YouTube Transcript:
Ray Dalio on AI_ Job Loss & the Future of the Economy | EP #148

our country is going to go broke faster
because of AI and Robotics that is
likely to happen there's going to be
great disruption I can vibrantly feel
the energy in the biotech world in the
AI World technology and AI is going to
be a force and it's a Tailwind the
question is is the Tailwind greater than
the head wind listen I'm the guy who not
the Glass isn't half full the glass is
overflowing I'm Mr optimism abundance
but reading your book it's got me
thinking a lot as we take 1 2 3 4 5
years do you think you're not going to
have an economic downturn do you think
you're not going to have a bare Market
really how do you think about China we
are at war with China and you cannot
lose the
war everybody Welcome to moonshots today
my guest is none other than Ray doio the
founder of Bridgewater the world's
largest hedge fund with $130 billion
under management I asked Ry about why he
holds gold over Bitcoin the impact of AI
and Robotics on the global economy and
on the US economy his advice for
entrepreneurs building tech companies
over the next one to two years we'll
talk about China and we'll talk about
the world ahead uh it's a fascinating
conversation with one of the smartest
thinkers ever particular on his new book
how countries go broke and being in the
United States I want to know what's the
impact on me and you as an entrepreneur
right let's dive in Ray good evening uh
you're on the other side of the planet
I'm in Santa Monica you're in Abu Dhabi
right now is that correct yeah well
welcome to moonshots my friend uh it's a
pleasure to see you I I I normally run
into you in in Riad or in in the
Emirates sometimes in New York and I
have to say I've been so looking forward
to this conversation uh I think the work
that you have been doing recently uh and
and writing about you know how countries
go broke will dive into that really on
the back of the uh the changing World
Order uh as individuals as entrepreneurs
who are really focusing on AI and
Robotics and Longevity or think about of
course the future uh a lot of us really
want to have a stable World in which to
build our
dreams uh and
I think it's important for folks to
understand the cycles that
humanity and countries go through to
help them get a sense of where things
are
going uh so no one better than
you well I don't know about that but
I'll do my best all right well let let's
jump in I and in particular I you've
charted what you what you describe as
sort of the five major forces that are
driving uh the health and wealth of
Nations uh could you give us an overview
of those um yeah and I will also uh just
touch on how I came by them please um
I'm a global macro investor and I've
been for over 50 years a global macro
investor and that's taken me to all
different countries and seeing how the
systems work and I'm also very much a
systems mechanic person cause effect how
does the machine work kind of person and
what I learned through my experiences is
that um sometimes when I was really
surprised I was surprised because the
things that happened to me didn't happen
in my lifetime but they happened in
history MH so there were three things
about five or six years ago that didn't
happen in our lifetimes and um
let me go back and find the cycles of
Rises and declines of Reserve currencies
and countries and
Empires and uh the first three and then
I discovered really the other two or
realized the other two the first was um
of course I I knew about the debt
money um economy market cycle right and
we we know that there's a short-term
cycle uh we know what that's like you
have a recession inflation is down they
put Credit in credit is buying power
they buy uh things go up financial
markets go up everything goes up um you
get to uh limited capacity inflation
Rises they raise interest rates but then
okay we've been through 13 of the we're
in the 13th of those Cycles but there's
also a a big long-term debt cycle that
takes place
over 80 years give or take about 30 debt
Rises relative to incomes and then
there's a limitation to that so we're
going to get into that in a minute the
second cycle it very much goes with that
is the political or also the internal
order disorder cycle so when you go
through that cycle there are larger
wealth and values gaps that um
increasingly create greater and greater
conflicts the left and the right
populism of the left populism of the
right and
a um a a fight between the two and is
that is that typically also an 80-year
like
cycle um
it's um they coincide they don't
necessarily have to be but they are
usually together so for example uh this
cycle the last cycle began they they
have wars and that's what uh ends the
cycle and so World War II was also
accompanied by
many breakdowns of domestic orders and
new Waters new systems that came into
Power um sometimes they were just total
revolutions sometimes they did not break
in in the case of the United States and
the UK we didn't have a new order new
domestic order but there was a lot of
internal fighting and you came out but
in most other country's cases they
happened at the same time there was a
total breakdown of the order and new
orders came
about I'm G to at some at some point
later I want to get into the
conversation how tied is this to human
life lifespan
um there's
um there is um an um I I believe an
important element that's tied to the
human lifespan because these things only
happen once in a lifetime typically so
we don't learn the lessons about war and
those things you know it's something
like also you know the idea of three
generations to rag Leafs the rag Leaf
kind of thing um but um it is definitely
the case by all measures that we say why
don't we learn well because we never
experienced it before and so I remember
my my parents used to you know they were
born during the
Depression effectively or the tail end
and it changed the way they're W they
were wired that's right yeah my dad my
my dad um and almost everybody at the
depression came out of that wanting to
save turn the lights off son eat that
food right because the power of saving
and the security and he never could buy
stocks and uh and so and if you looked
at the yield it was very
interesting the yield on stocks the
dividend and earnings yields um were
were both um about twice the yield on
bonds so from a investment point of view
they had to go down in order to provide
the same Total return made no sense but
that was their mindset was a
reflection of the I don't want to own
those risky things I want to save work
hard and so on and that's part of the
cycle
so so the third so that's the second
this internal order disorder which as
you point out is they're all all these
parts of the cycle are related so that M
mentality affected the how we saved and
spend and and so on so forth the third
part of the cycle uh what I call the big
cycle is um the international World
Order who is the dominant power so in
other words you have a
war and then you come out of the war and
you say who sets the rules well the
winner sets the rules and that is the
New World Order and so the United States
set the rules that's why the dollar is
the reserve currency that's why the
World Bank the IMF uh the uh United
Nations yeah United Nations they're all
in the United States right because that
was the New World Order and we created a
a an order is a type of system okay in
which there's collaboration the idea was
anyway that was that order when then
when you have a rising power challenging
an existing power uh uh you know there's
no world court that you plead your case
to and then they say okay you win and
we're going to go by your rules or
something there's no International
Constitution or something might is right
and so then you have who has the might
and you have the war so that's the third
Major Force tending to follow that same
Arc the the fourth which isn't the same
doesn't have the same 80-year kind of
cycle to it big cycle to it but it but
it's a big force and it's a bigger
Force um than the first three because
it's killed more people and it's toppled
more world and domestic orders and that
is climate and and acts of nature
acts of nature droughts floods and
pandemics have killed more people and
Chang toppled more World orders okay and
certainly it's a big deal now you know
when you when you speak about climate
most people go to you know the current
climate crisis but you're really talking
about the long cycles of climate causing
drought causing starvation basically
just ending ending Nations yes
yeah and then
um and then there's number
five um which I which is um is man's
inventiveness in all of its various ways
particularly technology but that
inventiveness and so it looks something
like this right which I mean what I mean
is
technology inventiveness you don't lose
it you you rise
build on itself upward force and it's a
great upward Force now and then there
are these Cycles like the business cycle
and the political cycle left right left
you know we um we had the left and now
we have the right now we have the left
and so on and these economic Cycles are
those and then there's the big cycle
which is like that to GDP and that those
kinds of things so that's visually how
it looks to me and everything that we
talk
about um although there is one other
Force but almost everything that we talk
about uh is one of those five and that
you drop down so whenever you're asking
me anybody we will go into one of those
five and you could almost see where you
are in the cycle and they all relate to
each other right so tariffs relates to
economics relates to you know
geopolitics oh the six Force which I
didn't mention but it's also very very
destined is demographics of course yeah
we have a silver tsunami we have an
aging populace uh and we have uh growing
I mean it's interesting right because
these are uh the the age
demographics uh are I think I'm thinking
they play a much bigger role today than
they ever have and will and will yeah
everybody Peter here if you're enjoying
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all right back to our episode I want to
get into something and then get into the
uh the five um uh the five stages of the
of the big dead cycle you write about
and I want to dive into something
instantly here which has been bothering
me I I did not get a good night's sleep
thinking about this last night uh as we
get ready which is our country is going
to go broke faster because of AI and
Robotics so if I understand this
correctly right the federal reserve's
mandate is basically to juggle jobs and
inflation right uh provide maximum jobs
maximum employment stable prices
moderate long-term interest rates and
and traditionally you lower interest
rates that boosts employment because
companies can borrow cheaply that expand
operation that hire more work more
workers and that's been the game up
until recently now you've got uh Optimus
humanoid robot and figure you know the
prediction right now is we'll have
billions of them by the mid 2030s you
know elon's prediction when I
interviewed him at uh uh at fi in Riad
it was you know 10 billion by 2040 you
had Sam wman tweet out yesterday that
their 03 Mini model um and their deep
research Tech will start displacing
singled digigit uh employee you know
white collar workers right away I
interviewed uh mark benof on this
podcast I don't know two weeks ago he
said listen with uh with salesforce's
new agent technology we're 30% more
productive and are hiring no new
engineers and so the question becomes
you know as we're marching forward here
if a company has access to lower
interest rates wouldn't they just buy
more robots and hire more AI agents and
thereby you know reduce labor and sort
of create this massive decoupling
compared to what had been the the
process yeah uh um it is I think
virtually certain but that's even that's
debatable but it is virtually certain
that it will replace a lot of people and
that uh what we've been seeing in the
form of a wealth impact of
technology in which there's um small
population that has unicorns and it's
the most most wonderful world that we
can possibly imagine to be in um also we
have a population in the United States
where 60% of the population has below a
sixth grade reading level and and is
pretty broke and
so that is likely to uh happen there's
going to be great disruption and then
the question and the question for all of
these things is how are we going to deal
with each other I mean the number one
question on all five of these and
demographics is how do you and I and we
deal with each other so that um we're
not just dealing with in a greedy way of
our of our own self because you can have
a
great civil war or a conflict due to not
managing such social issues and those
social
issues um are difficult to manage
because everybody has a polarity
regarding those social issues I I'm
going to go a step deeper here because
traditionally you would hire workers
that would get money in their pockets
they would start consuming that would
fuel demand they would pay down
corporate and government debts and the
challenge again is again in coming from
your recent work uh you how governments
go broke um if workers aren't seeing
wage growth and aren't getting jobs then
who's driving
consumption and
then how does that drive uh our economy
I guess the question is well is it going
to accelerate uh your predictions on the
challenges well the techn the
technology advances are a two-edged
sword the way I think it is it's going
to raise productivity it's going to
raise output for manh hour sure okay um
and that's a good thing and that power
of that good thing you know means you
have you don't have to work as much or
you anyway or you get more out of that
uh result and um then it becomes
what do you do with the
distribution of that right yeah
so um so it becomes a how are
you like with each other to deal with
these incredible disruption effects I
would say I just also I want to say uh
something I um I think that we all think
we're
optimizing for the things that those
Technologies get
us in other words wouldn't it is it'll
be wonderful our life expectancy
Rises um we become smarter all of these
wonderful things who could argue about
their life expectancy rising and so on
and sometimes we lose
sight that that may not even be the most
important things in a world
that's in
Conflict um and so on so if you look I
did a I did a study of the well-being of
24 top countries using a lot of
Statistics it's by the way it's online
anybody could see it it's a great Powers
measures and it's very interesting that
um I measure different measures of
power income military power education
power different types of power um and
then I measure happiness MH and I
measure
health and past a certain basic level
there is no
correlation
between um per income and happiness and
health yeah I I remember that that
number was around
$70,000 or thereabouts for H for
happiness um it's it actually is
considerably less than that number I
don't know what it is but I know like
for example
Indonesia I was thinking for the United
States yeah yeah has a much happier uh
population and in terms of per capita
income and in terms of health it's much
lower but they have a much happier
population um I I I don't I I I would
have to go back and check sort of how
but it's more mostly above um that which
is needed to have to be out of pain you
know
to right and the United States in terms
of
health has a fiveyear lesser life
expectancy than Canada and comparable
income countries you know in other words
the developed countries yeah so and and
if we think back in time were your
parents that we knew my parents MH were
they less happy or well off and then
think about what the hell of wars and
things are so there it's it's not just
optimized by
technology and okay I get more life we
have to pay attention to these other
things too so so part of the question
becomes is there is there going to be a
new type of social contract that's going
to have to be created I mean I do
believe and and I write about this and I
think about this a lot that technology
is a force that turns whatever was
scarce into abundance right we've
created massive energy abundance and
food abundance to the point where where
o obesity is thing you issue abundance
of information abundance of all the
entertainment you could possibly want
abundance of almost every there's very
little that if you pushed me I couldn't
paint a picture of increasing abundance
even life uh the amount of things you
can do per unit time um per second dur
today so the efficiency of the of how we
spend our time
uh but even with that increasing
abundance uh if people are unhappy and
it turns us towards civil Strife then
we've got real issues yeah I think um I
think that we can agree um on the fact
that the technology and AI is going to
be a force and it's a
tailwind and then we also have to
realize that the other four or five
forces are big
headwinds and the question is is the
Tailwind greater than the headwind in
the appropriate time and oh so so when I
think about that um we'll we'll get into
the debt problem okay we're going to
have an an
immediate we're going to come into
budget
season um and we will over the next
several months and if they don't do
something we're going to have a major
debt problem and we'll talk about that
in a minute but it's a headwind yeah the
internal conflict is a headwind the
external geopolitical conflict is a
headwind the climate thing is a headwind
the demographic thing is a headwind so
now when I think of the Miracles that
I've experienced when I'm when I let's
say um and you've
experienced I remember when I used to do
charts
that I would literally do charts with a
ruler and colored
pencils and graph paper sure and I
remember when the calculator came along
and I remember when spreadsheets came
along and I remember the computer really
that came along and so when we think of
digitalization and devices and so on
they were pretty amazing
let's say over a really let's say a 35e
period and so on so when we think about
I mean they were revolutionary right and
connectivity instantaneously wow and
then we live our lives we're born we get
older we die we live right yes okay um
and so then I think okay what force will
this be this AI Revolution t as a
multiple of the force that we
experienced
from uh rulers and colored pencils and
and going to spreadsheets and being able
to do models what what factor will that
force that that was one hell of a force
and when I look at the Industrial
Revolution and I look at these things
now I think it's going to be a bigger
Revolution yeah but when we actually say
okay what is its magnitude I'm sort of
like I don't know if it's 1.2 25 or or
1.5 what the other one was cuz man it it
when you look back on it it may not look
big when you're in it and you imagine
the future like this is and then we have
the headwinds and we have a timing issue
okay because that baby better come on
and we better get there in time so I
think about what the 20s were like the
20s was the most patents the most
Innovation and then we came to 29 in the
Great Depression I think of the bubbles
that have been in quite often they were
matched also with the greatest
Innovations so we cannot just simply say
that these Innovations will necessarily
quickly and in time create such a
productivity miracle that the others
don't matter demographics and you know
okay there's going to a lot of be a lot
of people who go from working to needing
you know and and and so on who ain't
going to be productive and and are going
to be needing
so I don't know how that works exactly I
am impressed with it but I don't know
exactly yeah I I had this conversation
with Neil degrass Tyson who was saying
we're having the conversation exactly
that every generation feels like they're
at the most extraordinary period of
technological and societal growth ever
right it it it feel it feels it feels
that way I mean the the stuff that is
coming Ray that is I think I have to
believe it's transformational and the
question is is it unlike what it was in
the past in terms of the level degree of
transformation right I um okay let me
give you what it was for
me I computerized all my decision making
I have artificial intelligence decision
making data comes in um criteria are
specified orders get placed analysis is
done uh my decision making is um all
programmed um in ter literally in terms
of markets data comes in act things get
no people it's like one of those uh
factories that has just a few people
looking after it and everything happens
okay that came to me from the old world
way of thinking which I think most
people are still in which is I'm a smart
guy and I will make my
decisions okay we are still
a a long way from you turning it over to
the
AI
okay that decision there there is there
is debate there is debate but the
question what is what is a long way is
it is a long way three years five
years
years I find I find it so interesting
that so many people are users of
AI but they do
not follow
AI okay and if you ask it like if I ask
it um okay should I buy the um okay
tariffs came in and should I do this
this and this I get
okay I okay what would you do
okay I get bullsh because it still comes
back to understanding cause effect
relationships
you still have to it better understand
it and the question Human Relationships
Human Relationships sorry this this is
human emotional relationships well but
even even the relationship between do
you understand the mechanics of how the
tariffs affects this this this and the
other thing explain it to me and make
your would you how you run your company
or whatever you're a long way from
actually that decision making okay of
having the criteria and the cause effect
and that's even more so in the markets
because the markets are are are zero sum
game so in other words I have to be
better than the consensus to beat the
markets and so I'll get the consensus or
whatever it is I'll get that knowledge
but how do I get better anyway all I'm
saying is when we say we're going to
turn you know I'm going to turn it over
to there I I do believe that the idea of
it's an a partner
and a an associate and so on and it boy
it could teach you and it could do
wonderful things but as it but you need
this as a partner so I um and then we we
see where we go exactly but there's um
we we'll see I don't know anyway but
that's AI we agree a super plus for
productivity we agree a s super uh
probably divider in who benefits and who
doesn't and that it becomes a social
question as to how we deal with that not
just don't also assume that it is in an
environment of
law because laws are local laws are
within countries laws do not exist
between countries and so there are
competitions between countries to win at
all cost so I don't think it's going to
be regul ated or controlled and we also
have to look as it as a weapon because
it it can be a very important weapon too
and we'll get to that conversation about
us and China which I think is the
dominant conversation in that realm
right now before we get there um I want
to talk about this concept of abundance
I wrote a book 12 for let see 13 years
ago now called abundance the future is
better than you think um and the
argument for increasing I know the book
it's a good book thank you uh the
followon age of abundance is going to
come out in 26 but the the detail
looking at access to Food Water Energy
Health Care education almost every
particular factor and the demonetization
and democratization has been just off
the charts and
accelerating um you know we're on the
verge of fusion potentially you know the
the Chinese just had uh
held a fusion reaction for 18 minutes um
you know you've got helon and many
others looking at Fusion by turn of the
the decade here um solar exploding onto
the scene um and energy of course drives
everything else um so I guess the
question is when you think about
abundance as a concept for America and
Americans and for the world
um how do you how do you I'd like to
know how you think about that is it a
world of increasing abundance are there
factors that are going to basically shut
that down
um the factors that could shut it down
are the factors that shut it down
before um and they are in the um
conflict I mean if you look at how it
was shut down before the Industrial
Revolution or the great revolution of
the 19 20s when there were more patents
than any time and all of those times it
was a combination of an economic and um
and a war and and conflict but you
showed that you showed the technology is
a continuous Force that's right building
on itself despite the up and down Cycles
yes but the chart that you we
see looks
like looks like that and that and that
life that life expectance if you look at
life expectancy it looks like that if
you look at per GDP it looks like that
okay what
we upward
arcing that that upward arcing what you
don't see ironically when you look at
all of these things and you see The
Wiggles okay that's World War II and so
you hardly pay any attention to it but
it mattered okay you know it these wars
last maybe three years typically they
have and and so on and so you don't stop
that unless you destroy
mankind yes but you and you won't stop
that so when I say stop it I'm assuming
like what happened in the
30s slow down yeah yeah so you have yeah
you because you don't forget you still
have it you don't go
backwards um and then you build on that
but that upward movement um is slow like
if you had a bust now MH okay you could
imagine how that would change
allocations of money how that would
change Innovations and so on uh to some
extent I mean I think that uh we're in a
position that might be somewhat
analogous to 1998 or
1999 where um um
you know I'm digressing but um just to
complete bu right well yeah what happens
is assets become more and more
expensive and then there's a universal
view that that is a great miraculous
company and that's a great miraculous
thing and they're right it's great
miraculous company and a great
miraculous thing but um the question is
how much do it cost
and is it expensive and so what happens
is actually if as an
investor um you'd be much better off to
buy bad companies at good prices than
good companies at bad prices yeah when
when my mom starts telling me should I
buy this stock or my Uber driver starts
telling me about that you know you're in
trouble and and so if you look at
pricing and who is the owners and so on
I'm not saying we're there it looks more
like maybe
98 but you also have a situation if you
have that together with if you have an
interest rate change and we'll get into
the interest rate discussion in a minute
I suppose um you then have expensive and
you have interest rates and then you can
have what we had in 2000 you know and
pets.com and there's a sword all you
know and and things change and also so
we we get so um used
to that the
disruptors don't get
disrupted like that's funny isn't it I
mean like everybody they all get
disrupted of course it was interesting
when Jeff Bezos at one of his earnings
call said yeah Amazon might not exist in
30 years uh I mean it it shocked people
for him to say that and but that's I
mean like how wake up up like the Dow 30
you know go back 30 years go that back
20 years you know they didn't exist they
they don't exist any longer and the ones
that are on top do exist and that's the
nature of this evolutionary process the
structure am I'm still impressed that
Microsoft is is doing as well as it's
done for the last 50 years crazy or 40
years yeah U let's let's get into the
big dead cycle and the five stages you
break it down into and
again the the lens I'm coming at this
from is we have a lot of entrepreneurs
who are building companies and um and
when time is good you know we just
entered a new Administration where we've
got a pro technology Pro
m& uh you know mindset minimized
regulation and I'm just I vibrantly feel
the energy in the biotech world in the
AI world people are building building
building capitals beginning to flow
again um and and people are not looking
at what's likely to be coming in the
next two to five years they're just like
the time is good now borrow build go go
go um so H what's your advice to
entrepreneurs
right now and and let's do that in the
context of your of the five stages we're
in and I'd like to understand where you
think we are in the United States what's
the impact of that elon's having and
Doge you know can we can we hold off uh
these dead Cycles is there any chance
for that or is it just too far gone it's
a lot of questions but let's take it no
no um and I'll and I'll um uh I'll I'll
give you my thoughts on them I want to
emphasize before I do that that
study th this is the draft of my book
and it's free online so that people can
read about the cause effect
relationships
because the re I'm 75 years old I'm in a
stage of my life that I want to pass
along things that are valuable I'm not
earning money and that's not my goal
anymore uh any of that and um I want to
uh everything is cause effect
relationships there's mechanics to it
and if I give you less than I'm able I'm
not in this conversation going to be
giving you enough and so uh it's free
online go get it and and you'll see I
know it's on LinkedIn is it is it just
Google uh yeah you can go um Google how
countries go broke the principles NAA
get to you yeah yeah yeah
um what is so amazing to me because I've
experienced it throughout my life is
everyone pays attention to how they feel
at the
moment and how they feel at the moment
and they don't see the changes and the
the changes the cycles and everything
are so important and and there are
certain classic things of
euphoria um and and yet so there two
classic things of
euphoria first where we are in the
economic cycle right there's an economic
cycle there's always been an economic
cycle and there always will be an
economic cycle so to so we are
about 65 70% through the the E economic
cycle that we're in judging by measures
I won't digress into all of them though
though I can if you want but in other
words there
are it will the the cycle will go
on and in the political
cycle we are in the classic first hund
day honeymoon of the new Administration
which is a time of euphoria and is a
time that the new beginning
begins okay so we so we're at a
unusually good moment that if you see it
in the psycle the in a cyclical sense
and you say what is likely okay our
aspirations are high because we have um
capitalism business free markets
combined with technology to produce that
and the United States is on top of the
world and we should be very optimistic
and so on okay but first of all you're
not looking at the pricing okay so if
you look at the pricing of Assets in the
United States relative to other
countries right now it's expected that
that will improve relative to the United
States so there's a hurdle rate you
always have to keep in mind like it's a
horse race you have to bet on that you
have to keep in mind the handicap so and
and then if you take the
cycle I I I bet you um that as we take
one two three four five
years do you think you're not going to
have an economic
downturn do you think you're not going
to have a bare
Market do you think that everybody's
going to be as enthusiastic about how
things are going with how the government
is handling it do you think you're not
going to have any of those other
problems
really and it's the I mean the challenge
of an entrepreneur is you've got to be
especially a moonshot entrepreneur
you've got to be super optimistic even
to get into the
game uh and but people are not don't see
the long-term writing on the wall so how
do you properly capitalize yourself how
do you protect against the downside how
do you not over um burden yourself with
with debt or to Rapid growth um I mean
this is what I I this is the message I
want folks to be listening to I'm listen
I'm the guy who not the Glass isn't half
full the glass is overflowing I'm Mr
optimism Mr abundance but uh I as I said
reading your book it's got me thinking a
lot so I want to pass on I want to pass
this well I I I I think
um I think first of all one of the great
things about the United States
and our system is that you can fail and
you could start again yes it
differentiates us from most of the world
that's
right it's a
so okay then you think okay whose money
is it failing and how does that work and
am I straight and upright and honorable
with people but you know okay in this
world of you you know you got to go for
it you want to go for it and then you'll
be straight upright and and and and and
and you and and and and you go for it um
and you could fail um just don't get
permanently knocked out of the
game you you know um there's a there's a
great there's a there's a great uh talk
that bill gross not the economic Bill
gross Bill gross my day lab gives about
what's the single most important aspect
for a successful company and it's timing
it's living long enough to live forever
if you can
if you can live through the downturn and
be there at the upturn um
then in my case I never raised a dollar
of debt or a dollar of equity I built
the largest hedge fund in the world and
if end did very well but I never and now
I'm not saying that's the right thing
but the don't die uh Mantra was my
Mantra and I always and I did certain
things like I would always say is my
profitability X relative to that how
much do I have in this way and so on so
I I I I constructed the finances in
which it couldn't die yeah it could
contract but it couldn't
die um so now I'm not sure that that's
even the smartest way I'm saying that's
how I did it but I'm not saying it's the
smartest because it's also sometimes
it's okay if you die and people will
understand it and that because of what
you're like so invest in your character
okay your
reputation you can damage you can kill
your
reputation but you're you know U if you
if the company dies and you do it the
right way that's and your op right that
that's that's almost allowed in our
system but be what you know be of like
be of good character and be of good
capability it was about 13 years ago I
had my two kids my two boys and I
remember at that moment in time I made a
decision to double down on my health uh
without question I wanted to see their
kids their grandkids and really you know
during this extraordinary time where the
space Frontier and Ai and crypto is all
exploding it was like the most exciting
time ever to be alive and I made a
decision to double down on my health and
I've done that in three key areas the
first is going every year for a fountain
upload you know Fountain is one of the
most advanced Diagnostics and
Therapeutics companies I go there upload
myself digitize myself about 200 gigabyt
of data that the AI system is able to
look at to catch disease at Inception
you know look for any cardiovascular any
cancer any neurod degenerative disease
any metabolic disease these things are
all going on all the time and you can
prevent them if you can find them
Inception so super important so Fountain
is one of my keys I make that available
to the CEOs of all my companies my
family members because you know health
is in you wealth uh but beyond that uh
we are a collection of 40 trillion human
cells and about another 100 trillion
bacterial cells fungi VAR and we you
know don't understand how that impacts
us and so I use a company and a product
called viome and viome uh has has a
technology called metatranscriptomic it
was actually developed uh in New Mexico
at the same place with the nuclear bomb
was developed as a biod defense weapon
and their technology is able to help you
understand what's going on in your body
to understand which bacteria are
producing which proteins and as a
consequence of that what foods are your
superfoods that are best for you to eat
or what food should you avoid right
what's going on in your oral microbiome
so I use their testing to understand my
Foods understand my medicines understand
my supplements and viome really helps me
understand from a biological and data
standpoint what's best for me and then
finally you know feeling good being
intelligent moving well is critical but
looking good when you look yourself in
the mirror saying you know I feel great
about life is so important right and so
a product I use every day twice a day is
called one skin developed by four
incredible PhD women that found this 10
amino acid peptide it's able to zap
scile cells in your skin and really help
you stay youthful in your look and
appearance so for me these are three
Technologies I love and I use all the
time uh I'll have my team link to those
in the show notes down below please
check them out anyway I hope you enjoyed
that now back to the episode
let's get into the into the big dead
cycle and the five stages and give us
understanding of where we are in that
process if you
would um okay so there are these cycles
that are you know
the short-term debt cycle or the
business cycle that um years we know
what those look like and then they rise
debt keeps Rising relative to
income
okay um and the income is needed to
service the
Deb okay so the way I the way I view it
is um after the war debts are basically
written off you've got you know that you
you start with my parents didn't have
yeah they didn't have any debt they
didn't have any much um and and and then
they begin the and it's almost what we
talked about earlier they don't want to
spend money you know they don't want to
get and and in the early stage of the
mar the cycle it's the sound money stage
and the sound money stage can be um
measured
by
um
first does the debt create more
income then it's needed to pay it
back I mean that's that's basic it's
it's a good use of capital right it
makes everybody happy yes I got I lent
you the money I got pidb with my
interest rates I'm happy you got
borrowed the money you Ed the money in a
way that allowed you to move forward you
came up with the good ideas and so on
productivity increases and debt is not
Rising fast relative to income
confidence is high Financial systems are
stable yep the confidence being high
starts to be a red flag
ah okay you see so what happens is um
you're at that stage and by the way the
monetary systems at that stage are hard
in other words at the world at when we
came out of World War II this is the
beginning of the new debt cycle the new
cycle um gold was there you couldn't
lend more than gold because they had it
back and and so on so you had sound
money and sound
finances okay and then time goes
on and by the way I want to speak about
Bitcoin at some point as a as an
alternative to Gold but not right now
great um and
um and confidence
builds and everybody those who are doing
it are make making
money the prices go from cheap to
expensive like I told you
the uh earnings yield on stocks were
twice the bond yield I mean like wow you
could just take the dividends you know
but everybody was worried about going
down and then it changes the prices go
up the
optimism and you know they say uh Peter
what you're not in the market I mean
come on what's wrong with you man you
start your house and put it in the
marketplace yeah yeah okay and and you
go in there and then you come um really
to um getting invested asset prices uh
become expensive you borrow money to do
it and so you have um a debt
bubble in other words you get to the
point where the income produced doesn't
service the debt and then you begin a
dynamic of very simple uh is that where
we are
today um we're as I say it looks to me
like we're in
1998 you know these all become how
extreme okay and so I have measures I
have indicators like that give it and it
looks like
98 okay which means we still have a year
and a half of Good Times ahead I don't
it's not so
prise it's a thing that goes like this
and you know I know that we're over here
and then what happens
is that goes on and you see
unsustainable uh debt growth now the
unsustainable debt growth that we're
seeing right now is particularly the
government the government is going to be
in financial trouble and I'll get into
that in a minute yeah um but um what
happens is you see that debt growth and
then you see a rise in interest rates is
the
classic and a tightening of monetary
policy be put some breaks on and that
pops the
bubble and then you go through the um
debt liquidation
phase and Ray can I just ask a question
here which is these Cycles have been
over and over and over again there are
there are historians and printed books
and so forth is is it the
politicians are just
unable to
um uh to make hard decisions in order to
keep in political power is this just
yeah FAL in human nature that we can't
both both of both of those things you're
asking why in these Cycles
um you you
know if you look at let's say debt to
income it goes like this and why we keep
going wh why does this thing
exist um and and why don't we sort of
keep it a debt income more the same and
um and there were um the reasons uh
politics and human nature you you
touched on um that that uh first of all
um
credit
creates buying and
stimulation and everybody everybody
wants up but but that's that's
historically because the credit employed
people that then consume when you
spend if you I mean the Govern govern
when they say I'm now going to give you
money they're going to give you money
and credit it's mostly credit and they
make credit available and then you you
you go take credit that's how when they
lower interest rates and they make
credit more available um you go that's
you get your car you get your house on
credit yeah okay but credit creates debt
yeah and debt yeah okay so what happens
is every time you get one of
these then a local D they want to give
you credit but it's like giving an uh
you know an alcoholic a shot or to get
him out of the you know or or an addict
okay you give them a
dose um and okay and you and you get
that and politicians like credit because
what credit comes before debt
payments so I give you credit we get in
debt you love
me you know that's why they want the
Federal Reserve and the central
government to be separate you know to
try to do that but still what happens is
and that human nature wants the credit
you know so it
so so that's why debt to incomes go like
that you know and
so you
know show you in this in this this
book you know this is the government and
this is the the cycle and that and then
this is The Debt Service payments that
we're going to have going forward
so yeah human nature we all want up
we're all betting on up okay all the
time
up betting on up
unless to buy things that'll go up
yes um
so the the party ends the bubble
pops yeah uh that's right
um You have the debt problem and then
what historically what they would do is
then they would give more credit so uh
um except when you hit it zero interest
rate you had a
problem and I mean I found that
incredible to get into negative interest
rates even right why do I think that's
incredible no I said right right yeah
okay yeah um seems I was with
Central Bankers you know
I'm I'm in that group sort of and uh
when they had uh zero interest rate
negative interest rates and they were
calculating uh they said how negative
can we make interest
rates and they
calculated um they estimated for a very
short period of time uh it could be up
to 400 basis points and the way that
they calculated that
is by how much paper money that you
could store in storage because your
Arbitrage if you had the paper money you
wouldn't have to have a negative rate
you know
that why not hold the paper rather than
to hold something that has negative rate
and so how much negative rate could you
have and that what and that was the
essentially the Arbitrage well anyway
when that happen and it happened in
history by the way it happened 1933 same
thing wow and what they do is then what
they do is they print money and they buy
the
bonds so like in in 2008 uh excuse me uh
they did that in two th starting in 2008
and then 2020 when there was
covid they had to send out
checks so the government had to send out
checks
checks the government doesn't get to
print money where do they get the money
to send out the checks they borrowed so
they send out the checks and the Central
Bank lends them the money and prints the
money and lends them the money so
everybody gets all this
money and there's like a surprise that
there's
inflation everybody gets all these
checks and all this money and there's a
surprise that there's inflation I mean
there were other things going going on
too but disruption and supplies and
things like that but mostly it was the
amount of money going in so there are
two things that happen at that
deleveraging
point those so I I want to make that
clear that here are the here are the
things that cause the
deleveraging
[Music]
um Supply demand
and and Debt
Service okay so let's take the
government Supply
demand the government is going to have
to sell a lot of
bonds to owners because there's so much
debt around one man's debt and another
man's
assets so because they are all the world
is holding all these debt assets that
actually for various reasons they don't
want to add to it a big way because it's
already such a high percentage of their
portfolio and there are geopolitical
issues going on okay um that the am the
huge amount that will be
sold will likely
over be substantially greater than the
demand for it and so people start
selling their debt and when they start
seeing that it's going to be bad because
they know it could be one of two things
either you have a problem paying and
interest rates go up and and you have
that dynamic or the Central Bank comes
in and buys the debt which prints the
money and devalues the value of money
okay either way when there's too much
debt and a supply and demand imbalance
you don't want to own debt which is
where I think we are unless there is a
change it's what I call my 3% solution
but we won't get into that now I assume
uh um but you know there is a path here
to deal with this uh but um if they
don't deal with it you're going to have
a supply demand problem I believe and
then in addition to that what happens in
debt service when Debt Service
fill uh the way I think about it is um
the credit system is like the
circulatory system in our body and the
blood uh which is the credit brings
nutrients all through the system
but what happens is that when it
accumulates debt it's like accumulating
plaque in the system because you have
more and more Debt
Service that
constricts um the um that amount that
can pass through the system like the
government Debt Service payments are
grow and then you hit a part of it which
in in
markets uh is called and this this is
usually for uh private creditors is
called it a death spiral a debt death
spiral and the debt death spiral what
happens is as Debt Service payments
rise so that you have to borrow money to
pay the debt and then the Creditor sees
that so they pull back and the credit
spread Rises and as the credit spread
Rises you have to borrow more money that
is the death spiral and that's when you
see that
Dynamic um
that's and that's close to where we are
in the government debt but for a company
that will drive a bankruptcy in the
United States that drives what it D it
it it it drives the um Central Bank
to come in and buy the
debt and depreciate the value of money
that's what a monetary inflation is yeah
you know a a lot of
people think I when I started I think
why do you have an inflationary
depression in other words how can you
have when demand is depressed how do you
do it you have uh money money production
and then I say well why don't they just
stop producing the money well because if
they stop producing the money the debt
they'll have a deflationary debt problem
that's the dynamic that's the mechanic
and I want that's why I want to explain
these mechanics in this book yeah you
know so people could see it because I
show it in the book and everybody thinks
uh you know I'm a genius my house prices
are going value of my house is going up
the value of my stock portfolio is going
up but it's all in massively inflated
dollars I I I know like it's so
funny because people think they get
richer if the price of their houses and
the price of things that they're owning
in a sense go up but it's a same
house it's the same stuff right it when
when it goes up in price because of
inflation I mean buying power is what
matters not price a dollar what can a
dollar value today um which is why I
still like the meme you know one Bitcoin
equal one Bitcoin uh unfortunately one1
does not equal $1 uh any yeah uh so
we're in this this these five stages uh
of the Dead cycle and just to to wrap
this up we're in the deleveraging
stage and well the government you mean
now well no no I'm saying in in your
five in your five stages in your and
then that the leveraging stage uh
typically if the debt is denominated in
the currency that the central bank can
print you always get the printing yes
and you always get the devaluation of
money and then what happens is then the
debt becomes so
cheap that it's easy to pay it off so if
you're watching like like Japan is a
good example if you owned a Japanese
Bond you would have lost about 80% of
your money relative to something stable
like let's say gold and you would have
lost about 60% of your money relative to
a US Bond because you got 3% less
interest rates and the currency
depreciated by almost 4% a year and that
7% a year is what you would lose and
then what happens is if you're in
Argentina take it to the extreme you
take that debt and you pay it
off because it's worthless with
barrels of pesos or whatever it might be
yeah where where are we in term I mean
let me ask the question I started with
which is uh we're in this Administration
Elon jumps in the department of
government efficiency is created the
goal is cut back uh government waste uh
try and get us more towards a a uh a
balanced budget I mean clearly had we
uh not done anything there is no hope
we're we're heading towards disaster is
there any do you think that Doge can
make an impact on this um I honestly um
I honestly don't know the consequences
the
realities of of
that I I I I'm I'm I I can't answer your
question it's it's too complicated for
me I'm not at the nitty-gritty of being
able to say if you shut this thing off
what are the
repercussions of that and how that works
I would need to have a much more I need
to have not only a much more
detailed um but I would also need to be
able to
anticipate um you know there's an action
or reaction and what the reaction is um
it's something like the tariffs you know
um if it's very difficult for me to
answer your question okay I appreciate
that but you are clear if we're doing
nothing um there's a there's a
definitive wall we're racing towards yes
I'm this goes back to my 3% solution
okay let covered it's covered in
there under the
existing
budget if there's not a rolling forward
of if there is a rolling forward of the
Trump tax cuts from
before the size of the uh deficit will
be about 7 and a half% of
GDP you're going to
need about 3% of
GDP to stabilize
it
um uh so I call this my
3% three-part solution okay so first get
3% in your
mind okay can we get the deficit down to
3% of
GDP and there are three
things that can do that we we know the
first two uh is spending
taxes and by the way when I mean taxes I
mean tax revenue which isn't the same as
tax rates
mhm uh spending taxes and interest
rates because the interest rate on the
debt is such a big
factor now I've gone through the
calculations and have and have studied
this and and in that study you can you
can read it and you and whatever
if um if one way or another I don't care
how how you do it that the the how you
do it is almost an ideological question
the fact that you need to do it is
important so it's like you know the
patient that has too much plaque and
they're eating and they're not
exercising I don't care whether you eat
greens or you exercise or I don't know
but you got to get that plaque you've
got to get that um going the other way
and um and so that's the 3%
and you could do it from some mix now in
my studying
these um if you do it with the Right Mix
so that it's not too much of
anything it's not
traumatic um and if you do that you will
get a fall in race
naturally okay because the market will
be better off less
risk and um if there was any weakness
due to the fiscal stimulate uh fiscal
restraint the central bank will Le's
monetary policy and that's always been
the case I show I don't know how many
cases like 20 cases there of around the
world this happened in from 1991 to 1998
in the United States so there's a way
the real issue like I don't really care
they I think all the policy makers
should make this 3%
ledge because you're going to whoever it
is I they're going to argue over the way
yeah and they won't do it that's my
worry
okay um there's a there's a few
uh uh highflying Solutions out there and
I want to throw one towards you uh Rey
you know my passion about longevity and
extended Health span uh uh Dario who's
the CEO of anthropic I don't know if you
know Dario um no was at Davos and saying
something that's been discussed and
asserted by a number of other
individuals that in the next 5 to 10
years we will see fundamental
breakthroughs in human health span and
Longevity uh that we may see his words
not mine a doubling of the human
lifespan uh you know we have
$101 million Health span X prize going
on right now to add 20 healthy years and
so one of the factors I find fascinating
is the notion of if people are vibrant
have uh the cognition and the uh the
fortitude the Vitality to keep
functioning so that at you know 80 or 90
you've got the wherewithal you had in
your 50s or 60s
uh I have to imagine that would have a
fundamental uh impact on the economics
here
um I'm not
uh here's my confusion I'm not I don't
have the answer um a number of those uh
studies I've seen studies that said that
extending life span is going to raise
the
cost um the cost of heal
Health huh okay you would know this
better than I so I'm not um um but um
and and then there becomes the
retirement age question which is very
much a political question so the
question is are you productive or are
you an a consumer of productivity yeah
okay I would say that if you're watching
around the world extending working
years
you um you don't see it I mean you see
um the fight against it almost political
it's a
political
nonstarter s of fight so you have to ask
yourself does the um working years get
extended let's say and then
um ma ma the the what I had read was you
have more years that you have to take
care of that person and so on so it's
not like you go to become young again
well now I I'm not arguing that that's
the case yeah I'm saying I don't know
the answer today in the US the life
average lifespan is around 79 the
average Health span is around
63 meaning you're you're spending the
last you know 16 17 years of your life
in some level of of pain and decrepitude
and I think the goal is can we actually
change that so that you're healthy uh
initially and then extend the two two
you've got it engineered
beautifully but I suspect you know
longevity because you were just talking
about longevity not Health in those
years you know
I mean like the one thing we got this
baby boom and and these people these old
people of my generation and um and you
got a lot of them living and then when
they die they're not a
burden okay so dying from Actuarial
tables or financial tables can be good
remember Logan's Run the movie oh yeah
yeah you were you were supposed to be
you know knock yourself off at age 35
and turn yourself into a food supply
anyway that's a different story um all
right let's I I believe that if a person
uh is got the energy and uh the drive
and is not in pain uh and is not
restricted by regulation that at the
peak of your capability you're going to
want to keep in the game and that's the
hope that's at least the work well I I
would say um if you actually look at
what happens in
countries your hope is not consistent
with the reties in other words when
people come to their working their
retirement age they will fight and and
for that retirement
age we're going to find out soon enough
what I keep on telling people is you
know we're alive during the 99th level
of gameplay and a lot of these questions
are I want to be alive I'm with you keep
me alive keep me alive
favor I you know even if I get to
decrepit in my years that I wouldn't
have been in live yeah Tony Tony Robbins
who's a mutual dear friend and I both
invite you to come and and join us at
Fountain life and uh let us well you
know I will thank you I appreciate that
let's talk to bitcoin let's talk about
Bitcoin a second um I know you're a
Bitcoin holder but you're still more
excited about gold uh if I remember
correctly how do you think about Bitcoin
uh you know Mike sailor uh was my
roommate fraternity brother at MIT um
and he's probably one of the most
outspoken individuals if if you I'm sure
you've heard Michael speak about Bitcoin
are you sold by his his vision let me
tell you
um what I think about it
um because I could I'll speak for myself
and um I think these things are
accurate um first thing is
[Music]
we agree on
anti-money we agree on anti-
debt okay that's
important when you say anti-money Define
anti-money
please that there are two purp purposes
of
money um and that is as a storeold of
wealth and a medium of exchange medium
of exchange it'll exist store holder
wealth you store it in a
bond okay you're yeah money and debt are
the same thing because when you're
holding money you're holding it in a
debt
instrument you anything you're going to
put your money your dollars you're going
to be in debt instrument otherwise you
know you lose 5% a year or something
that you know um and so money and and
debt are the same because debt is a a
promise to get the money so they're the
same we have a supply demand problem
with this money in debt okay so I don't
want to own money and debt and so we're
aligned anybody who's going to want to
say it as a stor hold of wealth is
because the quantity of it cannot be
increased other than through the mining
activity BL you know but with that
restrictions okay and that's that that
so the first thing I want to emphasize
is are you there is that part of you or
there and then how much should be in
your portfolio of that thing or those
things so I'm a kind of those things guy
that prefers gold for the reasons I'm
going to explain okay but I but I have
some Bitcoin but I've got uh much more
gold and um and uh and the amount that I
uh I I think is a prudent amount
if you look at correlations and the
systems and all sorts of things the the
least risk amount to have in terms of
maintaining your buying power is
somewhere between 10 and 15% of a
portfolio so I think they should be%
should be Bitcoin or
gold anti-money anti-money and you're
putting the two together in that bucket
okay yeah yeah now on the Bitcoin versus
gold um here's the thing
um
Bitcoin is not a private asset any uh
the government's watch it they know what
you're going to have they know where you
are they can tax it they can take money
away from it it exists uh uh at their
pleasure and they can do anything they
want with you their comfort of you being
in Bitcoin is better than their comfort
of you being in Gold let's say uh well I
I agree the fact that it's that it can
be monitored the movement of it can be
monitored uh as but it doesn't exist at
their pleasure uh are you saying that
the government could shut they could if
they wanted to uh under regulation and
so on tax you yes as a matter of fact
like I was saying I was with the central
Bankers who said um the the reason that
we um when negative interest rates how
much could it if they had a digital
currency
there was no floor on the negative
interest rates because they could tax
you okay so okay they you don't have the
Privacy you can get taxed and and so on
um um whereas the saying of gold is you
know it's it it's the only asset that
you can have that's not somebody else's
liability meaning you have it in your
possession and um and that's that's
somewhat different the second thing is
um central banks holding it as reserves
I'm watch watching the
um periods of conflict and so on
um they go to Gold even in terms of
their enemies because like um what
governments do in periods of conflict or
whatever is they print money they make
bonds and that's not good and they don't
want to hold each other's bonds nobody
wants to hold the bond
and um and that's why they hold gold
they don't trust each other and um um
that wouldn't work that way for Bitcoin
because governments
can uh control it we we do we do inflate
gold every year what percentage is mind
every every year
infant a pittance okay um I don't know
like 1% or so of the stock of gold yes
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um uh and consumption for jewelry and
that's um anyway the
um
and it has been for thousands of years
in all different
places
so and another thing
is I can understand price changes in
Gold mhm
in other words if prices change I can if
this changes and that changes I can make
sense why the gold price change that way
I have a problem doing that with
Bitcoin it it it still very much moves
in a way that it wouldn't be necessary
it's a supply demand speculative Market
that's tougher for me to nail down yeah
I I I am curious um by the way I just
asked uh anthropic here and it's uh we
inflate gold about 1 .5 to 2% per year
um yeah that makes sense the uh uh you
know I am still i' I would expect uh
Bitcoin to go up when there is uh
International Strife or instability or
uh you know difficulty predicting what's
coming next but uh we're seeing swings
that are not related to anything that's
really explainable today that's that's
right so when I go down that list of
things I
say I favor gold for that reason those
reasons could you imagine changing your
mind if some sure if some thing came
along that tell me
why I I also um some people have said
and I'm not sure if this is right it's
been quite amazing but that with Quantum
Computing and so on there's a good
chance that you can break it
yeah I don't know if that's true I'm not
an expert I'm I'm just throwing another
thing in there where I'll give you
another answer to that R just so you
have it in your uh in your quiver if if
quantum Computing were to allow us to uh
to break encryption on bitcoin we have a
lot bigger problems that same uh that
same Quantum decryption would give us
the nuclear codes would allow anybody to
enter your bank accounts allow us to
we we you know we need to go to the some
Island Paradise you know
like it was so funny I uh I was in um I
was in Bali in this paradise and um um
then I fly up to
China and um you know um in in val there
was uh
this spot Off the Grid you know find and
they have this food plot I'm like I
didn't even know how much land produces
how much
food and I didn't realize that you can
have a plot of of land that's not very
big and you could live you know
wonderfully and everybody's in peace and
they're going to their meditation and
they're doing this and they'll enjoying
life and I get up and I go fly to
Beijing and I go and um with leaders in
Beijing and then I go to U there and
they're fighting for control of the
world you know
and you know you're on the
first okay yeah the grd and they're
going to get me and I you know they'll
get they'll take my phone and they'll
do you know I'm almost you know I mean
we do have to you know reflect on some
of these things let Let's uh two final
subjects uh if you've got the uh I know
it's getting late there but I want to
talk about China and I want to talk
about what your 2025 predictions might
look like so uh there's a lot of
conversation right now about China
versus us we've got a new Administration
coming in um you
know I'm my concern of course is we've
seen recently with deep seek we've seen
with nuclear fusion you know while while
the US is vibrant in terms of an
entrepreneurial and Technology ecosystem
and engine um China should never be
misjudged as someone who is uh is
pushing across the
board uh how do you think about China
how should we how should an entrepreneur
think about China we are at war with
China and it is a um it it hasn't turned
to a military war but it's actually
turned to very much a subversive war in
which each with you know with overthrow
the government and do all sorts of stuff
um and it's not going to go back it's
going to be that way the two countries
fight Wars
differently
um a leader in in China one of the top
leaders in China was describing
um the Chinese way of fighting War and
the Western Way which he calls the
Mediterranean way of fighting War um the
Mediterranean way is that you go in and
you fight and you fight to win and you
kill each other and you do that um the
Chinese way of fighting is so that your
opponent doesn't even know you're
they're fighting you wi if you're not
smart enough to win the war without
actually fighting you not stop be very
smart so it's a war of deception it's a
war of um anyway so there are these
different um Wars going on the different
mentalities um and um and and so that's
where we are I think um and then there's
this uh desire to have these separate
parallel universes in technology I don't
believe that you're um you're going to
be able to Main maintain control of
intellectual property that is something
that is publicly used I mean maybe if
you go inside your your spot and you
have sandboxing and whatever it is and
and you never bring it out and you never
look at it then maybe you can
intellectually protect it and that's
sort of how the atomic bomb was built
you know and maybe you can do some of
that um and by the way both countries
are trying to secretively build the
weapon that the other one can't um fight
against because if they show the the way
you really win is you build the weapon
that the other one can't fight against
secretively you show it to them they
find out that they can't win and then
you win without uh
fighting um that's the that's the best
way and um so but um we um we've changed
the world order
um and it's been very clear by uh Donald
Trump um that we have gone from a
multinational
multilateral environment to a um
unilateral each country for for their
own uh might is right kind of
environment and so we are in that
unilateral might is right if if I can
exert pressure on you to get what I want
to you know that's that's the way it is
which is historically what most of
History's been like and so um and we
have actually done that because we've
had a few
Wars we had
um the
um the Ukraine Russia War which I
think will come to some kind of a
ceasefire which will be temporary
probably you've had um the
Israeli um Iran and proxies Iran's
proxies war that uh Israel
won okay and you've had a conflict
between the United States and
China that um the United States did much
better and did much worse than they
would have
expected um that and particularly let's
say the Chinese and the Chinese have
domestic issues we have domestic issues
we will have our domestic issues but
they have domestic issues and I think
it's like you've you know you've got you
you've banged things around and you're
sort of surprised that the Chinese
probably are a bit and nobody wants to
go to worse War
so I think that probably over the near
term you're going to have this behind
the scenes
subversive kind of War you're going to
but in terms of economics and
Technologies look the winner of the
techn you cannot lose the war yeah in
the in the technology war and and by the
way that's also something that's
economically like I I think in terms of
let's say the super
scalers and you must win the techn not
only countries must win the technology
War those companies must win the and
profit may not be the number one thing
and you I think the opportunities are in
the
applications and the usage of it by the
way and China is doing a lot better than
that in terms of actual applications
we're we're doing we're we're Advanced
on the
chips and you know by how much but in
terms of actual usage of it and and
betting a Chinese so we have this
Dynamic going on and and China has its
own set of issues so I think that
probably over the near
term um you'll have a lot of pushing the
pushing the edge and that kind of stuff
but probably not going over the
edge um and so but that's not a
permanent set of circumstances but that
would be my take yeah you said a few
things I think are are really important
to hit on here uh number one um you know
any kind of restrictions we put on China
for AI like chips from Nvidia and so
forth all that does is force them to
basically uh start building capabilities
internally um and you know with huawe
chips right now the second thing and
forces them do is to become a lot more
efficient so deep seek was an example of
okay we don't have the the chip
resources so how do we change the
algorithms and just do it a lot more
efficiently so intell you know bringing
a new you you sort of darwinian
evolution have a constraint Evolution
will find a way find a way around it so
I think we've been seeing we see that um
also I'm a bit concerned I'm curious
what your thought are you know you
mentioned that 60% of the US doesn't
read above the sixth grade level uh
which is kind of shocking um we do have
a leveling of the education playing
field happening very soon when this
device becomes a polymath in your pocket
right where in a conversation with your
with your AI agent
you're able to deduce or learn or create
or serve anything that you need both in
China and the US I mean so we've got an
augmented
population you don't think
so well I I just go back to my
experience I I happen to have a son um
whose passion is edtech okay and he's
gone into the third world and gone to
the poorest areas um to make this
connected to make it like computers
and all of that and the the the original
theory was and the expectation was why
shouldn't they not only get educated by
this um and he can he founded he made a
device so that it's it connects to TVs
and makes computers and all of that and
why shouldn't they do that and then if
they do not only do you educate those um
but you have them have different kinds
of jobs that they can do remote remotely
and so on and so when I look at the
wealth gaps or the M these gaps and so
on um I was surprised that that didn't
happen so I'm hesitant to LEAP to the
notion you know a lot has to do with
parenting a lot has to do with you know
who who's giving the guidance you know
what is it like you know uh um so and
and we have an issue of parenting even
we have an issue uh you know okay why
does the 60% of the population have less
than a sixth grade education that
they're there's almost a leap that those
people are going to take this and
they're going to be productive and so on
so forth well I was surprised that it
didn't happen and I can kind of see
maybe why it might not happen is at
least my I'm I'm not assuming it
necessarily will
fair
enough um 2025 year ahead what are you
what are you seeing what are your
predictions for the what's the best
we're going to see in this year right um
obviously 2025 is a year of
great great great uncertainty I I think
that uh I I I think honestly the first
big issue that we're going to deal with
is the budget issue right now it's not
the issue and everybody thinks of it not
as the issue um in the first half of the
year um it's going to be the issue and
how they deal with that is very
important to me um in terms of the
supply demand because let's remember
that the treasury market is the basis of
all markets okay it's the foundation of
all markets and if
you create a reverberation for Supply
demand then it changes all that Capital
raising and that's funding this thing or
that I mean the world gets disrupted
okay so it's very important so um that's
the first thing that I'm sort of then
we're going to actually
see um um I the first 100 days of a new
Administration is a time of great
optimism and also is a time when you
have what priorities have got to be
it's got a you know it's real world time
now okay it's game time so the theories
are going to be put to the test and the
consequences you know
does you know does the cost cutting
happen does the is that realistic you
know how many numbers can you do that um
and not only because of you know its
secondary
consequences um but and then there has
to be prior PR ization I think the
prioritization is also going to be um
smartly on energy for data
centers um and the building of AI and so
on to win because the techn whoever wins
the tech war is going to win the
military war you know with with China
and so on and so but how that game goes
it's going to be a tough
game um so when I look at that I think
um we're not going to be as happy a year
from now as we think we're going to
be and and because also there's that
cycle things are pretty expensive if you
have interest rates Rising you know
there are these issues we can't get
so ignoring those that we um be in the
face of the AI thing um
and then you have to do it within two
years and it's got to stick because
midterm elections will swing um are
going to be harder for the Republicans
because they have more seats up so uh so
um so it's going to be
interesting um you're an entrepreneur or
I'm an entrepreneur
you're your
advice looking
forward thinking about you know planning
your business for the next year or two
years uh what's your wisdom you're at a
you're at a time of
relatively
um good Capital
markets credit spreads are narrow
there's a lot of
money
um um
plan
on Surviving droughts as well
as um the difficult time you know the
good times fill your Equity
cers
yeah don't take on too don't take on too
much
debt plan for realistic
growth and and um
make great
partners with the investors that are in
it um ultimately it's going to
be and not only your numbers but it's
going to be your character and
um you know don't be overly greedy
but um so have the relationships as well
as the
money that is your foundation
yeah I think that's beautiful wisdom Ray
uh grateful for you thank you for making
uh your research available and and
writing these books and I I I sure wish
uh we humans uh were a bit more
intelligent or a bit more uh uh had
longer memories um you know I I do
wonder sometimes whether AI can help us
get out of these repeated cycles and
support us in uh in in more uh logical
planning and growth um I guess we're
going to find out maybe if we ask it the
qu right
questions H oh good to see you my friend
thank you again for your time grateful
for you it's always a pleasure thank you
Peter thank you buddy
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