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

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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

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

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

this episode please help me get the

message of abundance out to the world

we're truly living during the most

extraordinary time ever in human history

and I want to get this mindset out to

everyone please subscribe and follow

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on notifications so we can let you know

when the next episode is being dropped

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

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

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

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

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

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

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

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

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

[Music]

um uh and consumption for jewelry and

that's um anyway the

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