Gold, Crypto, the Debt Crisis, and How to Survive When the US Needs a Bailout

The U. S. government is nearly $40 trillion in debt, a fact that pretty much guarantees exciting times ahead. Coleman Church on what comes next. (00:00) Debt Trading and Emerging Markets Debt (08:58) The IMF's Role in American Foreign Policy (28:57) How the Fed Is Secretly Destroying Free Market Capitalism (1:07:59) What Is the Alternative to Investing in the Stock Market? (1:12:07) Is Crypto the Next Global Reserve Currency? Paid partnerships with: Dutch: Get $50 a year for vet care with Tucker50 at https://dutch.com/tucker TCN: Watch our new outdoor series at https://tuckercarlson.com/americangame Last Country Supply: Real prep starts with the basics. Here’s what we keep stocked: https://lastcountrysupply.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:34Tucker Carlson?

  So one of my midlife realizations is that people in my world, certainly me, ascribe too much to ideology and too little to money. The financial dynamics of the world drive a lot more than we acknowledge that they do. And we look at things where like, oh, these people believe this and these people believe that and that's why they're fighting or that's why they're allies or whatever. But really, we should all remember that the love of money is the root of all evil and money really has a huge effect on outcomes, but nobody says that. And I miss it so often. So you spent your life in the money business, trading debt.

• 1:18Tucker Carlson?

  Tell us just to start, but like you worked in Ukraine. You traded Ukrainian debt. What was that like?

• 1:25Speaker 02

  I never worked in Ukraine. I've been to Ukraine on investor trip. I have traded Ukrainian debt. I traded emerging markets debt my whole life until May of this year. Traded and sold it at a bunch of different banks, London and New York. Ukraine was certainly one of the insurance we traded, traded through the Russia crisis.

• 1:50Tucker Carlson?

  Can you explain, for the truly ignorant me among them, what is emerging markets debt?

• 1:57Speaker 02

  So emerging markets debt, originally, the asset class grew out of the debt crisis of the 1980s. When money center banks were hung with primarily Latin America debt. After the 80s crisis, Nicholas Brady, Treasury Secretary at the time, came up with a plan called the Brady Plan to restructure the debt, back it with collateral US Treasury strips that would make it more palatable to a broader base of investors, to get it off the balance sheets of the money center banks and to create a more of an institutional uptake of the debt and retail uptake of the debt.

• 2:37Tucker Carlson?

  So, American debt, American banks are left with loans from other countries that those countries can't repay?

• 2:44Speaker 02

  Correct.

• 2:45Tucker Carlson?

  I'm just trying to put it in terms like I can understand. And so then the Treasury Secretary basically says to those banks, "We'll bail you out by guaranteeing these loans with American Treasuries?"

• 2:58Speaker 02

  It's one way to put it. It's a way to clean the balance sheet up and to create, I think there are two impacts. One, you clean up the banks' balance sheets, get it off their sheet, and create a marketplace and a dynamic that allows liquidity for this debt and then creates a whole new marketplace and a valley to issue and clean up the country's balance. So, you're doing good for the banks and you're doing good for the countries and theoretically doing good for a whole new investor base. And that started in the early 90s and I kind of walked into Wall Street in the early 90s out of college and I just fell into this market that was starting and really boomed for a while.

• 3:42Tucker Carlson?

  And so what does that mean to attach a Treasury to foreign debt? Can you tell us, layman's terms, what that means to Treasury strips? What is that?

• 3:51Speaker 02

  Treasury strips are zero coupon bonds, effectively.

• 3:56Speaker 02

  So you have collateral, you have risk-free collateral that's attached to the bonds. So that to get investors who are obviously wary of sub-investment grade emerging market, at that time it was called less developed countries, LDC, then it evolved into emerging markets debt, which actually...

• 4:17Speaker 02

  Is sort of a misnomer at this point because it it characterizes almost everything outside of G7 from

• 4:23Tucker Carlson?

  Right.

• 4:24Speaker 02

  Single A debt to defaulted debt. So it it's grown over the last 30 years to incorporate sovereign debt, debt of countries, primarily issued in in hard currency, dollars and euros, down to investment grade corporates, government owned debt like oil companies, let's say nationalized oil companies that would be called quasi sovereigns, down to corporate debt, all the way down to defaulted debt. So it's all of credit, all credit products went in a number of countries. It's ballooned. But at the infancy, it was really a, it was a evolving asset class to got to clean up the balance sheets and and open access back

• 5:08Speaker 02

  to lending to these countries. And instead of just being reliant on major money center banks for loans that really sat on their balance sheet and weren't that liquid, didn't trade much, let's open it up to global investor base, create, trade euro bonds, put in your, not necessarily put in your 401k, but put in your pension funds and then hedge funds traded it. And from there, it evolved from dollar debt into the local currency debt became much more fashionable. So investors can buy Turkish slayer denominated debt or Kenyan shilling denominated debt. And then obviously derivatives.

• 5:46Tucker Carlson?

  You can buy Kenyan debt in Kenyan currency?

• 5:48Speaker 02

  You can. It's not that easy, but the harder it is to trade, the more the banks make money at trading it. So it's, certain countries are harder to access than others.

• 5:59Tucker Carlson?

  So all, so all of this debt originates from the desire of countries to raise money from the world?

• 6:06Speaker 02

  Correct.

• 6:08Tucker Carlson?

  So if I'm Kenya and I want to, you know, fund the operations of my government, I issue bonds?

• 6:17Speaker 02

  Yep. You issue locally, issue local bills to local banks primarily, treas, local bank treasuries. Foreign investors can access that through typically plain vanilla kind of derivatives and they'll issue dollar denominated euro bonds that are open to the world to trade in dollars.

• 6:42Tucker Carlson?

  So if you're the Treasury Secretary, that's a huge power that you have. You can bailing out other countries.

• 6:49Speaker 02

  Certainly. I mean, I saw it my first job. For about a year, I was an analyst on a trading desk. And like six months in, they gave me a trading book, the Mexico book. This is 1994. And they gave it to me because I was a kid and it was the safest book you could, you couldn't hurt yourself too much with it. About six months after that, the Mexican peso crisis hit. So yeah, that was Robert Rubin and friends. I lived through that whole experience of the.

• 7:18Tucker Carlson?

  What did they do?

• 7:19Speaker 02

  What did who do?

• 7:20Tucker Carlson?

  What did Rubin, then Treasury Secretary, what did, under Clinton, what did he do with the Mexico?

• 7:25Speaker 02

  Well, what's interesting is, he, I don't know if it's, it's a, it's a function of just how the human brain works. And you look back and you're like, oh yeah, the, we basically bailed Mexico out and cleaned it up and everything went on as it was. But you forget, as you're going through that, these things all take a lot longer. Your memory shortens up.

• 7:48Tucker Carlson?

  Right.

• 7:49Speaker 02

  It took a lot longer and it took a few go rounds. And what I learned through that whole thing was, because I went through a bunch of these crises. There was the 94 Mexican peso, 97, the Asia crisis, Taibat, if you remember Taibat crisis and Korea chiballs and all that. And then 98 was Russia, 2000 was Argentina peso crisis. And then we had, you know, GFC. So there's, there's roll, there was a series of rolling crises and all in like the first 10 years of my career. So that definitely

• 8:19Tucker Carlson?

  Yeah.

• 8:20Speaker 02

  kind of wounds your ability to stay perma bullish when you're going through a bunch of rolling crises. But what I learned through these series of crises is that

• 8:32Speaker 02

  What you have to kind of start with is the bazooka, to go with the Moab of bailout. You have to go with way more than the market thinks you need. Because what, in the Mexi-Peso crisis, if my memory serves properly, they kept coming with not half measures, but sort of just enough of what they thought would would bring back market stability or market confidence. And just enough creates a bit of spike in confidence and then starts to panic again and then come back again until finally they come back with the mega bazooka, swap lines, bailouts, all that sort of stuff. So that was also early in sort of the Washington consensus era of foreign policy.

• 9:17Speaker 02

  And there was a...

• 9:20Tucker Carlson?

  I guess the macro point I would make or the conclusion I'm reaching is this is a huge feature of our foreign policy.

• 9:28Speaker 02

  It is, and you know, the IMF, it's funny, I've been, you mentioned Ukraine, and the trip I went to Ukraine was an investor trip. And part of the purpose of an investor trip is to go and to meet with their finance ministry, their debt liability people, meet with banks, meet with locals, get an assessment. And you know, we go to, you always go to the IMF, the IMF there, and ask what the likelihood is of the next tranche being delivered. And perhaps it's a bit cynical, but 30 years of trade in emerging markets will make it pretty cynical. But I'd always go into those meetings and walk away from those meetings like, what are we talking about here? Of course, they're gonna, of course, they're gonna disperse the next tranche.

• 10:13Speaker 02

  That's what they're in the business of doing. They're in the business of lending money to these countries because that's what they do and that's where they make their money. So it's very rare that they won't or they don't unless it's a real sort of, turn your thumb up, turn your nose up or flum your nose at the IMF and...

• 10:35Tucker Carlson?

  Is the purpose of the IMF to bail out? Mismanaged countries?

• 10:39Speaker 02

  I think it's simple terms, yes. I don't think that's the, I don't think that's the most euphemistic way of putting it or how they describe it, but effectively, yes, I'd say backstop or keep them, keep them afloat and to offer them guidance as to how to run austerity programs and get themselves back on the rails so that they can move towards prosperity, democracy, all this.

• 11:08Tucker Carlson?

  Does it work?

• 11:09Speaker 02

  Typically, no.

• 11:11Tucker Carlson?

  Why?

• 11:13Speaker 02

  Because, one, it's very politically unpopular as a domestic politician to be taking orders from any foreign power, but certainly the West, and those orders come with strict austerity, because how did they get themselves in those problems in the first place, right? A certain, a distinct lack of austerity.

• 11:38Tucker Carlson?

  Living beyond their means.

• 11:39Speaker 02

  Correct. So, you know, that's not, that's not, that's not particular to emerging markets countries. All sovereign, all sovereigns do that, right? Everyone in the West is doing that as well now, living beyond their means. But some of us, like the United States, are able to run what's called counter cyclical monetary policy because we have a reserve currency. So, we have a special privilege to be able to maybe be somewhat more profligate than others, but the money runs out a lot faster in emerging markets countries when you can't finance your debt and you have a dual crisis of both your currency and your interest rates running out of control. And at that point,

• 12:23Speaker 02

  you've got enough, you've got nowhere to go other than to your friends in DC or Brussels and ask for the backstop. But in return for the backstop, you need to make some promises about how you're going to conduct your business going forward. And as you can imagine, cutting expenses, raising interest rates, slowing the economy doesn't generally get people reelected. Exactly.

• 12:52Tucker Carlson?

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• 16:14Tucker Carlson?

  So you've really, you've got a democracy problem. These countries overspend because they're democracies and they're trying to meet the demands of their voters, and then it's impossible to fix because their democracy is trying to meet the demands of their voters.

• 16:31Speaker 02

  That's probably a little more euphemistic than I would say. Yes, that's one factor, but there are other factors at play as well.

• 16:38Tucker Carlson?

  How many countries have been bailed out by the United States over the past 30 years that you're aware of?

• 16:43Speaker 02

  Oh, I mean, there's hard bailouts and soft bailouts. So I couldn't really put a number on it. Like, how many are running an IMF program right now? It would have to be in the dozens. How many, like, strict bailouts? I really don't know off the top of my head. I mean, we can go through the, we can go through, obviously, Mexico, Argentina, excuse me, Argentina. In the, in the, in the Asian crisis, there were a whole host of Asian countries that had to post up. So there's, there's the hard bailouts, and then there's like the softer bailouts are sort of coming back, staying on the, staying on the teat, so to speak.

• 17:26Tucker Carlson?

  Who makes money from this?

• 17:29Speaker 02

  Uh, who makes money from this? So the IMF theoretically makes money from the interest on the loans, but it's typically below market loans. So it's, it's not a real profit motive.

• 17:46Speaker 02

  Banks make money from this, from facilitating the debt, so the, the trading of it, the issuing of it, the fees of issuing of it. Investors make money from higher interest rates, obviously. And then there's a subset of investors, like distressed debt investors, that will buy a bunch of defaulted, defaulted paper, sit on it, and then do workouts. Like the most, the most, probably stark examples recently would be Argentina. And, you know, right now, Ukraine will be a pretty significant one as well. See what the workout is with that.

• 18:32Tucker Carlson?

  What would you do with Ukraine as a banker at this point? Like, what's likely to happen to Ukraine? Not, not on a military level, but?

• 18:40Speaker 02

  Ukraine, Ukraine is a different one than, say, in Argentina, because it has, at the moment, more of a geopolitical put, so to speak, than...

• 18:51Speaker 02

  Pick a random country like Bolivia or Argentina. Although now, under this administration, clearly, there's more with sort of Monroe Doctrine Part Two, there's more of a geopolitical put to Argentina. But Ukraine's a tricky one because there are, you obviously, up until recently, you had the entire West behind that, right? And there's, this week alone, you've got Larry Fink, Whitkoff and Kushner over there working on, you know, stage two, what's going to happen, the peace process, but also the rebuild. So that's an odd one. I think that's going to be a combination of public and private, because there'll be

• 19:33Speaker 02

  so much rebuild to do and there'll be a lot of money to be made in the rebuild.

• 19:39Tucker Carlson?

  What does a debt crisis look like? What is a debt crisis?

• 19:44Speaker 02

  Well, a debt crisis typically is not a debt crisis alone. It's accompanied by a currency crisis.

• 19:54Speaker 02

  The debt crisis, the external debt, and then a local market interest rate crisis, which is also dead in itself. So the local T-BOs, local interest rates will skyrocket at first to try to raise interest rates, to try to attract money to the currency, to stem the rout on the currency. And that can work up until a point till you lose control of both. So what a debt crisis looks like is currency, runaway currency devaluation, runaway higher interest rates, which clamps down, the interest rates clamps down any lending locally, clamps down any local growth, creates defaults on domestic businesses.

• 20:37Speaker 02

  The currency running away depending on the country, but all countries, it causes inflation, but countries that...

• 20:46Speaker 02

  Rely on imports certainly even more, right? Everything you're bringing in is going to cost far more in your local currency. So it's really a spiral. And then currently typically what happens is bonds will drop to a level that's called recovery value. And recovery value is effectively what is a term more really more from, I see the corporate credit markets where if you were to strip everything down and sell it for parts, what could you get? You know, what could you get for the cash value?

• 21:19Tucker Carlson?

  Interest rates spike, bond values drop.

• 21:24Speaker 02

  Collapse, yes.

• 21:25Tucker Carlson?

  What does this have to do with debt? Why is it described as a debt crisis?

• 21:30Speaker 02

  Because no one can function without borrowing. No one can function without debt. So if you can't borrow, you can't exist.

• 21:41Tucker Carlson?

  And there's no country that's not true of?

• 21:44Speaker 02

  I mean, there's, there are countries that don't necessarily need to borrow as much as they do, but they still do.

• 21:51Tucker Carlson?

  Why?

• 21:52Speaker 02

  Because, one, because they can cheaply. I would argue the GCC countries don't necessarily need to borrow as much as they have.

• 22:04Tucker Carlson?

  The Gulf, Persian Gulf countries.

• 22:06Speaker 02

  But they have recently, you know, Saudi, for example, because they're going on a massive expansion to diversify themselves away from their core business, which is oil, which is actually, is actually a very wise thing to do because if you look at, if you look at countries historically, Venezuela is probably the most extreme example that had an, there was a single A rated country in the eighties. If you, I went there in the nineties, I mean, gleaming infrastructure, like incredible highways, beautiful hotels, amazing, amazing place.

• 22:46Speaker 02

  And they never took the oil wealth and diversified away from it in a meaningful way. And then when you have an oil shock and you've taken out too much debt against the. Let's make up a number, $100 oil price and oil drops to 30, you're all upside down. And so that's what, you know, that's what MBS is looking at for a multi-decade plan to build, you know, build these cities, technology innovation centers and so forth, which is clearly learning from, from the past. But they're borrowing to do that. They're borrowing to do that, yeah, but they're borrowing at fairly cheap rates.

• 23:27Speaker 02

  There's also a concept that you want to borrow as a sovereign level to set a benchmark against which your companies can borrow in international markets. It's be the broader the investor base, theoretically, the cheaper the interest rate. So they'll set a, they'll set a benchmark level and then a corporation can borrow at that rate plus 20 basis points or 50 basis points.

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• 25:49Tucker Carlson?

  So if every country's indebted, I mean, debt decreases your sovereignty, your ability to make independent decisions.

• 25:59Speaker 02

  That's correct.

• 26:00Tucker Carlson?

  Yeah, so if every country's in debt, then there are no fully sovereign countries then, right? Can't just, it's not, no country is free to do exactly what it thinks it should do in its own interest. They're all connected.

• 26:14Speaker 02

  No, no. And again, back to the US, I mean, theoretically, we, we are or were based on the fact that we have the global reserve currency, but there is a limit to everything at some point.

• 26:28Tucker Carlson?

  So what's the limit for the United States?

• 26:31Speaker 02

  It's hard to say what the limit is. The limit is what loses the global reserve currency status, right? And as I alluded to before, these things don't happen quickly. They happen over a much longer period of time than anyone would think. So how do you, you know, in, in simple terms to me, let's look at some global current, global reserve currencies historically. Dutch gilder, British pound, US dollar, probably the most obvious examples in relatively recent history. And what did they all have in common? They ruled the seas, military dominance, right?

• 27:15Speaker 02

  And, you know, you'll see memes online and people like, what, you know, pictures of fleets of aircraft carriers in the Gulf and displays of military power. And that's what backs my currency. And that, you know, that, that is true. But. You know, at some point, you gotta ask yourself a question like where, you know, also what had it empires from Rome to the Dutch to the Brits, like imperial overreach to an extent was what undid them, right?

• 27:46Tucker Carlson?

  Yes.

• 27:48Speaker 02

  If we continue to, I mean, what concerns me, what concerns me longer term of the potential to lose the reserve status is if we lose our military dominance. That's not happening, obviously, tomorrow, the next day. There's a few things that could, obviously. I mean, you're more versed than I am in this whole notion of modern day drone warfare, but that certainly levels the playing field very, very quickly.

• 28:15Speaker 02

  You see what the Hooties were able to do.

• 28:17Tucker Carlson?

  Yeah.

• 28:19Speaker 02

  With not so sophisticated and not very expensive drone technology.

• 28:23Tucker Carlson?

  No.

• 28:24Speaker 02

  But that's, you know, that's, that's the, that's purvey for some military expert, not me. The other thing that concerns me-

• 28:31Tucker Carlson?

  But the structure remains the same. So the United States can continue being indebted to the degree that it is because it has the world's reserve currency and it possesses that because of its military dominance.

• 28:45Speaker 02

  It does, but if, yes. I think what's a very important, was a very important moment, however, was the seizing of the Russian reserves at the beginning of the Russia-Ukraine conflict.

• 29:00Tucker Carlson?

  I felt that.

• 29:02Speaker 02

  And I think we'll look-

• 29:03Tucker Carlson?

  Can you tell us what happened, just for people who-

• 29:05Speaker 02

  Yes, so quite simply, the Western powers seized the Russian reserves that were sitting in, in the New York Fed. I believe it's 300 billion is the number that they seized and, you know, the Europeans still want to use that for, for rebuild and so forth in Ukraine. Now, not to get into who's right and who's wrong in the Ukraine-Russia conflict, that's not, that's not the point in this. The point is, it sets a precedent, that's a scary precedent, that is, your money that sits in US treasuries or gold in our, in our Federal Reserve is not safe if you run

• 29:50Speaker 02

  afoul of the powers that be. So there's a very obvious and natural reaction function to that, which is-

• 30:01Speaker 02

  Powers like India, China and Russia stopped buying treasuries and start buying gold. Though the gold call was certainly, we have inflationary, you know, inflationary pressures we can talk about, but even more to the point, it seemed obvious at that point that that's the trade. It's, it's, yes, it's an inflationary.

• 30:19Tucker Carlson?

  I bought gold that month.

• 30:21Speaker 02

  I remember.

• 30:21Tucker Carlson?

  Yeah. And I've done better than the stock market's done.

• 30:25Speaker 02

  Well, it's funny, if the move in gold this year, I won't get it right off the top of my head, but it's over the last 20 years, I think now is the gold's now beat S and P now when you compare the two.

• 30:37Tucker Carlson?

  Yep.

• 30:38Speaker 02

  It's really effectively just a debasement trade when you look at it.

• 30:41Tucker Carlson?

  What's a debasement trade?

• 30:43Speaker 02

  Debasement trade is that the currency that we, the currency that we all use and think about every day has been debased against gold, right? The value of the dollar. I think oftentimes people look at the, the dollar as the dollar strong or the dollar weak. And what people are looking at is effectively the DXY, the dollar index, and that's a basket of major currencies, or it's heavily weighted to the major currencies, euro, yen, Canadian dollar, Aussie dollar. And it's really, at this point, kind of a ridiculous comparison because all of those countries are sort of in a basket case with their debt issue and their growth. But if you look at the dollar versus Bitcoin, or if you look at it versus

• 31:26Speaker 02

  gold over the last 10 years, it's pretty clear that the currency's been debased in those terms. So if you look at it in that terms, the stock market returns don't really actually look quite as, as great. It's wonderful if you're looking at it and what a dollar would, how many, how many dollars it took to buy an ounce of gold 10 or 15 years ago versus today.

• 31:52Tucker Carlson?

  And all of that you think, or some of it is downstream from the decision by the Biden administration to freeze Russian assets because that scared the crap out of the rest of the world.

• 32:01Speaker 02

  I think the gold move is for sure. The dollar weak, the dollar weakness against gold, yes. But there's also, I mean, I, I think the big move in, I mean, if you look at.

• 32:18Speaker 02

  If you look at what we did after the GFC in terms of interest rates and

• 32:22Tucker Carlson?

  Global financial crisis.

• 32:23Speaker 02

  Where what we did bailout extraordinary measures fiscal and monetary, keeping interest rates at zero, emergency measures, keeping rates at zero that remained in place for a good 10 years. Like, I don't know how you stayed in emergency measures at zero interest rates when the stock market quadruples over triples, quadruples over 10 years. So what I think

• 32:56Tucker Carlson?

  Why is that bad? All those investors got rich. Everyone's happy with their 401ks. Like, why is that bad?

• 33:04Speaker 02

  Well, it's bad for a number of reasons. One is if you believe in a free market capitalist system, you believe in the pricing mechanisms, the free market pricing is everything. The price of meat at the farmer's market is set by the free market. Who is willing willing buyers, willing sellers at a fair price. Once you start to put in price controls on the Soviet Union, it's definitely we don't have free market capitalism. At the core of, you know, free market calves is the price of money. So we artificially put price controls on the price of money. It's the way I look at it. We artificially kept interest rates

• 33:48Speaker 02

  way too low at zero when the market didn't necessarily demand the conditions. Maybe at the time, certainly five years hence, 2015, I don't, I don't really see why we needed to keep interest rates at zero for that long. So yes, I think the reason why, in my opinion, the reason of the people at the Fed The dozens and dozens of PhDs at the Fed making these decisions. Probably to a man, to a woman, wrote their PhD on the Great Depression and what the Fed did wrong and the horrors of deflation. So really, the Depression was really a result of deflation, right? So that's the greatest boogeyman of all.

• 34:30Speaker 02

  So anything you can do to fight deflation. Deflation is the real killer, especially when you have an excessive debt load.

• 34:39Tucker Carlson?

  What? I'm going to stick to the dumbest possible questions. I hope I don't offend you. What is deflation?

• 34:45Speaker 02

  Deflation is prices going down. What you kind of want is a gentle inflation to help inflate away the debt. To show gradual, the benchmark, the target, Fed target for a long, long time has been 2% inflation. They soft upped that to three recently. And as you know, just cut rates this week, even with core PCE at 2.8. So they've kind of abandoned that 2% target. But what I think in that time.

• 35:17Tucker Carlson?

  Why wouldn't I want deflation? Because that makes the value of my paycheck higher.

• 35:23Speaker 02

  It depends on who I is, who the I asking that question is.

• 35:29Tucker Carlson?

  Right.

• 35:30Speaker 02

  So if you're you and your wages are constant and you've paid off your house. Certainly, deflation would be great. Go to the store every day and things are cheaper. I mean, there's deflation in certain parts, certain sectors, right? For years, there's been deflation in all technological goods, right? You get a flat screen TV for 400 bucks.

• 35:54Tucker Carlson?

  Yeah.

• 35:56Speaker 02

  So for you, Tucker Carlson, it would be wonderful. For the economy as a whole, that's really run on hyperfinancialization and debt. If you have a deflationary spiral, you are going to be left with a bunch of defaulted debt. So where we are right now. You know, to pivot, I guess, to where we are here with the US is, I think when this administration came in, they, they messaged pretty clearly that the move was going to be away from the Biden administration and more towards some austerity. There would

• 36:39Speaker 02

  be some tax cuts, but it would be offset with spending cuts. Doge, Elon, et cetera. People got very excited about potential, potential cuts. And then, I don't know what happened shortly into the administration, but there was clearly a pivot that I didn't see coming. And it was around the time of the tariff, the tariff tantrum and the big sell-off in the stock market. But out of that seemed to come that there was a shift towards what people are now calling run it hot, which is, forget about tamping down spending, little tax cut, maybe we'll take some slower growth, but we'll reduce the

• 37:19Speaker 02

  deficit for that'd be good for the long term. And instead, let's, let's just run it both ways, fiscal and monetary. So let's, let's cut rates and let's, let's cut taxes and let's spend more. And I don't know what, what happened, or if that was always the plan, but, or someone saw under the hood and said, look, the only way, typically, there's two ways to get out of a debt problem. You grow your way out, or you inflate your way out.

• 37:45Tucker Carlson?

  Right.

• 37:45Speaker 02

  And it seems to me, we're going all gas, no brakes on both. Like, we're just, we're gonna, we're gonna grow, and we're gonna, we're gonna let some inflation go, and that's the way we're gonna get out of this debt issue. And I think Trump this week was saying, I could see 20, 25% GDP growth. I mean, that's, that's a nice number, but that would certainly help our, certainly help our deficit issues.

• 38:08Tucker Carlson?

  Well, it wasn't that long ago that many Americans thought they were inherently safe from the kinds of disasters you hear about all the time in third world countries. A total power loss, for example, or people freezing to death in their own homes. That could never happen here. Obviously, it's America.

• 38:23Tucker Carlson?

  People are recalculating, unfortunately, because they have no choice. The last few years have taught us that. Remember when the power grid in Texas failed in the dead of winter? Yeah, it happened, and it could happen again. So the government is not actually as reliable as you'd hope they would be. And the truth is, the future is unforeseeable, and things do seem to be getting a little squirrely. So if the grid does go down, you need power you can trust. Last Country Supply's newest product is designed for exactly that. The Grid Doctor is a 3,300-watt battery backup system that will power full-size appliances, medical devices, and tools with clean, reliable power. It's even EMP-protected.

• 39:05Tucker Carlson?

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• 39:49Tucker Carlson?

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• 40:22Speaker 05

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• 40:48Tucker Carlson?

  Have you ever seen any country try that?

• 40:53Speaker 02

  Uh, no.

• 40:56Tucker Carlson?

  Really?

• 40:57Speaker 02

  Well.

• 40:57Tucker Carlson?

  In 35 years of watching?

• 40:59Speaker 02

  Oh, 20, 25% GDP, no.

• 41:01Tucker Carlson?

  No, have you ever seen any country?

• 41:03Speaker 02

  Yeah, sure.

• 41:03Tucker Carlson?

  Approach a debt crisis with that?

• 41:05Speaker 02

  Sure, sure. I mean, Erdogan's probably the most famous in Turkey.

• 41:11Tucker Carlson?

  Did it work?

• 41:13Speaker 02

  No.

• 41:14Tucker Carlson?

  What happened?

• 41:15Speaker 02

  Um, he tried to keep cutting rates into an inflationary environment and it can put pressure on the central bank to cap rates, but the free market always, you know, I think, I always say you can suspend the laws of of science, of physics, of gravity, of market economy for a time, but ultimately the gravity always, always works. So, and the free market always, always works. So, no, it didn't work. They have runaway inflation and extraordinarily high interest rates and he's under, been under a lot of pressure domestically for reelection, obviously.

• 41:54Tucker Carlson?

  So what's the right way to approach it?

• 41:58Speaker 02

  Uh, well,

• 42:02Speaker 02

  as, uh, I think it was Thomas Sowell says there are no solutions, only trade offs.

• 42:07Tucker Carlson?

  Yeah.

• 42:07Speaker 02

  There are no solutions when you're in this situ-, when you're in this situation of $37 trillion deficit.

• 42:17Tucker Carlson?

  Is that a lot?

• 42:19Speaker 02

  Sounds like a big number to me. I don't know, I'm not even sure how many commas are in there. It's a big number. It's hard, it's really hard to grasp, but

• 42:30Speaker 02

  I think you go back, you started with, you know, ideology.

• 42:35Speaker 02

  The answer is always going to depend to an extent on what your ideology is and what you're willing to sustain in terms of pain, in short term to long term. And for me, I was more

• 42:47Speaker 02

  I was more a proponent of what I thought the plan was going to be, which is some deficit cutting through spending cuts. And from what was coming out of Doge early, it seemed like there was plenty of fat to cut that would have been politically rather popular, I think, especially with the right PR guys behind it. You know, guys were getting out there every week and on Twitter and going on podcasts and talking about sort of the absurdities they were finding. Now, maybe, maybe it's a drop in the bucket overall, but I think it was a, it was a worthwhile exercise to go with. I don't know. I, again, I don't know. I'm not on the inside, so I don't see what he's got to see.

• 43:32Tucker Carlson?

  Could it be that there, I mean, so the idea always was that federal bureaucrats, public servants, as we call them, were serving, were serving, and they were making less than their private sector counterparts, and there was suffering involved, but patriotism impelled them to do it. So they did. And now you look at the numbers and it's like, no, no, no, no. Your, your federal employee on average makes way more than your private sector.

• 43:57Speaker 02

  2X.

• 43:57Tucker Carlson?

  2X. So they're the most privileged people, okay, in the, in the middle class. And by far.

• 44:05Speaker 02

  That doesn't count their gilded pension plan.

• 44:08Tucker Carlson?

  Is it really 2X?

• 44:09Speaker 02

  I think it's, I think the number is average, medium, private sector, family income is 70K. I think it's 110 or 115 for, for federal.

• 44:20Tucker Carlson?

  It's insane. Not including the benefits, which are ridiculous. Work from home for five years. But then, you know, of course, the population of federal workers or federal contractors, which are, I mean, there are probably as many federal contractors. No one ever says that, but there are. Deloitte is a federal contractor, right? So there's so many of them now that we maybe have reached that tipping point where no administration can pivot against its own employees because they're voters.

• 44:51Speaker 02

  Maybe, uh, maybe. But, you know, I'm sure you've alluded to many times, like you can't have, what is it, seven of the 10 top zip codes in, in the United States are all in. Sort of in and around Washington DC. I mean, I went to, you grew up there. I went to school there in the early 90s and I hadn't been back for 15 years. I, it's night and day. It's gleaming, gleaming office towers, rows and rows. I remember having an internship two blocks from the White House and you were passing, you, you had to pass sort of bombed out, derelict buildings and now it's as far as-

• 45:26Tucker Carlson?

  From the 1968 riots. They never were rebuilt.

• 45:29Speaker 02

  1992, they were still there. Like literally two or three blocks from the White House.

• 45:33Tucker Carlson?

  I remember.

• 45:33Speaker 02

  And it's crazy. I mean, it's, um, and flashes of Roman Empire, right? You just like, you, you go to, you go to Rome to collect your tribute and so I, I don't know, I don't know. I, I'm not as privy to that world as you are. I don't know what people see when they get into office and realize that there's potentially no way, there's no way around it. Um, all our intentions are, were great, but this is the way it's gonna be. I don't know.

• 46:05Tucker Carlson?

  What, okay, but you're also suggesting that this is not a solution, that you can't spend your way out of a debt crisis?

• 46:15Speaker 02

  I don't, I haven't seen it done before.

• 46:17Tucker Carlson?

  Right. How much magic would that take?

• 46:20Speaker 02

  A very talented individual. Uh, he's a lot of experience in markets, very successful.

• 46:30Speaker 02

  The right guy to have at the helm. If he thinks this can be done, I guess, I mean, we don't have any choice but to see what, how it plays out, but, maybe that's the play. The play is this is our only way out. It's, you know, people on both sides, people I speak to, people I knew in the markets, friends of mine, people whose opinion I respect on both sides of the aisle. The one thing we all agree on is that this is not a tenable situation. It's not some MMT Elizabeth Warren people we're talking to. This is like, normal people that say like, okay, at this point, we're kind of boxed at 37, 38 trillion. So maybe that's the issue.

• 47:12Speaker 02

  Maybe we're so boxed that we got to run this experiment because it's our only way out. And hopefully growth kicks in, but it doesn't.

• 47:25Speaker 02

  The growth scenario, the current growth scenario in the US is really hard to get your hands around. In one part, because it's such a polarized economy. People are calling it a K-shaped economy, which I think is a pretty accurate term. K-shaped, meaning the lower end is hurting and continues to hurt more and the upper end gains and continues to gain more. And now we've seen through throughout history, that's not a tenable situation.

• 47:56Tucker Carlson?

  No, it's actually what happened in Venezuela. It's how they got Hugo Chupin.

• 47:59Speaker 02

  Yeah, it's a powder keg ultimately.

• 48:03Speaker 02

  So, and it's also extraordinarily difficult to get a real handle on where the numbers are because we're not releasing any numbers right now because the government shutdown. So, you know, the Fed's flying blind to an extent. You can rely on certain private sector indicators that are kind of shockingly bad, frankly. And you look at consumer loan defaults, credit card balances, credit card, the late credit card payments, auto loan defaults.

• 48:32Speaker 02

  I think October was 185,000 announced private sector layoffs, I think the worst since 08. So you have a situation where you've got a, you know, the US economy is 70%, 69, 70% consumer-led. So if we're going to rely on the top 10% to continue to spend on, you know, Gucci bags and trips to St. Bart's. I just don't know how sustainable that is when the lower end is.

• 49:06Speaker 02

  You know, swapping out the New York Strip for pork loin and Walmart numbers are great because middle and upper middle class is shifting from the Publix to Walmart shopping. Like everyone, everyone's getting squeezed. So I don't know, I don't know that the growth is there. The growth can come. Maybe the growth can come with these tax cuts, with interest rate cuts, with certainly with deregulation will help and all this promised foreign investment. But there's a lag to all that. So we'll see.

• 49:43Tucker Carlson?

  It does seem from an ignorant outsider's standpoint, which is mine, that there's an awful lot of emphasis on the public equities markets and like the stock market's the measure of how we're doing. Whether or not that's a good measure, you know, I don't know. Maybe not a perfect measure, it feels like to me. But how safe is the stock market in the United States as a place to put your money?

• 50:10Speaker 02

  Um.

• 50:12Tucker Carlson?

  I can tell this is an uncomfortable question. Be as diplomatic as you can be.

• 50:18Speaker 02

  Well, it is the largest, most liquid stock market in the world. It does attract not just domestic savings, but huge foreign investment for, you know, there's expression that says money goes, capital goes where it's treated best. And we still do treat capital the best in this country. Extraordinarily dynamic markets from, you know, venture cap to private equity to public markets. And that's something we should all be very proud of. And it helps, you know, grease the skids of global commerce and that's great. There are some concerns, clearly concerns about the value, current valuation of the equity

• 51:01Speaker 02

  market and the structure, the economic structure of the flows. So one is massive concentration risk.

• 51:13Speaker 02

  It was the fangs, now it's the mag seven, the top 10 companies in S and P 500, I think have accounted for something like 42% of the gains year to date. The big get bigger. You had Nvidia at one point tipped over $5 trillion market cap, which is again, a hard number to really get your head around. At that point, I think it was larger in market cap than every market in the world, except for US and Japan, entire market cap of any other trade, any index in the world.

• 51:54Tucker Carlson?

  Wait, bigger than the entire index of any country in the world?

• 51:58Speaker 02

  Yes.

• 51:59Tucker Carlson?

  Bigger than the cumulative total of the value of all the companies traded on those indexes?

• 52:04Speaker 02

  On a random exchange, yeah. Except for, I believe, US for sure, and I think Japan. Again, I could be wrong, but something in that, in that, you get the idea of what I'm...

• 52:16Tucker Carlson?

  So just one company dwarfed all these economies?

• 52:19Speaker 02

  That's right. And that, you know, we don't need to go into all sort of the price to book and price to sales and expectations of future revenue, all that sort of thing. You get into a market psychology event where stocks that go up continue to go up because people chase momentum. I read something yesterday that the explosion in, in options trading, the volume of options trades now three and a half trillion a day, which is larger than the entire market cap of the Russell 2000. So 2000, like the 2000 mid, small mid-sized companies, 300 million to 2 billion market cap companies in the United States. And that...

• 53:05Speaker 02

  Doubled, I think, from 2022 and then doubled again. So you've got an insane amount of leverage. You've got margin debt at all time high.

• 53:14Tucker Carlson?

  May I ask, why is it significant and the options market is huge?

• 53:18Speaker 02

  Because it's not just the options market is huge. It's also the structure of the options. They've moved to zero day to expiry options. So it used to be weekly or monthly options and now it's one like same day options. So the retail, with the gamification sort of of.

• 53:34Tucker Carlson?

  Yeah.

• 53:35Speaker 02

  Of.

• 53:36Tucker Carlson?

  So an option, my understanding of an option is an option is a bet on in what direction.

• 53:40Speaker 02

  In the direction with, and you get an immense amount of leverage, immense amount of leverage. So.

• 53:46Tucker Carlson?

  How does that work? How do I?

• 53:48Speaker 02

  So let's say that you want to buy a call betting that Nvidia is going to go up between now and the close.

• 53:58Speaker 02

  And at the money Nvidia call, meaning let's say it's trading at 177 right now. And you think it's going to go up and the price of the at the money, the 177 call is till now to the end of day is 75 cents. Let's just say, so you're betting that it's going to go up more than 75 cents. If it goes up a dollar 50, you've doubled your money. You're not just making 75 cents on 177, which would be whatever 31%. You're making 100% of your money. So you're getting, all you can lose is the premium, the 75 cents you pay for that option.

• 54:38Speaker 02

  But everything over 75 cents starts to run exponentially in terms of profitability. So people are making an insane amount of money on, in this run up on, on options, zero day options. And they're doing it from their phone. It's pretty easy with a.

• 54:56Tucker Carlson?

  That's not really investing though, that's betting.

• 54:58Speaker 02

  Yeah, that's gambling.

• 55:01Speaker 02

  But that's just one component of the structure of the.

• 55:03Tucker Carlson?

  But it sounds like it's now a huge component.

• 55:05Speaker 02

  It is a huge component, but again, with the gamification of, you know, crypto trading and, and options trading and Robin Hood and with gambling, you know, DraftKings and all that stuff. It's sort of part of the culture and it all started in COVID, people at home with extra STEMI money and not much to do. And the market was ripping and people got hooked on it and people keep doing it. And generally people are doing quite well. I think, you know, retail has done better than institutional, largely speaking. This year, but the other part of the structure of the market that's somewhat concerning is just this passive flow. So then there's a guy named Mike Green, who you should probably speak

• 55:45Speaker 02

  to, who's done the best work on this. And passive flow, basically 401k, if you put your money in every two weeks, your money's automatically going to your 401k. And it's, you click to that, it's auto invest. If you go and you look at most companies 401k options, their options and what to invest. And then you break down each one of them. Basically, every single equity option fund you have, has the same high concentration in the same five stocks. So, you know, Apple, Microsoft, Nvidia, whatever. So, you don't know that necessarily. You don't really know what

• 56:26Speaker 02

  you're buying, or what percentage of the fund is in those. It's very highly weighted, because the higher the market cap go, higher weighting, the higher the weighting goes, and on and on and on. So it's an auto, it's just an automatic, machine-like, underlying bid to the market, that continues to, the big, the big get bigger and bigger and bigger. And you could say, okay, what's wrong with that? These are great companies, they're multinational, they have great business models that were low capital intensive and high margin, and they're basically, a lot of them are monopolies in their space. Okay, well, two things can happen. If unemployment rises,

• 57:06Speaker 02

  if you lose your job, you're not putting your money in 401k. If you lose your job, and inflation keeps ripping, you might have to withdraw from your 401k. It creates a vicious cycle. The other way, they have

• 57:20Tucker Carlson?

  It's too much concentration in two

• 57:23Speaker 02

  Too much concentration, and the structure of it is, perpetuates it. And then you add on the leverage of the option, trading with the momentum that keeps this trade going and going and going, to where you get to $5 trillion market caps. Now, there'll be a whole coterie of Wall Street analysts that will justify why $5 trillion makes sense, because of this, that, and the other thing, but

• 57:48Speaker 02

  I'm not sure.

• 57:49Tucker Carlson?

  What if they're of the five, eight, 10 companies that have the bulk of the value, the plurality of the value of the entire S and P? If one or a couple of those companies dramatically reset in its value and its share price, what would happen?

• 58:07Speaker 02

  Well, you're seeing it kind of right, right now as we speak is the AI trade is starting to lose a little bit of favor. There's starting to be some questioning on the AI trade. And the market can't continue to trade up when it's trade up if one or two of the major components are falling out of bed. I mean, this week it's been Oracle and, you know, last night Broadcom like took the market down and Nvidia is starting to weigh a little bit. So it's, we're very tech sector heavy and the other, the other thing that concerns me to an extent about not just for public markets, but for private credit markets is

• 58:49Speaker 02

  that with this AI build out and this data center build out, obviously an extraordinarily capital intensive. And what I was speaking about before about how a lot of these MAG7 countries have, companies had a great model of being capital light, they're now becoming quite capital intensive.

• 59:08Tucker Carlson?

  Right. It's not writing software. It's building physical things.

• 59:10Speaker 02

  Exactly. You're building physical things and you're spending, you're borrowing a ton of money. And this is what the problem with Oracle is right now is they borrow a lot of money. And now they're borrowing a lot of money to build things and build things that depreciate in value over time, right? Like a chip that you buy, a lot of this, a lot of the financing that's been going on too, has been people have been using collateral, these chips as collateral to borrow against. So there's borrowing and borrowing and borrowing, but you're borrowing against a chip that naturally is going to be replaced by the next evolution of chip.

• 59:46Tucker Carlson?

  Of course.

• 59:47Speaker 02

  So that's a bit of concern about the value of the collateral and when that daisy chain unwinds, it could be ugly. The other thing is that there's so much, there's so much borrowing in the private credit markets for these hyperscalers and these data centers that it crowds out. There's a finite amount of borrowing available, right? So it's crowding out borrowing and investing in other areas of the economy. And that concentration risk concerns me to an extent as well. And the different, a lot of people have made the analogy to, you know, the 99, 2000 tech bubble. And, you know, the good news coming out of that down the line is that, okay,

• 1:00:31Speaker 02

  we all got hyped up on the internet and we got carried away with pets.com, things like that.

• 1:00:37Tucker Carlson?

  Etoys.

• 1:00:39Speaker 02

  But the truth was, in retrospect, we weren't hyped up enough about the internet and what it would do and how it would change the world. But there's still a cycle that comes along where there's the euphoric cycle and then the crash cycle. Uh, and then on the back end of that, you have the winners that survived, like the Amazons, right? That, that you could have bought for practically nothing in 2002. And then there are, you know, companies like, similar to me to this, the hyperscale data center were the, uh, were the fiber, the fiber companies like, um, Global Crossing, uh, WorldCom, right? And those were bubbles that crashed. Uh, but what were they doing?

• 1:01:23Speaker 02

  They were laying fiber, uh, fiber cable for the internet, which, okay, we had a malinvestment boom, the companies crashed, but the cables still exist and the cables are in use today and the cables were very valuable and the cables didn't depreciate because the cables have a useful purpose. So the people are making the same argument now is like, okay, we may go through that cycle as well. It's maybe get a little euphoric, there'll be, there'll be winners and losers out of this and it'll be fine down the road and AI is not going away. I'm not here to disagree with that. But there's a slightly different component where you...

• 1:02:04Speaker 02

  You're building these things that aren't, that could, you know, you're buying all these chips that could depreciate down. It's not exactly the same tray.

• 1:02:12Tucker Carlson?

  No, and the nature of technology is hard to forecast, very hard to forecast.

• 1:02:18Speaker 02

  Yeah.

• 1:02:18Tucker Carlson?

  I mean, so they were telling us six months ago that AGI was right around the corner. Nobody thinks that anymore. So for, just for example, and so all of these infrastructure bets are predicated on predictions about what the technology will require in 10 years.

• 1:02:34Speaker 02

  The thing that we're really running up against.

• 1:02:36Tucker Carlson?

  Do we know that?

• 1:02:36Speaker 02

  We don't. You're exactly right. And I think there's, the worm's turning a little bit on the efficiency of a lot of these.

• 1:02:43Tucker Carlson?

  Yes.

• 1:02:45Speaker 02

  And what they can and can't do. And people say, you know, I, I saved a half an hour, or I saved an hour coding something, but then it took me three hours to check, to debug the work that the, the actual, you know, Claude or whatever did. But the real thing that we're going to run into is we don't have enough power. We don't have enough electric and we don't have enough water to, to heat and cool all these things. That's just point blank. And even, you know, Jensen and Altman and those guys, they'll tell you that. And that's why they're going hat in hand to DC and trying to make, you know, trying to make, trying to make the case that this is a critically important industry that may

• 1:03:28Speaker 02

  need some government backing. But even if you get that, the fact that matters, the only way you can really power these things without spiking electricity bills another 300% and then creating a whole nother political problem domestically is you need nuclear power. And, you know, we can't, we have plenty of natural gas that can work as a stopgap, but you need nuclear power and it's a 10-year build out minimum to get the nuclear power that you need. So when do we hit the, somewhere between there, here and that 10 years, we hit the wall in terms of our ability to, to, to get the electricity for these at this growth rate. Now, will, is this growth rate?

• 1:04:11Speaker 02

  Accurate projection, maybe it's not. And if it's not, then we need to see a lot of these companies come off in value. So

• 1:04:19Tucker Carlson?

  Also, there are a lot of concerns about climate change.

• 1:04:22Speaker 02

  Yes.

• 1:04:23Tucker Carlson?

  Oh, just kidding. That kind of ended quickly, didn't it?

• 1:04:27Speaker 02

  Um, yeah.

• 1:04:29Tucker Carlson?

  I haven't heard that phrase in months. Have you?

• 1:04:32Speaker 02

  Climate change. No, I did see, I saw something about, I saw something that nature had, nature magazine had to revoke a paper they did a few years ago that said that

• 1:04:47Speaker 02

  climate catastrophe was going to create a economic catastrophe. And that was all based on false premises. I think they did.

• 1:04:55Tucker Carlson?

  Yeah, I think the new idea is we're going to have an economic catastrophe if we think about the climate catastrophe in any way. I noticed Larry Fink's not lecturing as much about the climate anymore.

• 1:05:06Speaker 02

  Climate, climate in ESG is not as fashionable as it, as it was a couple of years ago. That's for sure.

• 1:05:11Tucker Carlson?

  So how did that, like, as a guy who has dealt in markets, like emerging debt, pretty pure, it's like a debt trading is like a pretty pure market, right?

• 1:05:26Speaker 02

  Pure is an interesting choice of words.

• 1:05:30Tucker Carlson?

  No, I'm not saying unsullied.

• 1:05:32Speaker 02

  It's pretty plain vanilla. Is that what you mean?

• 1:05:34Tucker Carlson?

  I mean, like, there's a willing seller, willing buyer. And but what I really mean is the price is an organic price. It's like what people will pay.

• 1:05:44Speaker 02

  Correct.

• 1:05:44Tucker Carlson?

  So that is the definition of a market, right? Well, how do you get to the price?

• 1:05:47Speaker 02

  Correct.

• 1:05:49Tucker Carlson?

  So as someone who's spent his life in that world and who clearly, you're clearly like committed to the idea of markets, like you believe people should be able to decide what they're going to pay for something and what they're going to sell something for. How do you explain ESG?

• 1:06:07Speaker 02

  I don't know that, funnily enough, I don't know that even the experts can actually define it. And I'm, I'm not.

• 1:06:19Speaker 02

  I'm not joking when I say that when I at my last job, we would do a conference every summer in Europe for investors and we'd have a series of roundtable topics and the one topic that was standing room only sold out every summer in Europe was the ESG without question. It seems the US has definitely faded faded quickly from that, but Europe still seems very, very hooked in, very hooked in it. It's not faded there at all. It's definitely a part of the investment process. But what's fascinating is if you go to 20 clients in

• 1:07:00Speaker 02

  London and you talk about ESG, you will get a different answer from each ESG specialist as to and especially in emerging markets. It's a very difficult thing to, to work your way around the ESG constraints when most of what emerging markets are based on are hard commodities. And there's also obviously the governance component, the G component. It's not always maybe up to Western standards with the G. So there

• 1:07:34Tucker Carlson?

  With the G, a little light on the G.

• 1:07:36Speaker 02

  The G, the E is not great. The S, no one really knows what that means. And the G is highly questionable. So it's funny. It's just, it's there. It's still, I guess, what I call a work in progress.

• 1:07:51Tucker Carlson?

  But just like conceptually, the idea that factors that are not really relevant to your fiduciary responsibility, which is to maximize returns for shareholders or something related to that, like

• 1:08:08Tucker Carlson?

  I don't know. That's just it's just an interesting concept. Like, how did that happen?

• 1:08:14Speaker 02

  It's

• 1:08:16Tucker Carlson?

  That my personal guilt as like an educated Westerner supersedes your right to have me handle your money responsibly?

• 1:08:26Speaker 02

  Well, it's straight government intervention is what it is. It's government. It's government. It's ideology. If you are of that mindset where you believe in control economy,

• 1:08:43Speaker 02

  it is the dream of all dreams to incorporate your ideological bent into the last thing that should be left alone, which is the free market. You now inculcate all of this ideology into every decision-making process, all the way down to setting the price of money, which to me, I know I've run afoul of plenty of people on this, but to me, that that's a bridge too far. That's not the place for it. But it's it's one in once in, it's impossible to get out, you know, once, once you go into

• 1:09:26Speaker 02

  that's that's involved in all the investment processes. It's really hard to take it back out again.

• 1:09:32Tucker Carlson?

  So back to the AI infrastructure boom in the United States.

• 1:09:39Tucker Carlson?

  If that slowed down or if people lost confidence in it, are you concerned about a cascade effect on public markets?

• 1:09:49Speaker 02

  In the short term, yes. The question is, how quickly does the market rotate? How do the rotation trade? So we're starting to see that actually the last week or two, you're starting to see like small caps really rally, Dow components really rally, old economy stuff really rally as tech is being soft. So there's the way you can thread the needle there.

• 1:10:16Speaker 02

  But with the concentration risk and with the size of just actual size of these companies, it's gonna, it's gonna, uh, it's gonna be a drag on the overall market as a whole, best case scenario.

• 1:10:30Tucker Carlson?

  One of the reasons the stock market is, my theory, is so big is because it's the easiest and as you said, most liquid way to park your money with some hope of return. And I don't really think Americans are encouraged to think of other ways. I just have always noticed that.

• 1:10:47Speaker 02

  Absolutely. And, uh, as, as an emerging markets guy who's been able to look into other, other countries, frontier markets, et cetera, and how they look at it. There, there's always from, if you're an Argentine or Brazilian or Turk, you're, you're always looking outside of your domestic economy, domestic market for opportunities. Um, and we really don't too much.

• 1:11:14Tucker Carlson?

  No, and it's so easy to participate in the public markets in the United States. As you said, you can do it on your phone. You can make bets on market movements from your phone, which is just like, seems like it might have unintended consequences, maybe.

• 1:11:28Speaker 02

  There's, yeah, crosses the line from, as you said, from investing to straight gambling.

• 1:11:32Tucker Carlson?

  But, okay, so it's ease of use is like the key to any scale, I think.

• 1:11:38Speaker 02

  Sure.

• 1:11:38Tucker Carlson?

  That was Amazon.

• 1:11:40Speaker 02

  That was, that was, yeah, there's a lot of, there's a lot of, there's a lot of applications to that.

• 1:11:45Tucker Carlson?

  Uh, well, yes, yeah, yeah. That's true.

• 1:11:49Speaker 02

  Yes.

• 1:11:50Tucker Carlson?

  Yeah, well, that's by the way, why tobacco use went absolutely crazy as soon as someone figured out an automatic rolling machine for cigarettes. People used to have to smoke pipes, cigars, take snuff up their nose. The second you made it super easy to burn tobacco, the whole world became addicted to it.

• 1:12:05Speaker 02

  Makes a lot of sense.

• 1:12:06Tucker Carlson?

  Right. And that's what the stock market is in the United States from my perspective. So, but if you're trying to be a little more creative or hedge a little bit, your future, your family's security, where else do you put your money?

• 1:12:20Speaker 02

  Uh, again, it depends on, you know, who you are, net worth, et cetera.

• 1:12:25Tucker Carlson?

  Let's say you have an extra hundred grand. What would you, what would be a good call?

• 1:12:28Speaker 02

  Well, the problem is. The great obvious trades run a lot already, right? Gold and silver's already run a ton. So, long-term investing, let's try to look at stuff, the ideal cross of,

• 1:12:44Speaker 02

  you know, what sort of fairly valued or cheap or distressed or out of favor that people haven't really cottoned on to because you see a trend that's about to emerge.

• 1:12:53Tucker Carlson?

  Right.

• 1:12:53Speaker 02

  Right now, we're in full-throated recognition of the debasement trade and silver's breaking out for not for that reason, but also there's a notion that there may not be as much physical silver out there as derivatives have been written against. So, there's been a bit of a squeeze going on. Two weeks ago, the Chicago Mercantile Exchange shut down for a cooling issue overnight, just as silver was spiking, which was kind of convenient. So, there's some technicals in that market.

• 1:13:33Tucker Carlson?

  Wait, so you think it's possible there's more paper against silver than there is silver?

• 1:13:38Speaker 02

  Yeah, so, yes, there definitely more derivatives written against all commodities than exist, but no one ever asks, not no one, but typically if you're an investor, you don't ask for physical delivery of the commodity.

• 1:13:52Tucker Carlson?

  I do.

• 1:13:53Speaker 02

  I know you do.

• 1:13:54Tucker Carlson?

  I do.

• 1:13:55Speaker 02

  I know you do, and I'm going to find out where that stuff's buried, too.

• 1:14:00Speaker 02

  So, you don't typically ask for the physical delivery of it when you're trading in tens and hundreds of millions of dollars of derivatives against? You cash settle your derivative against mine, cash settle. The loser pays the winner and you move on.

• 1:14:14Speaker 02

  So, where do you go? At this point, given where valuations are, I think, I think you go abroad. You look at multiples on US stock market where we are trading historically.

• 1:14:29Speaker 02

  Extremely high PE ratios for the index on a historical basis and very high against foreign markets. I think what this administration's doing in Latin America particularly, as I mentioned earlier, sort of Monroe Doctrine two, there's clearly a movement afoot to stabilize the region and to partner with those that are critical to us. I would imagine that'll open up a ton of investment and growth there. There are plenty of Latin American countries that offer pretty cheap historical PE ratios. So I think it's probably time to diversify a little bit out of the US and diversify out of tech-heavy stuff. That's

• 1:15:09Speaker 02

  where I would go simply. I think you still have to own some, some gold and silver. You just have to own some, but just not as much as you wanted three years ago, given how far it's run.

• 1:15:19Tucker Carlson?

  So, but you're basically making a pitch for the Venezuelan stock market?

• 1:15:23Speaker 02

  Uh, not specifically, but there may be, there may be a catalyst coming there that could create, create a big move on way or the other, it seems, in the next, in the next couple of weeks.

• 1:15:33Tucker Carlson?

  What about real estate, land?

• 1:15:35Speaker 02

  Real estate, land for sure. That's why I asked. Like, it depends on who you are. I think productive agricultural real estate, anywhere, is always a good investment, sort of a disaster hedge. But yes, land is a whole yes. I don't think I'd want to be rushing into blue cities and paying high interest rates and taking out a bunch of debt on, on overpriced co-ops in New York City necessarily.

• 1:16:05Tucker Carlson?

  What about buying a 70s era office building on 6th Avenue in Midtown New York?

• 1:16:11Speaker 02

  Uh, if you can convert it to residential, perhaps, and get a lot of tax breaks. I may want to see, may want to see what our friend Mamdani says the first couple of weeks.

• 1:16:25Tucker Carlson?

  So you made the point that for a bunch of different reasons, Ukraine war, but other structural reasons, we are on the path to losing our privilege as the holders of the global reserve currency at some point, right? Well, because all empires are.

• 1:16:42Speaker 02

  Yes.

• 1:16:42Tucker Carlson?

  So we know that. The question is, when does that happen and what replaces it? And my read is, as of now, there's no obvious like national replay. We're not going to like adopt the British pound or the euro or the yen or the ruble. But instead, gold is the stopgap, as it has so often been. But crypto seems like the next global reserve currency. Is that fair to say?

• 1:17:12Speaker 02

  Um, yes. Yes. I mean, I would say this, there's, they're kind of, I think people bundle together the notion of like blockchain and cryptocurrencies. And what I'd say, I can't necessarily make a pure prognostication on any one particular crypto. I mean, it's been a phenomenal exercise and wonderful to see is sort of like adhere into Austrian economics.

• 1:17:46Tucker Carlson?

  Yeah.

• 1:17:46Speaker 02

  To see, to see the experiment work. I don't think we want to get into like the, the dynamics of individual cryptos. I think, you know, at some point, probably Bitcoin as a crypto will be usurped just by sort of a better technology. But put that aside. What, to me, unequivocally, and the next venture I'm going into is related to blockchain is blockchain is, is here and is not going, going away whatsoever. And blockchain is going to transform the financial services industry, pretty much every, everything we

• 1:18:31Speaker 02

  do financially, transaction wise. And

• 1:18:36Speaker 02

  Fortunately, we have the wind at our backs with this administration and David Sacks and Genius Act, etc. And nobody, nobody who maybe was somewhat skeptical three, four years ago is at all. I mean, Larry Fink, as an example, is, I think, continues to say all assets are going to be tokenized. Just this week, DTCC said all assets are going to be tokenized and put on the chain. And that's going to remove a lot of little frictions in the system, extra costs that don't need and extra time lags that don't need to exist. So the cryptocurrencies, cryptocurrencies exist with the layer of the blockchain. You

• 1:19:21Speaker 02

  can't have crypto without the blockchain, but the two are somewhat distinct.

• 1:19:27Tucker Carlson?

  So a couple of questions. One, is it safe? I mean, it's reliant on electricity.

• 1:19:38Speaker 02

  Yes. But so is, so is every, like I mentioned, the CME went dark, right? The other day.

• 1:19:47Tucker Carlson?

  Chicago market.

• 1:19:48Speaker 02

  Right. So the NASDAQ could shut down, right? Everything we do is reliant on, except for you, coming over in your golf cart with a bag of gold coins for me, is, is, is reliant on energy, that extent. Is it safe? Is it hackable?

• 1:20:11Speaker 02

  The theory, you know, one of the theories being proposed of Bitcoin, I'm not really sure if this is, you know, Bitcoin's had a pretty decent drop from high 120s to around 90. You know, part of, part of the thing being floated is that with quantum computing making the leaps it's making, that Bitcoin might be able to be hacked at some point. Perhaps. But again, I'll put that separate to the blockchain. The blockchain, deeply encrypted, safe, these are the rails on which everything's going to run.

• 1:20:51Tucker Carlson?

  Okay. Will it eliminate corruption?

• 1:20:56Speaker 02

  Um.

• 1:20:59Speaker 02

  Or curtail it. I think. I mean, because it's kind of. I think the question coming from you is is a funny question because you know that nothing will ever eradicate corruption in the human. Unless it changes the human art. Right. No, of course. Uh, yes, it should eliminate corruption because what it's what what the blockchain is going to do, what it does is it creates a permanent electronic unhackable ledger. So think about something as basic as like title insurance. I don't know if you've ever had to deal with that, but first of all, like, why do we need to pay? Have I ever dealt with that? Yeah, I pay constantly for title insurance. So why, like, it's it's an absurd notion, right? There's a title. You own the title.

• 1:21:41Speaker 02

  You put it on the blockchain. It's there forever. And I buy my house from you. The title gets transferred to me. It's registered on the blockchain. The transaction's there. Now it's mine. It's there forever. We don't need to pay a couple grand or whatever. Sorry, one of my best friends runs a title company in Maryland. Uh, so, you know, he's my age, so he's probably almost done anyway. Um, but that's just an example. Like, why do we need to pay five grand for title insurance? I just sold a house in Westchester and I found out that there was from two owners ago, there was according to paperwork, there was a $650,000 mortgage still on the property and that never got expunged. But the the

• 1:22:24Speaker 02

  tie the brokers just kind of waved it back and forth and everyone just kind of stamped it like that stuff. That's just an example that everyone can kind of relate to. But also, like, why we'll be able to send money immediately, you know, with no, you know, if I send money to you, you'll immediately get the money, get the get the care, get the interest on it. Why should I be paying $30 to send a wire from JP Morgan? Like, that's. Pure $30 of margin, like all that kind of little stuff. And so the company that that I'm start is going to be starting with Jan one is called liquidity.io.

• 1:23:03Speaker 02

  And we we have one of only six fully registered licensed alternative trading systems, which is a trading system that's going to be able to trade all these tokenized and financial assets. And what we want to do is help democratize the financial markets and tokenize all kinds of assets. But we're working with our with our backer just made some acquisitions with a couple of consumer loan businesses, auto loans and manufactured homes, mobile homes, for example. Like, there's a great story, these two young guys in Dallas, they're working at JP Morgan. And with their fourth bonus, they said, we're not, we're not, we're not going to blow it this time.

• 1:23:46Speaker 02

  Let's buy some rental property and they couldn't find any rental property there in Dallas. So they just cold called like 250 mobile home parks and they found one, put in 50 grand, turned around, it was a $6 million trade. They were going to do a bigger one and what they realized they were better off doing was revolutionizing the lending business for mobile homes. Because guess who the biggest player in that is, is Warren Buffett. So, great business, obviously, high margin business. But what I didn't learn until recently is that there is no refi on a mobile home and there is no lending available on a secondary purchase.

• 1:24:29Speaker 02

  So if I take out a loan for my mobile home and then want to sell it to you, you can't get a loan, you have to buy it for cash. And if rates go down from eight to four, I can't refinance it. So they're going to, with their business and tokenization, they're going to eradicate all kinds of costs, which, and create these two separate markets, which is a solution to, is a partial solution to the home affordability crisis. Like, that's something everyone can get by.

• 1:24:56Tucker Carlson?

  How does this new technology figure into like monetary policy?

• 1:25:03Speaker 02

  Like, wow, that's a great question. So, are you familiar with the stable coins?

• 1:25:09Tucker Carlson?

  Yeah, I am. But will you describe what they are?

• 1:25:12Speaker 02

  Sure. So, stable coins, let's think about it this way.

• 1:25:17Speaker 02

  In simple terms, say crypto like a Bitcoin is sort of a free floating currency. The market dictates. A stable coin is more like a pegged currency. So pegged to fiat. In this case, like Tether, Circle, they're pegged to the US dollar and try to keep it stable at parity, one to one. So what they are is a-

• 1:25:43Tucker Carlson?

  And there are national currencies like this. There are countries like the Bahamas or whatever, just pegged one to one.

• 1:25:47Speaker 02

  Exactly. Yeah, Panama is dollarized. Stephen Hankey was a big dollarization component. They tried to do it in Argentina, it didn't work. Hong Kong's got a dollar peg. So, so the stable coins, they, they try to keep parity with the dollar and they're back theoretically backed by Treasury bills. So money comes in, the money gets invested in Treasury bills, one for one, you're backed by AAA rated, short dated, no risk.

• 1:26:27Speaker 02

  But it become, these become a conduit for all these transactions on the chain, automatic through these. So it could go through, go through the, the stable coin and into other things from there as a sort of a conduit. Now, that's all good and well, as long as they, we're sure that those stable coins are taking dollar for dollar, investing in what they say they are without a lag or without moving too far away from that. Tether at the moment, it seems to be diversifying away from strict T-bills and they've been moving into gold, which is working for now, but you know, yet to be determined how that works out.

• 1:27:07Tucker Carlson?

  So, does that make, does all of this make the US dollar stronger or weaker?

• 1:27:11Speaker 02

  Oh, sorry. Yeah, so the good, that creates a natural bid for our Treasury bills, which is a great thing for dissent friends, because that creates a whole new- Demand vehicle for our treasury debt on the stablecoins. And what these stablecoins do allow for, again, a lot of emerging markets participants is allows them to quickly access dollars and avoid depreciation risk in their own country. So you're getting a lot of foreign money into stablecoins that will be bid for T-bills, which should hopefully help with our funding.

• 1:27:55Tucker Carlson?

  Hmm. Is there any way for the US government to use stablecoins as a weapon in the way the Biden administration used Russian assets at the New York Fed as a weapon?

• 1:28:08Speaker 02

  I don't know. I don't know. I imagine there is.

• 1:28:14Speaker 02

  I don't know what that mechanism would be. I don't think, I mean, in the Russia Reserve instance, it was a bilateral seizure. This would be a seizure of untold amounts of investors. You're seizing that. I'm not sure what the purpose would be other than just

• 1:28:36Tucker Carlson?

  Right.

• 1:28:37Speaker 02

  stealing the money.

• 1:28:39Tucker Carlson?

  Well, we've seen that before.

• 1:28:40Speaker 02

  True.

• 1:28:42Tucker Carlson?

  What do we know about global gold reserves since it's such a huge component now?

• 1:28:47Speaker 02

  What we know, we don't know everything that we know because it's not fully transparent. But what we do know is the direction of travel, which is massive increases, particularly

• 1:29:01Speaker 02

  from India, China, Russia. That doesn't seem to be abating at any time.

• 1:29:06Tucker Carlson?

  That means they're importing gold?

• 1:29:08Speaker 02

  That means they're buying gold and there has been a lot of movement of physical gold, particularly over the summer. But the movement appeared to be more from the London Vaults back to the United States rather than elsewhere. But we don't know, we don't have complete clarity on any of that stuff.

• 1:29:28Tucker Carlson?

  How and why? How? So if you're going to have an ancient commodity that's like a huge part of the global system, economic system. How can you not have transparency? Maybe I'm answering my own question.

• 1:29:44Speaker 02

  I saw.

• 1:29:44Tucker Carlson?

  You look at me like I'm an idiot.

• 1:29:45Speaker 02

  I saw you answer. I saw you answer it before you finished the sentence.

• 1:29:49Tucker Carlson?

  In other words, if it's so important, why aren't people being honest about it? Because it's so important, that's why.

• 1:29:55Speaker 02

  Totally weird that the Chinese wouldn't tell us exactly how much bullion they have in the vaults. Yeah.

• 1:30:02Speaker 02

  Yeah, there's no reason they should or would or have to.

• 1:30:06Tucker Carlson?

  I guess my question.

• 1:30:07Speaker 02

  Also, you don't actually show your hand on how much you're accumulating as you're trying to accumulate an asset.

• 1:30:12Tucker Carlson?

  Oh, is that true?

• 1:30:13Speaker 02

  Well, yeah, typically.

• 1:30:16Tucker Carlson?

  I'm learning a lot about markets from you.

• 1:30:18Speaker 02

  That's great. That's great.

• 1:30:21Tucker Carlson?

  So I told you, I promised you stupid questions.

• 1:30:23Speaker 02

  I know, I said there are no stupid questions, but I was wrong.

• 1:30:27Tucker Carlson?

  So, um, okay. Then let me reframe the question this way. If we got somehow full transparency on gold, global gold reserves, where they are, who has gold, how much? Would we be shocked? Is there a big spread between perception and reality?

• 1:30:49Speaker 02

  I think so. We still don't have the audit of Fort Knox that we were supposed to get a few months ago. So.

• 1:30:56Tucker Carlson?

  Really?

• 1:30:57Speaker 02

  Yeah, you might be shocked about that, too. I don't know.

• 1:31:00Tucker Carlson?

  You think Fort Knox just has a lot more gold than they're telling us?

• 1:31:03Speaker 02

  They may have 10 times more. I don't know. I really don't. I don't, I don't want to speculate. I mean, I like to speculate, but I don't want to speculate on that.

• 1:31:14Tucker Carlson?

  I'm guessing if there is a spread between perception and reality, it's, it's to the negative. But what do I know?

• 1:31:20Speaker 02

  Not sure. There's talk about revaluing the gold as well.

• 1:31:23Tucker Carlson?

  What does that mean?

• 1:31:25Speaker 02

  That means if you automatically revalue our gold reserves to market, we automatically have a higher effective capital base that should make us more credit worthy, for lack of a better term.

• 1:31:42Tucker Carlson?

  So gold now, um, US reserves are valued at like under a hundred bucks an ounce, something like that, something crazy, right?

• 1:31:50Speaker 02

  I'm not sure exactly what.

• 1:31:51Tucker Carlson?

  But, but I mean, that's like 1933 levels or something.

• 1:31:54Speaker 02

  Right.

• 1:31:54Tucker Carlson?

  And, and of course, gold is over four grand an ounce. So like, why would we continue to value our own gold reserves thousands of dollars below what they're actually worth?

• 1:32:04Speaker 02

  I have no idea.

• 1:32:06Tucker Carlson?

  That's weird though, right?

• 1:32:07Speaker 02

  It is. Yeah, especially when every other metric in the economy, we have cost of living adjustments based on the CPI basket. I don't, I don't know.

• 1:32:16Tucker Carlson?

  That's a, so how much, um, just to go back to your, uh, career trajectory in emerging markets debt?

• 1:32:23Speaker 02

  Yes, sir.

• 1:32:25Tucker Carlson?

  How much, uh, chicanery is there in that business? Like, so if, you know, you're dealing with emerging markets. So some of those are like, you know, solid, transparent, well governed countries and some of them are Nigeria.

• 1:32:39Speaker 02

  Right.

• 1:32:39Tucker Carlson?

  What's that like?

• 1:32:42Speaker 02

  Well,

• 1:32:45Speaker 02

  I would say there's two components in the emerging markets trading business. There's the, the trading thereof in sort of the big money centers like Hong Kong, London, New York, and then there's the domestic stuff that happens. Now, I could say in terms of chicanery, there's a clear AD BC line at the global financial crisis on how we conducted business across the street and all products pre-GFC, post-GFC. And all I could say is a lot more fun pre-GFC.

• 1:33:19Tucker Carlson?

  Was it fun?

• 1:33:19Speaker 02

  It was a lot of fun. It was as much, it was as fun as you could have having a job.

• 1:33:25Tucker Carlson?

  Really?

• 1:33:25Speaker 02

  Job.

• 1:33:26Tucker Carlson?

  What was so fun about it?

• 1:33:28Speaker 02

  Um, every day was different.

• 1:33:31Speaker 02

  You're on a trading floor, everyone, every, every day is different. You had a front seat, uh, you have a front seat and you're participating in global events every day. Uh, markets moving up, moving down. You're working with like a truly diverse bunch of people from all walks of life that are as close probably to meritocracy on trading floors you could get. And it was very clear what the motivator was.

• 1:34:01Speaker 02

  It was making as much money as you could every single day and, uh, there was nowhere to hide from that. So as a young person.

• 1:34:12Speaker 02

  It couldn't be a better learning experience because every day, at the end of the day, there's a number next to your name and whether it was through your good luck, bad luck, hard work, whatever, the number doesn't lie and that's the number. It's just a great way to learn and to have to face yourself and improve upon yourself. And you know, the train forwards, guys, you know, like PhDs from Princeton to guys that dropped out of college and we were all kind of in it as a team. It was really fun and.

• 1:34:44Tucker Carlson?

  What were the personality traits that allowed people to be successful? Like, what's the perfect profile of a trader?

• 1:34:52Speaker 02

  You know, it's funny, I've found that the best traders, there's investors and there's traders, right? Different, it's a different mindset. The best traders I find were guys like to think with thought more in two dimensions. So if you thought in three dimensions, you could outthink your, you could outsmart yourself way too much. The what ifs and oh, oh, but, and if you're in one dimension, you're just not at the IQ level to function. So the two dimension that kind of took the factors at play, saw what the trend was, took it at face value, didn't overthink it, went with it and wasn't too

• 1:35:35Speaker 02

  mu, had enough risk appetite, but wasn't too much of a cowboy, I guess, would be the perfect trader they saw. The worst.

• 1:35:43Tucker Carlson?

  You're describing my dogs.

• 1:35:45Speaker 02

  Yes. The worst traders I saw were oftentimes the smartest people.

• 1:35:52Tucker Carlson?

  Really?

• 1:35:53Speaker 02

  Yeah.

• 1:35:54Tucker Carlson?

  Because they just overthink it?

• 1:35:55Speaker 02

  You just overthink your way, you overtrade it, you overthink it. You're always looking at the, you're always looking, oh, but this and that, and I have all this information. Analysis paralysis and or talking yourself out of a good trade.

• 1:36:10Tucker Carlson?

  How did it change after the financial crisis?

• 1:36:16Speaker 02

  We were egregiously overregulated from all, from all sides.

• 1:36:24Tucker Carlson?

  Did that make markets safer for retail investors?

• 1:36:28Speaker 02

  I don't think so.

• 1:36:30Tucker Carlson?

  Because the picture you painted over the last hour and a half is not one of like impregnable safety.

• 1:36:36Speaker 02

  No.

• 1:36:37Tucker Carlson?

  Let me just say that.

• 1:36:38Speaker 02

  I mean, there's obviously a lot of unintended consequences from the excess regulation, but it just, you know, it's funny, on Wall Street, I think we were actually at the vanguard of hyperregulation, hyperregulation, hyper monitoring. I mean, they were monitoring every Bloomberg chat, every email, every phone call. Everything was taped. Then they ran algos against it for keywords.

• 1:37:13Speaker 02

  You, just like way more scrutiny in every way.

• 1:37:15Tucker Carlson?

  So you lived in the panopticon before everyone else?

• 1:37:17Speaker 02

  Yeah, I did. And I, and I think there's also, you know, a lot of, going back to the global financial crisis is such a simulmo in this country in a lot of ways because it actually, we made this deal with the devil and I, you know, I, I'm a beneficiary of bailout. I worked at a big bank that got bailed out and, and I make no, I, I, I won't, I'll never deny that, but in doing so, we, we let the Trojan horse in and we married the government effectively and we, they came in and they basically wrote our policies.

• 1:37:59Speaker 02

  They wrote our policies for us and from HR policies to recruiting policies to, you know, all the regulation and the stuff that I saw from a distance in terms of sort of arbitrary

• 1:38:18Speaker 02

  fining for violations was.

• 1:38:22Speaker 02

  Kind of gangster like and I saw a lot of good people sort of thrown on the funeral pyre, sacrificed, um, just, just tossed out like, oh, let's, you know, this guy, this guy was in violation. These guys weren't, but they were on the same Bloomberg chat. So let's, let's give like 10 bodies. Everyone's fired. Everyone's career's over. It was, it was, that was a bad, that was a bad time. It's a bad time. And so everyone started trading scared. People tried trading scared and it lost the, the joy and it lost the.

• 1:38:52Tucker Carlson?

  Good. Famously, none of the, you know, the CEO, the executive level seemed pretty insulated from punishment.

• 1:39:00Speaker 02

  Yes. Um, you know, if I were gonna give, if I were gonna give a more sort of generous take on it, you know, the CEOs really didn't have much of a choice in some regard. It was like, look, here's the deal. You could keep your job and keep making 25 million dollars a year. Uh, or if you agree to this fine for mortgage backed securities or whatever, live war rigging or whatever it is, this, this arbitrary number, you could keep your job and you can keep your salary or you can get fired and the next guy will agree to it.

• 1:39:44Speaker 02

  So like, and they kept it afloat and they had to be, they had to be in good stead with the government or the fines and the regulation would just come and come and come, come. But once you get bailed out, once you ask for the bailout, they own you. And that's what happened.

• 1:40:02Tucker Carlson?

  It always is what happened. They made the deal.

• 1:40:04Speaker 02

  Yeah. And it was like the tobacco companies, right? Like they kept the tobacco companies alive just long enough to keep bleeding them for fees. Like then they figured out there was just, there was money there to, to take and, uh, they just kept coming back.

• 1:40:19Tucker Carlson?

  Yeah. And the country did not get healthier. Like expect since he went down. And if I can just be honest, I don't think the quality of the cigarettes improved at all.

• 1:40:28Tucker Carlson?

  No, I'm serious. If you smoke a sort of pre-settlement Marlboro Red, not that they exist anymore, or a current one, it's like, it's not even the same product.

• 1:40:37Speaker 02

  I was a pre-settlement guy. I quit.

• 1:40:39Tucker Carlson?

  Yeah, oh, me too. I'm just, I'm just saying I've heard that. So, no, I don't really think anyone won, except for politicians.

• 1:40:46Speaker 02

  Right.

• 1:40:46Tucker Carlson?

  I don't think there are a lot of lung cancer patients who've died.

• 1:40:48Speaker 02

  Yeah, well, a lot of nice new regulatory buildings were built. And I think also, one of the great stories that hasn't really been, maybe this was for you, one of the great stories that should be investigated is, where did the proceeds from all those post-GOC fines go? Because I saw some stuff in and around the time that was kind of staggering as to where it went. And obviously, it went back into building more of the regulatory bodies, like more SEC regulatory, whatever. But I, I think some of the money flowed to some very specific political organizations.

• 1:41:33Tucker Carlson?

  There's no question about it. It went to the swamp. Meanwhile, the whole pretext for this, the justification for doing this was, I, I lived here then, I just sold my house that year, so I, I was a victim of all this too, even though I never participated in it. But I lost my job, along with a lot of other people. And just because the economy contracted, so people lost their jobs.

• 1:41:54Speaker 02

  Right.

• 1:41:55Tucker Carlson?

  Including those with four children. But the justification was, which I wasn't against, it was like, these people are totally reckless. Like, they're completely reckless. Like, what is a mortgage-backed security? What's their derivative? And like, no one outside your world has ever heard of any of that. It's like, I thought when I, you know, signed up for a mortgage, like, the bank I signed with held the mortgage. Like, we, we had no idea they sold the mortgage. Like, most people didn't know. Again, there's a lot of ignorance, including in my house, about this stuff. And so the idea was like, this is crazy, and we need to rein it in. You've just described the quote gamification.

• 1:42:32Speaker 02

  Yeah.

• 1:42:32Tucker Carlson?

  Of markets and it's like, that doesn't seem like a decrease in recklessness.

• 1:42:36Speaker 02

  Well, it actually reminds me something for the part of the previous conversation, which is, you know, people say you never know when you're, when you're in a bubble until it's over.

• 1:42:45Tucker Carlson?

  Yeah.

• 1:42:45Speaker 02

  And that's entirely incorrect. I mean, I've been through a bunch and we all know, like, we all say, oh yeah, we just didn't know when it was gonna end. I mean.

• 1:42:55Tucker Carlson?

  Like, give me an example.

• 1:42:56Speaker 02

  People were talking about the bubble in oh five. No, if you fought it in oh five, you were out of a job pretty quickly. Like, it went on for a long time. I could tell you, the, the reason I want to bring it up is again, the perilous to today is, you know, so in oh seven, I'd been on trading bonds for whatever, thirteen, fourteen years. So, not the smartest guy, not the most quantitative guy, but been around enough to trade enough stuff to understand kind of how stuff works. And all this stuff they're coming through with like CDO, Square, it's CLO, and like synthetic this and that, and like, I didn't really understand it. I didn't have to trade it, but like, I didn't really understand it. I didn't really want to get into

• 1:43:37Speaker 02

  it because I didn't need to, but it's just, I was thinking if, if I'm already in the whatever percent of financial experts, just by nature of where I sit every day, and it doesn't smell right to me.

• 1:43:51Tucker Carlson?

  Yeah.

• 1:43:51Speaker 02

  Something's not right.

• 1:43:53Tucker Carlson?

  And you trade Nigerian debt.

• 1:43:55Speaker 02

  Right, right, right, right. So, anyway, I'm taking credit to rivers on Bulgaria and stuff. So like, yeah, yes, but.

• 1:44:05Tucker Carlson?

  You're taking derivativeism Bulgaria, but you're like, this is too much for me.

• 1:44:10Speaker 02

  It's just like, how many acronyms? Also, I'm just, I'm, I'm substantially averse to any acronym. And then when you, when you take the acronym and square it, you know, you're in trouble. But, but then this, this latest go around, the last couple of months with all this circular financing and hype with all the AI companies, and every day, you know, somebody's buying chips from somebody who's gonna lend the money to buy the chips, to invest in the scaler, who's gonna do this, like for every day, four companies are, you're like. Yeah, I suppose I could figure that out if I sat down and really tried to, but it gives me a headache just even thinking about it. And clearly, it smacks of some kind of, it

• 1:44:55Speaker 02

  smacks of desperation or something. That's just my, my gut is just having, you know, the sniff, haven't been around a long time. It's like, dude, if it doesn't smell right, it's just, it doesn't smell.

• 1:45:05Tucker Carlson?

  Don't put it in your mouth.

• 1:45:06Speaker 02

  Right, right.

• 1:45:09Tucker Carlson?

  So you remember thinking like, what about the tech bubble in 99, 2000? Did you think?

• 1:45:15Speaker 02

  Oh, I got blown out per in personal trading, trying to short that like the fall of 99 on the bottom of other people. Yeah, I mean, everybody, yeah, I've hilarious, hilarious. That's, I was with my wife in March of 2000 at a dinner, at a lunch with a guy who was chairman of a major, major broker dealer, famous, famous broker dealer. And we're, she's 30 at the time, never invested in anything. And we're sitting next to him, he's like, so what do you, she's like, oh, I've been day trading stocks. He's like, explain that.

• 1:46:00Speaker 02

  What do you mean you've been day trading? She's like, oh, yeah, I just buy whatever IPOs. I just, if it comes out, I buy it. Do you remember that in 2000, all the actual friend, everything just went up? Like, she's like, yeah, I just, I just buy it and I sell it. It's awesome. And I saw, I saw his eyes just go like this. And then that was like, that was like the, that was like the Joe Kennedy shoe shine moment. I mean, it was literally like February or something. I think it was probably within probably two.

• 1:46:26Tucker Carlson?

  No, it's when your housekeeper is investing in condos in Clark County, Nevada, that you were like, I think maybe this is overheated.

• 1:46:34Speaker 02

  Just a little bit.

• 1:46:35Tucker Carlson?

  No, for real.

• 1:46:36Speaker 02

  Or you get your Uber divers like trade crypto on.

• 1:46:39Tucker Carlson?

  Completely.

• 1:46:41Speaker 02

  Yeah.

• 1:46:42Tucker Carlson?

  Whenever people are going hard on like Cape Coral, Florida, real estate, who don't know anything about real estate, not against Cape Coral, but you know what I mean?

• 1:46:49Speaker 02

  Yes.

• 1:46:49Tucker Carlson?

  And those were the hardest hit zip codes. Yeah. So you think it's pretty obvious is what you're saying?

• 1:46:57Speaker 02

  I just, it's, it feels, there are sort of like the Russian, just sort of like the letter that they wrote about the Hunter Biden laptop. It has all the hallmarks of Russian disinformation. It is all hallmarks of a late stage rally. Let's say that.

• 1:47:22Tucker Carlson?

  Yeah. Well, you're very diplomatic. I have to say though, just like with the baseline fact that you spent your life trading emerging markets debt. I think if you're uncomfortable with something, it's fair for the rest of us to be uncomfortable with it.

• 1:47:34Speaker 02

  Appreciate that.

• 1:47:35Tucker Carlson?

  Yeah. Last question. You've been through all these bubbles and bursts and debt crises and bailouts. And at the, at the end of every story is the United States or US aligned institutions like the IMF coming in and kind of saving the day. Is that, if that's, that's the thread that runs through all these?

• 1:47:56Speaker 02

  Yeah, in simple terms, sure.

• 1:47:59Tucker Carlson?

  I only deal in simple terms, Coleman. Um, but what happens if that happens to the United States?

• 1:48:06Speaker 02

  The bailer? Who bails the bailer? Uh, nobody.

• 1:48:14Tucker Carlson?

  Okay. So then what happens?

• 1:48:17Speaker 02

  I don't, I don't think, I hope you bought that, that agricultural land in Brazil at that point. So then what happens? I don't think, I don't think we get to that point anytime soon.

• 1:48:33Tucker Carlson?

  But just theoretically.

• 1:48:35Speaker 02

  As we've mentioned before, you know, there is no, there's no alternative right now, right?

• 1:48:43Speaker 02

  People still, as bad as it can get in the States, like, we're still the cleanest dirty shirt in the pile for the time being, right? We still have this free and open markets where capital flows and gets treated well. There's time, there's still time to course correct. I'm not willing to go to who bails out, who bails out the bailer. I just, I'm not willing to go there.

• 1:49:09Speaker 02

  I'm not willing to go there. We'll be all right. We're still, still the United States of America and we've got a lot. I mean, this administration's got a lot of mental firepower and a lot of experience. We still got time.

• 1:49:21Tucker Carlson?

  Coleman Church, ladies and gentlemen. Thank you.

• 1:49:23Speaker 02

  Thank you so much.