Trump Declares War on Iran (again), Inflation Crashes HARD, and ICE Killings Continue | The Tom Bilyeu Show

What's up, everybody? It's Tom Bilyeu here: If you want my help... STARTING a business:join me here at ZERO TO FOUNDER https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show: https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show SCALING a business:see if you qualify here. https://tombilyeu.com/call: https://tombilyeu.com/call Get my battle-tested strategies and insights delivered weekly to your inbox:sign up here. https://tombilyeu.com/: https://tombilyeu.com/ ********************************************************************** If you're serious about leveling up your life, I urge you to check out my new podcast,Tom Bilyeu’s Mindset Playbook https://open.spotify.com/show/47VE90Cittmo6TGGFqg2xf —a goldmine of my most impactful episodes on mindset, business, and health. Trust me, your future self will thank you. ********************************************************************** FOLLOW TOM: Instagram:https://www.instagram.com/tombilyeu/ Tik Tok:https://www.tiktok.com/@tombilyeu?lang=en Twitter:https://twitter.com/tombilyeu YouTube:https://www.youtube.com/@TomBilyeu Straight Arrow News: Go to san.com/tombilyeu http://san.com/tombilyeu to get the unbiased truth on the stories that matter, only on the Straight Arrow app. Let’s exit the echo chamber. Quince: Free shipping and 365-day returns at https://quince.com/impactpod Whatnot: Download the Whatnot app today and get free shipping on your first order. ATT Business: Switch to AT&T Business at business.att.com http://business.att.com Shopify: Sign up for your one-dollar-per-month trial period at https://shopify.com/impact Incogni: Take your personal data back with Incogni! Use code IMPACT at the link below and get 60% off an annual plan: https://incogni.com/impact Quo: Try for free PLUS get 20% off your first 6 months at https://quo.com/impact Paleovalley: 30 for $36 https://bit.ly/PaleovalleyIT Netsuite: Right now, get our free business guide, Demystifying AI, at https://NetSuite.com/Theory https://netsuite.com/Theory Welcome to The Tom Bilyeu Show Live. In today's episode, Tom, Drew, and Ryan break down a packed news cycle starting with the biggest CPI inflation drop since Covid and why it may signal a deep economic sickness rather than a recovery. Tom walks through the mechanism behind the drop, the collapse in labor force participation, and what China's refusal to buy oil despite falling prices reveals about a hidden downturn tied to its $18 trillion housing crisis. The conversation connects the global energy picture directly to the Iran war, where Trump has now formally notified Congress that the US is at war, restarting a 60-day clock and shifting toward a doctrine of disproportionate response. The team explores how a softening economy could hand Trump a political win heading into the midterms, and what China's distraction could mean for Taiwan. From there the episode moves into election integrity and immigration, including a Senate seat filled without an election, the bundling of voter ID with a US-Israel military bill, and a heated three-way debate on incentive structures, ballot harvesting, and the populist moment. The crew digs into ICE temporarily suspending most vehicle stops after multiple fatal shootings, including the death of a Colombian man with a work permit who wasn't the target, and what humane, rule-of-law policing should actually look like. The group then has an extended debate on fully AI-generated political ads, network TV, satire, and whether the answer is regulation or a technological trust system. Finally, Japan reclassifies crypto as a financial instrument, banning insider trading and opening the door to spot crypto ETFs, alongside quick hits on Circle's national trust charter, an AI companion from the makers of Genshin Impact, a SpaceX-founded manufacturing startup, and an Indian company breaking China's grip on rare earth magnets. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

• 0:00Speaker 00

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  Their dashboard tracks what comes next based on what your business actually needs. So EIN number, registered agent, licenses and permits, bookkeeping, business banking. I tell every founder the same thing. Just make it official. Click the link in the show notes to check out Taylor Brands and get started on your business today. This is a paid advertisement. Good morning, everybody. Welcome to another Tom Bilyeu Show Live. We have got a spicy one for you guys today. CPI inflation has had the biggest drop since COVID, but it's likely bad news. We're going to do that analysis. Very important for any of you investors out there to understand what's actually going on. Trump just notified Congress that the US is re declaring war on Iran.

• 1:31Speaker 00

  There's been another fatal eye shooting. This is where we need the another one. Japan takes the lead on crypto assets by officially categorizing them as financial instruments. The game is going to be changing on that one. I think people have been sleeping on crypto for so long. People have a totally distorted mental model of that. That'll be fun to talk about. A company called Terra Firma has secured financing to build next gen manufacturing equipment for moon and Mars bases. So that's starting to get real. They have not raised a small amount of money. That one's pretty gigantic. So a lot of interesting stuff going on, especially the fact that an Indian company has just smashed China's stranglehold on rare earth magnets by creating an EV battery

• 2:14Speaker 00

  that runs on software. Wild. And an AI agent made by the makers of Genshin Impact is going viral, man. I'm telling you, AI agents are going to take over in ways that people do not understand. They're starting to brand them, give them personalities, make them highly individualized. And people are going for it. Shout out to our sponsor today, Straight Arrow News. We love you guys for giving people just a straight take on exactly what's going on on the news. Not a biased take, which is these days hard to avoid. The QR code is on the screen right now. You can go to san.com/tombilyeu. Sorry for how that's spelled, to get the unbiased truth on the stories that matter. You guys know me, everybody has a frame of reference and trying to find a way down the middle.

• 2:59Speaker 00

  So you can actually make up your own mind is incredibly important. And if we want to keep these sponsors going and keep this show going, we're trying to get to 100 downloads today. So, boys and girls, go to it. If you think this will be beneficial in your life, please take advantage of this moment. So again, shout out to our friends at Straight Arrow News. All right, speaking of something that you should be seeing in the news. Inflation has dropped like a rock, but it is not the good news that people are expecting. Though you're going to see a lot of people are interpreting this as a good thing. And boy, does it feel weird as the person who just bangs the drum over and over and over about how bad inflation is to tell you this drop in inflation is not brought to you by anything good.

• 3:43Speaker 00

  This drop in inflation is brought to you by a deep seated problem that has been brewing in the economy since about 2024. But here are the facts. Headline CPI just fell in a single month by its largest amount since COVID. That's massive and is exciting in terms of you guys will be paying less for things. But unfortunately, the thing that it's tied to is going to end up getting weird and we'll get into that. Wage growth, by the way, right now is actually tied with inflation. So when you start putting that together, the right question all of you should be asking is, Tom, how in the world is it possible that we've gone from inflation that was eating my real wage growth

• 4:27Speaker 00

  to now those two things are tied and it's dropping? How could that possibly be bad news? All right, as with all things economic, it really does come down to the mechanism. You guys know my core focus in life is cause and effect. So what is the thing that caused this to come down? I started getting into this. We have an interview coming up with a guy named Jeff Snyder, who really, I found him maybe eight or 10 months ago. He started introducing me to concepts in terms of how money actually moves around the world that I find really useful in terms of its ability to predict what's going on. And as you start breaking down what's actually happening in the Iran war, it starts giving us a glimpse into a sickness at the core of the global economy

• 5:12Speaker 00

  that I think will feel right to people. Now, I use the word feel on purpose because for a long time now, people have been saying, hold on, I'm getting all these numbers. I'm being told that the stock market is absolutely crushing it, but I feel terrible. I'm not able to make ends meet, that things are getting harder. So where in the data am I going to see the reality of what I'm living on the ground?

• 5:36Speaker 00

  The, one of the biggest red flags that everybody should be queuing off of that happened recently is the labor force participation is getting terrifying. That's both people that can't find a job, but it's also people that just are no longer even looking for a job. So there's all this softness. We're seeing the number of jobs added in a year roughly matching, sorry. Yeah, the number of jobs added in a year roughly matching what we used to add in a month. And so when you look at all of that, the alarm bell should be going off in people's heads. Now, if the CPI were coming down because of deregulation or innovation, then we could, you know, say, all right, this is a very good thing. If we were riding on the back of some breakthrough in productivity, we would definitely say that this is a very good thing.

• 6:20Speaker 00

  But unfortunately, that isn't what's happening. And so all eyes on the Iran war to understand precisely what's going on. So at the beginning of the war, we saw everybody rightly freaked out, right? Everyone was looking at oil prices. I have said, many people have said, because it's true, that oil, the price of oil acts effectively like inflation itself, because everything rides on the back of energy. No matter what you want to do, it's going to take energy. You want to ship a bushel of bananas, you're going to be putting that on a truck. That truck, by the way, not only is using diesel, but it's probably refrigerated. And so you just see like there's a thousand ways that energy is finding its way into a system, no matter what you're shipping. So, or no matter what you're trying to do.

• 7:05Speaker 00

  All of that stuff, when you raise the cost of energy, they go up as well. And so that's why when people get nervous about the cost of energy going up, they really get paranoid. The thing is, as with all things in the economy, it comes down to supply and demand. So the 50 year, call it myth, has been that energy supplies or energy demand, excuse me, is inelastic. And the thing that people would point to is the 1973 Arab oil embargo. So 1973, we get into a kerfuffle and all of a sudden, we're not able to get the oil that we want.

• 7:45Speaker 00

  As you would expect, that causes the prices to go up. Nobody is surprised by that. The prices end up going up a lot, but instead of the people pulling back from demand, what ends up happening is it, it becomes one of the key factors that puts us into the biggest, at the time, the biggest recession since the Great Depression. So imagine how inelastic the demand for energy has to be, where you basically, your entire economy gets nuked, but people just, because people are paying so much more for energy and it acts as inflation. So everybody's like, oh my God, I just can't buy all the other stuff I would normally buy because I have to spend all this money on energy. And so that locks into people's minds that you can jack prices way up. You're not going to hurt demand.

• 8:28Speaker 00

  You'll hurt every other area of the economy, but you're not going to hurt demand. People are still going to go for that oil. Everything has to be shipped, planes have to move, the things that people are manufacturing, all those lines are going to keep running. Okay, so that dominates the economic conversation for 50 years. The Iran war comes along, all the pundits look at this and go, ah, yes, oil prices are going to spike up. And they do, they, they go up very rapidly. And everybody looks at that and goes, yep, this is the drill. And so people were saying, you know what you're going to see by the end of this? If the straight continues to be closed, you're going to see first, prices will hit 150. And we got with landed physical oil, we did hit those prices. So at the beginning of this, back in March, we were seeing things, I can't remember if it's March or April,

• 9:13Speaker 00

  but we were seeing prices landed, oil prices at $150 a barrel. And they were saying, this is going to go all the way to $200 a barrel. Now, for anybody fact checking, that's different than the paper bets. So if you look at the paper bets, it was slightly different. I think the number there was like $126, maybe just above. But anyway, ask questions in chat if you want deeper on that. But that's what we're seeing in the price action. Everybody's like, yep, this is so known, 1973 oil embargo. Why would you expect anything different? Then with the MOU, the prices came just crashing back down.

• 9:48Speaker 00

  Now, when it first happened, people were looking at China and they wanted to see what China was gonna do. China had built up this massive stockpile, over a billion barrels of oil in their strategic reserve. Looked super brilliant, like, yeah, great play. Then, when the price dropped back down, people started asking questions because China didn't start buying again. Also, China wasn't able, wasn't able, it's a weird way to say it, but you can understand why, wasn't able to even draw down their reserves very much. I think they ended up, a total drawdown of like 20 million barrels. Okay, so they lose, uh, what, 20% of the world's supply is going through, uh, the Strait of Hormuz.

• 10:31Speaker 00

  The pullback on demand, which, remember, everybody thought was inelastic, but the pullback on that demand ended up being massive. 74% of the pullbacks from China. So everybody's like, okay, China's an authoritarian dictatorship, so of course, they can just tell people, you guys have to pull back. But you would expect there to be some sort of pushback from people. If the US, when we went through this, we pushed ourselves into a recession, a massive recession, rather than pullback on demand, we'd rather pay more. China doesn't do that, but there's no social upheaval. They just account for 74% of the global pullback and everybody's chill. So people are like, hold on, wait a second, what's really going on here? As you start to uncover the actual layers,

• 11:16Speaker 00

  what is most likely happening is that China, whose actual demand for oil has been going down since 2024, this is all tied to what they've got going on in their housing crisis. Remember, China's been trying to hide the fact that they're in the middle of a massive economic downturn. If you guys know the history of Japan, so 1989, the real estate bubble in Japan pops. They lose an entire decade. Some will say they've really lost 30 years, that's a separate thing we can get into. But there's this massive, um, destruction of wealth in Japan, based on real estate. It has the most catastrophic economic consequences. China goes through something similar, so China just obliterated 18 trillion dollars in home wealth.

• 12:02Speaker 00

  But all the economists are looking at the way that China's buying oil as a signal of the health of their economy because oil is a proxy for economic activity, for the reasons that we were talking about with the bananas and all that. Okay, so you've got, China just keeps buying, buying, buying, buying, buying, and everybody thinks, oh, well, I guess they've managed to engineer some sort of soft landing, not sure what they did. Everybody's sort of shrugging, but hey, they managed to pull it off. Now, instead of this being, oh, look at China's amazing, they're able to pull demand back on a whim, what we're realizing is, no, that almost certainly isn't true. Because if that were true, then we would have seen them burning through their reserve.

• 12:44Speaker 00

  But instead, at the beginning of all of this, when it first kicked off and their supply got shut off from the Middle East, they were actually still building their reserve, which tells you that their demand is weakening. And the fact that when the price dropped back down, when the MOU was signed, their purchasing didn't go back up. So, these are people that were originally saying, hey, we just cut off all of this because why would we buy oil at a higher price? But then you would expect them to start buying when the price comes back down and they don't. So, that paints a far more distressing picture that what we're seeing in China, and I'll get to the US in a second, but what we're seeing in China is actually just an absolute crush of demand.

• 13:25Speaker 00

  So, if you interrupt supply and the price doesn't go up, because we're, we're back in the full thick of the war, prices have gone up a little bit, but not a lot, and the most important part of this is the long tail of the curve. And so, when you look out at the long tail of the curve, what you start seeing is that, so think of oil. The near-term trade is like, okay, there's a supply disruption right now, so I'm gonna pay a little bit more for oil right now. But the long tail tells you at least what traders believe is going to happen to the supply and demand mismatch. And those prices have been locked basically in the 60s this whole time. So, the sharps, as they call them, the people that pay attention to all of this, all the global macro movements,

• 14:08Speaker 00

  they're like, no, no, no, there is a thing happening you guys don't understand, and there is going to be a deflation, there is a deflationary pressure that people don't yet recognize that makes the long tail of oil stay low. So, that's where you start going, okay, well, what is that deflationary pressure? And the answer that I'm putting forward, and, uh, we're gonna hear more from Jeff Snyder later today, but what I'm saying is that this is really, you've got a housing crisis going on in China that's now spreading across their economy, which is making the average person pull back, which means refiners don't need to keep refining, which they have stopped doing. And that the, oh, this is all coinciding with the war because you've got China trying to hide the fact that they are in economic distress right now.

• 14:54Speaker 00

  So, much like people used AI as a way to say, oh, I'm laying all these people off because we have all these increased efficiencies, it wasn't that we overhired during COVID, which would be sort of a black mark on their stock price. They don't wanna say that. So they wait till AI comes along, they're like, hey, we got a perfect cover story. China's doing the same thing. The war in Iran gives them the perfect cover story to stop refining, to stop purchasing new oil at basically any price at this point. And so, now, that gives you a glimpse into, okay, hold on a second. They're not behaving like somebody who's just looking for a better price. They're behaving like somebody who doesn't have the demand. And if they don't have the demand, that is a sign of deflation, right?

• 15:35Speaker 00

  Coming because there's lack of demand, which is not what you want if you wanna be excited about a drop in inflation. Same thing in the US, okay? People can feel it, there's something wrong with the economy, what's going on? Our problem, so we don't have the same problem that China has, but we have a problem. And our problem is that we're basically, we had a massive break in terms of real wages going up. We had this step up in price basis essentially caused by COVID, and it's now just continuing to work its way through the system. And I think everybody just sort of thought, oh, we got on the other side of COVID, everything is fine. But the reality is, we got on the other side of COVID with this bump up and everything is just more expensive.

• 16:19Speaker 00

  And so, real wages have been chasing it, they've been trying to get back up, they've never been able to quite catch up. And we certainly haven't gone back to historically matching the prices before COVID. So now, everything is just more expensive, welcome to the new world, that's how it is. People tried to sort of keep the party going by spending their savings down, which we saw massive drawdowns of personal wealth in the US, and racking up credit card debt. And now, basically, all of that is coming to an end. You can only do that for so long before people start realizing, I'm getting poorer and poorer by the day, so I'm gonna pull back. So now, the US also has decreased demand, and so you see inflation coming down here in the US. So you have just people buying less stuff.

• 17:03Speaker 00

  So, you can think of in that way, the energy is sort of the last thing. By the time that this pullback has reached energy, you've already stopped buying things at the, you know, the store that you otherwise would have purchased, whether that's a new stereo or whatever, just all kinds of stuff, everybody's starting to pull back. And so, looking at this sort of weird break of like, hold on a second, since when are energy demands elastic? We, we've known for 50 years, people will push themselves into a recession before they'll give up on their energy. And now that has broken, and that has broken because of this underlying and growing softness in the two biggest economies in the world. Now, I very much doubt that it is just the US and China.

• 17:49Speaker 00

  But once you have the US and China, which account for some ungodly percentage of global GDP in this economically rough spot, now all of a sudden, looking at inflation coming down and being like, oh my God, yes, finally, you're looking at a sign of overall poor health in the global economy. And so, it's brutal because I want to cheer for the fact that prices have come down. But they've come down for a reason that is going to increase in its problematic nature over time. We're hitting pause for a moment, but there's plenty more ahead, so don't go anywhere.

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• 20:34Speaker 00

  Thanks for sticking around. Let's get right back into the action.

• 20:38Speaker 01

  It's one of those things though, because I just seen a report that China has then pivoted to coal. They bought thirty percent more coal in June than they did the year before. We all know that they are leading in EVs and nuclear power. They have a dam that slowed the Earth's rotation. So was it just, I understand that oil has a very specific use. But at the beginning of the war, there were places, there were different Asian countries, Singapore, Thailand, there were some people work from home. Don't drive to work, don't commute anymore. It's cool like, and China being top down, can't they just control their populace and say, okay, guys, we're not using oil anymore. So it's a bit easier to-

• 21:12Speaker 00

  They certainly can. China can, China has shown a willingness to shoot people in the face if they get out of pocket. At the same time, China is also very paranoid about doing things that causes those kinds of uprisings. And so they're always trying to smooth those things out. And what you would expect to see, because that's like one of the, so I ended up doing a deep dive about this. One of the formal arguments that I cover in the deep dive is that it's the replacement theory. So it's like, well, hold on, Tom, why are you worried about this? Because China is moving over to electric vehicles. They're bringing on solar faster than any nation, way faster than the US. So what's the problem? They're just switching over.

• 21:52Speaker 00

  Now, that would make sense if China were playing this out over a four or five or maybe even ten year period. Because you, when you're making a transition of energy sources, you don't bring on a bunch of solar panels and call it a day. You have to transition your entire fleet over to the new style. And so if you look at the diesel expenditures on the Chinese side, you'll see that diesel's not being, it's not like backhoes all of a sudden are electric. So that whole industrial fleet hasn't been moved over at all. Diesel is one of the earliest signs that something was going wrong in China. Now, that makes sense. All that industrial grade equipment, all that diesel pullback.

• 22:34Speaker 00

  When you go, oh, you're in the middle of a housing crisis. Oh, that's gonna have a huge impact on the construction industry. The construction industry is largely what drives, and their infrastructure play is largely what drives the use of diesel. And so that started dropping earlier. That started dropping back in 2024 as well. So it's like, uh-oh, like, they're not shifting that over to electric yet. Let's assume that they will, but they're not doing it yet. And then also, what we're talking about in the war in Iran is a four month period. Nobody is transitioning one energy source to another in four months. It just doesn't happen like that. There's too many new cars, backhoes, cranes, all of that, that has to be moved away from

• 23:17Speaker 00

  oil onto electric. And so that hasn't played out. So it's like, yes, China is doing that. And yes, China deserves a lot of credit for the innovations that they're doing there. And boy, oh, boy, do I wish that you could look at the numbers and see that that's the reason for this like super sharp four month decline. It track, and look, in the final analysis, of course, we're gonna get a fuller picture. It isn't gonna be exactly the way that I have mentally mapped it now. Things never are. You need more information. But when you switch the map over to, oh, China was trying to hide what's really going on. China is notorious for lying about their data. And so you've got, okay, China is likely to lie about their data.

• 23:58Speaker 00

  China is, like anybody, likely to look for that cover story. And so when you map that to this rapid sudden decrease in need for oil to a four month change, it's like, it doesn't make sense. If you switch it over to, oh, they've been trying to obfuscate with the one number that they know everybody pays attention to, which is how much oil are they purchasing? Then you go, oh my God, this gigantic reserve that they built up is really about that. It's about the fact that, oh, I can keep showing you guys that we're importing just as much oil as ever. Stock it away in my reserve and wait to see if an opportunity presents itself for me to go,

• 24:41Speaker 00

  okay, cool, here's why we're gonna stop buying. It's nothing wrong with the economy. I don't know what you guys are talking about. It's the insert Iran war. So now, whether they did that on purpose or whether it was just like, guys, we can't just keep filling these stockpiles. This is getting crazy. And the timing just happened to overlap. You don't have to assume even the manipulation of the data to just be like, nonetheless, stopping now tied to the Iranian war does also give them the cover story. So whether or not it was a strategic plan, it's being leveraged in that way. So now you've got another sort of proof point that that's what's going on. If China really built this gigantic reserve because they're like, that's what we need.

• 25:26Speaker 00

  Then, when this first happened and you had a shut off of the supply, then their strategic reserve should have dropped. But they were growing their strategic reserve even after the cutoff. And through all of this, they've only burned through about twenty million barrels, which for an economy of their size is very, very small. Now, that doesn't mean that there aren't also levers of like, hey, we want everybody to chill because we don't know where this is gonna go. We don't know how long this is gonna last. So it's like, if you think of China as, they also love their countrymen, they want their country to do well. And so if they're like, you know what, we're gonna stop exporting things, which they did. So some things that they were normally selling, they stopped. Because there's so many question marks for them as well.

• 26:09Speaker 00

  So I think it would be a mismatch to say, the only move here is that they're just trying to obfuscate this from the world. It's not just that, but that's a key part of this. And then another thing that shows you that that probably isn't the play is that when prices returned to normal, they didn't restock their strategic reserve, which tells me they know their strategic reserve is bigger than they need. And so they're just like, meh, nice convenient time to let that draw down a little. Also, they're not even turning their refineries back on. So you can imagine, you've got this massive stockpile of oil. If you had the demand, just keep refining your stockpile. Because the stockpile is like, it's like putting the future gas in the freezer, right?

• 26:54Speaker 00

  You leave it as oil, you don't refine it. But they're like, they've drawn their refining down to record lows. I don't know if it's all time lows, like last fifty years or whatever, but it's like certainly regional record lows of refining. So it's like, that's a demand story. That's not a, oh, we have a supply problem. If they had a supply problem, they go back to, they probably would have just kept refining. And they certainly would have started purchasing again once prices normalized, but they didn't.

• 27:21Speaker 01

  Yeah, we got into this talking about the CPI. So what are some of the blowblacks that the average person can expect? Because from my standpoint, we're going full ham into the war and we're gonna cover that next. So energy prices are gonna rise back up. So the CPI dropped that-

• 27:36Speaker 00

  That's the trippy part. So right now, if you look at the discrepancy, so we are from a number of bombs dropped. If we're not farther ahead than where we were when we first started the war, we've got to be pretty close. So all hell is broken loose. Iran has said, we are no longer operating under the MOU. Trump has gone to Congress and said, we are now again at war. So this is, like, we're back to the status we were when in March, when prices like skyrocketed. They're going up, but they're not skyrocketing. But again, the thing to pay attention to is the tail end of the curve,

• 28:17Speaker 00

  which is saying that there's gonna be a deflationary pressure, not an inflationary pressure. So the smartest people in the world from a trading perspective that are looking at this are saying, you guys are misreading the economy. The economy is going to be cheaper down the road than it is now. And if they were betting on innovation, I'd be thrilled. Now, maybe some of them are. Kevin Warsh is gonna ask you to believe all this deflation that people are projecting. It's all AI, bro. But where the fuck do you see that happening? Like, AI for sure will be deflationary, but anybody betting on that in an aggressive way right now, whoa. Like that, we're not seeing that realized yet. I believe in it massively.

• 28:58Speaker 00

  But I believe in it in like a five to ten year time horizon. I certainly don't believe in it in a six to eighteen month time horizon. You're not gonna feel it at that scale. So that's where it's like, hmm, that's all a very fishy read on what's going on. Especially when, and I don't appeal to emotion often, but people can feel there's something wrong with the economy. But people have been unable to put their finger on it. In the US, I think it's just people spent through their savings, they racked up their credit cards about as far as they could. And now we're sort of hitting some limit of how far people are willing to overextend themselves. And now you're getting apathy in the job market. People just saying, I'm not even trying to find a job anymore. You're getting the rise of socialism, which is massive. I think is a massive part of that story. Why are people going towards that? Can't get a fucking job.

• 29:43Speaker 00

  And so everybody's telling you, you can't get a job because of AI.

• 29:48Speaker 00

  Like, I think that that will play out in some ways, but that's gonna be more of a job transition. So every technology in human history has always created more jobs than it's destroyed. It's possible that AI doesn't do that. But for AI to have that kind of job destruction, I think you're gonna need to be edging towards proper AGI, maybe even ASI before that happens. Like, when I start prognosticating, all these jobs are gonna be lost. I'm, I have a mental model of artificial superintelligence. We've not achieved that yet. So it's like, without saying that whole thing isn't gonna play out, that isn't what's playing out now. It's the same way I feel about the, oh, this is just China switching over to solar.

• 30:27Speaker 00

  It's like, China will switch over to solar and they are moving towards that, but that doesn't explain this level of drop right now. So it's like, yes, that's true. That's gonna become part of the story. But that's not the story that's playing out right now. So what can people expect? This is one of those-

• 30:47Speaker 00

  Hopefully it will play out much slower and it'll be more chill. I'm not trying to get people overly afraid. I think we have been in a stealth recession for probably two years. And I think that we're now about to realize it's just going to be a full blown recession. And so you're going to see deflation, but crisis led deflation, not the kind of deflation that I've always tried to champion, which is innovation led deflation. That would be the AI side of things. So I think you're in crisis led deflation now, and that drop is that. Another thing to point to that is what did the Fed do to create the deflation? Taking a short break, but there's more Impact Theory after. Stay tuned.

• 31:30Speaker 00

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• 32:15Speaker 00

  That's S U R F S H A R K dot com slash TOMB. Surfshark.com slash TOMB. Use code TOMB for four extra months of Surfshark. Thanks for staying tuned. Now let's get back to it. The answer is nothing. The Fed has been sitting back watching. Their last report was, yeah, we're, if anything, we're going to raise rates and we're not going to lower them. And you got deflation from that. You're supposed to get deflation from them tightening rates, but they haven't. We've also, I know people don't like to see 4.5 or whatever, but that's historically low. So we're still in historically low territory. It's not a regional low.

• 33:00Speaker 00

  No, no, no, rates.

• 33:02Speaker 01

  Interest rates.

• 33:02Speaker 00

  So we're in historically low interest rates and it, all of a sudden, we're getting the biggest drop in inflation since COVID with the Fed doing nothing. So then the next argument will be, well, Tom, Trump is coming to office. He's doing all this, um, he's deregulating. It's like, yeah, hopefully that will play out, but it hasn't played out yet. So it's like, point to the thing that got cheaper because of deflation. So you won't be able to. You might be able to in a little while because you're starting to see people build. But if I were seeing the jobs numbers going up, if I were seeing real wages going up, then I'd be like, all right, shit, we're reempowering the middle class. Fuck yeah, let's go. But that's not what's driving this. What's driving this, as far as I can map, what's driving this is crisis led deflation

• 33:47Speaker 00

  in the two biggest economies in the world. China, housing crisis, US, uh, you had a step up basis that real wages couldn't keep up with that COVID and you've just never been able to rectify that ship. People were in like a euphoric mood, partly because of the stock market. And so they've just kept spending as if tomorrow will take care of itself somehow. And tomorrow hasn't taken care of itself yet. And so things are going to slow down. Now it doesn't mean catastrophe. It doesn't mean that people need to start crying in their milk. But if you want to know how I'm like, from an investor standpoint, I am getting more into cash and cash equivalents. I'm extending my paranoia period. Um, I'm measuring things in years, not months.

• 34:29Speaker 00

  So, you know, nothing dramatic, but I am certainly going, okay, things are less stable and less optimistic for probably the next couple of years. And people should be thoughtful about that.

• 34:44Speaker 01

  Yeah. Let's jump into the actual, uh, notification that Trump gave to Congress. So he has notified the US Congress that the US is at war with Iran per Politico. Details include, one, the move give Trump's another 60 day to you military in the region without congressional approval. Two, Trump says strikes that began on July 7th represent military action consistent with my responsibility to protect Americans and US interests, both at home and abroad. Three, Trump also said that he will hit Iran hard tonight amid mounting tensions. The Iran war appears to be back again.

• 35:16Speaker 00

  Yeah.

• 35:17Speaker 01

  And some reports are this is the most strikes that we have done since the start of the war has happened over the last six.

• 35:22Speaker 00

  It's gotta be, man. Like he's going day and night. Uh, they were talking about a daytime strike that was happening, uh, which is very unusual. I think that the mental model that I have of Trump now goes like this. Uh, I tried negotiating, they don't negotiate. All the things that people said previously are true, that they will use every delay tactic they can. They will tell you the right things to try to get you back to the table, only to then go blow something up an hour later. Also, here's something, I don't hear this talked a lot about. So when we killed the Supreme Leader Khomeini, you got rid of a center of gravity. So the way that, at least my understanding of the region, prior to the strikes was that

• 36:06Speaker 00

  the IRGC was reporting to the religious leader. You decapitate the religious leader, you, um, wound his son badly enough that he is so far not appearing in public. And so if he is as disfigured as people would have you believe, then basically the IRGC is in control. Now you've killed layer one, layer two of IRGC. So now you're layer three IRGC. They probably have internal conflicts as well. So if you put that together with a destabilized government, love or hate a theocratic regime, uh, it's a change. And so now you have a military government running the country and they may have some infighting amongst themselves.

• 36:48Speaker 00

  And so there, and I talked about at the funeral for Khomeini, and I know I'm mispronouncing his name, forgive me. But, uh, the, um, at his funeral, Arubachi, I think is the guy's name, the one that we see out front all the time, he had rocks thrown at him because the hardliners think he's an appeaser by even going to the table and having conversations with the US. Now, I don't know if that represents a large number of people, a very small number of people, but it represents a number of people. So now you've got heightened tensions amongst the IRGC. So you can imagine you have a group that their strategy is to drag things out, coupled with the fact that now they can't get on the same page anyway. And the mental model, again, mental model that I have of Trump, and I could be wrong,

• 37:31Speaker 00

  we'll see how this plays out, is that, right, I just have to bomb the shit out of them until they legitimately have no ability to sustain. Now we'll see if he can get it done in 60 days because he started his 60 day clock again. So I'm expecting him to sustain the combat for much longer than he did previously, to be far less, um, willing to come back to the table. I think that he's in a punitive phase at this point. I think he plans to use, um, he's said words like this, will it ever be an official doctrine? I don't know, but I think he's going to be using a doctrine of disproportionate response. He may call it proportional, uh, but at one point I heard him say something along the lines of, forgive me, this is me paraphrasing and from memory, but it was something like

• 38:14Speaker 00

  for every, um, thing they blow up, we're going to blow up 20. So it's like, obviously he's not trying to be proportional, even though he's going to use that word. Um, he's trying to be wildly disproportionate so that he can break their back economically and just from a will to fight. They are also now just, they killed more IRGC troops in a single strike. And I think the number was 80, um, in a, uh, than they have at any time in the war. So clearly he hasn't, the way that I, um, think about this is originally it was like very surgical strikes, was clearly military targets. Then we widened out into sort of gray zone stuff where it's bridges, maybe they're dual use. And he's talking about just straight going after infrastructure.

• 38:57Speaker 00

  Now whether he'll, uh, call it civilian infrastructure, dual use infrastructure, that we'll have to see play out in time. But we're now widening the war to something far more aggressive, something far more disproportionate, where he is trying to, um, dial up the aggression and punitive nature, uh, so that Iran doesn't want to be in a tit for tat game. So that's what we're going to see play out. And that's why, again, I'll point people back to, okay, if we're really going into something more aggressive, wider, more sustained, then why aren't we seeing energy prices actually hit the $200 level that people were prognosticating? The only thing that makes that make sense is you just don't have the demand.

• 39:39Speaker 01

  And they're not just doing military attacks. Treasury Secretary Scott Besant said the US Treasury is committed to disturbing and degrading Iran's illicit financial activities, including its abuse of digital assets. Today Treasury Office of Foreign Asset Control sanctioned multiple wallets tied to the Central Bank of Iran, resulting in the freeze of over $130 million in digital assets.

• 39:58Speaker 00

  130 million?

• 40:00Speaker 01

  Million.

• 40:00Speaker 00

  It's pretty low. So yeah, I mean, that's not going to be a big deal for them.

• 40:04Speaker 01

  Let me hold some time. 130 million is pretty low. That's, that's significant.

• 40:07Speaker 00

  That's low, low, low, low, low, low, low, low, low, low. I'm surprised he's even bringing that up. Just to give you an idea, Iran, I can't remember if this was, um, recent or at the beginning of the war, I was hearing some, I can't remember if it was old or not. But anyway, Iran was saying, hey, just if you want to get us to the table, give us the 24 billion. It's nothing to the US. That's a paraphrase, but it's very, very close to direct. So, and by the way, that's true. So when you're like 24 billion, bro, it's a rounding error for you. Why are you even tripping over this? Just give us the 24 billion back. It'll matter to us. It doesn't matter to you. We'll come to the negotiating table. Everything's going to be great. We'll give you what you want. And so 130 million is nothing.

• 40:45Speaker 01

  Compared to 24.

• 40:46Speaker 00

  Yeah. What are they really going to be able to do? Like buy new socks for the military? It's like you're, you're not going to do a lot. That, I mean, you can get a nice basket of drones.

• 40:54Speaker 01

  Keep failing audits is because 130 million is a sneeze in a bucket.

• 40:57Speaker 00

  For real. So that's unfortunately, that's why, I mean, we can really fractal into my absolute, um, hatred of the more we tax, the more we tax.

• 41:10Speaker 00

  The more we tax, the more we tax. It's like, people just, look at, look at that number go up. It's never solving a problem, but just, more. The next, the next round of tax elevation is rude. That's gonna be the one that finally we tax our way to prosperity. It's like, that's not how this game is played. So, these guys throw around so much money, uh, that it just gets stupid. Nobody's worried about efficiency anyway. I'm gonna totally fractal on something that doesn't matter right now. But 130 mil is whatever. I'm surprised they brought it up. In fact, I'm so surprised they brought it up. It triggers in me, they're trying to, uh, reach inside my mind and control what I think. Because that's a very weird number to throw out.

• 41:49Speaker 01

  Got you, that's very interesting. Trump also backed away on his claim of charging a proposal, proposed 20% fee on cargo moving through the strait. Some people are calling it a toll. Iran is saying-

• 42:01Speaker 00

  Fuck that kid. Let's really, for, for everybody that wants me to get animated about when Trump does something stupid, on that, fuck that kid in all capital letters, that is the dumbest shit of all fucking time.

• 42:14Speaker 00

  When I heard that, I was like, what the actual fuck? This is so crazy. You're bombing them because they're saying, yes, I know the whole nuclear thing, but let's be honest, a big part of this is that they're trying to control the Strait of Hormuz. And everybody, Trump, Rubio, they've all said it. You can't do that, that's fucking crazy. No one gets to charge, uh, a toll that is totally off the table. We'd never allow it, we're gonna fight over it. Oh, PS, by the way, we're gonna do it. What the fuck? That was the craziest shit I've ever heard. I was, yeah, okay, that one is, uh, completely ridiculous. Completely ridiculous. And I am certainly glad that he backed off it. I though, don't think that intellectually, he actually has a problem with it. That's so crazy.

• 42:58Speaker 00

  That one is absurd. Absurd.

• 43:02Speaker 01

  So when it comes to, the thing that you brought up, how we got here, again, CPI, the oil demand. If oil isn't as big of a draw as we might have thought it was, does that change the dynamics at all of the war? Or now we're just in the-

• 43:15Speaker 00

  I mean, so the crazy thing is, that if you really don't, if China's really like, nah, whatever. And they're not back channel, like sweating you like, bro, we're about to really make this a problem. And China now is thinking, oh, I don't need the oil. And you guys are now mired in a fight with, uh, Iran. Yeah, now I got my eyes on Taiwan. Like, you guys keep doing your thing. So now, some of the pressure that I thought was gonna be coming from China, or was already coming from China, may not be coming from China. If other allies are like, yeah, our economies are soft. This is the one I feel the most out over my skis, because I don't have reporting on other nations. Like, is Japan like, oh yeah, we don't really have much need?

• 43:58Speaker 00

  Because for a while, Japan was like, in the news, like, holy shit, like, we gotta have our oil. Now I haven't heard a peep, have I not heard a peep? Because, and we know that Japan is in economic distress. So is China, or, uh, Japan, like, yeah, we also aren't really sweating the oil? That would give Trump a much longer runway from that perspective. And if there's a gap, and there will be a gap, I just don't know if that gap is like 30 days, 90 days, 6 months. I don't know what the gap will be. But there will be a gap where at first, it's like, oh, prices are falling, oh, thank god. And it just feels better. And so people will be like, oh my god, this is a huge win. And then all of a sudden, it's like, huh, we're not growing anymore as a country. Uh-oh, wait, our GDP is contracting. Okay, hold on, this is bad.

• 44:40Speaker 00

  So, if that period, like, imagine for a second, I don't know this is gonna happen, this will require more research. But imagine for a second, if inflation keeps dropping, what if next month we have another drop? And now, Trump is gonna be like, I told you, I told you I had this under control. You guys didn't believe me. Just in time for the midterms. Hey, this is cheap, this is cheap, this is cheap, this, she's gonna run down the list. We got you. I got the new Fed chair in, because people won't know, Fed hasn't done shit. Even though Kevin Warsh has said, we didn't do this. He, he's literally admitting, for us, this is not job done. But he knows people are already saying, oh man, great job, you guys fucking brought it down.

• 45:21Speaker 00

  So, he'll be able to spin for some duration, this story, if it keeps dropping, that we solved inflation, not a problem, told you we would deregulate, we're bringing jobs back, this is all fantastic. And if that buys him time to get past the midterms, while he's kicking the shit out of Iran, choking off that supply, people that aren't in the weeds of the economy, they just know the headline that they hear. Inflation bad and inflation down, so that's gotta be a good thing. And, uh, Trump's at the wheel, Trump's beating up Iran? Shit, beating up Iran, caused inflation to go down? Holy man, this guy's amazing.

• 46:02Speaker 00

  So, if there's a gap between feeling the increase of the softening economy and prices coming back down, that will be a rejoinder that looks positively on Trump.

• 46:17Speaker 01

  Yeah. He wrote of Japan, so I wanna throw this article out there. Japan is set to receive their first Mexican crude shipment since war on Iran began. So I know we talked about it at the beginning of the war, how US has now become a net exporter of oil and energy. Uh, Mexico is getting into this in Canada, so it seems like Asia, led by Japan, is starting to see some alternative sources. So, to your point of strangling out Iran, you know, they were responsible for 80% of the shipment to all these countries. And what if that drops down to 50, 40? Now they're feeling it in their economy, with Secretary Besse on the backside, manipulating their currency. They can then feel an economic pressure that might make them lose the appetite for war, even though this is ideological and some other things. But when their gas prices start going up, and when they start having layoffs and their housing market explodes,

• 47:02Speaker 01

  it'll be interesting to see if they're, uh, the people of their economy are still willing to go fight America versus trying to fix home and become Iran first, or something like that.

• 47:11Speaker 00

  Yeah, I mean, that is a big part of the plan, uh, to make things so untenable. This is exactly what Ukraine is doing to Russia. We're gonna make your inflation spike by destroying your ability to refine your own oil, or to produce your own oil, uh, and refine and distribute it. And so, now you've got, in Russia, you've got them importing oil for the first time in, I don't know, ever? I don't know that it's ever, but it's certainly the first time in a long time. People are very shocked that they are no longer a net exporter. Um, and so that is certainly very interesting. If that same thing happens in Iran, obviously that would be a very different game that we'd be playing.

• 47:55Speaker 00

  Now, the fact that, um, Japan is importing from Mexico is very interesting. I wanna know more about that, I hadn't heard that. So, the reason that's fascinating to me is that the US is trying to position itself as, like, hey, we're the gas station of the world now, forget those kids in the Middle East, they're a mess, we got you, send your people to us. Japan is one of our closest allies, they have to be because of their beef with China. So, it's like, now you've got somebody that's beholden to us, so they've got every incentive to, if they're gonna import from somewhere other than the Middle East, they would want to make Trump happy by saying, we're gonna buy oil from you, and they're buying it from Mexico? So I need to look at that, at a headline level, that one is jarring. So I don't yet know what to make of that. Um, it's a weird signal. And so, it's either a signal that, oh, Mexico just has better prices,

• 48:39Speaker 00

  in which case people are gonna go to Mexico before they come to us, until their supply runs out, and then we become spillover. Or, we're not ready yet to export even to some of our closest allies. And so what does that mean about us really being the gas station of the world? Is that just propaganda, or are we really moving in that direction? So, that headline hits me in the same way that the 130 million, it's like, hmm, something here does not match my worldview. And so either my worldview needs to be updated, fair enough, or I'm, someone's trying to, um, what do they call that? When you're like, trying to plant seeds in somebody's mind, oh god-

• 49:14Speaker 01

  Like inception you?

• 49:15Speaker 00

  Yes, but no, there's a phrase that people use all the time, this is so common. Anyway, they're trying to, the way I think of it is, they're trying to terraform my mind, to get me to see something in a particular way, there is a name for it and I'm forgetting.

• 49:27Speaker 01

  But I mean, we are in the thick of negotiating the new NAFTA deal between us, uh, Mexico and Canada. So, I feel like that's leverage that Trump can use when he goes to the table with them, like, hey, now you guys are selling oil to people, this wasn't, but like, you might hate my war, you might hate how I did it, but you guys are doing better, Mexico is thriving in that way.

• 49:43Speaker 00

  That's kind of the crazy thing that Trump might throw out, so yes, I could see him saying that. But unless Mexico is fully retarded, they know that that's really stupid. Because the underlying statement there is, hey, I created so much chaos in the world, you guys can take advantage of it. That's really dumb. But, I will say, it is fascinating to see how many plans are being put in place to work around, some people will clock it to work around the Middle East, most people will clock it to work around the Strait of Hormuz, so that we can get around these choke points. Now, I still haven't figured out how they plan to do oil pipelines, unless you bury that shit bunker buster deep, uh, it's, you just fucking bomb it.

• 50:24Speaker 00

  So, um, if I'm Iran, and you're, let's say Saudi Arabia, or you're the UAE, and you're trying to run a pipeline around the Strait of Hormuz, I just go, nope, and I strike it. And they're clearly letting people know that, um, we can touch you. So, there was a military base, I believe in Qatar, the US military base. US is talking not at all about it, but if you look at satellite images, it's been hit. So, it's like, the Iranians are reminding people, we got, you know them drones that you see in, uh, Ukraine and Russia? Yeah, we got those too. And so, they'll just keep sending them out, sending them out, sending them out, until we get to the point that you were saying, unless Trump can break their, their will to fight and become Iran first-

• 51:09Speaker 00

  They're just gonna keep hitting shit and fucking with their neighbors.

• 51:12Speaker 01

  Alright, let's stay in the Senate for a little bit. Lindsey Graham's sister, Darlene Graham, has now officially been sworn in to take her brother's place as a US Senator from South Carolina. And I just need all the people that read my comments talking about DEI to tell me who voted for Darlene Graham, what her notifications is, where her qualifications are, and what merit she's bringing to the Senate. I think this is interesting.

• 51:32Speaker 00

  I got you bitch!

• 51:33Speaker 01

  Before me and you were talking about this, I was like, I didn't know you could do this. Like, I didn't know this was like a thing. I thought everybody who's a representative had to get voted for. Apparently not.

• 51:42Speaker 00

  This is wild. Both of you and I were like, "Say what?" Yeah, I didn't know this was a thing. I didn't know that you could just appoint a stand-in. I thought if you weren't at like, a certain distance from the election period, that you had to do a special election because the people had to have somebody in there. And that you just like on a soccer field, you got a red card, you're playing with 10 men. So if you're the Senate and one of your senators just died and you haven't done the next election, well, you're playing with one less senator. And so whatever votes are, they are what they are. And so, sorry, tough break. I didn't realize you'd be like, "Hey, you're gonna vote just like Lindsey Graham, right?" Yep, cool. You're in. That's wild. Because, let me tell you, for whatever people say, like, "Oh yeah, I know exactly how I'd vote on this side or the other," that's not how it works.

• 52:26Speaker 00

  So you need somebody who's elected by the people. I mean, we have a rule for it. I just didn't realize the rule's a rule, but that shit cray.

• 52:34Speaker 01

  Now jumping to the other, the other House of Congress, the House of Representatives, they have officially bundled the NDAA, that's the Military and Israel, the Military, US and Israel merger bill, with the SAVE Act. And it is now set to, it got proved through the House and is now being sent to the Senate to vote on it. So just like how earlier, at the top of the year, they had the Housing Act separate, Trump said, "I'm not signing anything until the SAVE Act gets passed." This new bill that has been floating around, the NDAA, is now being bundled with the SAVE Act. So you are not getting voter ID without a US-Israel military merger.

• 53:11Speaker 00

  I gotta look into this US-Israel military merger. It's one of those, I have an intuition that it is not at all what people who are mapping the world as Israel controls everything, it's not gonna be like they think. But anyway, I'll do, until then, nobody should listen to my stance on that. I've not done the research. Okay, in terms of tying this to another bill, I hate it when people do this, but it is what people do. This happens all the time. So the thing for me is, we must have voter ID. We must have voter ID. I'm perfectly willing to accept that there's not wide-scale

• 53:53Speaker 00

  voter fraud in terms of, somebody is pretending to be somebody else, fine. But when you look at California and you see the incentive structure, it all comes down to like, making things legal so that there are no checks and balances, there's no way to stop, first of all, fraud from happening. There's certainly no way to stop the probably far more problematic ballot harvesting from happening. And so, that's where I'm just like, wait, what are we doing? First of all, we have a census that counts anybody, regardless of whether you're legal or not. That influences your voting power in Congress, so that's already

• 54:34Speaker 00

  crazy. You already have an incentive to get as many people in your state as you can from that perspective. And then, we are already in a period where people are becoming more socialist and communist, which, just to disclose my mental map, I believe that is the single most destructive thing that you can do to workers. Go look at China, go look at Russia, I am not making this up, this has played out over and over and over and over. The elite class will still fucking win. The elite class will rule your dumb ass for time immemorial, so all the people that you're trying to get rid of, you will just entrench their power and they will abuse the shit out of everybody else, up to and including starving them to

• 55:13Speaker 00

  death. It is a terrible fucking idea. So now, you've got all of that playing out as well. So it's like, in a period where that's happening, we are just going down a very stupid path.

• 55:27Speaker 01

  Yeah. Speaking of like voter fraud, like Thomas Massey said something interesting that kinda caught my eye on the timeline. And I wanted to just kinda talk about the first kind of year and a half that Trump has been in office after this, but let's queue up this clip first.

• 55:44Speaker 02

  I think it's ironic that we control the House, the Senate, the Supreme Court, and the White House, and we're yelling "election fraud"? I mean, we won all the damn elections. And we're in charge and what are we doing with it? We're bankrupting the country, we're starting new wars, we're violating the Constitution, we're not cracking down on the fraud. The problem is not the elections. We won the damn elections. The problem is, we're wasting our opportunity that the voters gave us. And the Republicans are gonna pay for that in November. It'll be an absolute shellacking if they don't wake up.

• 56:18Speaker 00

  So he's simultaneously right about the things that he's pointing to, and he is absolutely out of his mind to say that you don't need to protect your system of voting, like, that's crazy. But to his point about the wasted opportunity, that gets into what makes politics so ridiculous and offensive on its face, is, what do you want them to do, Mr. Massey? Do you want Republicans to vote in a block, more like the Democrats? Because you're the one that votes against the Republican Party at a rate that I think is much higher than anybody except maybe Rand Paul. So you have the guy who I think

• 57:03Speaker 00

  has the sharpest mind in terms of, he is mapping the world accurately. We need to be focusing on fraud. We need to make sure that we stop bankrupting the economy like full stop. And he has been extraordinarily good on that side. But when you talk about wasting the opportunity, the only way that electing all of those people isn't a waste is if they all get together and vote as a block and start moving the country in a singular direction. I think that's a terrible idea. I think you actually want people to go in and battle the ideas. So the fact that the Republicans were unable to get momentum going in a direction is because they're fucking retarded and they're focused on the wrong

• 57:45Speaker 00

  shit. So it's like, he's conflating two things that are, don't conflate, because they are both incredibly large problems. So here's my overarching thesis on why voter restrictions, voter identification becomes so incredibly important. We have created an incentive structure that incentivizes people to come from all over the world and just get in the country. Illegally is fine, just get in the country. After that, there is a party that if you vote for, they are going to give you more free shit. And, by the way, both sides of the equation are going to make sure that there's just a ton of inflated dollars sloshing

• 58:28Speaker 00

  around the system. So get to America at all costs. Running that experiment will destroy the country through a mechanism that's very easy to walk people through. We will rise the debt until the debt becomes so problematic that the interest payments that we're making are so large and so catastrophic that you have to force yourself into austerity or defaulting. If you default, you're just like somebody with a 400 credit score. Nobody's gonna give you money. Right now, money pours into the US, that will stop. So you raise your debt to the point where you can't raise debt anymore, and austerity is forced upon you in the worst possible way. So it's like, I'm not just appealing to like vibes and feelings, I'll walk you through the fucking mechanism that I'm saying is a problem. So

• 59:11Speaker 00

  we have created that problem, where people are incentivized to get here and find some way, amnesty or otherwise, to vote for those policies. And so I'm like, fucking stop, you've got to figure out, who is a citizen? Because I'm already under attack from birthright citizenship, from people, in my opinion, getting completely ideologically captured through the education system and becoming unhinged lunatics that actually think socialism will be better for the working class. It is so crazy. Dude, honestly, this is gonna be controversial, and forgive me if you've got kids, send them out, but like, I really believe this. When I hear the DSA talk about socialism being good for workers, it is like

• 59:53Speaker 00

  somebody saying raping women is good for women. It's like, what the fuck are you talking about? And I do mean it at that level. When those policies are carried out over time, people end up starving to death. I know it sounds like a cliche, and I know it sounds like I'm being hyperbolic. I am simply representing history. So it's like, Jesus Christ. So that whole thing is such a big concern to me. And so when I hear Massey, who I think is fantastic on virtually everything else, say like, "Ah, it doesn't matter, don't worry about that," it's like, bro, just look at the incentive structure. Even if you're gonna say, "Hey, look, we won all the elections, Tom, shh, shh, shh, calm down, everything's gonna be fine." It's like, dude, we are in a populist moment. Can you not see lawfare

• 1:00:38Speaker 00

  skyrocketing? A willingness to, again, I'll just go to amnesty, even if you don't wanna think fraud, that we're pushing towards amnesty policies. Can we agree that things that California are doing are making sure that fraud could happen, even if it's not happening? Can we agree that ballot harvesting should be illegal, even if it's not illegal? These are all things that make following the incentive structure that is self-destructive can be followed like in a greased chute. So, ah, that one's weird. Thomas, I love you. I love you. I hope that you find a way back into Senate. Boy, that would be great. But goddamn, to brush off that-

• 1:01:22Speaker 00

  Making sure your elections have integrity, that's crazy town. Even if you're like, this part of the timeline, we're fine. Bro, project out five, 10 years, like what's happening? Populism will drive you into a completely deranged area. You've got to do things to secure your elections.

• 1:01:40Speaker 01

  I agree with that, but I think the five year timeline, half of these politicians are going to be dead. Respectfully, so.

• 1:01:47Speaker 00

  Median age is like sixty, sixty seven or six seven.

• 1:01:51Speaker 01

  No, but to Massey's point, like Trump came through, he got the big beautiful bill across the finish line. Shout out to Trump. He closed the borders, cool, you, you, you two for two. And then for the last year, he just been fumbling the bag, one after another, after another. And it's one of those things, if you did do something that addressed housing, if you did do something that addresses, if you did do something that you, you slash, he's getting the wins that from Project 2025 that they said they wanted. The Department of Education is now getting like removed.

• 1:02:20Speaker 00

  Praise Jesus.

• 1:02:21Speaker 01

  You, um, cool. You got your, your tax break for the rich, you, um, no tax on tips to the 2%. So there, there's all these different things that he can then like put this up and say, this was an absolute win. If he would have kept in that stance, I think he would have made a lot more progress into the socialism and stuff that we fear. If you would have gotten housing down and you've reduced my taxes and you've increased jobs and the economy is booming and AI bubble and AI like push has actually like materialized into something. We're building more power plants, we just tripled construction jobs over the last year. Now, when I say, hey, guys, look how good we're doing it, let's keep this going, let's make sure our election. Now I'm a bit more apt to say, okay, I can sit down to the table and have that conversation. But I, I, I come back to this point a lot when we have this conversation.

• 1:03:06Speaker 01

  We keep talking about something that's going to happen in 10 years, but meanwhile, things are crumbling today. So that's why a lot of people that aren't scared of the 10 year thing is because the houses is crumbling today. So the young people who want to be socialist, they can't afford a house today. So why the hell do I care about 10 years from now? So let's blow it up now. But once they, as soon as they get a house, as soon as it's now a contract, they now have the shackle on their, on their ankle. They're not going anywhere and they're built into the capitalism now. That socialism stuff is going to immediately disappear. So it's like, we can cure some of these things. And if California wants to fry itself by letting all the illegals come, then let California fry itself. That's why states are, some states are good, some states are bad. And everybody would like loot, everybody would just move and leave California.

• 1:03:45Speaker 01

  So I, I think we, we can't over index on what's happening in three places and say, this is why we need to do this thing for the whole country. And we're going to have, take the whole country hostage until we like solve this issue. And I think there's different things that we should focus on.

• 1:03:59Speaker 00

  That's giving genius.

• 1:04:02Speaker 00

  Channel, uh, so listen, I don't disagree with any of that. I think all of that is bang on. You're being, um, less offensive than Thomas Massey. In that you're not saying, hey, it's not a big deal. You're just saying that there are other things that we need to focus on. I would say this one is, uh, you need to focus on debt, you need to focus on housing, you've got to secure your elections. I think, I don't think people understand that 47% of the US budget goes to entitlements. That we, for every new dollar of tax we bring in, we spend a dollar fifty eight at the government level. The government is completely deranged and unhinged.

• 1:04:42Speaker 00

  And we've got to get to the point where we don't make it legislatively accelerated, which is exactly what we're doing right now. And so, um, that, that to me is just, you, you can't ignore that one. Now, if, if that is, um, because in literally everything you've said, other than I think you're downplaying the importance of election integrity, everything you said is so bang on, and I so wish Trump had done that, wouldn't that have been incredible? Uh, and that's why I say like, to hear Thomas Massey, the guy that like is really, really trying to get people to focus on the importance of debt, the importance of fraud, the importance of waste, like, oh my God, it's incredible.

• 1:05:23Speaker 00

  So I would much rather him say something along the lines of, listen, I get it, we've got to secure our elections, but Jesus Christ, we're not even going to have a country if we don't solve that. And then insert debt, fraud, all that, would love it. But honestly, and I get it, he's just been abused by the political system. So he just had, um, APAC work to get him out, Trump worked to get him out. And so that's going to make you feel some type of way about your ex-girlfriend. So I get why he feels the way that he feels. But it's now getting into like, okay, be a little bit more thoughtful about what you're saying, because I'm starting to just see some of the like frustration and bitterness seep through.

• 1:06:06Speaker 00

  We are in a populous moment, people will reason from emotion, they will do things that they otherwise wouldn't do. And that, that's not a left or right thing, that's a human thing, that's just what humans do. And so I'm trying to do anything that stops that from escalating. Everything that you laid out would work, absolute massive wonders to that. In the meantime, much like you need to close your border, you've got to secure the way that your democracy actually runs. Uh, and we are not doing a good job of that. Like I'll throw one more thing out just to be nice and controversial. When you look at Mom Donnie, Mom Donnie got elected by people that are foreign born. He didn't get elected by, um, native New Yorkers.

• 1:06:46Speaker 00

  So the fact that you can graph how different people that were born and raised in New York vote versus a mayor who also was not born and raised here, uh, and voters who were not born and raised here, they vote very, very differently. This is the culture clash coming to roost. You've got people that, that were just raised in a place where it's like, oh, this is how we do things. They come here and it's like all this prosperity and they're like, yeah, you guys are doing things wrong. So let's do it the right way, but with the prosperity. And that's how they view it. Or you can take a very cynical view, because I know some of them are more just like, no, you guys plunder the world, fuck you, we're taking it all back. Which is 10 times crazier, but it's like, both of those must be stopped. Not at like all costs, I'm not that guy, but it's like, eh, it's serious.

• 1:07:31Speaker 00

  We need to really be careful to protect our institutions. It's like I say here at Impact Theory, you can challenge any idea at Impact Theory, except are the principal system. Where it's like, anybody should be able to say what they believe to be true, even if that means challenging me. And I mean, listen,

• 1:07:52Speaker 00

  no one will believe you if you say it now, but it's like, you challenge me openly on camera. Now, I have acknowledged you a thousand times for also being a good producer, you'll throw your punches and then you let the show be the show. I respect that, I've told you that a thousand times. But never once have I been angry with you or upset, even though I say, if you can prove me wrong live on camera, fuck, go, do your thing. Like I've got no beef, same with Ryan. I don't think, even if these guys left in anger and hatred, they may say Tom's a dick, he's an asshole, I fucking hate him, he's a right wing lunatic. They may say all of that, but they're never going to be able to say, I told them to shut the fuck up and not say what they believe to be true. Literally, no universe, I would put them in a lie detector test, because it's not my personality. So, um, period, I'll stop there.

• 1:08:38Speaker 01

  I wanted to throw this up there too, uh, these are political ads in the age of AI. Thomas Massey shared these after the, uh, primary like went Ari, but it's very interesting how they, he's in a throuple, they got him holding hands with AOC and Iman Omar. And this is the ads that they were running and all they had to do at the bottom was saying, this is a tr- satirical ad was created with artificial intelligence. But that's on grayscale at the bottom for two seconds at the end of the ad. There's some old lady in Kentucky that was like, what? He's, he's in the throuple? Oh man, the liberals got him too.

• 1:09:11Speaker 00

  Yeah.

• 1:09:14Speaker 00

  I'm okay with this.

• 1:09:16Speaker 01

  Really?

• 1:09:17Speaker 00

  Yeah.

• 1:09:17Speaker 01

  That surprised me.

• 1:09:18Speaker 00

  Uh, I'm a little surprised myself. The, the reality is that we are all going to have to learn that we live in an AI world. And what I want to see, and I'm still like, I can't get my head around, um, how the blockchain is not being used to certify this thing came from this account. And what should happen, in my opinion, is everyone should assume that what they're seeing isn't real. And that the biggest problem we have is people, we're in this weird liminal space where people still trust their eyes. You can't trust your eyes and it is going to get worse.

• 1:09:59Speaker 00

  So now we have to live in a world where people are trained not to assume that they only see real things. They need to be trained to assume, I have to fact check who this is coming from, who posted this? And then people will earn their reputations over time of like, I can or can't trust that person. That to me, it's the only sane way forward, because even if, what, what will end up happening is people will go, we've got to protect against this AI misinformation, like this is crazy, we can't live in this landscape. And then I'm going to create a video that accurately represents the truth. But like, I changed the sky color to make it pop a little more to grab people's attention. And so now it is like modified by AI and people are like, see, that's all fucking fake, this guy used AI.

• 1:10:42Speaker 00

  And it's like, they will, the platforms will shut that content down and they'll say, nope, sorry, we detect AI, this is shut down. And they won't be able to get into like, oh, this is, we checked the facts and this is factual. Fuck you, anybody that didn't learn from COVID, literally fuck off. If you went through COVID and you didn't realize that the government, with or without good intentions, is prepared to decide for you what's true and what you can and can't see, I'm not, no way. I'm not living in that world, bro. That is either you eject the fuck out and you find somewhere where they allow freedom of speech, or you like Second Amendment that shit, but you sure as hell do not just go, oh, this is fine. Like that one is the line in the sand for me, that is crazy town.

• 1:11:27Speaker 00

  It has already been weaponized against us, I will not tolerate that again, no fucking way. And so what I don't want is a world where we vote for shit, where we're like, protect me from AI. No, no, no. You want to put in solves for this from a innovate, like come up, how do we show that this is, uh, AI? Oh, cool, there's like a little, um, thing in the corner and it marks that this is AI and I just learned to check. I just watched the video, hmm, that seems weird, is this AI? No shit, it's real, holy cow, this is AI, let me click it, what was AI? Oh, this is like, uh, they modified the saturation, just to be overly simplistic. Or, no, no, no, these aren't even the real people, but cool. Now it's like, I've got a breakdown and, oh, let me check the reputation of the person who posted this.

• 1:12:11Speaker 00

  It, this is a new account, they posted three times, get the fuck out of here. It's like, oh, this is account, they posted 500,000 times. Holy shit, they've got a 98% rating, okay, yeah, I can trust these guys. Like we, we need to build the world that way. It is the only way that we will be able to make sense of the world without saying, I trust the government to tell me what's okay. Jesus, man, people that want that do not have the same mental map of the government that I have.

• 1:12:37Speaker 01

  It took me 45 minutes to create a chat GPT account for my mom through the phone on FaceTime. I feel like we're asking way too much for the senior citizens who vote the most in America to verify AI by going through accounts and stuff like that.

• 1:12:51Speaker 00

  I reject the premise of a nanny state on its face.

• 1:12:54Speaker 01

  So in the meantime, I'm gonna take advantage of all these old and senior citizens.

• 1:12:58Speaker 00

  You should go to jail.

• 1:13:00Speaker 01

  And then we'll figure it out. But like you said, this is, this is manipulation. So we can say that it's cool, we reject a nanny state, but we can also say that this was a lie and this was manipulation.

• 1:13:09Speaker 00

  Word choice is a manipulation.

• 1:13:12Speaker 00

  Literally. And we do it all the time.

• 1:13:15Speaker 03

  This is like blatant lie, like, America is a very uneducated country. I feel like we are in a situation where when you create these political ads, that is just bold-faced lying. It's like the Tellerico one where they put him in a dress and had him say random stuff. Like, it does get to a point where it's like, we're lying to old people who aren't gonna be able to fact-check this stuff. Like, my parents, who aren't even that, like, old, still can't tell what the difference between real footage and AI is, and they're very smart people.

• 1:13:45Speaker 00

  Should South Park be allowed to exist?

• 1:13:48Speaker 03

  That's different. That's parody. That's not AI-generated fake.

• 1:13:51Speaker 00

  So who gets to decide?

• 1:13:53Speaker 01

  Elections. Don't, elections. We talked, we just had a conversation about elections. We just had a conversation about election integrity. So you can't parody elections.

• 1:14:02Speaker 00

  Okay, so you want no satire in elections whatsoever?

• 1:14:04Speaker 01

  Yes.

• 1:14:05Speaker 00

  So the Babylon Bee gets shut down?

• 1:14:07Speaker 01

  They're not running ads and they're not endorsing campaign, they're not endorsing candidates.

• 1:14:11Speaker 00

  They'll put all kinds of crazy hilarious shit out there.

• 1:14:14Speaker 01

  They're not on, running ads and they're not endorsing candidates.

• 1:14:16Speaker 00

  Okay, so you want the line to be, it's a political ad. Now who gets to decide? Was Spencer Pratt's, um, posts, were they political ads?

• 1:14:26Speaker 01

  He's a, he's a political candidate running and yes.

• 1:14:29Speaker 00

  Okay, what if I, who am not running, created that exact ad and put it out?

• 1:14:36Speaker 01

  And endorse Spencer Pratt? That would not be, that would not be allowed.

• 1:14:39Speaker 00

  What if I don't endorse anybody, but I put out clearly, my videos have a slant? But it's me, I'm not a political guy, I'm not taking a stance, I'm not telling you to vote for.

• 1:14:48Speaker 01

  You're Fox News, then.

• 1:14:49Speaker 00

  But I'm just painting the picture, that's good.

• 1:14:51Speaker 01

  Then you are a news organization. But when it comes to political ads, I feel like we can draw this line.

• 1:14:56Speaker 00

  Okay, and so as long as it isn't coming from a stated political advocacy group, it's fine.

• 1:15:03Speaker 01

  Endorsing a candidate, yep.

• 1:15:04Speaker 00

  Uh, define endorsing a candidate.

• 1:15:06Speaker 01

  At the end of this ad, it was, uh, Ed Mirren waving with Trump at the end. That was endorsing a candidate. You showed the opponent with a illegal throuple, that's not even illegal in, in America, with two people that are married. And then now you're saying that, but this guy stands with Trump and fights for you. So on, on mass, you're endorsing this candidate.

• 1:15:25Speaker 00

  Okay, and is it that you don't want AI use full stop, or you don't want AI to create a fake scenario?

• 1:15:33Speaker 01

  Um, fake scenarios is a great place to start. But if.

• 1:15:36Speaker 00

  And who's going to adjudicate?

• 1:15:39Speaker 01

  What is real and what's fake, then let's get AI out of political ads.

• 1:15:42Speaker 00

  Yeah, so I can actually get down with some, um, if you put tight enough constraints on it, like this can't come from a political organization, uh, they can't use anything that artificially places a candidate into a false scenario, something like that, like, okay. Like, we can make it tight enough that there's some sensible restrictions there. Obviously, I as a default just do not trust the government, but I don't think that's crazy. I think that you could probably drill down to something that's tight enough. But what I am saying is, that is not going to solve you guys' problems. Both of you went straight to the real problem, which is there are people that are not going to understand that there is a difference between the hyper-viral ad that Spencer Pratt, wouldn't come from him in the future,

• 1:16:27Speaker 00

  would come from somebody else that's working on his team, they publish it, it's a non-political account that does not do the thing that you called making it officially a political ad. But it gets thirty million views, fifty million views, and it spreads like wildfire, and neither of our, none of our parents realize it's fake, because they don't realize AI is AI.

• 1:16:48Speaker 03

  Well, even what worries me is, not even two months ago, the three of us were sitting here talking about, is Benjamin Netanyahu dead because of a coffee shop video? And we can tell what's AI and not, and we were still stumbling on that. I think the problem is just, we're creating false realities visually, versus, oh, I'm just gonna lie about a candidate on a podium, right? Like, that is something that you can easily be like, oh, Trump said this, it's just not true. But when you start incorporating, like, political ads that are fully AI-generated and, and share, like, maybe based on tweets someone once said, you're, you're just lying to people, like outright.

• 1:17:21Speaker 00

  But they've been lying to people.

• 1:17:23Speaker 01

  I would even take it back. Trump had to do a press conference to America because his base is, is not chronically online. Everything he said was on his true social feed. But the people who don't, who aren't on Twitter, who aren't on YouTube, who aren't chronically online, that just watch traditional TV, that still have a cable subscription, those people, they're seeing these ads, and that is my beef. If it, it's, if that's my, the entirety of my beef, I'm not saying AI is bad, I'm not trying to blow up a data center. All I'm saying is they ran a political ad on network, like, cable TV, that was a hundred percent false. And to me, that us just struggling out, like, well, you know, I don't trust the government, so let's, I'll let anybody lie to me now. It's like, I, I feel like we should have at least some better standards than that.

• 1:18:02Speaker 00

  Uh, well, so, do you believe that these guys were saying, this is actually what happened? Not, this is satire. You think they were putting it forward, this actually happened, they are actually in a throuple?

• 1:18:18Speaker 03

  I think they put it forward knowing that it could be misconstrued as reality.

• 1:18:21Speaker 00

  Of course, so does the Babylon Bee. That's what makes it funny.

• 1:18:24Speaker 03

  Babylon Bee is clearly satire and online.

• 1:18:27Speaker 01

  And again, it's online, it's on Twitter. You have to go to X, and if you're on X.

• 1:18:30Speaker 00

  So that we don't death loop.

• 1:18:31Speaker 01

  Yeah.

• 1:18:31Speaker 00

  Uh, let's establish what we've decided as, as our little throuple here. So, one, I think we're all on board. A, there's a certain set of really tight restrictions that we could do that would get rid of this particular thing. It's an official campaign ad, uh, it's generated entirely with AI, like, cool. So we'll set that aside. Where I'm trying to get you guys, because my whole hypothesis is, you do not want the government deciding, um, satire outside of what we already do, so you can obviously sue somebody and say this is defamation, it, you know, you've lied about who I am for this reason, that reason. So we have legal definitions around that stuff.

• 1:19:10Speaker 00

  What I'm trying to get to is, you will very rapidly have a world where somebody goes, well, hold on, you can't do that episode of, um, South Park, because they put words in Saddam Hussein's mouth, that's not what he actually said. And so then it becomes, they'll say, but it's obviously not real. Now, we're going to, what's obvious is a reasonable person, and now I'm saying, we already have those laws. So we have laws that say a reasonable person would or would not think that this is real. Now, I will say, a reasonable person will see this and realize in the age of AI, this obviously is not real. And so now, it's like, we have legislation around that, and so you guys are saying we need tighter regulation.

• 1:19:52Speaker 00

  So now, to just avoid the death loop, what we wanna, I think, it would still be fruitful to discuss is, okay, at what stage do we say dumb people must be protected?

• 1:20:04Speaker 03

  I think tighter's the wrong word, word usage for this. Because like we've always said, with new, with new innovations, with new technology, we need to figure out how they fit into our society. And I think we're hitting a point with AI where we need to comprehend that, like, maybe it's not protecting stupid people, but it's being real and saying this stuff can manipulate in a stronger way than our words can.

• 1:20:24Speaker 00

  It can and will, so now what do you do?

• 1:20:26Speaker 03

  We regulate it.

• 1:20:27Speaker 00

  Yeah, that's a death knell, because it will be abused, as all regulations are, and there will always be people that can get around it, up to and including, let's say, Iran. Iran posts fake videos all the time to show we're not, uh, losing, you guys are crazy.

• 1:20:45Speaker 01

  TV. That's, that's the line.

• 1:20:48Speaker 00

  To avoid the death loop, we have already accepted the, okay, this kind of stuff on network TV is not going to exist.

• 1:20:54Speaker 01

  Everything else on, online is all, is all fair game.

• 1:20:57Speaker 00

  Okay, so you and I are now on the same side, against Ryan. We're saying that, hey, it's Wild Wild West, people need to be educated and figure out their own thing. But the thing I'm trying to focus the conversation on right now is, do we or do we not use regulation to protect dumb people? I think you, with the caveat of it's not on network TV, are saying, yes, dumb people gotta figure it out for themselves. I think there should be a technological solution that just shows people what it is. You believe?

• 1:21:25Speaker 03

  Um, which part are you asking more about?

• 1:21:27Speaker 00

  Protecting dumb people, yea or nay?

• 1:21:29Speaker 03

  Uh, you know, I think it's a situation by situation case. I don't think framing it is protecting.

• 1:21:36Speaker 00

  Regulatory body that's going to review all the material?

• 1:21:39Speaker 03

  I'm not even saying that, but it's like, we have regulations on, let's just say, remember they just passed the thing about generating porn with real people, with AI? I don't see why there's any world where we couldn't start exploring, putting those types of regulations on AI political ads. We already regulate political ads and what you can and can't say.

• 1:21:54Speaker 00

  Or political satire?

• 1:21:56Speaker 03

  Well, so which, it depends which video you're talking about. So if we're talking the Tellerico video, which is the one that I always go to for the AI conversation, that was a political ad. These right here.

• 1:22:05Speaker 00

  The three of us have already said, no political ads.

• 1:22:08Speaker 03

  Okay.

• 1:22:09Speaker 00

  In a very narrow definition.

• 1:22:10Speaker 03

  So then we're on the same page.

• 1:22:11Speaker 01

  AI should stay out of political ads, especially on network TV. If a X account wants to tweet whatever they want to tweet, God bless the X account.

• 1:22:17Speaker 03

  Yeah, go for it.

• 1:22:18Speaker 00

  Now, just so you know, things that look. distressingly close to a political ad are going to be created and the world is going to be awash in them. They're just going to be created by accounts that have their own agenda, but aren't actually political bodies, and they're going to get tens of millions of views. And in aggregate, Jesus, they'll have billions of views. So what I'm saying is at some point, that needs to be addressed. I think that has to be addressed with a technological solution that people can opt into so that people can build a trust score essentially. And then you know who you listen to and who you don't. That would be my solution, rather than a government regulating that, okay, that one looks so real that it can't go out, would be my take. All right.

• 1:23:01Speaker 01

  ICE temporarily suspends most vehicle stops after two fatal shootings, one in Houston and one in Maine recently. The one that just happened in Maine, all three officers involved didn't have body cameras.

• 1:23:11Speaker 00

  Hey, look at that. What a shock. That's crazy. That is just like the very convenient nature that when Jeffrey Epstein killed himself, that all those cameras broke. Isn't that weird? So yeah, listen, again, could be a coincidence, but Jesus, it's crazy. It's crazy. It's crazy. Dear ICE, you've got to chill on this shit. As somebody who really does want to see our borders secure, people that are here illegally be deported. I love it the most. But goddamn, man, you can't go around shooting people. So if you guys don't know the story, another person was shot and killed in an altercation with ICE. This is the fourth killed by federal

• 1:23:55Speaker 00

  immigration agents this year, and it's a second in under a week. So we officially have a problem. There is a way to do policing well, and there's a way to do policing poorly. So I understand the desire to stand in front of somebody's car to make sure that they comply. Unfortunately, that is not working out well. So we've immediately got to adjust our tactics. I don't know if that's they carry those strip spikes around and they put them in front of the wheel before they start talking to the person, or if we just say, we've got to let them go and we've got to track it. I don't know if these guys carry a pocket full of tracking devices and they put it on the car, whatever. But it clearly isn't standing in front of the vehicle with your gun drawn. I'm not even saying that these

• 1:24:38Speaker 00

  guys aren't using their cars as a weapon. They are, but goddamn, man, like being in a situation where we're shooting people with that degree of frequency is, it's not sustainable. First of all, it's going to make the country turn against you. And I understand in a populist moment, the whole vibe is just, well, fuck the left, and these guys are getting uppity about nothing. No, no, no, they are your fellow citizens. And so we want to be in a position where we have rule of law, we find solutions to these problems. But just like I thought it was very wise for Tom Homan to say, we're going to get rid of the guy that looks like he took Mein Kampf way too seriously, and we're going to put somebody else in that's going to be more sane. We're going to do this in a humane way. I really

• 1:25:19Speaker 00

  want to see America get back to leading with their value system, saying, hey, some things are right, some things are wrong, and understanding that, yes, like, we may have to come up with new tactics, because I am for one, not saying, oh, you just let them go. Nope, definitely not. But clearly, when you have a strategy that is creating too many deaths, you have a bad strategy. So we have to understand the moment that we're in. By the way, the person that was killed wasn't even the person they were looking for. So the person that was killed had a work permit, as far as I understand it, was a Colombian man, I believe he's 26 years old, and had a right to work in the country.

• 1:25:55Speaker 01

  Had a social security number.

• 1:25:57Speaker 00

  Listen, we've got, we've got a couple of things going on. One is, why the fuck is this guy running? So he's panicking, he's acting a fool. So for sure, either we had a cop going unhinged, you trigger this guy's fight or flight response, and so now all bets are off. Remember, humans are animals, and they will start acting stupid if you put them in panic mode. And so if you've got a cop in panic mode, you've got a guy in a car in panic mode. What's that?

• 1:26:24Speaker 01

  ICE is not cop. Like, I don't want to conflict though.

• 1:26:26Speaker 00

  Law enforcement.

• 1:26:27Speaker 01

  They don't have red and blue whistles, they don't have marked cars, they're en masse with guns.

• 1:26:31Speaker 00

  Perfect.

• 1:26:32Speaker 01

  It's very different than LAPD.

• 1:26:34Speaker 00

  Even more likely that you're going to cause somebody to go into panic mode. So we've got to figure that out, got to dial that shit down, whatever that looks like. If that means that ICE officers are just all labeled head to toe, and you've got to put the hammer down on the neighborhood for blowing the whistles and all that shit, great, fine. You've got to be able to do your job, you've got to be able to get people out. But if we're just causing mass panic, we're causing stampedes and people are getting shot, it's like, okay, it's time to come up with a new strategy. Again, I'm pretty straightforward on my immigration policy. Keep the borders ultra-secure, and if you're here illegally, you gotta go. So I'm a yay. But, again, you have to do this in a way

• 1:27:19Speaker 00

  that's actually high-functioning, that is not causing just a bigger and bigger rift between the two sides. Plus, you're just giving ammunition for people who are going to say, yeah, this is why we need to abolish ICE, which is one of the dumbest fucking things I've ever heard in my life. You have to have immigration enforcement when you have such an insane incentive for people to come to your country and get in, no matter what. You're going to have to have a nice, sane way to deal with all of this stuff. But by the rate of killing people, you just have to be above it. And look to something like what happened in the civil rights era, where it was like, all right, guys, listen, they're going to stick dogs on you, they're going to be spraying you in the face with water, and you give them all the ammunition you need if you become violent, even though you would, I don't think anybody would be confused as to why you might want to get

• 1:28:04Speaker 00

  violent in that situation, but it is not going to serve your purpose. And so because it's a populist moment, and people don't feel like they need to understand the other side, or draw everybody back into one big group, they're just like, fuck them, we're going to be as authoritarian, stormtrooper-like as we want to be, and just fuck it, it is what it is. Now, listen, Tom Homan has been better than that. But nonetheless, we're flirting with that line again. We've got to find a new strategy. There is a new strategy, I'm telling you. The way these guys are doing it is not the only way to do this. I'm not saying it's going to be easy, but I'm saying that we do need to find it.

• 1:28:37Speaker 03

  To give insight into why the guy ran, just speaking from a Texan perspective, my last year in college.

• 1:28:45Speaker 00

  I thought Texans never run.

• 1:28:46Speaker 03

  Well, depends. Because, you know, Alamo, we stood tall, but we don't always stand tall like that. But my last year of college, Greg Abbott allowed ICE agents to wander our campus daily. And a lot of my friends are Latinos legally here. And what happens is ICE will stop everyone and racially profile them. And so a lot of my friends had to begin carrying their passports around. And what would happen in classes if you didn't have any form of identification, and ICE happened to walk in and see you, you'd get questioned, you'd get taken out of the class. And I can see why, being a person of color, being an immigrant in a country that is actively making laws to push against you, I can see why your

• 1:29:30Speaker 03

  instinct is to run away, because it's scary. And so I think-

• 1:29:34Speaker 00

  That's crazy. I can't see that, I'll be very honest with you.

• 1:29:36Speaker 03

  The runaway part, or the-

• 1:29:37Speaker 00

  The runaway part.

• 1:29:38Speaker 03

  I guess to each their own. Because I mean, at the end of the day, I'm a white dude. I'm never going to experience, you know, any questioning from ICE. And so it's just a very interesting thing to look at in the grand scheme of how ICE implementation has occurred over the last, you know, term compared to presidents prior.

• 1:29:54Speaker 00

  I will say, I understand why people don't like seeing a military force wandering around. There is something that just makes you a little bit uneasy when you see a bunch of people carrying guns.

• 1:30:03Speaker 01

  With masks on.

• 1:30:04Speaker 00

  The massing.

• 1:30:05Speaker 03

  They did wear masks on campus, too.

• 1:30:07Speaker 01

  Obama deported three times as many people. None of his ICE agents had masks.

• 1:30:10Speaker 03

  He made the cages. Obama.

• 1:30:12Speaker 01

  So we've done this before, well and better. Why do you want them to be masked? Why is that okay?

• 1:30:17Speaker 00

  Well, so there's an answer to that question, even though I agree with you.

• 1:30:20Speaker 01

  LAPD is a mask. FBI is a mask. CIA is, like, there's so many other law enforcement agents that are doing things twice, three times, four times as legal. And these guys have 60 days training, like hairstylists have more training than them, and they're the ones that are masked up. That's why they're shooting with impunity, because they have an enemy. It doesn't matter.

• 1:30:35Speaker 00

  So I'll take a slightly different stance and push back as you see fit. So here's how I would look at that. We are in a time where you've got people going to ICE facilities and attempting to kill ICE agents. You have times where there are people that are rioting outside of ICE facilities and saying, I've seen your face now, I'm coming after your whole family. So there are reasons, given the unpopularity of ICE on the left, there are reasons why they would not want to be doxxed. So I certainly understand that. I don't think it outweighs the downside of them being masked, and how weird that feels,

• 1:31:18Speaker 00

  and the level of danger that it creates, all of that stuff. And so, all of that, I get the fear and frustration. There is a reason why they're doing it. Again, I don't think it outweighs it. Let's stop doing it immediately. Let's solve the other problems that are associated with that. But going back to, okay, we've got the people that are running, and hey, you've got a masked guy coming up with a gun, is it sensible to run?

• 1:31:52Speaker 00

  If somebody is going to fake being an ICE agent and they're going to fake it to your detriment, they'll fake being a cop, they'll fake the badge, all of that, like the Hortman, I believe is her name, in Minnesota, who was murdered by the guy pretending to be a cop. I mean, he went to the extreme of getting the cop outfit and doing all that shit. So it's like, that isn't going to stop it. That's motivation. And if people are motivated to go in and harass people, you need to immediately arrest them and make sure that's just abundantly clear. Motherfucker, you do that, you're going to jail. And so if you start putting people like that, forget jail, you start putting people like that in prison and people don't start fucking around imitating ICE officers.

• 1:32:33Speaker 00

  Unfortunately, to the people in ICE, you've got to de-mask, you've got to do your thing. And then if somebody actually does something, then if, one, if you know that there's a credible threat against them, protect them, protect their families. And if it's just, well, there could become a credible threat, then if somebody makes a move or whatever, you've got to go after them. But you can't just create the draconian police force. It isn't working. So I'll even say, hey, we ran the experiment. Doesn't work. It's just too many people get shot. So, cool, you tried it, non-starter, it's doing something to the psychology of people in the country. It was a failed experiment. Now, let's find that next thing that we're gonna do. But running is definitely not the play. Like, that's crazy.

• 1:33:17Speaker 00

  And I see more and more footage of people running from ICE cops, whatever. That's just crazy town. Chill, assess the situation, what's going on, and then move forward. Now, does that create a very, very narrow possibility? That this actually isn't an ICE agent, this is somebody pretending to be? Yes, it does. But like I said, you have the same problem with the cops. And to abolish the cops would be the most ridiculous thing I've ever heard in my life. Same thing with ICE. You don't abolish it, but you do have to, there's gonna be risk on both sides. And right now, it feels like everybody's trying to get rid of all the risk ever that could be anywhere. And it's like, that's not how this works. So, yeah.

• 1:33:58Speaker 03

  I found the case you were talking about. It was, I'm assuming you were talking about Melissa Hortman and her husband? And then Senator John Hoffman and his wife?

• 1:34:05Speaker 00

  Correct.

• 1:34:06Speaker 03

  Okay. There you go.

• 1:34:09Speaker 01

  Cool. Let's jump over to Japan.

• 1:34:11Speaker 00

  Let's go.

• 1:34:11Speaker 01

  Where they announced their own Clarity Act, break it down to us and how it impacts my crypto holdings, because they're looking kinda weak right now.

• 1:34:18Speaker 00

  Yeah. Well, we're certainly in a moment with crypto in terms of it chopping sideways. But Japan really has done something what Washington hasn't yet been able to do. We've been talking about having a Clarity Act here in the US. But this morning, Japan's upper house passed a landmark amendment reclassifying crypto as a financial instrument. So that's a very big move. This is exactly the kind of thing that we're trying to do with the Clarity Act. This is the same for Japan. It's the same legal category as stocks and bonds. And final passage through both chambers is now done. So that's really exciting. And I wanna see the US do the same thing. The value of these things is gonna go up and down, but we already have stocks and bonds, they go up and down.

• 1:35:02Speaker 00

  So if people wanna say, listen, give me the regulation, and I will adhere to the regulation, great. I don't understand how we've been doing all of this through litigation. So remember, the SEC has just been like, no, no, no, do whatever you think is best, and then we'll sue you if you get it wrong. That is fucking crazy town. That is the dumbest shit ever. The government does stuff like that all the time. It is an absolute dereliction of duty. They should say, here is your guidance. Now, they can put guidance in the beginning and then update it over time and say, okay, we've amended it in this way. But as long as you were doing it according to that, great. And by the way, if they come to you, as Coinbase did, and say, hey, we wanna sit down with you guys, we wanna get clarity, and they still tell them, just go do what you think is best, and we're not, we're not going to comment on it here,

• 1:35:48Speaker 00

  but if we see that you do something we don't like, then we're gonna go after you, we're gonna pursue you legally. That is the craziest shit ever. And that's what they were doing. We need something like this. I am shocked that America's not been able to get this across the finish line. You've got to tell people what they can and can't do. You can't just sue them because you have invisible rules in the back of your mind that you're unwilling to put down. That's so crazy. Either have the regulation or don't, but don't have it invisibly stored inside your own mind. All right. Now, what is this gonna do to crypto? So crypto moves out of Japan's Payment Services Act, a framework that was built after the 2014 Mt. Gox collapse, that's a whole thing. And that was treating Bitcoin just like a payment tool only.

• 1:36:31Speaker 00

  And it takes it into the Financial Instruments and Exchange Act, the law governing Japan's security markets. So that single migration is gonna trigger everything that comes after it. So insider trading on crypto is now banned. Let's go. That is fantastic. That is fantastic. We wanna get that here in the US, man. So, like, crypto gets such a bad name, which it shouldn't, but it gets such a bad name because so much stuff is able to happen on the margins outside of the normal regulatory framework. Issuers will face mandatory annual disclosures. Great. So we can see what's actually going on because what we should want to see more of, and we are starting to see this with Circle here in the US now.

• 1:37:12Speaker 00

  I don't know all the finer details of this yet, but Circle now, I think is an actual regulated bank? Ryan, that would definitely be one to fact-check me on, but I think that's true. That Circle is now a regulated bank that they built from scratch. And so now they have certain regulations that they're gonna have to follow in terms of backing their stable coins with actual assets. I imagine there's gonna be reporting requirements so you know what assets are backing it. This is the kind of stuff that we should want. Now, back to Japan. Penalties for unregistered operators jumps from three years in prison to 10 and fines more than triple. So this is fantastic. There are gonna be trade-offs for sure. You're gonna get increased regulation, but you get legitimacy out of it.

• 1:37:57Speaker 00

  And the reclassification creates the legal architecture for spot crypto ETFs on the Tokyo Stock Exchange, which are supposedly gonna be coming in 27 or 28. This is all good news. Now, normally, I am against regulation, but the reality is when it comes to finances, man, the consequences get so wild. We have a regulatory framework, it's working well enough. Let's just invite crypto into that regulatory framework. As always, I'm a light-touch regulation guy, there needs to be some. I'm not a zero-regulation guy. And that's largely where crypto has been banished to, is out into the hinterlands.

• 1:38:36Speaker 00

  But people are so angry and so frustrated with the manipulations of the global economy that they still were able to create something, even with all the attacks that it came under, and build it up from effectively nothing to being something that really is meaningful and I think will keep getting more meaningful into the future. And so I'm very excited to see Japan do something very sensible that will help them move into the modern era of banking by allowing what is obviously a superior technology to come on board. Now, the question is gonna become, can we pull this off in the US? Boy, I would like to see it come to fruition.

• 1:39:16Speaker 03

  Circle National Trust is approved by the OCC in July 2026. That provides custody for digital assets backing its USDC stablecoin, but cannot take deposits or make loans like a commercial bank.

• 1:39:27Speaker 00

  Okay, word. Thank you for that.

• 1:39:28Speaker 03

  No problem.

• 1:39:29Speaker 00

  So, yeah, that is a phenomenal first step. Now, the problem right now is that the US banking sector is fighting against crypto being able to pay out interest. That, you should be offended by that. You should be up in arms over that, figuratively. That is one of those things, that is so crazy to me, that that is just banks saying, we wanna be the only ones, one, that can create money, and then, two, we wanna be the only ones that can pay people for storing their money with them. That's crazy. Anybody within the regulatory framework should be able to do that. We used to create new banks all the time. People were constantly running experiments to see what worked.

• 1:40:14Speaker 00

  What does the future of banking look like? And then that just got killed. We have regulated that out of existence. I forget how many new banks you created, but it's something like zero in some astronomically long period of time. We went from, god, I'm making these numbers up, these are directionally correct. We went from hundreds of new banks every year to literally zero, one, two, something like that. I mean, it's just absolutely crushed down into nothingness. And so obviously, the bank industry is going to push back on this. But as customers, we should want the competition. The very thing that hurts the end consumer is when there's monopolies. And right now, the banking industry has a cartel, if not a true monopoly, and they are making it impossible for people to innovate.

• 1:40:58Speaker 00

  And crypto came along and just refused to be banished. And so now they're having to contend with it. But if I'm going to give my money to somebody like Coinbase, yes, I expect that that is gonna act like a savings account and that you're paying me a return. Now, if you end up going out of business because you don't know how to run your fucking bank, then shame on me for banking with you. And I should lose the money that I put into that bank. That's how this should work. But you can't just, again, going back to nanny state, we gotta protect everybody because we think everybody's dumb, and so we're gonna bail out every bank ever and nobody's gonna take any risk. That is absolutely fucking stupid. It is precisely why we are in the economic situation that we're in right now.

• 1:41:38Speaker 00

  Let people innovate. Let new banks come online. And let people take risk. It's their money. They've gotta be adult enough to say, I'm gonna make a choice for myself. And yes, that choice may bite them in the ass. And yes, that choice may have consequences. It is what it is. And every time life has slapped me with consequences, I have been distressed that I made a stupid decision. But it is what it is, and I'm not reaching out to the government to save my ass. It's like, man, I am where I am because I made a series of choices. And boy, oh, boy, have some of the choices that I've made bitten me in the ass. But it's like, you learn and you move forward. But when you're constantly looking for somebody else to bail you out, you get this fucking insane, gigantic government that is just making it impossible for the working class to thrive. Therein lies your problem.

• 1:42:33Speaker 00

  Sipsy.

• 1:42:34Speaker 03

  Also, since 2008, we get about a handful to a dozen banks a year. And then in terms of crypto, we've seen a rise from 2025 to now with Circle, BitGo, Ripple, Paxos, Fidelity, Coinbase, Crypto.com, and a ton of others.

• 1:42:46Speaker 00

  But they are not able to do things that banks can do. That's the problem. Like, they can't pay interest.

• 1:42:53Speaker 03

  Yeah.

• 1:42:54Speaker 00

  And so you've got, basically, the banking industry saying, you can create things that sort of look like us, but they can't do the things that make us cool. So, for instance, they can't create money, and they can't pay interest. It's like, that's crazy. I get they can't create money, but I've got beef with that whole system anyway. But the fact that they can't pay interest is insane.

• 1:43:20Speaker 00

  There's no argument for it. None.

• 1:43:22Speaker 01

  All right, some quick hits in future tech. First, we have MiHoYo, creators of Genshin Impact, just announced Olivia, an AI companion who lives on your desktop, plays piano while you work, and exchanges letters with you. 100K downloads on day one.

• 1:43:37Speaker 00

  Damn. So, first of all, if you guys haven't played, if you're a gamer, and you haven't played Genshin Impact, it is pretty dope. I went into a hard loop on Genshin. Now, it's a gacha game, so it's got mechanics that are very similar to gambling, so I wouldn't let your kids play it. But it is, yeah, it's a very interesting genre of game, and they've done a very good job of it globally. It is so popular. I have an absolute fetish for in the future, integrating AI inside of Kaizen. We don't have it now, it's just beyond our capabilities today. But inserting AI like this into the game, so you can have a relationship with characters in the game, out of the game, I want to do it with like, a little character on your desk. Anyway, I'll derail on that.

• 1:44:21Speaker 00

  But it is absolutely fascinating that a gaming company is getting into AI. You're going to see characters like this be built up as personalities. Here, in fact, let me broaden this out to my core thesis on AI. AI will have two paths before it. One is gonna be, it's gonna be commodified, it's gonna be treated just like oil. So you can start thinking in terms of, if you've got barrels of oil, you've got bundles of tokens. And people are going to buy those baskets of tokens in the same way that they think about buying oil. And so it'll be commodified, and so you buy it from whoever's got the best deal, and so whoever puts that out in the best way, you're gonna go get that. But you're going to have, and this was that whole Alex Karp thing that he was trying to

• 1:45:06Speaker 00

  get people to understand, you're gonna build an intermediate layer that's going to allow me, as Impact Theory, to go, okay, I want to do a whole bunch of proprietary stuff. And so I'm really trying to move away from the commoditized intelligence into a very specific, almost human-like intelligence. I don't mean that it's gonna think the way we think. I mean it that it's going to be individualized in the way that we're all individualized. And so all of us, as companies, are gonna interface with this intermediary layer. We're gonna change all the dials and knobs, the waiting, as they call it in AI. And we're gonna make our layer, that's proprietary to us, act in a way that the other commodified

• 1:45:50Speaker 00

  intelligences won't. And so my AI will output something very different than the next person's AI. Dude, when you get to that, oh my god. Now, I'm incentivized as a company to be like, yo, I want to tweak all these dials to do something that nobody else is gonna be able to do. And now, I can scale AI, but in a way that is unique to me. And what you're seeing with this is sort of the marketing spin on top of that. I imagine they're still using a largely commodified basket of intelligence, that it's gonna be very similar to things that you'll get, but they're doing what they can to give it a real personality, both in terms of how it responds with the letter writing, but also, most importantly, in your mind, because they're branding her. So they had, she was out for like, a year or something.

• 1:46:35Speaker 00

  They gave her a persona, so she was like, a university student who was majoring in music, I think, or piano. Yeah, majoring in piano, had a minor in psych, if I remember right. And so it was like, people built this relationship, she was sending them messages back and forth, and so now you've got that branding effect of, oh, this isn't generic AI, this is that specific AI. Now, I think you guys should be paying attention to the fact that this is made by a gaming company. I'm trying to scream as loudly as I can about what it's like to actually be a gaming company, and how you are basically trying to understand human psychology to the nth degree, understanding dopamine cycles and things like that. You'd be shocked how much of gaming is just about getting the dopamine cycle, right? And then, the fact that they're understanding AI, character development, and merging those

• 1:47:20Speaker 00

  together. Ooh, buddy, like, the world moving forward is going to get fascinating. If what I'm saying is true, and gaming companies remain differentiated, because they have made a proprietary AI, the actual creation of the, like, code, sure, that part's gonna be simple, everybody's gonna be able to do it very easily. But the games that get outputted are still gonna be unique to that company. That is a far more exciting future than the one that I think everybody's been imagining, where it's like, well, AI is just the same everywhere. Man, if this gets differentiated with that intermediary layer, it's gonna be interesting. So, when I saw this, I was very, very excited.

• 1:48:00Speaker 00

  Kaizen's probably a ways out from that. But nonetheless, I was excited to see that this is coming from a game company. I think they really get it. And I think that this is sort of that consumer way to understand what Alex Karp is banging on about.

• 1:48:14Speaker 01

  Nice. Next one, we have, um, oh, the construction vehicles of the future. They just raised a bunch of money to revolutionize how we built.

• 1:48:28Speaker 00

  How much did they raise? Go back, it's like...

• 1:48:30Speaker 01

  A hundred million dollars in Series A.

• 1:48:32Speaker 00

  So they raised 115, including 100 million of that coming from Kleiner Perkins. So 115 million dollar raise, was it Series A?

• 1:48:42Speaker 01

  Yeah, Series A.

• 1:48:42Speaker 00

  Bro, that's, for that kind of raise, that's early. This is exciting. For this kind of company, this isn't like, just, oh, we're an AI company, which you can get like, absurd valuations. So, these guys are former SpaceX guys, so they were doing Starlink, SpaceX, all the stuff that Elon has been working on. So these are real engineers. The reason that this is so interesting is, we have spent all the time building software, that's been all America's been doing, our manufacturing base has been getting glutted forever, and these guys are called TerraFirma, I believe, yeah, TerraFirma Inc. These guys have said, no, no, no, no more of that. We're gonna start building here in the US. This is the same reason that I'm excited about Palmer Lucky and what he's doing at Androl.

• 1:49:25Speaker 00

  This is people who are manufacturing in the US that have managed to convince young kids growing up, go be an engineer, go move electrons around the world. It's something that we haven't been doing, it has put us in a globally weak position in a way that should terrify anybody that's paying attention to what's going on with Lucidity's Trap and our rising tensions with China. It, also, Jesus, what's going on right now, actively with Iran? You want to be in a position where you can manufacture. We want to be in a position, purely even just from an economic standpoint, where we have a thriving working class, because there are things for them to actually work on. Okay? Part of the reason that our working class is struggling, there's not work to do.

• 1:50:06Speaker 00

  So, this, making things in America, focusing on innovating with technology that will first be used to build factories and things right here in America, eventually moving out, building bases on Mars, on the moon, they called that out specifically, that's not just me throwing this out into the future, that's really what they're gonna be doing. This is so exciting, man. This, this kind of shift takes a very long time, you've got to raise kids that look at engineering as something that's incredibly cool. And so thankfully, this has been brewing behind the scenes for a while, and we're now starting to be able to reap the rewards of it. But if we can make the US a manufacturing powerhouse again, now you're into the world

• 1:50:49Speaker 00

  where, hey, AI becomes this incredibly disruptive technology, to be sure, but we end up getting more jobs created on the back of this, just jobs that right now, we can't think about. But instead of being static, like, we've been for so long, because we've so focused relentlessly on financialization and software, now seeing people starting to build real things, man, this is so fucking exciting. And I'm very sad that we're like, in this weird place right now with AI, in terms of people starting to lose belief, they're confusing it's gonna take longer with, it's just never gonna happen, which of course, is what happens with all these technologies. Remember, you can go find people that were saying, bro, the internet's a fad, this isn't going anywhere. That's wild. And you're getting people saying similar things about AI.

• 1:51:33Speaker 00

  I think you're going to see companies start coming online that just wouldn't be possible without AI. In fact, we're gonna be talking about one here in a second, that while I don't know the ins and outs of how much they used AI, I would be absolutely shocked to my core if AI wasn't a core part of what they've done. But TerraFirma Inc. really got me excited when I saw that. This is like, America getting back to form, more and more people at least spreading the message, we need to be an engineering powerhouse.

• 1:52:01Speaker 00

  And keeping the trend going in future tech, Vigmag Labs secures a patent for a rare earth electric motor platform. This is huge because most EVs were like dependent on these rare earth magnets. But this is the first one that is able to build a motor without them at all. Boys and girls, you must understand China controls 94% of the world's EV magnets. So if you want to build an EV car or anything that uses rare earth magnets, you've got to go through China. And we all know that that was a big part of the tariff battle. China was like, all right, you want to start fucking around with chips and things like that? We're not going to let you have the rare earth magnets, which your entire modern way of life is tied to.

• 1:52:42Speaker 00

  Now, a 10-month-old startup in Bangalore just patented a way to not need rare earth magnets at all. This is incredible, man. Shout out to these guys. This is very impressive. The company is called VMEG Labs. On July 8, they secured their fifth patent in India, but not that that matters. But their fifth patent for something called a virtual magnet synchronous motor. Now, almost every electric vehicle on the road today runs on a motor with rare earth magnets embedded inside of it. And if you can get around that, one, you've got new innovation. Lord knows where this is going to go. Does it end up making it cheaper? I don't know. But according to the International Energy Agency,

• 1:53:26Speaker 00

  China handled roughly 91% of global rare earth refining at 94% of the world's permanent magnets in 2024. So these are the things that people need for all the things that China is trying to hamstrung people for. So it is going to be very exciting to see if now India and VMEG specifically are able to create another thriving industry, even if it's just exporting this technology to other companies so that around the world, so that we're not beholden to China. And again, like I said, this could end up driving costs down or make things possible that weren't possible before. So this is very exciting. I'll need to do more research to find out if AI was used and if so, how much.

• 1:54:08Speaker 00

  But if this also leans into that, that this is something that wouldn't have been previously possible without AI, now all of a sudden you're starting to see some of those things that we couldn't have predicted. Like nobody, and again, I don't know this is true. But if it's true, it's going to be things like this that will start happening where nobody would have expected that this thing, we'd be able to get around rare earth magnets because of AI. It will be things like that that AI starts making possible, even if this isn't one of them. I'd be a little bit surprised, given how precise the timing of the software has to be to get the magnets to work. Because if I understand correctly, it's like you're turning them on and off like at these insane rates. And I'll stop there because I don't understand the technology well enough. But this is very, very exciting. I can't wait to see how this plays out.

• 1:54:53Speaker 00

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