The discussion highlights the precarious state of the global financial system, driven by massive debt, misallocated capital, and the potential for a systemic crisis originating from the Japanese Yen carry trade and its ripple effects on global markets, particularly in real estate and fixed income.
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Dario, better known as just Dario on X
and YouTube. Uh, I'm glad we're able to
connect and u, I think timing is
everything and there's so much, you
know, let me let me back up because I
say the same words out of every show and
I got called out on it, but a lot
happening in your respective field and I
want first of all, thank you for coming on.
on.
>> Thanks a lot. And I want to start off. I
want to I want to put the ball on your
court. You know, you're posting a lot
about things. You put out a YouTube uh
uh episode talking about something
specifically, which you know, we'll do
at the end. Encourage everybody to go
follow Dario's YouTube channel. But what
is most on your mind right now in terms
of economic global? What's first thing
that comes to your comes your pops into
your brain?
Woof. Actually, I think I had the so
many things in my mind that uh the the
thoughts in my brain that just just
clashed among each other. But uh no, the
first thing on top of my mind like right
now eventually there are two things. Um
the the first one that everyone it's pretty
pretty
waiting for it are in video results that
are for for you guys like they're in US
is going to it's going to be tomorrow
here in based in Asia. So it's already
like my day here on Wednesday uh after
market close and this is going to be a
pretty big deal. The second pretty
important thing in my mind like right
now is what's happening in in Japan. And
um hilariously it's such an important
thing that
for whatever reason I struggle to to
understand doesn't get enough attention
in in Europe or in US media and so on
despite how important it is for markets.
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a mic.
So, so let's let's let's work our let's
go backwards here. and start with with
the second thing you said because I I
was at the grocery store earlier today
and people that know about my show were
they you know they'll ask me questions
about you know the state of things and
you know the question that people were
asking me Dario was about Epstein and
Trump and I said I'm not not look look
at I want the Epstein list to come out
like everybody else but we've been
through this before here in America
whatever they put out it's going to be a
limited hangout probably be the same
thing that they've been putting out.
They they've put out uh they put out
earlier this year. So, I'm not focusing
on that. And when they asked me, okay,
what are you looking at? I said, well,
ironically, I'm talking to somebody
today about Japan and the carry trade.
And so, people will ask me, what is
that? So, if you don't mind, you know,
providing a top level explaining it to
somebody like they're five years old,
why is Japan so important to you right
now? And why should it be important to
everybody else?
Okay. Um, so Japan,
let me try to explain like a five years
old. Let's see if I can do a good job.
>> And that's for me, Dario. I'm the
5-year-old here, so not my audience. I
would never I don't want to disrespect
my audience. It's for me,
>> right? It's it's it's a good challenge
because usually I I tend to be like too
too technical and complicated, but I
love I love the exercise. So,
Japan um the problem with the current
trade it goes back actually many many
years when Japan was um basically a
rising star economy and um like in the
80s and everyone thought that Japan
would have taken over the world.
So just to give an idea of the level of
inflation and speculation at at that
time there the land upon which the
imperial palace in Tokyo is built was
worth more than the entire land of the
state of California.
So that should give a good idea of the
magnitude of the bubble out there. This
is a real estate example, but it was
going across the board like in um stocks
um like financial institution, banks and
so on.
So when the when this bubble burst, it
was like a colossal damage and
the way that the country decided to move
forward was like virtually speaking not
let anybody fail. Okay,
this is a bit of a counter sense. Okay,
because in that case you should allow
company to fail in the economy to
cleanse. So in order not to allow
anybody to fail so to keep like high
level of unemployment even if it would
have come an incredible with an
incredible economic cost.
They started to
effectively print money and put it in
people's and companies pockets.
But now
you wonder how much money do you need to
print in order to lift things back up. Okay,
Okay,
so these people
have been doing this for over 30 years
with zero results.
And the ultimate explanation for this is
that eventually the money that was
supposed to be printed and stay in Japan
to help Japan recover
ended up being invested in foreign economies
economies
because it's a better investment opportunity.
opportunity.
It's a it's a very basic concept. I know
people can talk about derivatives uh
trades and whatever but the truth is
that you know the
other economists looked more promising
and people in Japan they only saw
despair and they didn't see they saw a
lot of like slack over supply so they
simply like this money started to go
abroad and here there is a very
simple concept like when your currency
is very stable towards another currency
and in this case we have the US dollar. Okay.
Okay.
And there is a big differential in returns
returns
in the economies.
So in Japan interest rates were at zero
but along with interest rates at zero a
lot of things were close to zero like
economic return, corporate returns and
so on like margins very low and whatever.
whatever.
So and on the other side you had you
know everything growing like a three
four five six 7% and whatever it it's a
no-brainer. You take that money and you
invest abroad and you borrow that money,
you invest abroad. You pocket the gap
and you're fine. And this literally went
on for like decades. of course small at
the beginning but like a bigger bigger
and bigger to the point that currently
it is estimated
that well no one knows exactly how much
is the size but it depends whether you
consider outright carry trade or
derivatives involved or whatever we
might talking about something between$2
and 10 trillion dollar
So this is the the scale of of this
carrier trade and why it's important in
particular for
European and especially in the US
is because you don't like it's not like
a Japanese person goes with a bag of
cash takes the plane goes to California,
New York or whatever and buys a buys a
piece of real estate or whatever. Yeah.
In reality, this car trade has been
exploited significantly by foreign banks
and traders.
So you add like investment banks in Wall
Street looking at Japan and say, "Well,
we can borrow so cheaply. Come here, we
do what we do. We spin it around. we
have effectively like free leverage at
no risk on that front
and we can get great returns in uh in
using that.
There's a problem with that and
everything was hunky dory for decades
simply because you know Japan was at the
rock bottom and people were I keep
asking theelves why the bank of Japan is
giving so much money to the economy and
the economy doesn't recover I mean and
no one was asking the question what is
the money really staying there
I mean right plus there are
there is a
little bit higher level of complication
in Japan that because of um you know an
industrial and economic surplus that was
also going on at the same time because
Japan still had um an industrial
structure they were able to accumulate
like foreign reserves. So there was
there was a lot of this confusion that
they were seeing like the Japan economy
not going anywhere but then you look at
the currency surplus and the trade
surplus and accumulation of foreign
reserves and people really couldn't put
these things together.
So to conclude here this things was
perfect for years where everything was
going up elsewhere and not going
anywhere in Japan. Basically
small problem is now like when you are
when you take depth to invest in assets
>> when you take what I'm sorry Dario say
that again when you take
>> when you take depth when you when you
borrow depth to invest in assets
and the value of these assets goes down
while the value of the debt that you
have to repay goes up well then you have
a serious problem and
that in a nutshell
is exactly what's what's happening right now.
now.
>> So, what happened last year? Didn't this
come up last year where it was last
summer, I believe, where they were
talking about the carry trade in Japan?
>> Yeah. Yeah. Yeah. That's that that's a
that's that's a very interesting case
actually because um I I was warning
about that for so long. Um
>> when did you Dar let me interrupt you.
When did you get a sense of what was
going on here? How how long ago?
Oh, I mean I've been writing in Japan
since since I have memory like um
like frankly things started to escalate recently
recently
when the whole structure
upon which the global financial system
is built started to effectively like
turn upside down to a certain extent.
And the reason why it started to turn
upside down is when inflation began to
show up in Japan.
And to give you an idea of how
incredible is that, I mean companies in
Japan producing like groceries like
goods and selling stuff. They have not
been hiking prices for like 40 years or
something. And there is this famous
YouTube video of a company that even
apologized for raising prices. So
inflation started to creep up in Japan.
And what prompted me to see that things
were turning bad and here we we become a
bit complex. Um but I'll um I'll try to
to simplify as much as possible is
actually Turkey. Turkey is like no one
talks about Turkey like zero. I mean I
mean someone talks about Japan. No one
talks about Turkey.
like at all.
But people like don't realize that
Turkey is a G20 company. It is in an
incredible strategic position. Um for a
while was well steel is personally I'm
not a big expert of geopolitics but are
they like US allied Russian allied? I I
you you don't get it very well exactly
what what's going on there.
the Turkish economy was like roaring.
Okay, why it was roaring? Because after
you know US was kind of plateauing,
Europe was kind of plateauing.
Middle East
never really like took coffin and they
have so much money there that they buy
everything themselves. you don't do you
as a foreign investor you don't do anything.
anything.
There was
Turkey and money started to pour into
into Turkey
and and what happened there
it's it's the extreme because inflation
at some point was like almost 100%.
I mean I'm not kidding. Like right now
it's like still
35 40%.
I mean if you look at the I I was
remembering like the US dollar Turkish
LRA exchange rate
was at eight at that time and everyone
was saying oh so undervalued as a
massive like opportunity like go along.
I'm like you guys don't understand
what's happening here and here is a
critical point that I've been talking
about for years that people don't get
it. People were like, "Oh, they're going
to hike interest rates. They deal with
this inflation problem, their currency
will strengthen a lot."
Right now, the dollar Turkish l exchange
So, it's not like at 9 or 10, it's at 42.
42.
So the Turkish lera they basically they
don't have curren anymore like in Turkey
when you go to the airport in uh in
Istanbul or whatever and you want to buy
something the prices are in in euro and dollar
dollar
like if they quote so they they have
like a realtime changes for for the
Turkish leader and stuff that is is
quite incredible.
What is is important about Japan?
What people don't get it still is
when you are in a highly levered system
where the money supply is
is
growing bigger and bigger. The bigger it grows,
grows,
the less control the central bank starts
getting over the various lever that
govern it.
And especially when you have such a huge
amount of debt
and inflation starts creeping up in your economy,
economy,
what happens, right? You start to have
pressure on the front to high rates. And
if you don't I rates like Japan waited
for so long to do it. They waited they
waited beyond the end of the rate Ike
cycle everywhere else in the world to do something.
something.
But the reason why they waited and it's
it's not really due to Japan. It's
actually due to the carry trade. But
we'll come back to this later.
What it's important to understand is
that when you have inflation, inflation
and you have investment
effectively the real return of your
investments starts to become
negative, right? So
all this money that was lent
by Japanese for the car trade to go
abroad because there are always two
sides two face of the coin that is the
lender the borrower the investor and so
on. It's it it's a chain that's also why
it's a bit it's not very straightforward
to understand. So this money that was
lent people in order to carry on with
this they want high returns.
Okay. But there is an issue when you
have all this amount of money starting
to so imagine all this money that went
abroad. Okay. And then because of COVID
and what happened because the rate hike
cycle abroad all the fixed income
investment and whatever was starting to
bleed a lot and the economies were
plateaued then people what do they do?
They cash out they repay the bet they
dep comes back so they start having inflation.
inflation.
So what happened to Turkey
is exactly what happened to Japan like
at a scale like 100 times higher.
Basically you enter in a feedback loop
be because the inflation goes higher and
higher. By the way in Japan is much
higher than than what they report.
That's another item nowadays that is
completely unbelievable like the
completely fake statistic out there.
But then because the government
needs to monetize its depth to carry on,
right? So you have the debt
monetization, you have inflation, and
then you have interest rates rising.
Because interest rates are rising, you
need to print even more debt, even more
currency to to repay the debt. But that
creates even more currency that gets
stuck in a compressed economy. And then
you know it's it's basically a a circle
that creates a spiral. And that's the
problem in Japan. If you read my article
for from one year ago, two years ago and
so on, like one year ago, I literally
said Japan US dollar to Japan FX rate is
bound to go to 300. And I remember like
the first time when I was like the
currency was around like 110 120 and
people were like oh like US now is going
to um you know this is going to it's
going to back to it's going to go back
to 90. All the Wall Street banks are
like oh it's so undervalued. I'm like
this is going to 150 160. You guys do
not understand. And I mean it's all in
the articles there. So now people see
the currency devaluating and the
interest rates rising and they don't get
it. They're like completely lost.
They're like how is this possible? I
mean you know that's because there is
this nasty vicious circle that trigger
when there is too much
econom too much sorry money supply
interest rate economy that triggers hyperinflating
hyperinflating
dynamics and that's where Japan is is
right now. So you have this happening on
one side basically the cost of this
carry trade is going higher and higher
okay and on the other side of the ocean
because interest rates are high and
what's happening with the commercial
real estate with the residential real
estate and so on because most of the car
trade I mean it's not invested in stocks
stocks people talk a lot about them but
in reality it's a small market like
bonds and debt is 10 50 times larger
than than stocks. FX is the FX market is
100 times larger and so on. So not every
so the the lion share of this is
invested in fixed income assets. So the
fixed income assets are real are
underwater and the cost of that is
rising. But then you might ask now well
the the currencies is devaluating the
the JP that should be a good thing. Well
not exactly because all these car what
is your risk if you borrow that right
besides the interest rates going up is
that the currency starts appreciating
against your currency. So you had to you
have to edge that risk right. So all
these carry trade there they're not like
people simply borrowing money and
bringing it somewhere. There actually
there is a complex derivative structure
upon them. And because of this
derivative structure people in order to
edge the risk of the appreciation of the
yen they gave up on the benefit on the depreciations.
depreciations.
So the currency depreciating is not
helping them. But the interest rates
increasing is actually a big problem for
them because interest rates if you edge
everything in a in a trade you don't
make money. There is no buffer at the
end of the day. So most of the times the
currency was edged but the risk on
interest rates wasn't.
And now you have this massive amount of
derivative that is getting a huge mark
to market on top of the borrower while
the assets of the borrower are underwater.
underwater.
So this is exactly the problem of the
JPY carry trade and this problem is
massive right people like they are
shocked in December 2023
you the federal reserve
included so you have emergency facility
for monetary intervention there is one
very specific facility that people make
a lot of confusion about but it's called
the standing repo facility.
>> The standing you said standing standing
repo facility.
>> The standing repo facility. Yes. The
standing repo facility just to say like very
very
in simple terms is basically a bank that
cannot find
liquidity in the market all the
liquidity that it needs. May maybe
because it's not there or maybe because
people don't want to don't want to lend
to them. But let's assume because it's
not there. There's not enough. The Fed
says, "No problem. Come to me. Give me
collateral. I give you liquidity."
December 2023,
the Fed
added to that facility
a Japanese bank.
You only have US banks or
or
branches. So of some branches of foreign
banks in US but
right now I think I I cannot think of of
any like I'm thinking about UBS but I'm
not 100% sure but all of these are like
a major
investment bank financial institution
further and then in December 2023 they
add norin chuking bank that no one knows
that is one of the biggest investors in
the US real estate and commercial real
estate and
asset back securities market
if not the biggest investors in some
corners of this market.
>> Dor let me interrupt you. What's the
name of that bank again?
>> Not in Chukin.
>> Do you know how to Okay. I is uh
uh the agre the agriculture and and
>> Same size that it was credit Swiss.
>> So roughly trillion dollar balance sheet
more or less.
>> Three billion $1 trillion balance sheet. >> Trillion.
>> Trillion. >> Yeah.
>> Yeah.
Roughly speaking.
>> And how much of their portfolio is
invested in United States commercial
residential real estate? if you had to guess.
guess. >> Uh
so in terms of securities, you know, I
need to dig to into my memory and make
the conversion of uh GPU between uh
>> percentage just a percentage of it.
>> So the you have to distinguish between
direct and indirect investment. They
have a portfolio of direct securities investment
investment
that it goes between government bonds and
and
um private securities.
If I'm not wrong, the portfolio was
like $150 billion. But
But
they that is the direct part. The
indirect part is that there are lenders
to institutions that are both investors
but also lenders to institutions that
are in the car trade.
So there is a double a double item into
into northern shooking bank but it's not
just that this is only what they have on
balance sheet. Okay. So
all this like all this money is supposed
to be like in in the top in the top
quality tranches. Okay. But norinuking
bank because of this activity actually
creates a lot of um derivatives
volumes and notional across the system.
So even if this amount don't sound too
big to you, okay, it's like what is like
150 or $200 billion? Is is it a lot?
Well, it's it's a lot when it's
concentrated in a very very illquid
market because that's the real problem.
all these like MBS, CNBS, direct
lending, asset back securities and so
on, they're incredibly liquid. So,
everyone is simply simply sitting on
their ends waiting for repayments. Like
the secondary market, it tends to be
tends to be like, you know, a fraction
of what it's supposed to be. Okay. So,
when things go south,
basically it's a domino effect. And when
you have someone with such a
concentrated exposure, then becomes a
problem. Also, when this someone is a
bigger is a big holder of US government
bonds because they were doing the car
trade, then it's a problem. So the
Federal Reserves and I'm sure like you
know they talk among central banks or
whatever they added Nurinuking Bank to
the standing repo facility.
I'm trying I'm trying I was trying to
look look them up while while you were
talking and I How do you How do you
spell that? Nor
C H U K I N.
>> Yeah.
>> Central Credit Union for Agriculture and
Forestry is what uh it's on Wikipedia.
They serve over 5600 agricultural,
fishing, and forestry cooperatives from
its headquarters in Tokyo.
And total assets are 545.7
billion US.
>> No, no, it's much higher.
>> Might not be updated.
>> Yeah. Ex. Yeah. Exce I'm sorry. Exceeding
Exceeding
investment portfolio of more than 400
billion and assets exceeding 840 billion
is what Wikipedia shows.
>> Ah, yeah. Okay, now starts making sense. Yeah,
Yeah,
>> they have a huge investment portfolio.
>> I mean, the one I was talking about was
specifically to the US. They have
investments across the world, these guys.
guys.
as you're describing this, you know what
I'm thinking about? I'm thinking of the
movie The Big Short when Steve Carell is
sitting there with the guy talking about
the synthetic CDOS's
like realizing how deep this problem is.
Cuz as bad as you probably as bad as I
think it is, you know it's worse than
what I think and it's probably even
worse than what you think it is. How bad
how much exposure.
>> Oh well, I tell you like to be fair, we
no one knows no not even central banks
know the extent of the problem. No one
knows. There is no reporting. There is
no tracking whatever already. What's in surfacing
surfacing
it's of a magnitude that
I mean should be scaring the hell out of
people. Like people are talking about
the AI bubble and I'm like yeah sure.
And then when they say oh Nvidia is too
big to fail. Nvidia
Nvidia
like has a hundred billion dollar budget
roughly speaking. It's not a systemic
company like JP Morgan is almost like 4
trillion. JP Morgan goes in trouble.
It's you know everyone you know it's a
money is is going to be your last
problem because it's not going to have
any value.
But we go back to barter okay and there
is a series of banks that are huge and
actually they're becoming after 2008
they became bigger instead of like make
them smaller they actually make them
bigger and the example of what happened
two years ago with credit Swiss I mean
credit Swiss people can go back to my um
check my history in in I had like a 50
followers and I was telling it was going
bust because people like
tend not to understand
and to overlook the dynamics of banking.
But what happened in KFC went bust and
then they merged it with UBS creating an
even bigger problem like they doubled
the size of a bank right. So a problem
here is huge and and honestly it's very
complicated. It's it's not of a of a
easy solution like how can you solve
something like this?
I mean that's that's the other question
like how do you solve this? I have no
idea. like someone needs to someone
needs to take the pain, someone needs to
humble down and whatever, but uh I mean
we know the problem. Now you ask me
what's the solution? I'm like
I mean we go back uh to a financial
stone age in some part of the world. I
don't know like seriously speaking I I I
don't know like the assets inflation
that there is across the world because I
mean JPY credit is is one of the reasons
but it's it's not the only reason it how
can you how can you fix that right
right
so you need to reset and what you do you
cancel the dep we do like a dep Jubilee
but then like you know you try to save
the the the future of younger generation
but then no one wants to take the pain
today so what's the solution I don't
know that's that's what's the scariest
part that no one knows the solution so
there is not like a straightforward
solution that you can deal with and
these things might fall apart all of a
sudden so
so okay so two two questions one
why should because ultimately with all
this stuff and this is from quoting the
big short too which people haven't seen
that movie it's amazing how many people
I come across have never seen it you've
seen that movie
>> of course
>> it's a phenomenal it's I mean it's
really good even just from an
entertainment standpoint but I've
probably seen it now like 10 times but I
love the part where Steve Carell says at
the very end when he's sitting on the on
the on the stage and he said ordinary
people are going to have to pay for this
because that's how it always goes right
2008 The great funny the GFC who paid
for it ordinary people. Nobody went to
jail. Co who paid for that? Ordinary people.
people.
It's the way the way it works. So
explain how ordinary people are going to
be impacted by this. And people in
America are going to I mean they're
going to feel this pain.
I mean like ordinary people how they're
going to be impacted. I believe even
people that don't have knowledge in
economics and uh finance, they're
starting to realize that the amount of
like savings and earnings that they're
having every month is purchasing less
and less.
this global financial system because
it's not an isolated system anymore.
cannot it's a mistake to talk about the
Fed, the Bank of Japan, the Bank of
England, the European Central Bank in isolation.
isolation.
The system is is global. The only major
central bank that to a certain extent is
out of this is the people bank of China
because China and as a strict capitals
there are other economies that have
capital control. For example, Korea has
capital control and people don't know it
and other like EM economies or whatever.
Mostly the the reason for capital
control is to because they don't have
know the proportion of of the res of the
currency reserves against the size of
the economy. You know, if they don't
have any capital control like they the
resource can be drained very quick.
Usually that is the is the reason but
impacting like so you have all these
central banks across the world like the
Swiss national bank it's already
interest rates already at zero okay with
some part negative the
the
ECB the bank of England have all been
cutting rates they started before the
federal reserve now the federal reserve
is is cutting rates because they're
telling them to cut rates and that's
Another thing that people don't get is
like when you get to a point
that you cut rates, you try to lose
losing the financial condition in the
economy, trying to make the cost of debt
cheaper and whatever. But in reality,
what you are creating, you need people
to finance your debt. So the Fed cut
rates and then the yields go up. And the
reason why interest rates on the 5, 10,
10 year and 30 years in the US are not
going up further is because currently
the US government is doing what in
simple terms is yield core control.
Although it's not done by the Federal
Reserve, it's done by the government
effectively front front frontloading the
issuance of treasury bills in order to
finance buybacks as they call them on
longer treasury bonds to keep the yield
at that level. Otherwise, you would have
seen yields already going bananas
because let's be fair, the inflation is
above and beyond whatever they always
declared. But not just like across the
world. So this is how people are paying
for all these imbalances, constants,
bailout and whatever in the financial
system like the value of the money in
your pocket is simply becoming like
lower and lower and the way to protect
yourself is owning assets.
The problem is that which assets
to own first of all and secondly there
is a degree of magnitude right you
cannot own more than a certain amount of
assets and people say oh if you invest
in the in this in home depot or in the
S&P 500 like 10 US 40 years ago now you
could retire with like two three million
and I'm like yeah so 40 in 40 years you
didn't have to eat you know didn't you
have expenses and people they always
make this consideration on the on on the
long run but they're like 10,000 US when
omnipot were went public a huge amount
of money you you could buy like a house
in some part of the US right you know
they they always make this calculation
so long story short the inflation is
there a problem and the scary part is
how they are hiding it, it's
unbelievable. I mean, you look at the
statistic of the BLS in US and they're
telling you that the insurance cost for
US people in the past few years is down 30%.
30%.
And I mean I I know US people travel to
US. I talk to people they're like is
your cost down 30% or is up by by far or
you know all these other like metrics
and then people like
go to the go to the grocery store like I
mean I don't want to say anything
political because I don't care but uh
there was this post now at Thanksgiving.
Oh, the thanks to thanks to Trump and
before it was like thanks to buy thanks
to Trumpet you're you're going to get,
you know, prices are going down at Thanksgiving.
Thanksgiving.
>> Walmart Walmart was the big thing.
You're going to have a cheaper
Thanksgiving dinner. Walmart is
decreasing whatever it was 20% or something.
something.
>> Yeah. And then you read that the average
grocery expenses
for a US family or an average one it's
now above a,000 US a month.
I mean that's money spent on food.
So we are getting to a point that during
the US shut down but let's be clear I'm
saying this because most of you have US
your audience so might be easier to
understand but it's going on everywhere
in the world I mean in a different I
mean shapes and forms but it's very
similar in the US shutdown it comes up
that there are like what 45 million
American food stamps
>> I think that number is actually a lot
higher than what they even cuz you you
know as we've just talked about the
numbers are always bigger than what they
project just like the CPI and and the
unemployment and so on and so forth like
they put these numbers out there and I
can't believe people are still naive to
actually believe that this is this is
the number right because it's always
higher I'm I'm literally coming to that
conclusion with all this it's always
higher and it's always worse than what
they tell you
>> yeah well they already admitted that
Now what are the chances that they were
not reporting the inflation correct? I
mean let me let me just precise one thing
thing
so far objectively speaking the biggest
amount of inflation being under
reportported was in the aftermath of
COVID and during the Biden administration.
administration.
So when they say the inflation is lower now,
now,
it's okay. It's it's not it's not wrong.
But when price increase, okay, when a
number increases from let's make a big
number just to give an idea for 10 from
10 to 20. Okay, from 10 to 20 you have
like 100% inflation. Okay. From
From
20 to 30,
you have a 50% inflation. So inflation
is lower. Freaking hell. Like if you
compare to where you start, you're like
three times higher.
So when people say like it's not about
the growing prices, it's about the
absolute amount of prices.
So this is how people are paying like
the value of their savings is getting
diluted and is getting redirected to
people that own assets and can benefit from
from
assets price
inflation because of monetary dynamic.
Ultimately inflation is a monetary
phenomenon that goes around various part
of the economic system. Different timing
and different forms. It can impact
consumer price inflation. But then you
have asset price inflation
and other forms of indirect and direct
impact of monetary inflation. But the
bottom line is that you create massive
distortions in the system and the masses
pay for it for
benefit of the few. And this is not the
first time it happens. It happened every
single time in history that currencies
were devalued from the Roman Empire to
the Chinese empires when they invented
like paper currency and to to the friend
to France during the revolutionary time
when they started to print like paper
bonds I don't know where to the to the
British Empire to you know Spain to the
Spanish Empire and so on. I mean it's
always the same thing. Nowadays it's
particularly bad because at least before
you had like hard commodities, hard
currency like overseas or whatever. Now
we are in this world of like fiat
that is a Latin word by the way that
means like
you know fiat is
an hypothetical value
and people are like oh the value of the
currency is given by the value of the
economy. I'm like, okay, what's the
value of the economy exactly? Is it the
GDP? Is the GMP? Is the value of the
assets? What what is exactly? So, it's
like uh you know, you like to quote um
Wall Street movies, you know, when there
is the war for Wall Street that the very
beginning that the guy says uh fugats,
he's like, "Yeah, yeah, fugats. Forgot."
He's like, "What matters is that, you
know, we get cash and then everyone else
is like, you know, it's rich on paper."
Yeah. for we are
>> fairy dust. It's fairy dust.
>> Yeah. It's like Yeah, exactly what it
is, right? But at the end of the day,
people are like, "How come like I'm
working my ass off? Like your savings
and whatever and the living standards
are going down, not going up." Like
we're one of the most
like the most developed and in theory on
people like richer economy. that when
people look at statistic is like yeah
you have 10 chicken 10 people everyone
has a chicken. No if someone has nine
chicken and nine people need to share
one chicken statistics will tell you
everyone has a chicken and everyone is
going to be wellfed
but that's not how does it work. So, how
did um h how did they work through last
summer when this it felt like the same
issue, you know, arose and the alarms
were going off last year?
Well, last last summer basically they
started to print a a ton of more as
usual like they don't have there's no
way out and it's not only Japan. It's um
I put it out there to show this problem
is global. The exact day
that we had trouble in Japan, the
lending facility
similar to the standing repo facility of
the Fed of the Bank of England
started to go up. They started to borrow
liquidity in England
in order to make up for that. Because
what people don't know is that when
financial institution are in trouble
especially global financial institution
they go to look for liquidity wherever
they can find them
and at the moment they needed a ton of
liquidity in order to fend off the
margin course for the car trade and then
right now that facility is 90 billion pounds
pounds
okay and Japan is like I mean I I
started counting I didn't count
intervention from last year. But the
Bank of Japan has a myriad of market
facilities. They even bought stocks.
So that the Bank of Japan owns is the
Bank of Japan is the largest
shareholders of
like twothirds
the major listed companies in Japan.
Like so I said they started to print a
ton of money and then they coordinated
with the Japanese pension fund GPIF
that basically what they were doing they
were selling US assets and they were
buying Japanese assets like stocks and
bonds. Why?
Now we get a big complex but the
Japanese pension fund GPIF the public
pension fund is a huge
fund and they have a mandate that
basically their portfolio dictates they
need to be diversified across domestic
bonds, domestic equities, foreign bonds
and foreign equities and they have a
balance. So if the value of the Japanese
domestic bonds and equities crashes in
order to rebalance they need to sell the
foreign one and buy them.
But you cannot just sell things easily
in particular when on this side it
trades during Tokyo hours and this side
during US hours and the markets are not
open at the same time.
So what happens is that you go to the
central bank you say okay I give you
these assets as collateral you give me
liquidity now to buy this once the
market open on the other side I'm going
to sell another bunch of assets and I
give you the money back
so that's how they fixed it at that time
plus you know famously when the VIX was
about 60 you had this uh rumor Okay. Oh,
the emergency fed rate cut 75 basis
point. And that was more than enough for
people to say, "Oh, wo, let's go. Let's
go all in." And like people then started
to to buy the deep because the Fed is
your back. And only that announcement
was enough in order to twist things
around and get people like
chill down. So this is how they fix it
last year.
>> So why don't they just do that again?
Well, there's a small problem. Like last
year when this happened,
Japanese 30-year rates, if I'm not
wrong, were like a 2% something. Now
they're like a 3.3%. I mean, every time
you have a market intervention,
the cost becomes bigger and bigger.
The bailout of the in the aftermath
actually no the bailout of LTCM
was certain size the bailout in the
aftermath of the com bubble the fed
started to print all this money it was
already 2x
the increase of the federal resource
balance sheet and all the intervention
after the GFC was 800
800
billion dollar like in in the in that
range right the overall
The bailout during COVID was like what
two trillion
federal loan
with the total balance sheet because
they did QE for so many years and then
the total balance sheet I got what like
t trillion or something
with the Fed effectively like buying out
like almost like what trillion dollar
mortgage back securities like people
during COVID like I can understand the
treasury market
but no one asked question why are you
buying mortgages during
co what what does to do like mortgages
are 30 year 20 year whatever because
banks were going under if they needed
liquidity and they needed they needed it
quick and they needed to take those
assets off the balance sheet so they can
continue to to do this but the cost of
the intervention is becoming higher and
higher And also is becoming less and
less straightforward because at least
before people you can track pretty
straightforward matters. Now you have
the US government like government
deficit all around the world governments
are in deficit. So you have like deb
monetization but how do you monetize
this deb the Fed is not running QE.
Yeah, but the Bank of Japan has been
running QE and they still running QE for
like ages, right? The the ECB, the BOE,
they have like indirect facilities that
effectively are injecting temporary
liquidity in the system, but it's there
every single week. It doesn't go away.
That's not, you know, after something
goes on for like seven months, it's not
temporary anymore, right? After
something goes on for a year, it's not
temporary anymore.
So they can continue doing this. That's
why yesterday I put out an article. I
said it's going to like Trump dilemma.
Is it going to bail out or not bail out
the AI bubble? Because now everything is
bot like okay. Yeah, print whatever.
Yeah, they can keep doing it. But at the
end of the day, like when it comes to a
point that people cannot buy food
because they don't make enough, they
work two or three jobs and they see
their living standards are decreasing.
That's why I thought, you know, when the
SNA the the idea that they were going to
cut the SNAP benefits, I said they won't
do that for very long, if at all,
because you you're already dealing with
poor people. Even though you look at
some of them and they they don't look
hungry, but still the idea that they're
poor and cutting off. Nobody wants the
knives quote unquote coming after them.
These politicians, they're dumb, but
they're not that stupid. So, I knew that
that they would restore that would be
one of the first things they would
restore when this federal government uh
you know reopened or got it resolved.
But in terms of the AI bubble and you
wrote about this that you could see some
type of bailout for Nvidia Open AI collectively
collectively
it'll be enough to get them through the
midterms. Is that is that that was you
that wrote that, right?
>> Yeah. Yeah. Yeah. That's me who wrote
it. Um
>> I read so much stuff, Dario. I can't
keep straight who who writes what or
>> well the thing is that the
the
previous administration the current
administration um this administration
before the previous administration and
so on they they basically tied their
faith to the performance of the stock market
market
and claiming that a booming stock market
is equivalent to a booming economy. It
is completely wrong. But you know it
keeps working. Still works. So now
you have a you have a big problem here.
Like this I mean yesterday
the the CEO of Google
in an interview said oh if the bubble
burst is a problem for everyone. And
then you have the CEOs of meter. Yeah we
are in a bubble but that's okay. you
know bubbles happen is a is good for the technological
technological
um development. I was like
yeah but it depends on the size. I mean
the com bubble yes was a bubble. It was
created like damages. But now we're
talking about companies at the trillions
and trillions of market cap. Like
Like Nvidia
Nvidia
as market cap and as I wait in the S&P
500 is equivalent to the whole energy
It's Isn't the value Isn't the valuation
bigger than the Nikkay?
>> Uh the Nikk No, I think it's bigger than
>> I believe
>> twice the the GDP of Canada. I mean
>> I think I believe it's bigger I believe
it's bigger than Nikk. I could be wrong
on that but I think somebody else said
that on my show but I could be wrong.
>> Well I would five I think it's maybe
bigger than Indian market. Not the Nikk
is a little bit Oh no the NK225. Yes.
Not not the whole Japan market, but
yeah. And
what people saw how the index could go
up so much is because you had this
handful of companies pushing them higher
and high. And yeah, we can open a whole
long conversation about passive
investing and why this is happening.
Okay. And how is it connected to
money printing, monetary policy and so on.
on.
It's going to become a six hours
>> or or or you could just come back. We
come back and we'll do another one. But
either way,
>> yeah. Yeah, sure. Like you can come back
>> cuz this this AI conversation isn't
going away anytime soon either. >> Oh,
>> Oh,
man. Like the most uh you know, the most
painful thing for me is that I've been
warning people like for years about this
about whatever they were doing that it
was not it was not clean. It was like an
incredible scheme of revenues round tripping
tripping >> and
>> and
>> Jack Amble, do you know Jack Amble from
Nobody Special on YouTube?
>> Uh, yes. Yeah.
>> Yeah. So, he was just on my show last
week. He comes on he's he hadn't been on
for a little while, but he, you know, I
have him on somewhat regularly and we
were talking about that, but he was
telling me about that a year ago and he
was talking about that for a few years, too.
too.
Yeah, it was uh yeah it was covering it
was more covering like um actually me
him um Kakash and uh and a few others we
were like around this we started in in
in different direction but we everything
ended up converging at the same point
because all these companies were doing
this shenanigans al together and and now
you have these indexes at this level
because of inflated valuations.
And and it's not just into the public
market. You have the private market. I
mean, you have private market companies
like OpenAI that
that
objectively speaking have been lying
through their nose and when the numbers
comes out, they're always like dumbfounded.
dumbfounded.
But as per the latest proven
documents that have been covered, he
made $4 billion in revenues in the first
half of the year and 12 billion in losses.
How the hell this company is supposed to
be valued $500 billion?
You got to be out of your mind.
How the hell are companies out there at
multiples that
are like it's imaginable. So you have a
valuation bubble here. This is these
companies that the this company's market
cap can go down a lot. it will impact
indexes although the more they go down
the more other parts of the indexes are
going to replace them over and over
again because these companies are not
too big to fill it's just like a
mathematical dynamic
in in the previous year the biggest
sector in the indexes where like energy
companies like Exxon Mobile was the
largest company in the world and then
they they they get replaced by the next
cycle of company the next cycle of
company so Yes, the the index will go
down. That will create like financial repercussion,
repercussion,
but from a pure economic
perspective in terms of the health of
the economy, the impact of this would
not be as
damaging as people try to portray
because they want to they want to be
bathed out. If banks go down, that's a
massive problem. That's a huge problem.
And when this AI bubble goes away and
people start realizing what's going on
in the banking system,
even worse,
like the the amount of
like debt being repacked, resold in the
shadow banking system is completely
huge. So, but anyhow, everyone gets a
bout nowadays, right? So you have these companies that accounted for like 36% of
companies that accounted for like 36% of the index
the index that they accounted for most of the
that they accounted for most of the gains in the index in the past years.
gains in the index in the past years. They got to valuations that
They got to valuations that I mean
I mean like people really did incredible mental
like people really did incredible mental acrobatics to explain
acrobatics to explain and now you are at a point that
and now you are at a point that if the market goes down
if the market goes down that impact the morale of the people
that impact the morale of the people because after you tell them for years
because after you tell them for years that stocks going up means the economy
that stocks going up means the economy is good then if stocks go down means
is good then if stocks go down means does it mean the economy is bad
does it mean the economy is bad Right? So you created that mental
Right? So you created that mental connection. So now people are stuck with
connection. So now people are stuck with that. And if you want to have a parallel
that. And if you want to have a parallel where these things in reality is
where these things in reality is disconnected,
disconnected, you can look at China. In China,
you can look at China. In China, no one connects the economy to the stock
no one connects the economy to the stock market. Actually the stock market is a
market. Actually the stock market is a fraction of the size of the economy and
fraction of the size of the economy and is incredibly smaller than the US and
is incredibly smaller than the US and whatever. They went to completely total
whatever. They went to completely total direction. So stock market up, stock
direction. So stock market up, stock market down.
market down. People don't don't really care. They
People don't don't really care. They they see the economy under a different
they see the economy under a different light. While on the other side, they
light. While on the other side, they have been basically brainwashed that a
have been basically brainwashed that a stock market continuously going up is
stock market continuously going up is good. It's good for you. It's good for
good. It's good for you. It's good for your pension. It's good for the country.
your pension. It's good for the country. It's good for whatever, right? They're
It's good for whatever, right? They're becoming richer.
becoming richer. That's why it says, right?
That's why it says, right? That's why I think I mean like guys like
That's why I think I mean like guys like look at the pattern
look at the pattern in a way or another they are going to
in a way or another they are going to try to find a way to keep this thing
try to find a way to keep this thing this these things going
this these things going and as I said I think they will try to
and as I said I think they will try to get through midterms because if you get
get through midterms because if you get something nasty happening before
something nasty happening before midterms
midterms well we know what happens like you get
well we know what happens like you get you lose like a good chunk of control of
you lose like a good chunk of control of uh of the system like a good chunk of
uh of the system like a good chunk of support and then after midterms in two
support and then after midterms in two year times effectively you have two
year times effectively you have two years of US presidency that you're not
years of US presidency that you're not going to accomplish that much because
going to accomplish that much because your hands are tied and then the the
your hands are tied and then the the chances that the other party comes um
chances that the other party comes um wins the elections are greater simply
wins the elections are greater simply because for two years like they they
because for two years like they they tied your hands on behind your back and
tied your hands on behind your back and uh you didn't have chance to do anything
uh you didn't have chance to do anything in general anything for the country,
in general anything for the country, anything for the people that voted you.
anything for the people that voted you. So
So for me like surely there are
for me like surely there are conversation about this how they're
conversation about this how they're going to sell it politically like we're
going to sell it politically like we're going to bail out these people that like
going to bail out these people that like honestly this is not even like banks and
honestly this is not even like banks and whatever. Like this is literally bail
whatever. Like this is literally bail out like private billionaire or
out like private billionaire or billionaires on paper enterprises
billionaires on paper enterprises that are claiming to be strategic for
that are claiming to be strategic for whatever reason. Well, in the it's not.
whatever reason. Well, in the it's not. It's it's completely wrong what what
It's it's completely wrong what what they've been doing. But because they
they've been doing. But because they managed to inflate their value to to a s
managed to inflate their value to to a s to such a degree,
to such a degree, you know, it becomes an issue. is not
you know, it becomes an issue. is not too big to fail like economically
too big to fail like economically speaking but
speaking but for sure it's too to their failure is
for sure it's too to their failure is too big to digest.
too big to digest. Will it work? Will they be able to buy
Will it work? Will they be able to buy enough time in your view?
enough time in your view? Well, I mean for sure like honestly when
Well, I mean for sure like honestly when I saw
I saw back this year in April when the tariffs
back this year in April when the tariffs came out and even if I was a a bit
came out and even if I was a a bit shocked like many people um
shocked like many people um on the
on the on the delivery
on the delivery to a certain extent I thought okay
they're trying to achieve the right goal at the moment is simply in the in the
at the moment is simply in the in the wrong way they're going to fix it.
wrong way they're going to fix it. Okay. And then you had
Okay. And then you had US secretaries going um on TV and says,
US secretaries going um on TV and says, "Yeah, this is going to be painful for
"Yeah, this is going to be painful for Wall Street. They're going to they need
Wall Street. They're going to they need to suck it up this time for the benefit
to suck it up this time for the benefit of everyone else."
of everyone else." I think it lasted two days, three days
I think it lasted two days, three days and like okay okay we we stop all we are
and like okay okay we we stop all we are doing
doing boom everything back up I mean every
boom everything back up I mean every single time
single time but
but I mean how many people are popping
I mean how many people are popping champagne because stocks kept going like
champagne because stocks kept going like higher and higher in US do you see like
higher and higher in US do you see like celebr celebrations around. How many
celebr celebrations around. How many people in Japan are popping champagne
people in Japan are popping champagne because the Nikai reached like above
because the Nikai reached like above 50,000
50,000 is an index level.
is an index level. Are people like going around like in
Are people like going around like in luxury cars, you know, like and stuff
luxury cars, you know, like and stuff like that? It's quite the opposite. So,
like that? It's quite the opposite. So, I mean,
I mean, and stuff like that. So
like politically they keep doing it and they can get away with it
they can get away with it because at the end of the day this is a
because at the end of the day this is a massive misallocation of capital
massive misallocation of capital corroborated with incredible accounting
corroborated with incredible accounting shenanigans
shenanigans and
and market euphoria
market euphoria all together.
all together. Um all you need is the US government
Um all you need is the US government going out and say okay
going out and say okay we're going to like uh guarantee 100 or
we're going to like uh guarantee 100 or 200 billion dollar of uh debt you can
200 billion dollar of uh debt you can lend to these guys
lend to these guys and then they will try to find like the
and then they will try to find like the whatever trillion they claim to need
whatever trillion they claim to need then it's going to be completely wasted
then it's going to be completely wasted by the way
by the way for another bigger topic about AI
for another bigger topic about AI development that
development that very few are talking about. Although
very few are talking about. Although people are figuring out finally slowly,
people are figuring out finally slowly, it's going to be completely wasted like
it's going to be completely wasted like many other things that have been done
many other things that have been done with public subsidy because public
with public subsidy because public subsidies they never work like never
subsidies they never work like never like systematically never work. So if a
like systematically never work. So if a business needs to be publicly
business needs to be publicly subsidized,
subsidized, it cannot be a private business. It
it cannot be a private business. It needs to be in the public interest. But
needs to be in the public interest. But there's a whole different dynamic when
there's a whole different dynamic when you have private companies saying
you have private companies saying they're doing public good and getting
they're doing public good and getting like public subsidy. In reality,
like public subsidy. In reality, public sub subsidies is simply keeping
public sub subsidies is simply keeping them in business and their profitability
them in business and their profitability is dependent on the public money. But
is dependent on the public money. But then they take their products and they
then they take their products and they sell their products privately to the
sell their products privately to the consumer.
consumer. They're not like doing charities or
They're not like doing charities or something like that, you know.
something like that, you know. So
So I mean I I kind of expect something like
I mean I I kind of expect something like this because uh they simply cannot
this because uh they simply cannot stomach this.
stomach this. They cannot stomach the free market
They cannot stomach the free market operating as it should.
operating as it should. And uh and people like get sad, they get
And uh and people like get sad, they get angry, they say, "Okay, now the economy
angry, they say, "Okay, now the economy is not good anymore." and whatever like
is not good anymore." and whatever like psychologically speaking and you know
psychologically speaking and you know they're going to like punish themselves
they're going to like punish themselves punish them electorally you know and uh
punish them electorally you know and uh so in a way or another they will figure
so in a way or another they will figure something out.
something out. >> Last question Bank of Japan is supposed
>> Last question Bank of Japan is supposed to meet again in December I think is
to meet again in December I think is what I read.
what I read. What will they do?
Well, as I said before many times, um, in my humble opinion, the Bank of Japan
in my humble opinion, the Bank of Japan is done hiking rate.
is done hiking rate. They hiked twice. Like they can, the
They hiked twice. Like they can, the Bank of Japan is completely in a corner.
Bank of Japan is completely in a corner. They cannot do. They're getting to a
They cannot do. They're getting to a point that they're stuck. So now you
point that they're stuck. So now you have two choice. Either way, you move,
have two choice. Either way, you move, but if you move,
but if you move, you risk of breaking something.
you risk of breaking something. If you don't move and pray and hope that
If you don't move and pray and hope that whatever sort of miracle things around
whatever sort of miracle things around you gets a bit better, then you can buy
you gets a bit better, then you can buy time.
time. So, I mean, personally speaking, I don't
So, I mean, personally speaking, I don't think they're going to they're going to
think they're going to they're going to hike at all. They they they cannot
hike at all. They they they cannot like simply they're going to break
like simply they're going to break something. If they accept the risk of
something. If they accept the risk of breaking something, then maybe things
breaking something, then maybe things will change. But when you have a new
will change. But when you have a new prime minister that is saying that he's
prime minister that is saying that he's going to do like $70 trillion JPY of
going to do like $70 trillion JPY of stimulus, he needs funding to do that.
stimulus, he needs funding to do that. He needs the uh cost of debt for
He needs the uh cost of debt for companies to remain cheaper whatever is
companies to remain cheaper whatever is pressuring the bank of Japan. By the
pressuring the bank of Japan. By the way, the Bank of Japan is a listed
way, the Bank of Japan is a listed companies. You can buy well relatively
companies. You can buy well relatively speaking shares in uh in Japan stock
speaking shares in uh in Japan stock exchange. So it's like a it's a
exchange. So it's like a it's a corporation. Okay? It's not like uh you
corporation. Okay? It's not like uh you know this dynamics of independence or
know this dynamics of independence or whatever that we have in the west that
whatever that we have in the west that doesn't really apply very well here. So
doesn't really apply very well here. So basically the government is directing
basically the government is directing them to you know keep things cheap but
them to you know keep things cheap but do not screw things up. So because they
do not screw things up. So because they cannot stomach the devaluation of the
cannot stomach the devaluation of the JPY because that creates inflation power
JPY because that creates inflation power and so on. So this poor guy there that
and so on. So this poor guy there that has been like put there it's a it's an
has been like put there it's a it's an incredibly inconvenient position. So
incredibly inconvenient position. So they keep doing like all sort of
they keep doing like all sort of intervention in order to balance things
intervention in order to balance things around between yields and facts and and
around between yields and facts and and whatever. But hiking rates the Bank of
whatever. But hiking rates the Bank of Japan I mean they're good luck with
Japan I mean they're good luck with that. Like seriously speaking because
that. Like seriously speaking because like already when they hiked to 50 basis
like already when they hiked to 50 basis point we like what happened is you know
point we like what happened is you know when they started hiking rates we had
when they started hiking rates we had like the JPY car trade implosion like
like the JPY car trade implosion like almost shortly after
almost shortly after like when they went from from negative
like when they went from from negative to positive
to positive it's like not from like 1% 2% from
it's like not from like 1% 2% from negative to positive.
negative to positive. Well, h how much how much longer can
Well, h how much how much longer can they keep this ball bouncing for then in
they keep this ball bouncing for then in your estimation, Dario?
your estimation, Dario? >> Man, been doing this for the past uh
>> Man, been doing this for the past uh what 40 years.
what 40 years. Like as long as nothing major breaks,
Like as long as nothing major breaks, they can keep going
they can keep going like across the world. They can keep
like across the world. They can keep they can keep going. That when something
they can keep going. That when something major breaks, but that something major
major breaks, but that something major is not going to be a company. There's
is not going to be a company. There's something major is going to be something
something major is going to be something in the in the banking system where
in the in the banking system where people realize okay this is too big
people realize okay this is too big to fail but we cannot afford to bail
to fail but we cannot afford to bail out. It's too big to be bailed out.
out. It's too big to be bailed out. So what do we do now?
So what do we do now? This is is going to be the real problem
This is is going to be the real problem and people need to sit back and like
and people need to sit back and like okay
okay now we need to we are forced to rethink
now we need to we are forced to rethink about things
about things and then like someone needs to take the
and then like someone needs to take the pain
pain and others will
and others will have like less pain socialized pain
have like less pain socialized pain potentially like bigger benefit when
potentially like bigger benefit when things will be restored but uh I mean
things will be restored but uh I mean This time these things can gone for a
This time these things can gone for a while. Every time it happens
while. Every time it happens it the market resets around it. This is
it the market resets around it. This is why you see it's not like a fixed level.
why you see it's not like a fixed level. It's not like there is a trigger after
It's not like there is a trigger after you eat the first trigger.
you eat the first trigger. The market comes back and then when it
The market comes back and then when it goes to the level that trigger is not
goes to the level that trigger is not there anymore because traders are not
there anymore because traders are not stupid, right? They try to they
stupid, right? They try to they basically try to maximize and to push
basically try to maximize and to push the boundary. So the next trigger is I
the boundary. So the next trigger is I And now the current trigger is around as
And now the current trigger is around as I said like might be like 160
I said like might be like 160 JPY
JPY FX that's that's the area
FX that's that's the area and if that triggers you know as long as
and if that triggers you know as long as it's not of a huge magnitude
it's not of a huge magnitude then the market they will do this they
then the market they will do this they will makes things worse but still it's
will makes things worse but still it's not people can stomach it
not people can stomach it at at a certain point you I mean look at
at at a certain point you I mean look at look look at Turkey Turkey the currency
look look at Turkey Turkey the currency went down like 95% in value compared to
went down like 95% in value compared to the dollar um you have uh
the dollar um you have uh basically you don't have like a
basically you don't have like a functioning monetary system anymore the
functioning monetary system anymore the economy is doing
economy is doing what the hell it's doing and uh and
what the hell it's doing and uh and still it's it's still there it didn't
still it's it's still there it didn't like implode also because like Turkey
like implode also because like Turkey has a ton of like exports
has a ton of like exports to country of uh you know significant
to country of uh you know significant goods that they need but uh I mean
goods that they need but uh I mean Argentina how many times Argentina went
Argentina how many times Argentina went bankrupt.
bankrupt. I mean, Venezuela is still there. You
I mean, Venezuela is still there. You know, you guys that have some beef with
know, you guys that have some beef with them recently,
them recently, this things can can keep going for for a
this things can can keep going for for a while as long as they are
restricted. The real problem is then when it becomes global and when it
when it becomes global and when it becomes global is then you know Japan
becomes global is then you know Japan hiking rates it bankrupts just
hiking rates it bankrupts just hypothetically Bank of America then you
hypothetically Bank of America then you have a problem.
have a problem. >> Where can people find you Dario?
>> Where can people find you Dario? >> Well uh I'm on access just Dario. I'm on
>> Well uh I'm on access just Dario. I'm on YouTube at uh real Jazario and just
YouTube at uh real Jazario and just Dario and um you know try to do my best
Dario and um you know try to do my best and uh to keep going this the honest is
and uh to keep going this the honest is a hobby because I have a
a hobby because I have a I am actually the co-ounder of a company
I am actually the co-ounder of a company building a company but uh I I really
building a company but uh I I really love like um doing this is is a passion
love like um doing this is is a passion of mine and I'm really
of mine and I'm really um happy to have been uh here with you
um happy to have been uh here with you today Michael. I hope uh what I've what
today Michael. I hope uh what I've what I said today has been helpful, not too
I said today has been helpful, not too complicated.
complicated. Um we can come back and discuss things
Um we can come back and discuss things in more details. Now it's uh it's almost
in more details. Now it's uh it's almost one and a half hours since the Japanese
one and a half hours since the Japanese market is open. So it's about time that
market is open. So it's about time that I give it a look and see what's going
I give it a look and see what's going on.
on. Let's see where the rates are.
Let's see where the rates are. >> Well, and real quick, too, let people
>> Well, and real quick, too, let people know what you're doing on YouTube with
know what you're doing on YouTube with your channel.
your channel. >> Oh, yeah. what what I'm doing like um
>> Oh, yeah. what what I'm doing like um basically I I write I've been writing
basically I I write I've been writing article for a while and uh during the
article for a while and uh during the week I publish the podcast version and
week I publish the podcast version and um once a week I simply have um one um
um once a week I simply have um one um one podcast that I call it like cigar
one podcast that I call it like cigar time that basically is like 10 15
time that basically is like 10 15 minutes in which uh I share I share my
minutes in which uh I share I share my my thoughts some of my thoughts that
my thoughts some of my thoughts that didn't become research yet um I try like
didn't become research yet um I try like to to guide people and um you know to
to to guide people and um you know to share with them what I think it's like
share with them what I think it's like my view and how to expect what's going
my view and how to expect what's going to happen next and uh and be careful in
to happen next and uh and be careful in that regards. Um I'm being very brief
that regards. Um I'm being very brief with those and I hope um yeah that
with those and I hope um yeah that that's what I do uh also because of of
that's what I do uh also because of of time limits cannot uh I cannot do a
time limits cannot uh I cannot do a little bit longer but I think it's uh
little bit longer but I think it's uh you know when I can try when I can try
you know when I can try when I can try to help to to to share my thoughts and
to help to to to share my thoughts and warn people in advance I do it then you
warn people in advance I do it then you know people are free to do whatever they
know people are free to do whatever they want you know they trade they invest
want you know they trade they invest they borrow whatever like you know my
they borrow whatever like you know my side I put information out there and And
side I put information out there and And people are free to use it as they wish.
people are free to use it as they wish. >> And last thing, I know your website too
>> And last thing, I know your website too is where your articles are. Want to
is where your articles are. Want to mention your website then real quick?
mention your website then real quick? >> Oh yeah, just direct.com.
>> Oh yeah, just direct.com. >> And all your articles are on there.
>> And all your articles are on there. >> Yes, I put uh I put all my articles
>> Yes, I put uh I put all my articles there since uh 2023. I' I've been before
there since uh 2023. I' I've been before that I've been writing on on X even when
that I've been writing on on X even when they didn't have the long form. But uh
they didn't have the long form. But uh you know I prefer to have uh my my
you know I prefer to have uh my my personal article because uh sometimes
personal article because uh sometimes I'm a bit worried that what I write it
I'm a bit worried that what I write it can take me down on social. So at least
can take me down on social. So at least there can be something like out there
there can be something like out there just in case.
just in case. But now that everyone in the mainstream
But now that everyone in the mainstream media is talking about the same I I was
media is talking about the same I I was saying I'm not worried anymore. So this
saying I'm not worried anymore. So this is good.
is good. >> Dario, I appreciate this. I'd love to
>> Dario, I appreciate this. I'd love to have you back on. I mean God knows
have you back on. I mean God knows there's going to be plenty to to
there's going to be plenty to to discuss. So, uh, you know, we'll follow
discuss. So, uh, you know, we'll follow this along and, um, you know, I look
this along and, um, you know, I look forward to continuing to follow your
forward to continuing to follow your work. And also for people that are
work. And also for people that are watching, uh, I put all these
watching, uh, I put all these conversations on Substack early for my
conversations on Substack early for my paid subscribers. So, if you like the
paid subscribers. So, if you like the show and you have the financial means,
show and you have the financial means, please consider becoming a paid
please consider becoming a paid subscriber. Also, for people that are
subscriber. Also, for people that are going to watch on YouTube and Rumble and
going to watch on YouTube and Rumble and listen, I read all the comments, as
listen, I read all the comments, as painful as some of those comments are.
painful as some of those comments are. Uh, so, you know, feel free to comment,
Uh, so, you know, feel free to comment, like it, share it. Uh, it helps me out
like it, share it. Uh, it helps me out tremendously. So Dario, I look forward
tremendously. So Dario, I look forward to the next time that we speak.
to the next time that we speak. >> My pleasure.
>> My pleasure. >> Mic drop.
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