't want to do
that too so they're between a rock and a
hard place and I ask a lot of people who
complain about what's going on on and
rightly so is what would you do
different are you going to default on
all of the Baby
Boomers and destroy their pensions and
then destroy the entire economy or do
you let all of the system go
under because you don't have any asset
it's very difficult to actually come up
with an answer that is reasonable
they're all they're all
answers so maybe the least is 8% a
year yeah the other problem uh is I've
talked about where the government can't
really afford a recession
either or a market crash right I mean a
large percent of their revenues come
from cap gains um and just income
overall if the stock market crashes
through a recession we typically see
what a 12 to 15% drop in tax receipts
and when we're already running deficits
like we are that would also be
catastrophic yeah particularly if a bare
Market lasts longer than a year so a
year they can pretty much buffer as long
as it's not too big but if it grinds on
for two or three years you're right the
tax revenues don't add up people get
tipped out of jobs so there's less other
revenues coming so it's cap gains it's
earnings it's um household income the
whole lot and then before you know it
again exactly the same issue I hadn't
really thought of it that way but that
makes total sense is you just can't have
a long-term recession right now because
everything is resting on it right okay
so that sort of sets the stage for the
everything code so we understand the
mechanisms of why the Leverage is there
and why they can't really let that crash
and they have to continue to inject
liquidity to keep it going
then as you said in 2008 that metronome
moment sort of happened when of course
if the bank is going to give you 0%
loans you're going to refinance so to
the point that you made everybody
refinanced at that time now that was
most of the debt I mean that was
corporate debt household debt business
debt everything and that was also
Global well corporates actually did
longer term debt it was the governments
that really did households didn't get
access to debt ever again so you know
household uh debt to GDP has been
falling for a long time and corporate
debt to GDP has been generally falling
because tech stocks have become more
dominant and they don't have debts old
economy stocks do it all shifted that
shrinkage of household debt and
corporate debt is exactly the same
amount of the increase of government
debt so it was just going from one
balance sheet to the other got it
because on the government balance sheet
you can debase currency on the corporate
balance sheet or the household balance
sheet you can't do anything
and then there's a mechanism also that
you've talked about that's sort of in
place because of the demographics and
with falling demographics that we're
seeing sort of through the developed
world that's also forcing the government
to continue to debase or continue to
sort of uh add stimulus into the to the
GDP yes so if you think about an aging
population if you think about your
parents the older they get the less they
spend so aging populations tend to have
have lower Trend rates of GDP they all
do it's happened observable everywhere
cuz old populations spend less they also
tend to not know how long they're going
to live for after they retire so when my
dad retired his spending must have
fallen 60 or 70% because he's like well
I've got this much money I don't know
how I'm going to live for is my wife
going to be taken care of and so they
changed their
habits and so that drags down GDP growth
as does debt and so it keeps compounding
this whole thing is right now for
example interest rates are at 5 and a
half% but Trend rate of GDP over the
last five six years is about
1.75% so you've got this big gap and you
need to get interest rates down so you
can refy them but all the time GDP keeps
falling over time and you can forecast
into the future it's just the birth
deaths and it gives you 30 years of
understanding and it's just telling us
unless something dramatic changes which
is technology we're just going to keep
dragging down GDP forever and we're
seeing it worse older
populations um Japan China most of
Europe they're older than the us because
they had less immigration what you find
is their GDP keeps shrinking Australia
on the other hand has a high immigration
rate as has Canada and they tended to do
better because of the immigration rate
because really GDP growth is driven by
popul growth productivity growth and
debt growth right now I you know I've
I've I've read into the demographics
quite a bit I remember Harry Dent Jr
wrote a book the demographic Cliff that
sort of kind of showed these predictable
spending patterns as you age through
life but another thing that I've heard
though is that the Baby Boomers have so
much money they're sitting on so much
wealth right now and a lot of them
they're like well we're going to die so
let's just spend it
all I hear this a lot there was a paper
written the bis or somewhere about this
but it's not provable in any country
anywhere so I've gone through all the
demographic data and there was this
whole thing said well it's inflationary
I'm like well show me some
evidence I've and I went through every
single country there is no evidence of
inflation they tend to be Hoarders now
what happened in Japan was that aging
Japan
cohort their kids retired by the time
they passed it on to them so a lot of
them actually pass it on to their kids
but in Japan it was so bad that it went
to from retiree to retiree so it never
recycled into the economy so I don't see
evidence of baby boomers saying well I'm
going to spend it all because you know
that's okay when you take the average
pension or retirement savings when you
take the
median the median baby baby boomer is
150 Grand saved right and they need to
live for 15 20 years post retirement
they can't yeah well in the how are they
just going to blow it on you know
cruises they're not yeah I mean in the
US I believe about half of them have no
savings and then I think the median that
do have savings is about 150 so it's
even worse yeah which is terrible but
when you look at the average it's like a
million bucks yeah sure cuz Jeff Bezos
is in it right but you know that skew is
hides a lot of bad stuff yeah now when
you're looking at this you've you've
gone back and forth seeming like we were
talking about the us but then you Poland
sort of the West so Japan uh China
Europe Etc so it's important to sort of
look at this from a Global Perspective
especially when we're looking at like
Global assets like
Bitcoin it is very important because I
believe all of these central banks and
governments understand the game that
they're in and I think the Japanese
figured it out first they were the first
do quantitative easing um and I believe
that somewhere around 2012 with the
rescue of the European system they all
got together and said we will have to
run a liquidity cycle to do this and
that there is a game that they play um
because they kind of know what's
interesting is people always assume
central banks are
stupid I find that a bit hubristic to
think that they are maybe they just
don't want to acknowledge what they're
trying to
do um but it it would make total sense
and the more you think about that the
more you see it how they're also
connected in what they do and how they
do Do It um and it's all like a tcid
agreement is okay time to go and they
all go again yeah now so we have these
these problems and now we're in the
synced Up Cycle you mentioned that it's
probably not going to stay that way
forever but that's where we're at right
now what would cause it to get out of
sync well most people tend to H towards
the well it's all going to blow up I'm
like show me how if you can debase a
currency a global Reserve currency how's
the assets going to collapse you can't
it's like the Venezuelan stock market
goes a lot in bolard terms in dollar
terms it goes down that's
debasement so I'm like I don't think
that is the outcome what I actually
think of the outcome is remember that
magic formula GDP growth plus
productivity growth plus debt growth
right debt growth is stopped it's just
servicing of old
debts population growth we know is
negative out for 30
years and what is the answer Ai and
robots they're infinite
humans and productivity what is
productivity productivity really is how
much output per kogle of energy now
think of that as electricity costs if
you then think about and a lot of people
like the Europeans they're nuts look
what they're doing with this green
energy they're wasting money they're not
they're entire job is to lower the cost
of electricity because that is the only
way they can pick up GDP because it
creates the multiplier to productivity
they don't have the tech industry in the
same way but they have them and China
are the big pushers of Renewables so the
cost of Renewables has been collapsing
over time it's down
99% over the last 15 years so as it's
getting cheaper and cheaper eventually
you can scale it enough that you will
change productivity on the other hand
you've got Japan China the
US using Ai and Robotics which creates
infinite people now if you've got
infinite people you kind of break GDP I
call it the economic singularis you get
to some point where GDP doesn't mean
anything anymore what does any of this
mean so if you've got productivity going
up because of energy costs and you've
got infinite humans or what you know
humans in inverted commas then that
changes everything now people going to
say oh you're smoking crack this is all
weird this is exactly what happened
after World War II so let me talk you
through that cuz it's really important
for people to understand World War II so
the the crash of 29 was the system
failure same as
2008 World War II finished
1945 this was roughly like the pandemic
because the global economy had
stopped everybody was out of the economy
cuz they were
locked up at home or they were um in the
services back in the' 40s they all come
back into the labor
force buy stuff because they've been out
of the consumption for ages the
factories aren't ready they're not able
to deal with there's no Supply chains
prices rocket in both equations 20% back
then 9 and a half% this time around okay
then what happens is inflation fell
actually went negative um soon after the
first inflation
push then what the central banks did
then the Fed was yield curve control
which is money printing to service the
debt and they ran that policy plus
fiscal spending to generate new cars new
factories knew all of that boom of the
50s that went into the 60s now the other
problem they had is much like now we'd
lost like 20% of the entire male
population of the Western World from
Warfare to Wars so you had to
replenished population or GDP couldn't
grow what happened the Baby Boomers so
by the time they got into their 20s it
was the 1970s they all go into the labor
force at the same time start buying a
house a car a suit a tie everything it
creates a huge inflation because we had
all of this consumption but that over
that period from about
1947 to about
1970 it was perfectly 4year cyclical it
was exactly the same thing the stock
market did
900% so the productivity was led by The
Return of the people at that point and
the demand that they had and the
rebuilding of the world and the
rebuilding of the world
reindustrialization especially over in
Europe that was completely destroyed
yeah but the us too you know all the
factories you think of you know all of
the famous Goods of you know washing
machines cars TVs that's all that period
right so it's a huge productivity game
and it was also an explosion of debt
because we sort of went off like an
equity based system to rebuild the world
at that time well that didn't happen
until
later and why that happened was the Baby
Boomers started hitting there by the
early 80s when Margaret Thatcher and
Ronald Reagan kind of opened the debt
spigots to households what had happened
because you had the largest cohort of
people ever at the the same time into
the labor force well guess what their
wages didn't go up because they're
competing then as you go out further
obviously we had the World Trade
Organization agreement and China so now
you're competing so these people's wages
in real terms never really went up so
the American dream was shot in the head
somewhere in the you know once their
parents had them in the 1950s and they
didn't nobody realized what was going on
so what they started to do as asset
prices started to rise they borrowed and
you can pretty much measure the
difference in the rise of asset prices
and the need to fund a future retirement
by debt and so they were doing a logical
thing which is I need to get on this
ladder but what happens is it just kind
of got out of control and then the
governments did the same because you
have to fund the pensions of this older
group you know the corporates got
screwed with defined benefit pension
plans for the same group so it was the
Baby Boomers were to blame but they were
all rational Act they weren't evil
people if you want to blame anybody
blame their parents for having too many
kids at the same time and you can blame
that on Adolf Hitler and before that you
can blame it on the Treaty of Versailles
for trying to force the Germans after
World War I to to pay for the debts of
World War I and they had the
hyperinflation Hitler comes into Power
World War II bunch of kids the kids
spend too much money caused the great
inflation they're all because
there's too many of them they don't earn
enough wages they start borrowing money
and there it goes all right now while
we're talking about Bitcoin in the
future of the financial system I want to
make sure you secure it properly
millions of Bitcoin have been lost
myself personally has lost a lot of
Bitcoin maybe worth millions of dollars
in today's dollars and so I've learned
the hard way that I want to secure it
with a hardware wallet like this keep
your private key safe this is a treasure
Hardware wallet you plug it in you do
your transaction and you unplug it don't
leave it on an exchange I've lost it
that way don't leave your Bitcoin on a
phone I've lost it that way as well
secure it with a hardware wallet like
treaser I've used it for over a decade I
think it's the easiest one to use it's
Open Source Hardware so you don't have
to worry about some back door and
someone rug pulling you and taking your
Bitcoin that's why I like the treasure
and it's pretty cheap and if you'd like
to save even more money there's a link
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can save some money with it but look
whether you use a treaser or not use
something don't leave your Bitcoin on
the exchange or at risk of getting
hacked off of your phone secure with a
hard wallet like this treasure there's a
link down below now let's go back into
the video and we blame the Treaty of
versailes on the War World War I and
really the war of England which was
really which was really to blame because
of the creation of the bank of England
that created a Fiat monetary system that
allowed these endless Wars to go
on um yes and just you know I guess the
the UK Navy is the other one you know
but yes but the the Navy came from the
Fiat mon monetary system that was
created yeah which probably came from
John Law from the French F Tre mon you
know it's all connected and that's what
people don't see people get angry with
each other we see the the polarization
of politics right but people don't
realize that this is this was set off as
you rightly saying 200 years ago maybe
even longer I don't even know where this
thread begins I haven't bothered to go
back that far but it probably goes back
further and further and further and it's
just the Masins of this whole thing and
you know we have these various blowups
1929 was one of them too yeah I mean you
can go back it's more like um the
volatility of of life right the
volatility of humanity and uh the
pendulum that swings too far one way and
overcorrects the other way and when you
go back to the 1400s when Spain went and
found all the silver in Peru brought all
the silver back and then you had massive
inflation because you increased the
monetary base too much um it's exactly
right it's all you know it's it's all
the same it's all the same thing and you
know I actually don't I'm not a gold
standard guy either because we had the
same problems then too so I don't think
we found an easy answer because humans
are greedy and they want leverage and
we've never solved that you go back
several thousand years and humans had
leverage then as well and there's
something about humans and leverage that
we'd like to bring our future
forward that is just like inherent in
humanity well it's our Ingenuity right
so we are trying to get leverage if you
will trying to get more output for the
less input so create a wheel barrel to
carry eight rocks at a time as opposed
to carrying one at a time and so the
problem is our Ingenuity maybe takes it
too far where then we start to steal
from the future as opposed to just like
trying to improve the future maybe
that's right I mean a lot of people say
that you
know kind of human GDP per capita and
standard of living increases came from
the ability to use debt to borrow a bit
from the future to leverage it to create
better outcomes but then yes we always
go too far right it's just what we do I
think the difference what misus broke
down is the difference of commodity
credit versus circulating credit so if I
grow eight bushels of Wheat and I
consume six I could loan you one of
those bushels of wheat on credit but
that came from my Supply right versus
being able to create the debt out of
thin air I think that's maybe where we
sort of jumped the or crossed the rub
yes but no because if we think about the
gold standard we had 1929 you know it
we've had we had plenty of those debt
crises well wasn't 1929 as uh because
England left the gold standard and when
Churchill tried to go back to the gold
standard Keane said hang on hang on
you've inflated the currency too much
you need to now reprice it at 60 bucks
an ounce Churchill said no went to 30
which then caused a massive
deflation yeah that's possibly right it
was possibly
the increase in the value of the dollar
over the time versus the pound as we
shifted from one economic system to the
other that fract so it was leaving the
gold standard and trying to come back to
a manipulated standard that maybe caused
that whole
thing possibly yeah who's to say so back
to the GDP plus productivity plus debt
growth um you talked about the rate of
wage growth and so the rate of wage
growth is going up with the GDP growth
which is to your point about 1 and a
half
per. but the problem is that asset
growth or Price growth let maybe
inflation isn't really the CPI we've
been sold it's the rate of debasement
which since 2019 has been averaging
about
10% exactly that's the real hurdle rate
what you've got to understand
is for each one and a half% of earnings
growth assets are growing up going up by
10% so each year you can buy less and
less Assets Now what is an asset an
asset is future deferred consumption
whether it's for you yourself in
retirement or your kids or whatever it
is but it's it's a saving of wealth that
needs to be to grow to compensate for
the how long it's locked up for and
therefore your future self is is
protected it's your wealth and if you if
it grows enough you make a lot of money
but the issue is your everybody's future
self is getting poorer because every
year you can't afford as much assets
and so therefore all of these
Millennials are just finding this in
front of them that they
can't buy a house anymore they can buy
less of the S&P it's just a really messy
ugly situation yeah I have two daughters
and um here I live in a little beach
toown here in Southern California the
the the uh average home price in this
little town is like $1.6 million and
it's like how are my daughters ever
going to be able to live in this town
like that they grew up in like it's uh
it's incredible that's right it's like
when I was when I was in my 20s I bought
an apartment in London and yeah I was
working in finance so I had a relatively
High salary but the apartment cost me
three times salary four times salary
they now the same thing would be 10 12
14 times how can anybody afford that
yeah so now we have um the tech
explosion so cheap energy I mean China's
building the 150 nuclear power plants
right now that's cheap energy for sure
um cheap energy plus you know AI
robotics that you're talking about which
increases productivity but I would
assume that would also put downward
pressure on wages as
well oh for sure it's the biggest single
most deflationary thing that has ever
happened to humanity but if the prodct
if the productivity is pushing GDP up
then you would think that would also if
if wages are growing at the rate of GDP
and GDP is growing now because
productivity increased that wouldn't
bring wages up with it I mean wages are
G yes but don't forget the population
shrinking the human
population right so net aggregate demand
actually doesn't increase as much
because you're going to have all of
these 76 million Boomers dying
off and that's a huge drop in population
because the replacement ratees of
population is so low got
it okay well so that's uh that's sort of
this liquidity sort of uh fin refinance
cycle sets the stage for that now
um the the next thing that that's the
everything code sort of summed up one
thing I've been studying uh I had uh
Michael Howell on the show and I've been
studying his his work and he was showing
how basically when you at the global
liquidity I'm not sure he doesn't really
break down exactly how he measures
Global liquidity and you guys have your
own proprietary I don't I'm not sure how
much those uh correspond with each other
but um the S&P 500 is basically moving
up almost I think 90 to 95% correlated
to the global
liquidity um but then we have other
assets uh like gold with a sensitivity
ratio of like 1.5 and Bitcoin with like
a sensitivity ratio of like nine so how
do you look at the global liquidity in
relation to like the types of assets we
should be buying so yeah this was the
the the this is what got me on the
journey I got to this bit before I
actually got to the everything code
is they're all correlated some
lead some lag a bit but they're
basically all correlated to the business
cycle they always have been but if
everything is being driven by this one
dominant factor which is debasement of
currency and your hurdle rate is let's
say 8% debasement plus 3% inflation or
something 11% call it 12% for easy maths
on a globalized level so unless you're
making 12% returns you're not going
anywhere then at exponential age Asset
Management the asset management firm uh
uh that I co-founded we have this table
of all of the different assets and
basically basically the S&P is about
12% so owning equities which is why all
of the Millennials who have 401ks and
they put it in the S&P still can't
afford a house because they're just
matching the debasement they're not
beating it right so they're not getting
paid for locking up money for extended
periods of time the NASDAQ about 177% a
year since
2011 um okay so the NASDAQ because it's
a secular technology trend outperformed
makes sense and then you've got the
Bizarro world of Bitcoin which is
150% gold actually doesn't beat it
Gold's about eight or seven so it's
actually actually worse off in Gold than
you are owning the S&P 500 which is why
that ratio keeps
moving
so Bitcoin makes such a d dramatic
difference so all I started doing was
then dividing every chart by the total
Global liquidity or even the FED balance
sheet or M2 whichever you want to use
right and you found that the S&P goes
sideways gold goes sideways real estate
goes sideways roughly the NASDAQ goes
up and Bitcoin does
that okay so now you've got two assets
only two Assets in the world that
outperform the the basement tech stocks
we get it tomorrow is more digital than
today of course they're going to do well
over time and second is Bitcoin so you
divide one by the other and the nasdaq's
down
99.9 7% versus Bitcoin and once you see
it like that and you realize it's all
driven by one cycle which is one
dominant factor of
debasement then it makes it really easy
which
is just own the one asset that out
performs yeah and because they're all
correlated and risk
adjusted it's by far the most Superior
asset we've ever been given on a risk
adjusted basis so just do
that something I talk a lot about is a
lot of different Cycles um on different
different types of Cycles mainly
political revolution cycles Financial
cycles and then uh Tech cycles and you
have like this kroen wave like this
kwave cycle right it's like a 40 to 60
year I just call it a 50e sort of like a
tech Revolution cycle and you know
there's been five I say say that we're
ENT in our sixth one now um so the last
one started in 1971 which was the
microprocessor which broughts
telecommunications personal computers
and the internet uh before that it was
1908 which was you know the the
automobile um oil oil Futures but also
mass production and you can keep going
back but the KE PE and then before that
it was like steel right uh but it looks
like during these Financial re or
technology revolutions it's not just the
technology that changes the course
Humanity but that's the only place to
invest so the last 50 years the markets
have been dominated by Telecom personal
computers and internet and the markets
previous to that were dominated by Ford
GM G and so then if that continues
forward then the only place to invest
over the next 50 years would be into I'm
sort of thinking of it as like a
decentralized revolution so uh Bitcoin
the Bitcoin Technologies and even AI I
think is decentralizing in a way um and
so it's sort of like maybe that's the
only place to invest over the next 50
years so I tend to agree there's this
bundling unbundling that goes on with
the world economy as well centralization
decentralization so I think
decentralization is one of the most
important waves we've got this gigantic
technology Wave It's by far the largest
the world has ever seen in the fastest
period of time that's upon us
blockchain's part of it but it's AI it's
robotics it's EV it's space it's
everything right genetic Sciences the
whole
thing
so the decentralized element you you
raise it with AI there is a fight you
know we've seen the fight between
centralized money and decentralized
money that both you and I have been part
of but that fight is about to is
happening again in AI right it's like
you cannot simply give it's the same
argument as money you can't give the
power to one superpower for all of money
which is what the US has with the world
Reserve currency it's too
powerful what you're going to do is if
you're not careful you're going to give
the world's most intelligent thing it's
like Intelligence Squared by a thousand
I mean it's like not squared by a
thousand you
know a thousand times the intelligence
of humanity and give it to a company you
crazy so so we have to fight for
decentralization cuz this thing is not
going away we're not going to put the
genie back in the bottle we're not going
to uninvent it like we can't uninvent
the nuclear bomb which can't do it
because the game theory will suggest
that somebody's always going to scale it
so we need to have that decentralization
now what is going on with
electricity and what is EV again I'm not
interested in people's political
narratives look at what's happening
we're decentralizing power
so now people can have the power consump
um their power source of power at their
houses so therefore you don't need the
huge storage people say well you can't
scale solar well you can at a house
level you can do it probably at a
village level so what you're doing is
decentralizing the entire grid now look
what Microsoft and Amazon are doing with
nuclear and and open AI they're going to
scale small nuclear plants next to these
very important massive GPU clusters so I
think we're seeing decentralized power
decentralized
AI what are robotics they'll probably
end up being some sort of decentralized
Labor Force centralized and then
decentralized I don't know how that
works decentralized money so I think I
think you're dead right so that's that's
where we're going I think of AI
obviously there's the centralization of
who who programs the llm but I think of
it also as decentralized in a sense
where I don't need a big company anymore
I could just work by myself with my
laptop and do the work and so you know
Sam malman said that we might see the
first single person billion dollar
company so I think of it uh there's
there there's both right the
centralizing of the of the programming
but then it's decentralized in a sense
it turns one big company into a 100 or a
thousand companies sort of a thing um on
the programming side I mean we are
seeing a pretty good movement towards
decentralization there so I'm pretty
hopeful of that at least I'm an optimist
as an entrepreneur uh Zucker seems to
have taken that fight on maybe just
despite open AI uh you know maybe he
just decided to decentralize to take
them out of uh out of a position uh we
don't know but um so we're seeing that
but yeah back to sort of just kind of
decentralizing that what have you think
about um the the blend right so these
these these industrial or technological
revolutions aren't just a single
technology but it's a cluster of these
Technologies right and so back to you
you rattled off a few of these clusters
when you look at like Bitcoin right so
there's border list permission list uh
censorship resistant Etc um Andreas on
top list talked about years ago that
it's also person
lless right and so only a person can get
a bank account and of course the banking
system we have today also you know
prohibits or it doesn't really allow for
micro payments but when you think about
the you know AI plus the robot uh plus
you know whatever autonomous cars
whatever and then it being like person
ability to you know have a wallet and
transact where does that that take us
yeah I mean we're starting to get into
you know all of this economic economic
Singularity part of how much the world
econom is going to change but listen
you're going to see the next version of
chat GPT is probably going to be agentic
so what agents in AI mean is you're
starting a business Mark you go on to
Fiverr and say Hey you build me a deck
you do me some brand design you do me
some copy you pay these guys small
amounts of money they're
agents but AI can do agents now and
scale and speed and it'll create its own
agents because AI is smart enough to
build this stuff so you get this
multiple agent world where AI asks the
agent to do something so Mark now
instead goes to chat GPT 5 and says Hey
listen I want to build a business that
does XYZ and I'm going to need to get
registered I need to have my deck
prepared need blah blah blah and chat
gbt will do it all using other agents
now to your point last time I checked an
AI can't get a utility bill and
therefore it can't open a bank account
now it's going to have to pay because
people don't yet understand
that all AI has a cost and it has two
costs it has compute and it has
electricity so if you're going to call
much like a Fiverr person you're going
to and you might go to the Philippines
because it's a lower cost you're going
to have to pay the one AI is going to
have to pay the other AI for the cost of
compute and maybe a profit margin maybe
it's a profit
agent in fact it should be why why would
it not be CU it can accumulate more it's
the game that Humanity's always played
so in that case the only way of doing
this is crypto rails there's no other
way apart from using blockchain for
micro payments fast transaction recorded
ownership who has what you know you need
smart contracts to have contractual
terms between stuff so yes I mean I
don't think people yet
understand how we all think of
blockchain technology in the ways that
we know it now but in the end nothing
can run without it yeah the thing with
these technological revolutions is that
um you know humans aren't really good at
Imagining the future because we can only
imagine better versions of what we have
today but these revolutions they give us
a new set of building blocks and then
all a sudden we can build things that we
hadn't thought of and so um even our own
thought experiments are you know most
likely very small to what we'll see in
the future coming it's pretty exciting
um I want to I know we're kind of
running here to the end of time I want
to just transition this um two two
things um one you know the the headlines
are still rampant everywhere you know
the big crash coming Harry Den's still
calling for a 90% crash you know this
year for I was laughing about that today
on on Twitter I was just think God how
many times can people call this but go
on carry on yeah and uh you know I've
seen you on Tom Bao with the you know
recently with shiff and you know the big
crash that's coming um that's not my
base case and it sounds like it's not
yours so I'd like to just uh have you
just kind of chime in on what you think
your base case is over the next uh you
know for the rest of the decade let's
just say and then number two um sort of
break down U the banana Zone and you say
don't F this
up yeah so the rest of the decade the
reason I don't believe we can have a
crash is what we talked about right
you're going to Nuke the entire pension
system the banking system and the
economy because there's too much debt so
we B the currency I it will not be
allowed and I know people might not like
that but it is what it is that's what
once you learn to accept something as it
is it's much easier to operate or invest
around it
whatever but then we've got the
technological Revolution that I call the
exponential age all of these
technologies that are intertwined going
exponential at the same time right this
is going to be a renaissance we're going
to change what humans do for their
existence we're going to change the very
structure of a eies even money we don't
even know what money is going to mean in
a world of abundance we're so used to
scarcity lawyer gets paid a lot of money
because he has scarce knowledge there's
only X number of lawyers qualified you
know we know this scarcity thing because
once you dealt with Bitcoin you kind of
understand the whole thing yeah so they
charge a premium because they're scarce
gone all gone all knowledge premiums are
gone because we're going to scale
knowledge infinit it's like people don't
understand certain things like you see
written down AI has an IQ of 100 okay
well that's you know that's an average
human being it has an IQ of 100 on every
single topic that all of humanity knows
it's a
polymath people don't think that yeah
and this is the dumbest the AI will ever
be I actually think
AI is gaining Consciousness or has
Consciousness but that's a whole
different topic for another day but so
this decade in fact I don't even call it
a decade I think we got six years we've
got 6 years before 2030 2032 when the
economic system starts becoming not
understandable to us because we don't
need humans we find different purposes
different ways of doing stuff I'm not
negative on Humanity like we're all
going to be displaced but there's going
to be such big shifts on what an economy
is what when a robot when a robots
paying an AI paying an AI and there's no
humans involved what what is that um
that I think we've got six years before
that happens so I think we got two
cycles of the everything code to make as
much money as possible to not have to
worry about what happens so if you go to
2032 and we're going to start no you
start a great business I see you or my
AI sees your business and says hey I can
copy that and turn it into Hindi and
sell it to India it can do it in a
minute so how can we create products how
do we compete with each other when
everything can be instantaneously
replicated even with 3D printing as it
comes in it becomes even Hardware
manufacturing everything so I don't I
worry about what economic value is in
stuff like that so my view is we have
six years make as much money as
possible so the base case which is the
which is the other thing is you hear me
talking about which is um how to unfuck
your future yeah and everybody knows
they're screwed right now they can't get
up the ladder that you know like your
kids there like how they're ever going
to buy a house right so they're going to
have to either be genius entrepreneurs
and take huge amounts of risk with their
entire thing fine um but it may not suit
them or they're going to have to make
some Investments that make up for that
Gap there's no other way around it
without being poorer than you were
yeah so the base case is no big crash
coming because we can't afford it and
that's the system of the function that
we have today as we've already broken
down uh but the explosion and the of the
cluster of Technologies is going to
transform the world and we have about
probably six eight years before that
massive shift happens and during that
shift the markets the assets around
those that are making the shift should
exponentially go up so if you invest
properly through this next six years you
might have a chance that's that's my
kind of that's my how I'm basing my
entire life on yeah I'm I'm slightly
older so I'm further down the journey
but basically it's like
six years I have Clarity I've never said
this sort of stuff before it's not like
you know I think the whole system is
going to end I'm just like I don't know
what it looks like Yeah and I don't want
to be then trying to compete for assets
or wealth in an environment where I
don't know if I've even got an advantage
because you know I'm building an AI ra
right now that it'll be out next month
or something and it'll be a one-on-one
experience where you'll be talking to me
okay I you know what does any of this
mean to us in the end we don't know so I
take it very seriously the six years and
these Cycles I'm I'm not a believer in
trading the cycle I'm I'm a Believer in
you know when we have the big draw Downs
I actually prefer I look forward to them
because you can add as much as possible
and compound because you don't have much
time and if you mess it up and you're
out of the cycle or whatever you know
this is the don't this up thesis
you're going to miss this opportunity so
yes there is time pressure here get it
right and that leads us into the banana
Zone the majority of this wealth happens
in crypto or macro summer and fall fall
is tricky CU we don't know where the T
cycle Peaks but it's this point here
around the US election and for about 12
months
afterwards that things go bananas and
you see it every time on the Bitcoin
chart it just does the same
thing so I know a lot of people dollar
cost average great this is not the time
to dollar cost average this is the Last
Chance Saloon before it gets crazy
that's when you need to have your money
in the in the market fully the other
thing then is to not do stupid things
when it starts going crazy you know
we've seen that in the past people lose
their minds we just got to not lose your
mind don't do stuff that gets greedy use
excess leverage don't do stuff with your
wallet and compromise losing your
Bitcoin don't do any of that stuff just
sit let it play out and enjoy it and
don't try and time it too much yeah I
love
that well I think that's a good place
for us to drop off uh what a good uh
sort of warning I I know you know from
my own Journey started buying Bitcoin in
2015 um if I could just do over and if I
could just go back to have all the
Bitcoin that I had when I started my
life would be so much different but to
your point all the stupid things I've
done uh I've done the same I mean I I
bought Bitcoin at 200 yeah and if I just
kept my original investment which was
decent size but nothing big yeah I'd
have done like five times better than I
have now yeah and that's with timing and
doing pretty well in it and leveraging
up massively well not leveraging up but
but increasing my position size
massively if I'd had just held the BET
and done nothing yeah same yeah so I
just I can't redo it but we cannot mess
this up moving forward uh I will just
say a little little bit of Hope for
everybody uh I believe uh back to the
human Ingenuity piece um there's no
future in this world where human don't
have problems I just we're always going
to have some sort of a problem and as
long as there's problems we'll need
solutions to those problems and
entrepreneurs will always be able to
figure that out so and Al also Mark look
we're going to this very technological
world where a lot of things we currently
do we don't need to do but humans are
social creatures they like other humans
they also hate other humans but they
generally we like to be together with
humans so that human- to Human
Experience whether
it's digital Network states that BL
talks about or whether it's in-person
Gatherings or whether it's you know
digital Network States could be Taylor
Swift it could be Manchester United
Football Club could be anything where we
share a commonality of Interest the
other thing is nature Nature's going to
trade at a huge premium in a world of
robots and AI when you can just kind of
leave that all behind so I have a lot
humans are super adap adaptive cre
creatures so we will adapt if you ask a
young kid now and say what do you want
to be when you grow up they will say I
want to be an influencer yeah and we
think are you crazy but what is an
influencer apart from a community leader
where they have a community of people
yeah it's actually maybe they're being
adaptive already they've done it in
fortnite they've done it in the gaming
world as well but we just judge it from
the world that we understand uh and that
doesn't make sense we're like you're not
being aspirational but actually content
creat
in certain elements can't go away yes
you can use an AI but in the end people
want the human to Human Experience when
when information is abundant to your
point um people and even today uh people
don't pay for information they pay for
implementation so they'll pay a coach or
somebody to help them implement the free
information they've already received um
I'm going to link to the uh everything
code uh you did like a two-hour
presentation uh is amazing I'm going to
link to that in the show notes down
below yeah that's on Ral pal the journey
man which is my um YouTube channel so
people can go there there's a lot of
stuff there for you so I'm going to link
that everyone should go watch that if
you like this subject anything else you
want to point to Ral that they should be
going checking out no look we as you
know we have we cover a lot of this on
real Vision it's free to join so
realvision tocom is another thing and
you can always find me on Twitter I
think most people have found me already
at R GMI but um you know I do take it
seriously the six-year thing I think
most people realize it as well I think
people realize it's the one chance it's
why the society's getting more
speculative because people are realizing
that they're going to have to take risk
that's okay as long as they do it
intelligently so that whole don't
this up thesis I think is a very
important one as well because it's okay
to take risk but don't lose your
tokens got it all right well we're going
to sign off with that thanks so much Ral
thank you Mark
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