Massie's Primary Loss + AI Wars Heat Up | PBD #802

Patrick Bet-David, Tom Ellsworth, Richard Werner and Luke Gromen break down Thomas Massie’s Kentucky primary loss, the escalating OpenAI vs. Anthropic AI war, Meta’s 8,000 employee layoffs, Trump shutting down Xi-Russia claims, and the Fed’s inflation-driven interest rate warning. ------ 📺 SUBSCRIBE TO LUKE GROMEN'S FFTT, LLC: https://bit.ly/3OgGy4c 💰 LUKE GROMEN'S FFTT, LLC: https://bit.ly/47yPzfC Ⓜ️ MINNECT WITH RICHARD WERNER: https://bit.ly/3NSJ8NN ✍️ SUBSCRIBE TO RICHARD WERNER'S SUBSTACK: https://bit.ly/4s7AVDd 💬 TEXT US: Text “VAULT” to 310-340-1132 to get the latest updates on speakers at The Vault Conference 2026! 🦁 THE VAULT 2026: AUG 31ST TO SEPT 1ST: ⁠⁠⁠⁠⁠⁠https://bit.ly/4mZdLhD⁠⁠⁠⁠⁠⁠ https://bit.ly/4mZdLhD Ⓜ️ CONNECT ON MINNECT: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4kSVkso ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://bit.ly/4kSVkso Ⓜ️ PBD PODCAST CIRCLES: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4mAWQAP⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://bit.ly/4mAWQAP 👔 BET-DAVID CONSULTING: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4lzQph2 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://bit.ly/4lzQph2 🥃 BOARDROOM CIGAR LOUNGE: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4pzLEXj⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://bit.ly/4pzLEXj 🇰 KALSHI: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠http://kalshi.com/pbd⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ http://kalshi.com/pbd⁠

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

• 0:14Speaker 00

  My handshake is better than anything I ever signed, right here.

• 0:18Patrick Bet-David?

  You are a one of one?

• 0:19Speaker 00

  My son's right, brother. I don't think I've ever said this before.

• 0:27Patrick Bet-David?

  Okay, sounds good. Gang, we have to change it up today because my son, oldest son graduated 8th grade, so I had to go in there and sneak out to come here, be with you guys. We have a special guest today. You know, when they were on last time, it was a great conversation. We should almost create a show, Luke and Richard Show. I don't know if it's the last name, or it should be the first name, we'll figure it out, but we have brilliant minds in the house, including Tom. A lot happened last night. You know, I don't know what direction to go with you. One is the big race with Thomas Massie, with Gal rain, which was massive. People were, it's the biggest primary race we've had with the money being spent, 32 to 34 million dollars. Trump, the biggest data that you see, which was shocking to everybody who thought Trump's endorsement

• 1:12Patrick Bet-David?

  no longer meant anything. The guy went 39 and 0 in the middle of a war. How do you do that? Everyone was upset, the guy that went 39 and 0. You can say any, economy, affordability, Iran, oil, gas prices, and he went 39 and 0 with his endorsement. It is such a, can you imagine if you're him right now going to sleep last night saying, "I told you so, you should never go against me," and all the other guys that did, kind of lost. It was so bad, remember Bill Cassidy? Who was the fellow, I think, in Louisiana, Tom, if I'm not, is Cassidy out of Louisiana, Rob? Out of Cassidy that he voted, he was one of the seven senators, I think, that voted for J6 as a Republican against the president for the impeachment.

• 1:55Patrick Bet-David?

  And he lost to a fellow that Trump endorsed yesterday while all this stuff is going on and nobody is paying attention to it. Maybe the biggest thing that happened last night that no one talked about, not a lot of people talked about, remember this is the sport of politics, is the Senate advances Iran war power resolution, historic first. Senate voted 50 to 47 on Tuesday to advance a war power resolution requiring Trump to end military operation in Iran or obtain congressional authorization. But the biggest thing on this, guess how Bill Cassidy voted, who previously seven times in a row voted no. What do you

• 2:38Patrick Bet-David?

  think he voted last night? He finally said, let me side with Trump, after he lost. Kind of weird, right? When you think about what's going on here. So maybe he's thinking about his career long term, I better get my act together. The history of Mitch McConnell is gone. I think Mitch McConnell is no longer going to be there. Forty something plus years. I know a lot of people will miss him. I'm sure you're going to be very emotional because you want people to be in politics for 40 plus years. Maybe you want to even extend term limits. Maybe when they're dead, they're still in there, you know, so some people still want them to continue. I don't know what you want to call that, Luke. But Mitch McConnell is no longer going to have a seat. I think somebody, no, I don't think he competed for it though, Tom, right? I think somebody else came and took the spot, Tom, if I'm not mistaken with Mitch McConnell.

• 3:18Tom Ellsworth?

  I believe so. Yeah, the Senate is no longer a corrupt hospice.

• 3:21Patrick Bet-David?

  Yes.

• 3:22Tom Ellsworth?

  That would be California.

• 3:23Patrick Bet-David?

  Change. Which by the way, his family's probably happy. Okay. His Asian wife that has a lot of business over there is probably happy. They can now just kind of relax and enjoy themselves, spend time with the grandkids. And I don't know if he's got great grandkids, maybe he does. And at this point, you just don't want your grandfather to suffer what he's going through. Just relax and enjoy the last few years you have with your kids. NATO ships, NATO turns around and says, hey, we may just support the president now. Oh, now you want to do it? Now that you realize the guy may decide not to send money your way anymore, now you want to go support it? Then there was another $1.8 billion slush fund. Attorney quits hours after $1.8 billion slush fund to pay MAGA allies and J6 rioters. Sparks backlash, big story. At the same time, there's an IRS investigation, Rob, on page

• 4:07Patrick Bet-David?

  nine. I think that's an addendum story that came out. Very weird how this thing ended, by the way, where it says, what page is that on, Rob? I'm trying to see what page. You told me earlier, so I screwed up with the number I wrote here.

• 4:21Tom Ellsworth?

  Yeah, that would be.

• 4:22Patrick Bet-David?

  Addendum nine. Uh, addendum nine. New settlement. News, oh, there it is. New settlement bars IRS from investigating Trump, his family for past tax issues. That comes out. San Diego shooter, we have to talk about that. I mean, we'll, we'll go through another devastate. Very weird what happened here, but we'll talk about on the business front, which is on the business side. Maybe the biggest story yesterday. You got OpenAI and Anthropic who are both competing, right? OpenAI, Anthropic. On the night when all this stuff is taking place and you know, the lawsuit with Elon Musk, because hey, Elon lost because he filed too late, et cetera, et cetera. It's just kind of like, well, Sam Altman is winning.

• 5:04Patrick Bet-David?

  On that night, his co-founder of OpenAI decides to leave and go join Anthropic. Wait, what? Yes. He decides to leave and go join Anthropic. And you have to hear the reasons why he wants to do that, why he wants to leave. We'll talk about that as well. Facebook layoffs, they're doing something very weird. I think they're doing it today. If I'm not mistaken, Tom. Today, Facebook did something weird where they're, they're laying people off. But the way they're doing it, they told all their employees, don't come to work today. What do you mean? Just don't come to work today. It's either because they're so worried it's going to be nasty or two, they want to sweep the entire place for people not to put shifts in conversation and recording and cameras, all this stuff that they're doing. But today, if you're at Facebook,

• 5:47Patrick Bet-David?

  if you DM somebody and a girl doesn't get back to you fast today, it's because Facebook's taking the day off. Just letting you know, don't get upset. They'll get their act together on Instagram. A lot of you guys will be upset. Hang in there. They're laying off people, but they told everybody, stay home today, not to come to the office. And then Nina loans are back. You know, when Nina comes back to the club, it's not good news, but Nina's back. You know how she's back? Remember back in the days, the loans that caused WAMU, do you remember WAMU? We're old enough to remember WAMU, Washington Mutual Bank. I loved WAMU. They had the best. You know, when you would go to the front, their setup was sick. I just really liked that. That's how I met Merle and Taker in that WAMU. They had great employees, great customer service, but they had Nina, no income, no asset loans.

• 6:29Patrick Bet-David?

  And a $330 billion company goes out of business and who buys them for 1.9 billion? Chase.

• 6:37Patrick Bet-David?

  On a discount because of no income, no asset loans. But they're making a comeback. Good idea, bad idea? I think it's a horrible idea, but we'll see. Maybe, maybe these guys are gonna say it's a phenomenal idea. Pat, stop being so upset about the no income. We need Nina to come back. Maybe Richard Warner's gonna tell me that because of quantitative easing and tightening, we need Nina to come back. I don't know. I never liked Nina. She was beautiful, very attractive. But once you started dating her, she was a homewrecker. Okay, I'm just telling you.

• 7:03Tom Ellsworth?

  She was easy.

• 7:04Patrick Bet-David?

  But she was. She was very easy, but a lot of guys liked her. She got around a lot. So Nina is making a comeback. All right. So apparently there was a conversation between Trump and Xi where Xi told Trump allegedly, according to reports, Richard, I don't know if you saw this or not, that Putin regrets the war with Ukraine. And then Trump had to come out and correct him. Someone says, Xi never said that. That never was talked about. But apparently Xi told Trump that Putin regrets the war against Ukraine. I don't know what that means. Maybe we'll have some thoughts on it.

• 7:37Patrick Bet-David?

  And then a couple of other stories. If you guys are looking for discounting, you know, people like discounts. Like I know people that are in the discount game, like, hey, I wouldn't want getting a nice discount for shirt or suit or something like that. Well, universities that offer MBAs,

• 7:50Patrick Bet-David?

  it's a fire sale on MBAs today. So if you're looking for getting an MBA at a discount, it's a good season, right? Now, there's a lot of discounts when it comes on to this. And by the way, did you guys see all these commencement speeches? Where, you know, Eric Schmidt from Google got up and he said, wow, you know, the AI industrial revolution. Boo! Did you see this? Well, somebody yesterday, the co-founder of Apple, got up and gave a speech about AI. It was a very different thing. But Tom, he said, Rob, he said something. It's in my notes. Okay, I'm glad you have that. We're gonna go through that as well. It was fantastic. But this thing with AI is real. Kids are... Rob is telling me yesterday how his son says him and his friends are not using any AI. They're driving together. Rob, if you want to tell the story, what he told you that day?

• 8:35Speaker 03

  Yeah, cuz I have Grok in my Tesla.

• 8:37Patrick Bet-David?

  Yeah.

• 8:37Speaker 03

  And I was asking him questions. And my son said, why don't you just go home and actually use Google and do the research yourself? He was shaming me for using AI.

• 8:45Patrick Bet-David?

  How old is he? Is that 16?

• 8:46Speaker 03

  16. But it's a trend among all of their friends that they don't want to use AI.

• 8:50Patrick Bet-David?

  What's his first name?

• 8:51Speaker 03

  Benjamin.

• 8:51Patrick Bet-David?

  Benjamin. Shout out to you, buddy. Good for you for challenging us to use our brains. I am thankful for the Benjamins of the world. All right, next. Fed, Tom's got some bad news for you guys. Anytime we have bad news, we have to make sure Tom delivers it. Apparently, apparently the Fed's gonna raise rates, okay? So if you were thinking about buying a house, Brandon, and you blame everything on boomers, this is your chance to go buy something because rates are about to go up. According to Tom, all these boomers have decided to raise rates on you folks. Blame the boomers, right?

• 9:24Tom Ellsworth?

  Last of the boomers, speaking now.

• 9:26Patrick Bet-David?

  That's right. He's gonna, he's gonna drop the bad news for you guys. And then to all our friends in Simi Valley, I still live right next to Simi Valley, 118 freeway. All the cops used to retire in Simi Valley. It's one of the safest places to live in LA because your neighbors are, odds are, they were cops. It was a great way to go to the beach because you would go 118 freeway. I just love that entire area. I used to go to a church called Shepherd of the Hills with Dudley Rutherford, which a lot of people from Simi Valley would come. Seventeen hundred acres, only I think 5% as of last night is contained. Forty-four thousand people have been asked to be evacuated. Our prayers are with you who are living in Simi Valley. I love that area and we're hoping, I got a lot of friends I was texting this morning.

• 10:10Patrick Bet-David?

  I hope everybody's gonna be okay and nothing will happen to your homes, but those fires are not looking good. Hopefully, everything will end up working itself out.

• 10:18Tom Ellsworth?

  Karen Bass is heading to Ghana to see if she can bring some water.

• 10:20Patrick Bet-David?

  Yeah, she's gonna wanna help out, but, and then maybe if we get a chance, we'll have some stories about airlines. With that being said, I want to remind you guys that the Vault Conference we do once a year, Rob, if you wanna, for those of you guys that are small business owners and you want to find how to compete in a market like this, don't go about it yourself. Be in a community with other people. They can share with you what they're doing. We grew this thing from first event being 440 people to last year nearly 8,000 people. This year, we're expecting 12,000 people at MGM Grand Arena. Rob, I don't know if they've given you the video or not. If you do have it, if you want to play the clip, go for it. And it's a great opportunity for all of us to get together in one place where we talk about business, family. There's no walking on eggshells. We'll talk about every single thing at one event. Go ahead, Rob.

• 11:03Patrick Bet-David?

  Successful business people speak a language others don't. It's like when I lived in Germany at age 10 and a month later, I'm speaking German because I immersed myself in a Community of Germans, I speak that language, the same applies for business. So, studies have shown that sixty-five percent of people that immerse themselves in a new language, completely feel like a different person on the other side. So what does it mean? You go to business conference, you're at the Vault Conference, twelve thousand other people around you for four days. We're speaking a language that we're fluent in, in business. How we walk into room, how we negotiate a deal, how we hire somebody, how we raise capital, how we come up with a new strategy. The more you're around it, you all of a sudden start speaking that language fluently. So when you go back home, you do deals in a different way, you handle your business in a different way.

• 11:48Patrick Bet-David?

  If you want to get fluent in speaking a business language, once a year, we host a conference called the Vault Conference. This year for the first time, we're doing it at the MGM Grand Arena in Las Vegas, where we go through this two-hundred-and-ninety-six-page manual with twelve thousand people over four days in one room. If you haven't yet registered, click on the link above or below. Bring your spouse, bring your partner, bring your peers. Let's spend four days to get out Las Vegas, August thirty-first through September third. Looking forward to seeing you there. Go to vault2026.com, get your ticket again, vault2026.com, get your ticket. Cannot wait to see you and your family at the Vault Conference together. Having said that, let's get right into it. I say we start off with a business story, and the business story I want to start off with is OpenAI and Anthropic.

• 12:32Patrick Bet-David?

  Something quietly legendary happened yesterday in business. Everybody's, we're gonna get into the political story, but everybody was paying attention to this one headline. Twenty-two hours ago, OpenAI co-founder Andrej Karpathy joins Anthropic. Wait, what? Yes. Didn't we just get the news that Elon Musk was suing, you know, OpenAI and they dropped the case because it was too late to be filed? Yes. Wasn't that like a timing thing where, hey, maybe Sam Altman got himself a little bit of a victory? No, let me read this to you. Andre Karpathy, known as one of the best AI researchers in the world and a founding member of OpenAI, announced Tuesday that he's joining AI lab Anthropic. That's like going from the Yankees to the Red Sox. That's like going from the Dodgers to the Yankees, which is actually a good move if you do that.

• 13:17Patrick Bet-David?

  That's like going from, you know, the Lakers to the Clippers. You don't join the Clippers. You don't join a different team, but they're leaving Anthropic, leaving and going to Anthropic. And why this matters, the hire is a major coup for Anthropic in the high stakes competition for elite AI talent. And another sign the company is emerging as a magnet for some of the industry's most respected technical minds. Driving the news, Karpathy will start next week at Anthropic's pre-training program, which is responsible for the massive training runs that give Claude its core knowledge capabilities. And according to Anthropic, Karpathy will help launch a new team, focus on using Claude itself to accelerate pre-training research, an increasing important frontier as AI companies race to automate parts of AI development.

• 13:59Patrick Bet-David?

  I think the next few years at the frontier and LLM will be especially informative. I am very excited to join the team here and get back to RND. Tom, why is this such a big deal?

• 14:08Tom Ellsworth?

  It's a big deal because he and Sam Altman have gone back and forth. I mean, he tried to leave before, left for a little while, tried to do his own thing and this and this. But he was always assumed to be out there, kind of in Sam Altman's orbit. You know, you started here and everything, and now he just says, you know what? I'm going to Anthropic. You have to remember Anthropic was started, you know, Dario left and went in the name of safety. He said, I think safety is more important. I think there should be safe AI. I think we need to put guardrails around it. I think we need to do these things. And he was claiming that Sam and OpenAI were just going too fast and not doing it. Well, Karpathy felt largely the same way.

• 14:49Tom Ellsworth?

  And now he comes up, he's going there. And this is the guy who's taught like the first, there's an interesting stat, Pat. He gets permission to teach this course on neural networks at Stanford, and he got his PhD at Stanford. The first time he teaches it, they rounded up like 150 curious students. You ready for this? Two years later, there's a waiting list and every time the Course was offered, there's 750 students who want to get into it. So this guy has been seen at Stanford and in Silicon Valley as this neural network genius. And now he is on the eve of IPO season, he is now at Anthropic with Dara Mady.

• 15:32Patrick Bet-David?

  This is a big deal. Look, what do you think about this story?

• 15:35Speaker 04

  It's really interesting you bring up this point about safety. I didn't know that Karpathy was aligned that way.

• 15:42Speaker 04

  Because Karpathy put out on X three, four months ago, a study that he had conducted that looked at the risk to existing US jobs by sector. By I think there's 192 job classifications or something in the Bureau of Labor Statistics. And he went by jobs category across the entire US economy and rated each individual job category with the risk of job loss from AI over the next several years. And what he found was was shocking, which was that roughly 26 million jobs in America are at

• 16:21Speaker 04

  between very high or extremely high risk of being disintermediated by AI. He put this out. It's a fascinating chart because it just shows each area as a square and then green is very low risk. So you there it is right there. That's the that's that's part of it there, right? So you can see the areas. So, you know.

• 16:45Patrick Bet-David?

  Red is bad, green is good.

• 16:47Speaker 04

  Red is bad, green is good. And you can see it there. And and so this genius, this guy that's worried about safety, which to your point, Pat, I think is really interesting going from to the more safety or the however you want to term it focused AI model. This is something he put out three months ago, which is, I mean, look at it. Accountants gone, lawyers gone, market researchers gone, software developers gone, general office clerks gone. I mean, it is 26.

• 17:17Patrick Bet-David?

  I mean, but if you keep going, some of these jobs, you just said stuff that maybe we would say, okay, that makes sense though, Luke, those are going to be gone. Bookkeeping, okay, gone. Receptionists, okay.

• 17:28Speaker 04

  Yep.

• 17:28Patrick Bet-David?

  And then, but you go on the right side, software developers.

• 17:31Speaker 04

  Gone.

• 17:32Patrick Bet-David?

  Gone.

• 17:32Speaker 04

  Gone.

• 17:33Patrick Bet-David?

  Computer, what does that say on the bottom? Computer, I can't see the.

• 17:35Speaker 04

  Some sort of, yeah, it's.

• 17:37Patrick Bet-David?

  CS, let's just say computer science. What, lawyers? Lawyers is in the red.

• 17:42Speaker 04

  Lawyers is, lawyers, gone.

• 17:43Patrick Bet-David?

  Wow. Project managers, human resources, accountants, purchasing. Uh, which ones are green? Let's, let's focus on the greening side.

• 17:51Speaker 04

  Home health, hand laborers, uh, food and service, beverage, cooks, waiters, electricians. You know, right there in the middle, construction laborers, carpenter, general maintenance, janitors, childcare, you know, it's, it is, it's a fascinating chart because you have one of the, one of the, you know, the best geniuses in AI three months ago saying what China was to blue collar workers 25 years ago, AI is going to be to white collar workers in the next five.

• 18:20Patrick Bet-David?

  So if I'm, I just came from the eighth grade graduation, right this morning, and my niece is graduating as well, high school. She's valedictorian, she's going to a very good school. So these kids are doing everything that they're told to do. When they see this, like Steve Wozniak is giving a commencement speech. I don't know if you guys saw this or not. So we saw what Eric Schmidt got with Google. We saw what the other lady got when she spoke at University of Central Florida, booed hardcore. Here's what Wozniak said. Go ahead, Rob. Y'all have AI. Y'all have AI. Actual intelligence.

• 18:54Speaker 05

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• 19:24Speaker 06

  Now, more than ever, we need someone on our side. But Rob Whitman? Whitman's votes drove up costs, cut Medicaid, and risked 350,000 Virginians' health care to pay for tax breaks for himself and his donors. He's not on our side. Shannon Taylor will fight corruption, cut taxes, and bring down costs. This November, vote for Shannon Taylor. She's for us. Paid for by HMP, the House Majority PAC dot com. Not authorized by any candidate or candidate's committee.

• 19:56Patrick Bet-David?

  Now, watch what he says, which is very funny what he says next.

• 19:59Speaker 04

  My entire life in the technical world, I've been following people that were trying to figure out how to make a brain, software, hardware, synapse chips. And I was at a company where the engineers figured out how to make a brain.

• 20:12Speaker 04

  Takes nine months.

• 20:15Patrick Bet-David?

  It's funny, right? So he gave a promising message, right? He gave a message that is at least giving kids some confidence. How do you feel? If I'm a 19-year-old, 22-year-old, now coming out of high school, going to college, I got a lot of worries. The kids are talking to each other. What do you tell them?

• 20:32Speaker 04

  I don't know. I mean, I've got three boys, 25, 23, and 20. And we have this conversation with them a lot because the world is changing so fast. There are kids graduating high school today that are gonna go, and they played by all the right rules, and the world's gonna be different in, forget about four years. It's gonna be different in two years at the pace at which AI is moving. So I don't know what... I think what you have to do is, and I know what we've done with our boys, which is be honest with them, communicate, and then just talk about critical thinking, like Bozniak says, learn how to think, think critically, have character, you know?

• 21:10Patrick Bet-David?

  What skills are they taking? What skills are your three boys going into? What are you measuring in?

• 21:14Speaker 04

  So the oldest one's already out of college. He's working in audit analytics at a major US bank. And he's actually working on AI governance. His mother and I are... He's gonna be taking an online course through MIT that anyone can take, that you have to... You know, there's a tuition associated with it, but it's around... AI because he sees he's basically he sees the dragon coming and you know we've taught them and when you see the dragon you don't run from the dragon you run at the dragon. Middle one is actually going into funeral services, very AI proof.

• 21:46Patrick Bet-David?

  Sales or?

• 21:47Speaker 04

  He's his his his longtime girlfriend, his family, her family owns funeral home. And so he's been working there and so he actually likes the business and it's and it's a great business. So he's moving there and the youngest one's doing cybersecurity, which we specifically talked about. Let's find a something where there is you can leverage it where it's not, you know, you're you're not going to be in a red square.

• 22:12Patrick Bet-David?

  Luke, what's that MIT course and is that available for everybody?

• 22:14Speaker 04

  It's available for everybody. I would, I'd have to ask my wife. I know she's watching.

• 22:18Patrick Bet-David?

  Is it an online type?

• 22:19Speaker 04

  It's an online type of class. Anybody can take it.

• 22:21Patrick Bet-David?

  Would you mind texting your wife and see if she can respond back so maybe by the end of it we can share with the audience?

• 22:26Speaker 04

  Yeah, I could do it.

• 22:27Patrick Bet-David?

  Richard, your thoughts on this?

• 22:28Speaker 03

  I'm I'm actually quite positive. We do know that in recent, well, actually decades, there's been this tendency to for companies, you know, to merge and companies get bigger and staffing in many big companies has become somewhat bloated. I mean, there was David Graeber wrote this book Bullshit Jobs and apologize apologize for the language as the book title. And, you know, the argument is that actually a lot of these jobs are sort of redundant and that has become part of the sort of European American, you know, industrialized country

• 23:12Speaker 03

  business modus operandi. And I think these jobs are clearly now endangered. But at the same time, AI gives a lot of people new opportunities. And the most important area, which I think is very important for economic growth, is not going to suffer. What is that? And I think that's right up your alley and and all the things you're doing, Pat. Entrepreneurs, you know, owners of small firms, small firms, micro businesses. Entrepreneurs have now more opportunities.

• 23:54Speaker 03

  And essentially, what, what, you know, I'm, I would, you know, as a professor also at uni, what I'm telling the young generation is you, you've got to, you know, if you so far, you haven't thought about being an entrepreneur, you should think about it now. And it's an exciting thing. And I try to, you know, give some examples. And essentially, think of ways to set up a new business, offer new goods and services. And there's just so many areas because of the changes, and there are going to be big changes. It's really a fantastic opportunity for small firms. Now, one important bottleneck exists, and that is small firms, and that's very well known.

• 24:39Speaker 03

  I mean, they are the biggest employer, and that's why I'm not really worried that much about the overall economy. And I think if things go well and done well, and the policies, the right policies adopted, then we can actually see literally higher economic growth as a result of this, and also more job creation. Because it's not the big firms that are the big employer. 60% of jobs are with these small and medium sized enterprises. And in many ways, they're less effective because they're usually lean. And they actually, they'd like to hire more people, but they can't because, so what is the restriction here? What is the, the limiting factor that has been limiting growth of small firms? Because they're the ones that deliver productivity and, you know, job creation.

• 25:22Speaker 03

  And therefore, really the most important players in the economy. Just because they're small, we tend to ignore them. It's not famous big names, right? It's totally unknown tiny local players. But they could be exporters globally, as we see in Germany, for example. Many of the family owned small firms are global exporters. Well, the limiting factor is Finance. Most small firms are in the position where they already have a lot of good ideas and great ideas to expand, but you know, the money is the is the limiting factor. And I mean, there's this, there's a lot of research being done on this. Small firms are mostly held back by lack of funding from their main source of external funding.

• 26:06Speaker 03

  Of course, there's internal funding, and that's the single most important source for everyone is their retained earnings and also family and friends. But for external funding, small firms, and we're talking about these micro-businesses, very small firms, they're not really able to access, you know, capital markets.

• 26:22Patrick Bet-David?

  The way the bigger guys do.

• 26:24Speaker 03

  Even venture capital, I mean, it is all much bigger. So they get money, external money, from banks. And there is one principle, and we did a study with my collaborator on the US over 20 years in total, because there used to be, you know, more banks. In total, it's it's more than 10,000 banks that we followed for 20 years. Of course, during that time, many also merged. And we classified them into different size categories. And what we found is a very, very strong message. The the bigger a bank is, the less it's interested in.

• 27:00Patrick Bet-David?

  Small businesses.

• 27:01Speaker 03

  In lending to small firms. And of course, that's, you know, makes perfect sense. In many ways, you can't blame the banks. And so the the banks that lend most to small firms are the small banks. And it's really the smallest category is the biggest lender to small firms. The second smallest category of banks is the second biggest lender. And so it goes on until you come to the biggest banks and they're the smallest, you know, they have the lowest propensity to lend to small firms. And now what we also found over time, over these 20 years, is that, because quite naturally, banks also grow. And as they grow and move into a new size category, they also lend less to small firms. That alone.

• 27:41Speaker 03

  That alone, nothing else, you know, considering is a reason why we should always create new banks and the government should make it easy, the regulators should make it easy to always have new startup banks, small banks, because, you know, banks merge and get bigger and grow and then the lowest category, smallest category of small firms already not interesting for them. And we've had this problem in the past 15 years in the U S and in Europe very strongly that there's been a wave of mergers. The number of banks has declined by thousands, by thousands.

• 28:19Patrick Bet-David?

  And it's interesting what you said, though. Here's the part on the correlation, because when you said 60% of the jobs are small business owners, you're the one that shared with me and taught me the, you know, we had 14,000, we talked about it last couple of years. And so you got me thinking with this, but do you know what else has been declining, which is a concern, is the same way bigger banks are picking up the smaller banks or the banks that are screwing up and going out of business, so Chase keeps getting bigger?

• 28:43Speaker 03

  Yeah.

• 28:44Patrick Bet-David?

  You know, you said 60% of jobs are created by small business owners, right? We've always thought about this number.

• 28:49Speaker 03

  Employment, this is the, so 60% of total employment is with small and medium sized enterprises.

• 28:54Patrick Bet-David?

  Do you know what that number is today? That used to be the case in the 70s and the 80s.

• 28:58Speaker 03

  And, yeah, is it going down also?

• 28:59Patrick Bet-David?

  It's at 45% today.

• 29:01Speaker 03

  Yeah, yeah.

• 29:02Patrick Bet-David?

  So the small business.

• 29:03Speaker 03

  Which is unhealthy.

• 29:04Patrick Bet-David?

  It's unhealthy, it's not good. There is an opportunity for the younger entrepreneurs to do something with that, but this kind of leads me into the next thing, okay? And again, as we're having this conversation, Tom, I'm going to come to you with this here. Facebook layoffs. I don't know what page that story is on, but this is a very, very interesting story. Rob, if you have what page the story is. So Facebook is laying off a bunch of people today, but guess what they announced to their employees? If you just tell me the page, I'll go to it.

• 29:30Tom Ellsworth?

  The Meta layoffs are addendum page seven.

• 29:34Patrick Bet-David?

  I see it, perfect. So Facebook is laying off 8,000 employees today amid AI transformation, but guess what they're telling their employees? Don't come to work today. What do you mean? No, no, while we're doing, just work from home today, don't come to work today. Why don't I need to come to work today? Well, here's why. For the last month, employees at Meta have been on the edge. April, they were told that 8,000 of them were 10% of the workforce will be laid off. On May 20th, May 20th this year, as Meta made itself, uh, remade itself for the art artificial intelligence age, on Monday, they learned another 7,000 would be reassigned to new AI initiatives. The act started to fall in Singapore, where at 4 a.m. local time Wednesday, emails went out to workers who were being laid off. Employees in Britain, U.S. and elsewhere will be notified Wednesday morning in their

• 30:19Patrick Bet-David?

  respective time zone. Meta's offices were set to be mostly empty on Wednesday after Janelle Gayle, the company's head of human resources, told employees this week that they should work from home on the office walls. Some workers had hung up flyers sharing a petition to stop Meta's new program to track their data for AI training. Eight employees said some workers scavenged the office for free snacks and laptop chargers on Monday in case they no longer had jobs by the end of the week, said the employees who declined to be identified for fear of retaliation. The turmoil of Meta, which owns Facebook and Instagram, WhatsApp, offers an up close of layoffs in the AI age last week.

• 31:00Patrick Bet-David?

  The networking giant Cisco said it would eliminate 4,000 jobs that has shifted more resources to AI. Microsoft blocked Coinbase recently announced layoffs or buyouts because of the powerful technology. So, Tom, we're seeing this going into companies like Meta, massive company, multi-trillionaire company. How important of a story is this?

• 31:19Tom Ellsworth?

  I think it's very important. We covered this about a month, month and a half ago. I remember one of the things that I had done research and found out was that there was a lot of people, the first layoff that they were announcing, they announced in January 2026, and in that January 2026 announcement, what was hidden, the fact that there was 1,500, then another 700, then another 1,000, that were all supposedly related to Reality Labs. Now, what is Reality Labs? That is the name that Facebook gave to the group that was building Metaverse. So, in other words, they have been delaying and the people that were there put the comments on, by the way, Reddit suddenly becomes the conscious of Facebook because everything can go out there and people have

• 31:59Tom Ellsworth?

  burner accounts on on Reddit and whatnot. You found out that Reality Labs that was formerly, what would they call that Oculus? They were going to put on the goggles and all that. So that was bloat. So what I'm getting to is there was a lot of bloat that was delayed layoffs that Facebook did early in the year that Wall Street loves. Wall Street loves it when you take a one-time charge and it's not long term because now you've reduced operating expenses. As long as you're showing growth, now your PE is up. Life is good. Good things are happening. But what this is signaling is a bigger contraction. And the big statement inside of the Facebook

• 32:38Tom Ellsworth?

  announcement that I saw, 7,000 people internally being reassigned to AI initiatives from whatever they were working on. And I was trying to find on Reddit and other places, how much of that was Reality Labs? And the answer is, a good amount of it is, but I didn't find any like hard figures. So if you were working on various things, smart engineers are being put on the product on the product that they think needs more smart engineers, which is AI, which I thought was very, very interesting how this happened. And to give you the scope of AI and maybe get right back, kind of reflect on banking, we just talked about, Pat, you want some very interesting

• 33:16Tom Ellsworth?

  investment stories? So this is related to it. In Q1 2026, this was the largest global VC investment period of all time. $331 billion globally venture funded investment. Now, did that go into small companies that are there, people with a hoodie trying to get someone in there? Nope. 50% of it went into four companies, OpenAI, Anthropic, XAI, and Waymo.

• 33:47Patrick Bet-David?

  50% of four companies?

• 33:48Tom Ellsworth?

  50% of it.

• 33:49Patrick Bet-David?

  Wow.

• 33:49Tom Ellsworth?

  And then 80% of the total went into AI and 65% of the 80% or 50% of the total was only OpenAI, Anthropic, XAI, and Waymo. But wait a minute, who's got all that money? That's a ton of money. You know, this used to be that when you reached this way, you would hear about Fidelity, T. Rowe Price, and BlackRock, all who have venture arms, and they would jump into things like WeWork. They would jump into things like late-stage Uber before Uber went public. That's what the money coming from. You know where this money came from? Check this out. It came from The following, SoftBank put 30 billion in 2026 into OpenAI, that's Japan. Middle East and Gulf states, check this out.

• 34:34Tom Ellsworth?

  MGX, that's the UAE's version of PIF, which is Saudi's Public Investment Fund. Right, so MGX was UAE, took the lead. They're the lead in OpenAI's 122 billion round. And they also invested in, remember, put two chips on two companies. Anthropic's 30 billion Series G that just happened. And then Humane, PIF, put 3 billion into XAI. And then, not to be outdone, you know who led Anthropic Series G? Singapore, GIC and Temasek. These are sovereign funds that are now putting the money in because the dollars are so big. You don't go down, you don't go to Sequoia. You don't go to Benchmark.

• 35:19Tom Ellsworth?

  You don't go to the usual suspects there, Kleiner Perkins. You are now having to go right past the big US banks that used to do these things. And I named them. You know, people like T. Rowe Price, Fidelity, all have big CVC, Corporate Venture Capital Groups. But look at the amount of this money coming from there into AI internationally. And then you look at 7,000 people at Facebook get shifted over to AI. They get rid of the bloat that they had with the old Metaverse. And boom, then 10,000 people are out there looking for jobs. It's all happening.

• 35:59Tom Ellsworth?

  And the question is, you know, Karpathy, who is joining Anthropic now on pre-training? Pre-training is important, that's step one. That's where you somehow assimilate huge, massive stacks of data and let the AI go digest it like food. And that's what he's going to work on is pre-training. And so the question is, do you have Anthropic now having to go scale to meet it? And something you said about the alignment, are they really aligned on safety? Or did they just go hire the scaling guy in advance of the IPO? And now they got to go jumping into pre-training because they've joined the scaling race?

• 36:38Patrick Bet-David?

  Luke, thoughts?

• 36:40Patrick Bet-David?

  It's a lot there with Facebook, with the money going into 330 billion, 50% going to four companies.

• 36:45Speaker 04

  It's fascinating on number levels. Number one, who has to play now, right? So who has to play? It's these big sovereign wealth funds. Then you get into, okay, how, you know, we're in this race with China. Are we going to be able to firewall technology? Historically, it's a little trickier if it's not in our borders. Let's see.

• 37:06Tom Ellsworth?

  Is this foreign-owned infrastructure or foreign investment?

• 37:08Speaker 04

  We don't know. Number two, you know, it ties into the war. What happens when, you know, the biggest hyperscaler infrastructure was in the UAE? Iran's drones were targeted at very specific parts of that infrastructure. Where is it at? From a financing standpoint, the longer this war drags on, the more, you know, the Saudis, Saudis ran a, they're running a nearly, I believe, 20% budget deficit. They've spent three quarters of their projected deficit for the year in the first quarter. So they are going to blow, so they're going

• 37:48Speaker 04

  to need to go out and borrow money just to finance this. So, or are they going to sell other assets to make sure they make, that has market implications. That ultimately puts interest rates up, which we're seeing go across the world. I think it's, it also points to, you know, to Richard's point. It's, to the extent there is a disruption at a meta. I mean, this sounds very familiar to, I think, any American engineer listening to this, where over the last 20 years, they trained their replacement over in a low-cost country and then were let go. It's to the extent that Meta's almost doing this with an AI, where people are training the model internally and then being let go. And then,

• 38:30Speaker 04

  you know, like I said with Richard's point, it ultimately is an opportunity for entrepreneurship if.

• 38:37Speaker 04

  If you can use the AI well as an entrepreneur, you can compete in the same way that iTunes and distributed music, if you will, changed and broke the monopoly of the record companies. Now, it comes down to be successful in the music business. There's a lot more musicians, there's a lot more choice. But you are not beholden to the record companies, to getting radio airtime, to the promotional companies. If you can play and you can work, you've got a shot. And so, there's a whole slew of, from the very good of, hey, if you can play, you've got a shot. So if you're a great thinker and you use AI,

• 39:18Speaker 04

  well, you can take on any company, no matter their market cap, from anywhere in the world. There's probably some poor kid sitting in India today that's an absolute genius and working in a garage, living at home, and is going to come up with the next big thing in the next three years. And he's not going to have graduated from MIT or Stanford or any of these places. AI can do that. And the flip side of it is this disruption side at the other end of the spectrum of companies have data. Corporate America, maybe the biggest underappreciated asset in America is all these companies' data. I'm told that, for example, Procter & Gamble holds the value of their data at basically zero on their balance sheet.

• 40:03Speaker 04

  There's no explicit, is what I've been told. And if that's the case, think about what's the actual monetary value of Procter & Gamble's data. It's immeasurable. And so, if they can use that data, use AI, wow. A, it's great for corporate America. And B, the better they can use it, the more efficient they can be, great for corporate America. But more efficient means doing more with less. And usually, doing more with less in the corporate world is doing more earnings with less people.

• 40:34Patrick Bet-David?

  Richard.

• 40:35Speaker 03

  Yeah, so the threat is clearly... And to the the the big companies are threatened by AI and the established players, exactly as Luke explained. And and that's also where we have the more bloated, you know, employment practices because, you know, inside companies, it's politics, it's hierarchies, people building little empires, they're hiring their team and, you know, there's competition inside companies between groups and players and you get all these games and, you know, fun and games. But small firms cannot afford any of that. The small firms, micro businesses, they're extremely lean structures and it boils down

• 41:15Speaker 03

  to entrepreneurs, their ideas, their creativity and their entrepreneurial energy, flexibility, speed and quick decisions, intuition, understanding and having a hunch that, oh, this this could now become a thing and actually going for it. Now, this is something, this entrepreneurial spirit, and I think at Vault, you know, there will be a lot of, you know, input and and discussions of of things like that and that are relevant there. That's something AI has not figured out yet and that they haven't been able to train AI to do. So entrepreneurs are safe. In fact, it's the other way around.

• 41:55Speaker 03

  Entrepreneurs now, you know, get more opportunities and they're getting a big boost if they use this and I think they will because, you know, that's the whole point. In small firms, people are more flexible and they are able to think outside the box. But the funding thing is a limit. So I think, actually, we should argue. And interestingly, you know, we have at the end of the week, a new Fed Chair sworn in. And so Kevin Walsh has actually said that he believes productivity is going to go up thanks to AI. And that has implications for monetary policy. And he's gonna run monetary policy with that in mind.

• 42:38Speaker 03

  Well, and I'm, you know, I mean, this is a message to him, really, and to his people. There's some good people at the Fed. For example, Mickey Baumann, who's the vice chair. She actually, you know, is a great supporter of small banks, local banks, community banks. That's her thing. Well, so what are the implications for monetary policy, you know, of AI? It is this point that we now have an additional reason, a bigger reason than ever before, to have a new drive where we say, hey, this is a bit like in the first half or middle part of the 19th century where America was an emerging market economy and was growing really fast, you know, double-digit growth.

• 43:23Speaker 03

  That was the United States because it was all pioneering new things and also new technology and entrepreneurship. And at that time, it was so much easier to establish banks to fund this because we need the funding. And nobody's figured out anything better and more efficient than this decentralized mechanism for decentralized local decision-making, which is having many local banks. And, you know, we discussed China when the Chinese, Deng Xiaoping had this explained in Japan to him, and he got it very quickly. And he moved from central banking, central planning, one bank, Soviet system, to the decentralized model that the Asian high-growth economies actually adopted from Germany and

• 44:06Speaker 03

  originally Prussia, which used to be the, I think that was the first high-growth economy even earlier. And they had many, many small local banks because it's important. It is actually a principle that the Prussian army introduced. You know, the officer in the field has to have decision-making power. That was the idea of the Prussian king, and he put it in the laws. It was even in the Prussian constitution and the laws concerning the army. Whereas Britain and then later the United States in the Second World War, they used the old, which is actually the central planning idea, that the officer gets instructions, not just what to do, but also how to do it. And that's the most frustrating thing, because in the fog of war, things change very quickly.

• 44:49Speaker 03

  And, but you have orders to do this, which doesn't make any sense, right? And this is how you become very ineffective. And, you know, there's studies, military studies on the First World War, done by all sorts of international researchers, looking at the German army and the British army. And the German army was much more effective. And the same in the Second World War, American army and German army. And again, the German army was much more effective with, I mean, usually outnumbered, you know, ten to one or even more, you know, on the eastern front, you know, fifty or a hundred to one, and extremely effective, you know. Doesn't mean you have to win the war, because of course you can be so outnumbered. But that's established. And why was that?

• 45:30Speaker 03

  Because of this old Prussian principle, that the officer in the field had decision-making power. Now, for this to work, and the Prussians understood this, and later Germany understood this very well, you have to train people. So, education is very important, because they have to be able to make these decisions. But you want to decentralize this. And, and this, in the economy, this is reflected by a structure of, you know, many, many small firms. And they get their money from banks, and this is what works, is very well established. And so, having, you know, like China, moving to five thousand banks with, you know, all these local branches, and then essentially millions of local loan officers,

• 46:15Speaker 03

  receiving hundreds of millions of applications from small firms. And they are trained to do this. They select the most effective, most promising applications. And when a bank lends, this is the other important thing, well, this is directly linked to monetary policy. When a bank gives a loan, it's actually money creation. People tend to forget this, because, you know, the textbooks and, and the mainstream media still talks about banks as intermediaries. They, they gather deposits and they lend this money, which is not true, actually.

• 46:48Speaker 03

  And what I've empirically shown with my empirical tests, you know, if you Google, can banks individually create money out of nothing, you know, get the paper, it's published in a highly ranked finance journal, or the other one, Lost Century in Economics, you find the proof that banks, when a bank gives a loan, it's allowed by our system, this is the system, it's been around for centuries, to create new money. So the loan money that a company gets is actually newly created money that's added to the money supply, and that has macroeconomic consequences. So if banks mostly lend for productive business investment to entrepreneurs, small firms, that's when you get maximum growth.

• 47:28Patrick Bet-David?

  The question is with the regulation, they need to deregulate to open it up.

• 47:31Speaker 03

  Exactly.

• 47:31Patrick Bet-David?

  Right now, it's still too hard.

• 47:32Speaker 03

  That's the restriction.

• 47:33Patrick Bet-David?

  Well, let's see if they're gonna do that or not, because there's, the market needs it. Every time, like even, we talked about the last time with the quantitative easing, when money went in, money went to the rich, money went to the big companies, money went to buybacks, money went to bailout, and it didn't go to the people that needed it.

• 47:47Speaker 03

  Exactly.

• 47:47Patrick Bet-David?

  And I do, the president needs to see this, I think they're aware of this, and hopefully something changes about it, but I do want to go to the next story. I do want to go to the next story, because we have, I have 16 more stories to go at this pace, we're only hitting three stories. So, next one I want to go to is with the primaries. Yesterday, the biggest primary race ever, 32 to 34 million dollars, put into the Thomas Massie race against Gal Raines, which he was projected to, I mean, Massie had a massive lead, and then all of a sudden it kept getting smaller and smaller and smaller, more money was being put into it, and next thing you know, news comes out, it's even, thank you, then it went to, well, he's got a lead, then it went to, well, no, he lost, and then, you

• 48:29Patrick Bet-David?

  know, so the Trump, the biggest tweet yesterday that the president put, because everybody said, well, because the economy, because of affordability, because of Iran, because of the war, because of interest rates, because of all this stuff, there is no way a Trump endorsement has the same weight anymore. And guess what he tweeted? This is it. 6:25 AM, 37-0. Anybody he endorsed, won. Pennsylvania, 10-0. Alabama, 6-0. Kentucky, 6-0. Oregon, 1-0. Idaho, 5-0. Georgia, 9-0. And there's a lot of people that are not happy about this. There's a lot of people that are hoping his endorsement no longer carries weight, but it does. So Massey, yesterday... He lost to the Navy SEAL, Gal rain.

• 49:13Patrick Bet-David?

  And here's what Massey had to say in his speech last night. I want to get your thoughts on why do you think this happened? Go ahead, Rob. I would have come out sooner, but I had to call my opponent and concede. And it took a while to find Ed Galrain in Tel Aviv.

• 49:27Speaker 05

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• 49:57Speaker 06

  Now, more than ever, we need someone on our side. But Rob Whitman? Whitman's votes drove up costs, cut Medicaid and risked 350,000 Virginians healthcare to pay for tax breaks for himself and his donors. He's not on our side. Shannon Taylor will fight corruption, cut taxes and bring down costs. This November, vote for Shannon Taylor. She's for us. Paid for by HMP, the House Majority PAC.com. Not authorized by any candidate or candidate's committee.

• 50:35Patrick Bet-David?

  I did get to call through though. I have called and conceded the race. We've been honorable the whole time and we're going to stay that way. Okay. And he kept goodness. Tom, why do you think Massie lost last night?

• 50:47Tom Ellsworth?

  Massie lost for one reason.

• 50:51Tom Ellsworth?

  The power of influence in the political races out there on the Republican side still rests with Donald Trump. You've got your issues, you've got places out there, but Trump went out and said, that's not my guy anymore. That's my guy. And you have these folks up there that are trying to play the money game, do the spending game. And here he had this incredible spend, but the guy who still is carrying the influence with the American voter on the Republican side is Donald J. Trump. And he went sideways on Trump and Trump got behind the opponent. And by the way, you know, you could sit there and ask yourself. Not just us, but let's go to a Starbucks in the middle of the district and ask people,

• 51:34Tom Ellsworth?

  "What do you really know about Gellerin?" And people were like, "Well, there's a lot of money floating around," but they didn't know. He's a farmer, was a Navy SEAL. They know, and then you say, "Okay, that's good. At least you know his name. You know he's a farmer, Navy SEAL." But nobody really knew him. But when Trump comes out and says, "I'm not with this guy. I'm tired of it. I'm over here," guess what? That just showed everybody where the weight was. I think it's that simple.

• 51:59Patrick Bet-David?

  By the way, what is this Trump talking about, Massie? Go for it, Rob.

• 52:02Speaker 03

  He won the Massie thing. He was a bad guy. He deserves to lose. Thank you very much, everybody.

• 52:11Patrick Bet-David?

  You can pause it right there. Okay, look, why do you think?

• 52:21Speaker 04

  I, you know, what I will put the context with this as I don't, A, it's not my ballot, B, there's a lot of money in our elections. But I think, I think it has a lot to do with money. I think it has a lot to do with money. It's America.

• 52:40Patrick Bet-David?

  Do you think it's money, or do you think it's endorsement? Because Jeb Bush had $140 million, and Trump beat him on day one. So we can say money. Trump didn't have anything to do on day one with money. Nobody in 2015 when he ran. And then there was another guy. If you remember Scott Walker, do you remember the name Scott Walker? He disappeared. He was supposed to be our president. I don't know if you remember that or not. Scott Walker was like the guy, you know. Hillary Clinton had all the money. You know, Kamala Harris had all the money. So is it really all the money? Because money doesn't seem to help. Hillary didn't help. Kamala didn't help. Scott Walker didn't help Jeb Bush. But how is it that in this case, you think it's just money?

• 53:17Speaker 04

  Well, I would, I mean, I would say it's, I mean, clearly, his, I'm not saying his, Trump's endorsement clearly still means a lot. Clearly, you can't argue that with the races. You know, you look at, what was it? He won by, it was, I think, a total of 90,000 votes, was it? He won by 7,000 votes? Something like that? You know, thirty-two million bucks to swing seven thousand votes, it's a lot. I mean, the fact is, it's the single biggest spend in a congressional election. That is a lot of money.

• 53:47Patrick Bet-David?

  Indeed.

• 53:48Speaker 04

  And I think, you know, if centralization works everywhere else, if spending a lot of money works everywhere else, I don't think you can discount it.

• 53:56Patrick Bet-David?

  But the reality of it is, why doesn't he get more money? He can get more money.

• 53:59Speaker 04

  Who's that?

• 54:00Patrick Bet-David?

  Massie. He's got a lot of billionaire friends that are on the set. I even think he had a guy named Jeff Yass, who is a sixty-five billion dollar net worth guy, who is part of a lot of pro-Israel programs. He gave Massie a million dollars. He got some money, it's not like he couldn't get more money. Why doesn't he get more money?

• 54:22Speaker 04

  Yeah, good question. I don't know.

• 54:24Speaker 03

  I think it has to do with the age composition of the voters.

• 54:30Patrick Bet-David?

  That's actually a very good point. If you want to pull that up, Rob, because the audience needs to see this. The older boomers voted for him, and the only age category that Galoreen won was the older category. I'll pull this up while you're going.

• 54:42Speaker 03

  Precisely. It is only the older voters. Now, who are they, and why does it make a difference? I mean, obviously, you could do further analysis on their political sort of leanings and so on, but I think the single most important correlating factor is their attention to particular media, namely the mainstream media. So, the oldest age group is the one that is most influenced by mainstream media, and that, I think, was a big factor. And I think it was also, you know, about foreign policy, why all the younger groups were unhappy with Trump's endorsement, and were actually not going for Trump's endorsed

• 55:22Speaker 03

  candidate, and were going for Massie, because of his stance of not taking money from, you know, foreign influence groups and so on. And they liked it, but that's basically spread in social media, and in the more recent, the new media. So I think that's the link. It's the media and the link to the age group. And as Luca's saying, you know, it's actually the gap wasn't that huge. So over time, what is going to happen is clear. And, you know, so next time around, it could, just by the age dynamics, could look very different as the younger groups, of course, that are today younger,

• 56:06Speaker 03

  move forward and become more dominant.

• 56:10Patrick Bet-David?

  Yeah, but also the other part is, when I was younger, I was probably also socialist. I was probably also, rich people are bad.

• 56:18Speaker 03

  You're a socialist, that is impossible.

• 56:20Patrick Bet-David?

  My mother, probably not, I was never a socialist, but my mother was a communist. So for me, we probably didn't like rich people. And so, you know the saying, you know, when you're younger and you don't vote Democrat, you know, you don't have a heart. When you're older and you vote Democrat, you don't have a brain, right? You know, kind of, you've heard that saying before. So the question becomes, when you look at this, sixty-five and up, he won. The forty-five to sixty-four, Massie won. And then the thirty to thirty-four, Massie won. Eighteen to twenty-nine, Massie won, thank you. Massie won, when you look at something like this, but it goes to the following, because Massie was a fan favorite by a lot of people. And then to me, I think something happened. And here's what I think happened with Massie.

• 57:04Patrick Bet-David?

  Massie was a fan favorite. Massie was a guy that maybe, you know, three, four, five years ago, you're like, this guy's special. Covid, the stuff that he was doing, the positions that he was taking, you're like, okay, we like this guy. And then all of a sudden, something got in his ear, somebody. I have a speculation on who I think it is, but somebody got in his ear that said, I think you're bigger than Trump. I think you can go against Trump. I think you can beat Trump. So you know what, you know, the big beautiful bill, voting against it. Migration, voting against it. Then all of a sudden, he's voting against Trump and he's siding with Democrats. I mean, do you realize who were the people that were most devastated last night? A lot of Democrats. Real kind of devastated. A lot of liberals coming out saying, I can't believe this guy lost.

• 57:46Patrick Bet-David?

  And this is where it kind of takes me, and I want to go a little bit deeper into the story with these guys, and I'll ask you guys about it. Tom, I'll come to you, and then Richard, I'll come to you afterwards, is... If you think you're bigger than the establishment, then prove it. Because guess what? Guess what Trump did in 2015? Trump went against the establishment. Trump called out everybody in the establishment. And the establishment was who? The Bushes. He beat them, single-handedly. Karl Rove, establishment, he beat them, single-handedly. Fox News, they were not for Trump, they beat them, single-handedly. Mainstream media, he wasn't against them, he beat the mainstream media, single-handedly. Okay?

• 58:30Patrick Bet-David?

  Every other story criticizing him about the Republican, they wanted Jeb Bush, they wanted Ted Cruz, they wanted all these establishment guys. He beat them. Based on what? Based on the policies that he went with, which is what? Border, migration, crime, NATO, China, that's what he went on, okay? The market said, listen, I like what this guy has to say, let's give him a shot. He won. So Massie goes up there, if I were to ask you right now, what was Massie's biggest top three points? What did Massie run on? If you were Tom, what did Massie run on? What are the top three things Massie run on? Did you follow it closely?

• 59:06Speaker 03

  I can't say closely, but I think a key point is what you said about, you know, when he voted against these bills.

• 59:14Patrick Bet-David?

  But stay on this for a second, I want you to stay on this. What did Massie run on? What were Massie, because it's very, very important.

• 59:21Speaker 03

  Not taking foreign money, I think that certainly came up.

• 59:23Patrick Bet-David?

  That's one, what else?

• 59:24Speaker 04

  Anti-war, right?

• 59:25Patrick Bet-David?

  Okay, so what else? Epstein is one, we have to put Epstein.

• 59:29Speaker 03

  Epstein files, I mean, he did that.

• 59:31Patrick Bet-David?

  He voted against a big, beautiful bill, right? Multiple times he voted against the president on the ideas that he had. But a bigger one was mainly Israel. There's an article that came out, Rob, that said Israel divided the Republican Party. I don't know if you've seen that thing that Israel divided, you know what I think America is saying? I think America is kind of saying, look, guys. Of course, everybody, like Trump said something the other day, everybody spies on everybody. When he's meeting with Xi, we spy on China, they spy on us. Everybody is using their intel to steal from everybody. Everybody at this level is doing. You don't think Israel is using Epstein to get intel on American politicians and world politicians? You're naive if you don't believe that. I fully believe that. I had three hour conversation with his brother.

• 1:00:15Patrick Bet-David?

  Fully believe they were a part of that. But you don't think we do that? You don't think others do that? So I think America's finally come up and they said, listen, man. If everything was about Israel and if that's an issue, that America is fully on, Trump would have lost yesterday 0 to 39. If America was like, well, Thomas Massie and all these guys said everything they're blaming Israel, Israel, Israel, money coming from the outside, AIPAC, Adelson, which Adelson gave a lot of money. We know who Maryam Adelson, well, these are the people that are running the president. Guess what America said? Yeah, you guys are famous on Twitter. You guys are big podcasters. This is not how America feels. 39 and 0, because if you truly have a message that you want to disrupt the establishment,

• 1:01:00Patrick Bet-David?

  the market would have sided with you. And they didn't last night. It was a devastating loss last night. It was a massive victory for the president last night. And I know a lot of people are out there saying, well, you know this, you know that, you know this. Because sometimes like, I remember DeSantis. I'll compare DeSantis to Massie in a very weird way. Okay? I live in Florida, because I love DeSantis. I think he's a great governor. Okay, phenomenal governor. And you're always welcome to come here from Cleveland. You'll love us here. Hey, he's a phenomenal governor, right? Yep. Okay. But I was against him when he ran against the president and he never called him. I was against him. I'm like, hey, the guy helped you and I was against it.

• 1:01:40Patrick Bet-David?

  So somebody in Massie's ear and DeSantis's ear said, hey, you can beat him. You can beat him. He's not right. DeSantis believed it. Massie believed it. They both lost. So now what do you do moving forward? Now, DeSantis has recovered from it. I don't know what Massie is going to do because Massie is now saying he's going to be running in 2028. But the market is telling you what direction they're going. The market is telling you what issues matter to us going into 2728. And they're watching. If you can't win the Congress, how the hell you going to win presidency in 2028? So very different. Yesterday was a very, very big night. Of course, this will lead to midterms and different things that's coming on. But we'll see. I know a lot of people are not happy. I know a lot of people are happy. But it was a weird night last night.

• 1:02:25Speaker 03

  I think one issue is what you mentioned. This key example, the big, beautiful bill. So we have this huge piece of legislation with so many different issues put together. And that was used quite cleverly, if I may say, by the advertising against Massie, picking something that a lot of Americans would agree on in the big, beautiful bill and saying, oh, Massie voted against that. Well, actually, he found some bad points in the big, beautiful bill that a lot of Americans also think is bad. And that's why he thought we can't vote for it.

• 1:03:05Speaker 03

  And you see, so the issue is you can actually mess things up and confuse people and confuse voters and really distort politics if you have this. I think we need a reform. I mean, one is looking at the money side of US elections. That's been a longstanding issue in general. But the second one is, and that's perhaps simpler to push through, to have a pass a law that says we need single issue bills.

• 1:03:33Speaker 04

  Well, I would say too, as much as the market and the electoral side clearly delivered a message. In the financial markets yesterday, it's interesting. The bond market delivered a message. US 10-year Treasury yields are up 70 basis points since this war started. They're breaking out to very dangerous levels. Japanese bond market, breaking. UK bond market, breaking. And so there's, at the same very day, 30-year Treasury yesterday, highest in 19 years.

• 1:03:58Speaker 04

  And so if we, clearly, the electoral, it's almost be careful what you wish for because you just might get it, good and hard. The American public may get exactly, you know, 37-0 is a pro-war, pro-spending agenda?

• 1:04:12Patrick Bet-David?

  I don't think so. I don't think so. I don't think it's a pro-war, pro-spending agenda, and I'll tell you why I don't think that is. You see, that's the thing the market says, because we all have biases, right? I have it, you have it, you have it, we all have it. It's okay, that's okay, we'll debate it and we'll hash it out, and then the audience gets to decide at the end and say, you know what, Luke, you're full of shit. Pat, you don't know what you're talking about. Whatever Trump says, you're gonna side with him. You know what, Richard, you don't know what you... Okay, that's fair. This is why, when you put the camera on, we get that. But last night, while this is going on, guess what Senate voted for? We can say pro-war all we want, Trump didn't win the Senate last night, because there was a Senate war resolution last night. Let me see what page this is on. If you tell me, Rob, what page that is on.

• 1:04:54Tom Ellsworth?

  Seven times they voted no, last night, number eight, they voted yes.

• 1:04:57Patrick Bet-David?

  This is massive.

• 1:04:58Tom Ellsworth?

  Put the president in handcuffs.

• 1:05:00Patrick Bet-David?

  This is massive, because yesterday, the people who got voted to become senators, voted to not allow the president to do what he wants to do with the war. So this, I don't, I don't think America is a pro-war, I don't think that's the argument that was made. So yesterday, US Senate, Senate advances Iran war power resolution, historic first. The Senate voted 50 to 47 on Tuesday to advance war power resolution, requiring Trump to end military operation in Iran and obtain congressional authorization. This was the eighth attempt since the war began, February 28, and the first to succeed, and a decisive flip. Bill Cassidy, Republican Louisiana, who recently lost, who had voted no on all prior times,

• 1:05:44Patrick Bet-David?

  switched after Louisiana primary loss, removed political leverage over him. The war has now run 81 days, 21 days past the 60-day war powers act of legal deadline. So Tom, why is this so important? What are they saying?

• 1:05:57Tom Ellsworth?

  Because, you know, it's very interesting here. There are sore loser laws that people are gonna see subheads on today. And what the sore loser laws are, you remember when Lieberman ran as an independent in Connecticut in 2006?

• 1:06:11Patrick Bet-David?

  Yes.

• 1:06:12Tom Ellsworth?

  The Democrats blew him up in the primary, they were pissed at him, and then he ran as independent, and the people of Connecticut said, no, we still want you. Okay? Well, guess what? Massie is in a state that has what's called sore loser laws. You may not run in a special election or the general election and flip party and try to play games. Make sense, Pat? Well, guess what you have of Bill Cassidy? That is a BS sore loser vote. Seven times you voted, and remember, war powers is really misnamed. It's war limit powers resolution because you're limiting the powers of the president. And so if you vote in favor of war powers, you're voting in favor of limiting the power of the president. So Cassidy, seven times he votes yes.

• 1:06:55Tom Ellsworth?

  Give the man the power to complete the action that we've started. Don't hold him up. Give him the power to do that. And you frickin' lose your primary and it's like a sore loser. You come out, well, I lost. You lose. I'm flipping over, so I'm gonna vote in favor of war powers, which is war no power to Trump past a certain window of activity, 60 days or whatever it is. And that's why it's big. You know what it shows, Pat? It shows that Cassidy does not have a defined position in that vote. If you have a defined position on everything from oil exploration in the Gulf to the plight of a small fish in a stream or there's gonna be a hydro plant, you don't see people moving.

• 1:07:40Tom Ellsworth?

  You see people take a position and generally hold up. Budgets, you see people move votes. Why? Different things could be in the budget. We make a different agreement. We did different banking controls. Okay, I'll switch my vote. But on a decided topic like this, you rarely see people switch. And this guy lost his primary and flipped his vote with a big F you to the president.

• 1:08:01Patrick Bet-David?

  And by the way, guess who sat out yesterday as well? Cornyn. The three Republicans didn't even vote. Cornyn is one of them. Who was Cornyn going up against? Paxton. Who got an endorsement yesterday? Paxton got an endorsement yesterday from who? The president. So there's a lot of moving parts. So for me, like, you know, to say, well, the neo cons are back in power again. And they're the ones in charge. And we're going back to the Republican Party being a war party and all this other stuff. That messaging, you better believe it's going to be there in the 27, 28, when the, when the, what do you call it? Presidential election comes around as well as the midterms. I think that is going to come up. I do think the president's going to take yesterday as a victory.

• 1:08:44Patrick Bet-David?

  But this Iran thing with the Senate, Iran war power resolution? That kind of puts him a little bit in the gridlock.

• 1:08:50Speaker 04

  It's an interesting dichotomy, right? Because, yeah, 37 and 0, and at the same time, taking powers away on the Iran.

• 1:08:54Patrick Bet-David?

  I like that, though. But you know what I like about?

• 1:08:56Speaker 04

  Yeah, that's how it's supposed to work a little bit, right?

• 1:08:57Patrick Bet-David?

  That's why I love America. That's why I love America. You know, it's kind of like a, you know, it gives you the safety protection where it's like, well, listen, it's, you may have won here, but you lost here. You may have lost here, but you win here. So it's okay. Let's, Trump may have lost 2020, but he's flipped three Supreme Court seats. If he doesn't flip those three Supreme Court seat, what happens when he was gone 2020? A lot of things could have changed. So as much as people are worried about what's going on, what I'm watching for is more the sport of politics. Luke is, and I'll come to you. What I'm watching for is what will be the main three to five issues? In 2028, when people run for president? And I'm so curious to see what's going to resonate with who? Richard?

• 1:09:39Speaker 03

  I think it is the issue that Trump, as you mentioned earlier, won on, which is no foreign wars. And where he flipped, it seems. And I think, you know, I'm really with Luke on this. I think, you know, this was at the background, of course, of the, of this primary with Massie and others. And this Senate vote is really, I mean, that's a process. It's not a final result. It's not passed. But even if it was passed, it would give, it would just require to get a Congress vote. But presently, you know, would Congress actually turn down this proposal to make it a proper official war?

• 1:10:22Speaker 03

  You know, a lot of them are receiving funds. Massie was one of the few who was not receiving funding from Israel and APEC. So actually, does that really make such a big difference? But I think the voter is watching this. And I think quite a lot have been disappointed by this Trump flipping on one of his fundamental messages that they loved, tackling the establishment, the warmongers, the military industrial complex, and stopping this use of tax money for these foreign wars that don't really benefit the US. I think this is going to come back.

• 1:11:00Patrick Bet-David?

  Yeah, and again, it's going to be, do you worry more about APEC and Israel and Bibi's really running Trump? Or do you worry more about Iran having a nuclear weapon, controlling the Strait of Hormuz, controlling the cables that go through the Strait of Hormuz? You have to make a decision for yourself. Who's going to be selling the story better? But I do think there's going to be winners and losers. And America is going to say, that was not really an issue that we really cared a lot about. Like I had Wes Moore on the other day, and he's still sticking to the transgender position for Democrats. I think that's going to be a position that's going to hurt them long term. If you're still a Democrat saying, no, transgender is still, we should allow them to have puberty blockers, that's going to hurt you. So we'll see.

• 1:11:42Patrick Bet-David?

  Maybe Thomas Massie wins 2028, and the audience that is saying is right is right. Maybe he lost Kentucky, but he's going to win long term. Maybe there's more people. Or maybe the Republicans view Trump as the president. Everybody else is just a mouthpiece with opinions that they have, and it's going to filter itself out. We'll see what happens there. Next thing I want to get to is the following. Apparently, Trump, when he's having a conversation with Xi, Xi apparently told Trump, and Trump denied it, that Putin regrets the war with, what do you call it, with Ukraine. But when asked about it, this is what the president had to say. Go ahead.

• 1:12:53Speaker 06

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• 1:13:23Speaker 05

  Mr. President, you mentioned that the wall was your gift. It's a gift. It's a gift for me and for...

• 1:13:33Patrick Bet-David?

  Yeah, so now, while that's going on, The Financial Times reported that Xi, during last week's summit with Trump in Beijing, said Putin might end up regretting invading Ukraine, citing unnamed people familiar with the US. Assessment of the discussions, the outlet said that the comments were made during the wide-range talks that touched on the war in Ukraine. Putin and Xi are set to meet in China for their own summit with the Russian leader, eager to tap Beijing's help on a major gas pipeline project. Russia's heavily sanctioned economy is strongly dependent on China. Tom, thoughts on this story?

• 1:14:04Tom Ellsworth?

  Well, The Financial Times is not The Daily Mail. The Financial Times is not The National Enquirer. The Financial Times has a source, and they're talking about this. And by the way, I give it the sniff test. 350,000 casualties allegedly is the estimate that we've seen that Russia has encountered. And remember, whose Nord Stream pipeline was that? Who lost the revenue going into Germany?

• 1:14:34Patrick Bet-David?

  51% Russia.

• 1:14:35Tom Ellsworth?

  Correct. So, guess what? Who's really hurting here? Who's the only guy that's not getting aid from the outside? Ukraine was getting aid from everybody, bringing up, insultingly bringing a flag into our Congress and getting a big check from Nancy Pelosi. So, Ukraine's been getting help from everybody. Who's Russia been getting help from?

• 1:15:06Tom Ellsworth?

  Kind of, sort of?

• 1:15:07Speaker 04

  She.

• 1:15:08Tom Ellsworth?

  She, right?

• 1:15:09Speaker 04

  Oh, yeah.

• 1:15:09Tom Ellsworth?

  But is he backing up the truck? No, I don't think so. And Russia's lost revenue on energy trade. And so I look at that and say, could Putin be saying, you know, I regret this? Probably not. But would he be saying, boy, this has gone longer than I thought, and I'm sure not having fun? I think that very much could have happened. But when the Financial Times comes out with a source like that, Pat, I really lean into that and I go, wow, you know what? That sounds... If I'm over Putin, what do you think he's saying right now? Everybody helped Ukraine, it stalled you, and then you lost key energy trading on embargoes

• 1:15:54Tom Ellsworth?

  on a blown-up pipeline. You know, Putin's not sitting back there saying, yeah, just wait till the 15th round, I'm gonna knock this guy out.

• 1:16:02Speaker 03

  I think it may also have been a slight translation error, you know, by the interpreter. Because we do know that Putin, and he has said this on the record, and it's similar but slightly different, that he's regretful concerning this war. And that's very natural, because the Ukrainian people and the Russian people are very closely related. Many Ukrainians have Russian as their first language. You know, President Zelensky, his mother tongue is Russian, not Ukrainian. And of course, the other thing is, these languages are actually very similar, but that's another point. But, you know, even considering the differences, you know, actually, Zelensky was a Russian speaker originally, and so on.

• 1:16:44Speaker 03

  So it's clear the Russians didn't really want to make war on Ukrainians. I know Russians, I know Ukrainians, and really, most feel we're like brothers, we're the same people, or we're brothers and, you know, sisters. Many Ukrainians have fled to Russia. And of course, there are these clear ethnic Ukrainians as well. So the reason why it started, as we know, is really what happened in 2014, which was the Western-backed, CIA-backed coup, coup d'etat takeover in Kiev. The Maidan false flag, because of course they were doing this as a covert operation,

• 1:17:27Speaker 03

  driving out the elected president, who was friendly with Russia, which is what the majority of people want. I mean, Zelensky, when he ran, he was on the ticket, like somebody else, to have no war with Russia, no foreign wars. And people love that. They don't want, you know, Ukrainians didn't want the war, and Russians didn't want the war. In that sense, of course, everyone thinks this is very regretful. This is also why it's slow, because the Russians are very careful. They do, in principle, not want to hurt any civilians. But they felt compelled, that they had to intervene, because, as they explained, you know, before they did this, their last warning document, you know,

• 1:18:12Speaker 03

  just a few months before the February, you know, invasion started. It was in December, I think, you know, to the West, to the US, the warning. And it was that, well, the Minsk Agreement, Minsk I and II have been ignored. These were peaceful diplomatic ways of resolving things and handling things, but the Ukrainian side didn't actually stick to it. Later, we learned from Angela Merkel, oh, that was a trick anyway. We just wanted to win time against the Russians, which has showed the lack of good faith in this process. But more importantly, for eight years, there's been bombing by Kiev of the Ukrainian population, you know, in Ukraine,

• 1:18:55Speaker 03

  the population that there are Ukrainians but Russian speakers, you know, in the southern east, Donbas and Lukansk, you see. Literally bombing, and people died. I mean, estimates 30,000, 40,000 in these eight years. And of course, Russia was very clear, and it's a very popular opinion, Russia, not just Putin, I think he's actually one of the more moderate leaders in Russia. That something has to be done. We can't just stand idly by while Kiev is making war on its own people. Remember when we said this about Saddam Hussein? Oh, he's bombing his own people. We have to intervene. Well, it was much grander scale with more dead people than when we thought we have to intervene in Iraq, you see? And that's the reality.

• 1:19:39Speaker 03

  And everyone can check these facts. So, of course, the attitude therefore has always been, this is very regretful. And I'm sure Putin will have mentioned this towards Xi Jinping and others, you know, we're very regretful about this war and having had to invade.

• 1:19:56Patrick Bet-David?

  Luke.

• 1:19:57Speaker 04

  I wouldn't have too much to add there. I do think it adds the, you can go back to, it's either a Wall Street Journal or New York Times article, 2024, maybe 2025, but talking about the CIA's secret involvement where basically we were doing everything except for, you know, all the targeting, all the, you know, the ISR, intelligence, surveillance, reconnaissance, information for the targeting, for targeting actual targets inside Russia. So basically, we did everything. And then we basically hold the Ukrainians' hand and we pushed the red button and the missile launches. And we were doing that. And they are openly talking about this. I think it's like the secret history of CIA's involvement

• 1:20:38Speaker 04

  in the Ukraine war, whatever. The challenge is, as it relates, I think, now to Iran, prospectively, which is, the Russians, the Russians said, we, once we started hitting Russian territory, once Ukrainians did, with our help, the Russians said, we are not going to retaliate immediately. We will retaliate at time and place of our choosing. The time and place of their choosing, as it turned out, ended up being about three days after we attacked Iran. Because all of a sudden, they were using a system called apparently GLO-NASS, G-L-O-N-A-S-S, very accurate targeting. We didn't think the Iranians were going to be very accurate with their missiles. They were extraordinarily accurate with their missiles, so much so that we've

• 1:21:20Speaker 04

  evacuated a lot of our Middle East bases because we couldn't knock this stuff down. Why? Because they were in a direct retaliation for us hitting Russian targets on behalf of Ukrainians.

• 1:21:32Speaker 04

  The Russians were helping the Iranians target our assets across the Middle East. And we're still locked out of a lot of our bases as a result of this. And this is where we get into going forward. Okay, the War Powers Act versus the 37 and 0. Is the 37 and 0 that when Massie's running on a non-Iranian war platform? Is that the American public saying more war? Because if we get more war, to be clear, we're going to be fighting in Iran, being helped by the Russians. And the Russians' missiles, they have always been extremely good, very good targeting. We're going to be fighting in Iran that is going to be getting dual-use supplies because the Chinese are masters of strategic ambiguity, right?

• 1:22:17Speaker 04

  Is that used in military or is that civilian? The Chinese will tell you yes. They're going to be, they already are, being backfilled by both the Russians and the Chinese. And so it's, that's where I look at this whole conversation of, I agree that, I'm sure he said it's regretful, you can't be happy about it. I do think part of the reason it's taken this long is because they are being careful. They could go in and just hit Ukraine with a bunch of Oreshniks and this thing would be over by Sunday afternoon. And you'd kill 20 million people.

• 1:22:44Patrick Bet-David?

  Which do you think will end first? Russia, Ukraine, or the war with Iran?

• 1:22:53Speaker 04

  Probably the war with Iran, maybe, but I don't think Hormuz is going to open up anytime soon.

• 1:22:59Patrick Bet-David?

  What's anytime soon for you?

• 1:23:01Speaker 04

  Oh, it's going to be still closed, at least July 4th. I think maybe, you know, increasingly, Iran has a high degree of fire control over Strait of Hormuz still. It's going to be closed until Iran wants it open. And you've seen the list of demands Iran's making. The Americans and the Iranians are...

• 1:23:20Patrick Bet-David?

  Far.

• 1:23:21Speaker 04

  Far, far.

• 1:23:22Patrick Bet-David?

  In a big way, yeah.

• 1:23:23Speaker 04

  Big, big way. So I wouldn't be surprised, you know, when this war started, I said I wouldn't be surprised it was still closed at the end of May. That's a layup now. And I remember saying to a client, hey, don't be surprised. I would start stress testing your portfolio for Hormuz to still be closed on the 4th of July. This was like 6th of March. And they looked at me like, oh my God, that would not be good. I think July 4th, it's probably still gonna be closed. I think it's probably still gonna be closed Labor Day. Because again, the Iranians have more fire control. We have destroyed far less of their missiles than we said. They're getting resupplied. They are beginning targeting help from the Russians, thanks to our actions as it relates to Ukraine, you know, and in the

• 1:24:03Speaker 04

  Ukraine-Russian war. And so it's, it's, I don't know. I think they both could drag on and drag on, and it's just not a good situation.

• 1:24:10Patrick Bet-David?

  Tom, do you agree?

• 1:24:13Tom Ellsworth?

  Not entirely. And I'll go this way. Okay. What you have right now, the largest number of empty tankers around Karg Island, since the war began, was on what day?

• 1:24:30Speaker 04

  Well, February 28th, right? Started?

• 1:24:32Tom Ellsworth?

  No, May 18th. Day before yesterday, it was the largest number of empty tankers around Karg Island since the war began. And NATO countries are saying, can we please loosen this up and get this open? So somebody's making statements, NATO countries, somebody's moving tankers into position. These are empty tankers that are around Karg Island. And if the people that are sending the empty tankers there, think that the US, who has the naval assets in the Gulf, ready to go, is gonna go up, remember, we were tracking the minesweepers and the Marine Corps invasion ships that came from San Diego, it came all the way over, and now they're by India, and now they're here, now they're there. So why would all of these countries, and their insurer, Lloyds of London, be telling them, or why would they

• 1:25:17Tom Ellsworth?

  be getting staged? There's more tankers there. So I think that's a sign that at least somebody thinks something's loosening up. And so I think the Iran war is gonna be over long before the Russia-Ukraine war. Because I think there's a little part of Zelensky and Ukraine that is corrupt, that doesn't really want it to end, because he still has ways to get his aid. I think that there's something coming here. Is it next Tuesday? I don't think so, but all I do is I just look at assets and I look at assets like that. Why are all these countries moving tankers into position and more since the war began?

• 1:25:54Patrick Bet-David?

  Richard.

• 1:25:55Speaker 03

  It's a tough call because essentially I think both wars will continue sadly. Because in both cases, we have quite influential groups at work on the Western side, NATO American side, that want these wars to merge into a world war sadly.

• 1:26:18Patrick Bet-David?

  They want?

• 1:26:18Speaker 03

  Yes, yes.

• 1:26:19Patrick Bet-David?

  Why do you think NATO wants that?

• 1:26:22Speaker 03

  Well, why do people want a world war? It's a very good question and I'll try to be very brief on this one. But we have to look at how the First World War started. It really started, and you know, this is a big topic, but it was a strategic global consideration. The seas were controlled by the British Navy and therefore world trade. And we're talking about trade disruption and potential blockades and blackmail. All that power was with Britain. And so what Germany did, which was a rising power, just like the United States, high growth economy, doing extremely well, Imperial Germany, was they had an alliance with the Ottoman Empire, which is, you know,

• 1:27:07Speaker 03

  the whole Middle Eastern area, huge. And they were now building, and this was just at the turn of the century, they were building the Berlin-Istanbul-Baghdad-Bazra Railway, also known as the Berlin-Baghdad Railway. That was a massive, massive strategic challenge to Britain because it would have essentially immediately rendered this global British dominance via the Navy, this control of the oceans irrelevant because you can do trade much cheaper, much faster on that railway, linking essentially Europe with Eurasia, even down to India and so on.

• 1:27:51Speaker 03

  And you can, you know, trade both ways. And of course, troops, military can be sent and these were already allied countries partly.

• 1:28:01Speaker 03

  So the British decided, this is well recorded, we have to stop this, it's an absolute must, this must be stopped. And they tried various schemes, but it didn't really work. And they figured out the only way to stop this is to make war on Germany. Now, what is the modern Germany that, you know, Britain felt Germany was challenging Britain? And that led to World War One via this, you know, Berlin-Bagdad railway, challenging the sort of military, the navy control of the seas. What is the modern equivalent? Of course, it's China. And key strategic thinkers in the US have been very clear. There's a lot of policy documents on this, that the real enemy is China.

• 1:28:46Speaker 03

  And what they've been doing is the modern equivalent of the Berlin-Bagdad railway, which is the Belt and Road Initiative, which was launched by Xi Jinping 11 years ago. And it is essentially circumventing the American control over the seas. And we see it in the alliances that China has formed, and of course, the BRICS and all these.

• 1:29:10Speaker 03

  And by having the Belt and Road infrastructure on the continent, there's also a sea path, and of course, they've also been building up their navy. It's not as if they're not doing anything on that front either. So there's a massive challenge for China. Now, I think what has been happening with US foreign policy this year is all about China. You know, it's not sort of articulated.

• 1:29:34Patrick Bet-David?

  Yeah, but they say world war, like they want a, NATO wants a world war?

• 1:29:38Speaker 03

  That's the only way to take down this Belt and Road Initiative. The Berlin-Bagdad railway was stopped thanks to First World War. And then Britain invaded Iraq and then just divvied up the Ottoman Empire. And it's all British-created, artificial countries, you know? And so then you can manipulate the wars ever since. You control the oil, that's the most important thing. And they've done that quite successfully, including staging various coup d'etat's also in Iran, Mossadegh, you know, a democratically elected leader of Iran. But the key thing is this. So why is this year foreign policy been dominated by this? Venezuela, that's where it started. It was a very important event because... Essentially, all pretense was dropped. So far, for decades, it's all been about COVID operations when, you know,

• 1:30:21Speaker 03

  when we kill a president in Latin America, when we take out and have regime change in Latin America. It's all plausible deniability. No, it's done overtly, but why? Why Venezuela? What is it about? It's about oil. It's a key source of oil for China. China has built these refineries that you need for that particular type of heavy oil that Venezuela produces, and it's the biggest, has the biggest resources in oil, actually, in the world. So that disrupted, to some extent, Chinese energy plants significantly, because all these refineries in China were made for this very specific Venezuelan heavy crude oil. And then, of course, Iran is another key source.

• 1:31:05Speaker 03

  And the key piece of information that led me to put this together is when I saw that what was actually bombed in these bombing campaigns, US Israeli bombing of Iran, it clearly included key belt and road infrastructure, railways and bridges, particularly roads and supply lines. So, you know, it is hitting this challenge, this perceived challenge of US Navy dominance. And the only way to really stop this ultimately leading up to a third world war, which of

• 1:31:45Speaker 03

  course, you know, is nobody should aim for a world war and nobody should actually pursue wars is what I believe, but I fear this is what's happening.

• 1:31:55Patrick Bet-David?

  I don't think so. I don't think so, because I think NATO is shitting bricks about a war taking place. I think NATO is worried if anything were to take place. I understand what you're saying. I think they're sitting around saying, guys. Uh, like this story here from Bloomberg, NATO is starting to consider Hormuz's mission to protect ships. Just a few weeks ago, they were saying, no, we're not gonna let you use this, and we're not gonna let you travel, fly over us. Now they're like, hey, how can we help you through? What do you need?

• 1:32:22Speaker 03

  But that's escalation. These are escalation steps. So, you know.

• 1:32:25Patrick Bet-David?

  To leading to a war?

• 1:32:27Speaker 03

  Of course. You know, you've got now other military also participating on the western side. Well, that is increasing the probability. That's escalation.

• 1:32:36Tom Ellsworth?

  Did you think, hey, let me, let me ask you. I, I respect your intellect and where you're going from, but do you think that's an escalation point when at the same time innocent sailors on empty tankers are corrugating, are congregating around one of the largest, largest targets?

• 1:32:52Speaker 03

  I mean, your point is an important one.

• 1:32:53Tom Ellsworth?

  Those aren't military ships, and those are owned by many people.

• 1:32:56Speaker 03

  Yeah, you're right.

• 1:32:56Speaker 04

  And the blockade is an act of war. Full stop.

• 1:32:59Tom Ellsworth?

  Okay, there's, there's more ships that have been there since the start of the war.

• 1:33:03Patrick Bet-David?

  You're right, but the blockade is our position.

• 1:33:06Tom Ellsworth?

  Correct.

• 1:33:06Speaker 04

  The blockade is our position.

• 1:33:07Patrick Bet-David?

  Our position.

• 1:33:07Speaker 04

  But it was open until we bombed Iran.

• 1:33:09Patrick Bet-David?

  I know, but what I'm saying to you is, we are choosing the war. But to say NATO wants the war, that's the point of a, a.

• 1:33:17Speaker 03

  Well, I'm not actually saying NATO wants the war. It's not necessarily NATO. Well, NATO, but what is NATO? NATO is a tool. It is dominated by the deep state, which is, you know, US deep state dominates NATO. You know, there's, there's nobody in the, in the NATO leadership.

• 1:33:31Patrick Bet-David?

  You think, you think, you think Trump and US wants this war to continue with Iran? You don't think they want it to be done?

• 1:33:37Speaker 03

  Well, what does Trump want concerning wars? I mean, I, I, I do think that his personal true opinion is what he originally said, and back in, you know, when he was first president, that he doesn't want any of this. But it looks like he's not really in control of that decision. So, um, somebody else is making that decision for him, sadly. And, and I think this, the military industrial.

• 1:33:58Patrick Bet-David?

  You really believe that? You think somebody else is making a decision?

• 1:34:01Speaker 03

  Well, that's what we witnessed. Everyone has seen it.

• 1:34:03Speaker 04

  Marco Rubio's State Department, put out a document on April 21st, said, we are in Iran, defending the legality of the war. State Department document, you can find it online. We are in Iran at the request of, and the collective defense of our ally, Israel. Full stop. Those are Secretary Rubio's words.

• 1:34:18Patrick Bet-David?

  So, okay, so, so I want, I want to qualify this. So you guys are saying this is a war that we're in because somebody else wants us to be in this war?

• 1:34:27Speaker 05

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• 1:35:27Speaker 04

  At least in part. I don't think it's in America's interests. And I don't, I fail to see how it is in America's acute interests at this point in time.

• 1:35:35Patrick Bet-David?

  But you see, that's the part where this argument gets manhandled by a clip from Trump in 1987, when he said he would attack, he would go to Caracayland and he would Iran. This has been a message that's been given for a long time. Okay. Where his position with Iran, the speech he gave, I don't know if you've seen this clip or not. Have you ever seen what the president said in Iran in 80s? Yeah, yeah, 40 years ago. And have you heard what Rubio said 15 years ago or 10 years ago in Iran? He said, I want this thing to be documented, right? Uh, yeah, this is back in 1980s. Play this clip, Rob.

• 1:36:09Speaker 07

  The Iranian situation is a case in point, that this country sits back and allows a country such as Iran to hold out hostages, to my way of thinking, is a horror. You're advocating that we should have...

• 1:36:21Patrick Bet-David?

  Gone in there with troops etcetera and brought our boys out. I absolutely feel that, yes. I don't think there's any question. There's no question in my mind. Was his boss Bibi back then? Did they, did he even know Bibi back then? Can you type in when Trump met Bibi? See, this is the part where you, the contradiction slips out and you kind of lose credibility. To say, not you, the people that say, well, his boss is telling them what to do. Rob, when is the first time Trump and Bibi met, ever? Can you, can you tell me, you know, what Bibi was doing in 1985? What was Bibi doing in 1985? Was he in the military? Was he a journalist? Was he a politician? What was he doing in the 80s, 1985? So, the president, 1985, is ambassador, okay.

• 1:37:06Patrick Bet-David?

  These guys haven't met. These guys haven't spoken. So that argument loses credibility because this guy's been saying this for a while.

• 1:37:12Speaker 03

  You could rephrase the question. When did he, for the first time, accept money from Zionist billionaires?

• 1:37:17Patrick Bet-David?

  That's also a lazy argument.

• 1:37:19Speaker 03

  I just go to the.

• 1:37:20Patrick Bet-David?

  Because here's, by the way, here's how it works. Let me just put it to you this way, Richard. That is such a lazy argument that's getting so old. You know why it's getting old and it's such a lazy argument? It, it's, okay, give me one president that has taken money from Israel, from other people. Give me one that hasn't taken it. Give me one that if there's people that are giving money. Like, what do you say to that? Both side, left side, right side, everyone's giving money and what are they doing? The moment they came up, I had Paul Manafort on, on the podcast a long time ago. And I said, why don't we get money out of politics? Why don't they do it? I'd love for there to be no money in politics.

• 1:38:00Speaker 03

  Yeah, that'd be good.

• 1:38:01Patrick Bet-David?

  It'd be, it'd be good for who? It'd be good for all of us, right? But this is for you to say, well, this is because he took money and this is because he did this.

• 1:38:08Speaker 03

  When is the first time?

• 1:38:09Speaker 04

  No, I would, I would say, I go back to like black and white, his own administration.

• 1:38:12Patrick Bet-David?

  Yeah.

• 1:38:13Speaker 04

  Three weeks ago, the State Department said, "We are in Iran at the request of and in the collective defense of Israel."

• 1:38:20Patrick Bet-David?

  Rubio commented on that to say what he said. Did you see the other clip when he reacted to those comments?

• 1:38:25Speaker 04

  I've seen one from early on where he said something similar. I have not seen the more recent.

• 1:38:28Patrick Bet-David?

  Yes, he responded to that and he gave his position. So to him, the ally in there is, Israel is an ally, Iran's not an ally.

• 1:38:36Speaker 04

  Sure, no.

• 1:38:36Patrick Bet-David?

  So, it's an ally. It's a relationship. So then you can be anti-Israel and say, "Screw Israel." Okay, great. Then that's your position as well. It's like, hey, you know, I was like anti-Ukraine. Why? That's not our war. Why are we getting involved in a war that's not our... But this is a war that we decided to do. So if the president's deciding this war, then that's his position. And then you can say whatever you want. Yeah, like, for Ukraine, we kept giving money, we kept giving money, we kept giving... Everybody's supposed to wear, uh, what do you call it? A, uh, the pin? That was double dumb. But to say, "Well, it's because of Israel's war and all this other stuff." By the way, I also think that's, that's an element of why some positions going into 2028,

• 1:39:17Patrick Bet-David?

  this rhetoric of, "These guys are owned, owned, owned." Yes, I think a lot of these guys are owned. But the president's documented what he said 40 years ago. His position hasn't changed.

• 1:39:27Speaker 04

  His vice president's position, you know, said, "Hey, if you want the party of war, if you want, if you want to go to war, vote for Kamala Harris." He said that on a tweet at the end of 2024.

• 1:39:37Patrick Bet-David?

  JD Vance. But JD Vance is not a war guy. He's an anti, he's a non-interventionist guy.

• 1:39:42Speaker 04

  Correct, correct. Yeah. So I think, I do feel, I understand the frustration or the feeling that regardless of what this was, of a feeling that there's been a position reversal. A lot of people around him have, have, you know, or some people around him.

• 1:39:56Patrick Bet-David?

  I agree. And by the way, I agree the sensitivities of any of these issues. This is why we have these discussions.

• 1:40:01Speaker 04

  And for me, it's not about the politics of it. It's around, again, what we're seeing in the bond market, what...

• 1:40:08Patrick Bet-David?

  Let's go to that. Let's actually go to that because I want to go to that for the audience to kind of see this before we wrap up. So, it, story comes out because everybody's talking about, "Well, you know, we're going to get a new guy because they're going to lower rates." They got to lower rates, Luke. They're going to lower rates. If I was the, we would have lowered rates. I would have lowered rates a long time ago. And then all of a sudden, it's like, "Wait a minute." Because of what's going on to inflation, to your point, now they're talking about raising rates. What do you mean raising rates? Yeah, we may be raising rates. So Fed will have to raise rates. Do you have the clip on that, Rob, about Fed having to raise rates? Is this it? Go for it, Rob. And I think you guys are probably on the same page on this topic. Go ahead, Rob.

• 1:40:41Tom Ellsworth?

  But you think the Fed could actually hike rates in July? Well, I think the bond market is calling for that. I think the reason bond yields have gone up is because the perception is that the Fed is behind the curve on inflation. And the Fed has clearly showed that they're dropping their easing bias, which is what they had in their April meeting, and moved not to a neutral bias, but moved to a tightening bias at the June meeting coming up in a few weeks. And then after that, I think they have to follow up and actually show that they're willing to raise rates and do it by 25 basis points. The two-year is now indicating that

• 1:41:23Tom Ellsworth?

  the federal funds rate is too low. The federal funds rate range is 3.5% to 3.75%. The two-year is at 4.1%, and it's a pretty good leading indicator of what the Fed should do.

• 1:41:36Patrick Bet-David?

  Look, to the average person, what does this mean? Rates going up? No one's expecting it to go up.

• 1:41:41Speaker 04

  You can go back to February 2025. Secretary Besen and Trump together said, "Judge our economic policy, success or failure, by the yield on the 10-year Treasury yield, and judge us over time." Well, the day they bombed Iran, the 10-year Treasury yielded 3.96%. Yesterday, it traded at 4.66%. Yields up 70 basis points in eight or nine weeks. The translation of what that gentleman just said, Yar Denny, is essentially the Fed follows on interest rates relative to the market. And the market rate that the Fed tends to follow is the two-year U.S. Treasury bond yield.

• 1:42:22Speaker 04

  The two-year Treasury bond yield is rising. It is above Fed funds rate. And what he is saying is, the market, based on market factors, higher inflation, in particular, higher inflation Expectations as well as a direct result of his foreign policy choices in Iran are now projecting interest rate hikes. This has enormous implications for not just the private sector, but the United States has a lot of debt it needs to roll over. And we've spent the last two or three years since Janet Yellen at the end of 2023 shifted issuance forward to the front end rather than terming out debt at the long end when they could. And then she didn't because they couldn't. They would have blown up

• 1:43:04Speaker 04

  the bond market then. So they shifted it to the front end. Well, that's fine. That buys you time. But you better not start a war that sends yields up on the front end after you've shifted all your debt to the front end and need to roll it because now you're doing a payday loan higher, higher, higher. That to me is why I'm so worked up about the Iran war is from day one, I've thought Hormuz can be closed way longer than you think. And once that happens, you're going to have big, big inflation and it is just starting. We've only we had the big inflation print PPI last week. We've seen PCE pick up. Everybody's raising prices. The price you call up the ISM manufacturing and services prices paid components. They are at the highest level since 2022. We are having a Biden

• 1:43:48Speaker 04

  inflation under Trump as a result of Iran into a refinancing of debt that has been shifted to the front end. This is and the bond market action that we are seeing, you're seeing 10 year yields in Japan, UK, US, EU, you know, German, French, they are all skyrocketing and they all have high debt, but the two highest Japan and the US. And so and it is all a function of this war. We have really harmed. We've really shot ourselves not in the foot, but a little bit higher up on our leg as a result of this war from an economic standpoint.

• 1:44:23Tom Ellsworth?

  So there are there are two dates. Pat and I both have talked about that this thing has to be resolved by June 15. So that now we have an opportunity for, you know, the cost of oil to come down and then to run through the summer to let everything else that supplies come back up and the cost of aviation fuel, everything is derived on on oil to come down. So that that's got to But here are the two dates that are really important, Pat. June 18th, 19th, July 28, 29. Those are the next two Fed meetings in June 18th, 19th. Kevin Worsch is going to be his first meeting as a Fed. And he's going to be facing two things, Pat. He's got inflation led by oil in the midst of a war on one side.

• 1:45:06Tom Ellsworth?

  And on the other side, he's got, please don't let another company talk about unemployment and AI. Because if he's got unemployment over here, he should be lowering rates so that businesses can get access to capital more cheaply to build, invest and make jobs. But over here, if inflation is up, well, that's an overheated economy. You've got to bring the value of the dollar up. So you bring up the rate to help cool inflation. Kevin Worsch is coming in, he's standing in the middle of a tunnel. And he's looking out both ends of the tunnel and there's a light coming. And one is inflation and the other one is unemployment. This is a really hard problem that's about to be faced. And everything we just said is correct.

• 1:45:50Tom Ellsworth?

  But we could boil it down to make it simple for people listening. When inflation is up, you raise rates to bring prices down and help people. When unemployment is up, you lower rates so that businesses can borrow more cheaply and create jobs so those who are unemployed can get one. There's the simple. Unfortunately, both of them are happening right now. In June 18th, 19th, Kevin Worsch walks into his new job for the first time. And everybody is going to dissect that paragraph preamble that all Fed chair make that they come to the microphone and read. And the markets are going to be sitting there and you're going to watch four-point market movements on that paragraph.

• 1:46:28Speaker 04

  And I would add to you, I think one of the things the markets are starting to try to grasp with, with the bond market, stock market volatility we've had over the last couple of weeks is Regardless of whether he raises rates or cuts rates, long end yields are going to rise. And that's the part people don't get yet. Because foreigners are borrowed 13 trillion, 14 trillion dollars in dollar-denominated debt. Number one. So when we strengthen the dollar by raising rates, they need to defend their currencies. They need to, what do they do? They sell treasury bonds to raise dollars to service their debt to defend their currencies. We've also complicated by virtue of our war in Iran, bidding up oil prices. What is oil still almost mostly bought in?

• 1:47:13Speaker 04

  It's bought in dollars. Foreign oil importing creditors of the United States. China, Japan, Korea. When they need oil, what do they need more? Oil and food in dollars or bonds? Oil and food. So we have taken their two. When Wersh makes his choice. If he cuts rates into an oil spike, long end's going up. That's inflationary. Dollar's going to fall. Okay, we get that. The real kicker is if he raises rates to fight inflation, the long end is going to go up even faster. Because now the dollar is going to start.

• 1:47:47Patrick Bet-David?

  He's screwed either way.

• 1:47:48Speaker 04

  He's screwed either way. And he's screwed because of this war. Because of this war.

• 1:47:52Patrick Bet-David?

  But by the way, so my position with that. I agree on the fact that the side effects of the war are impacting the economy in a big way. This is why I said if you're going to do this. Look, as a leader sometimes, Luke, my opinion. As a leader sometimes, you get judged to take certain risks. Okay? And the risks you take. How many employees do you have? I'm assuming you run a company.

• 1:48:15Speaker 04

  We've got a team, probably six people.

• 1:48:17Patrick Bet-David?

  Okay, six people. Okay, and you probably ran, have you ran businesses before?

• 1:48:21Speaker 04

  Yeah, sure, sure.

• 1:48:22Patrick Bet-David?

  Okay, so how many employees have you had at the peak?

• 1:48:24Speaker 04

  Well, at the peak it was maybe 20.

• 1:48:27Patrick Bet-David?

  Okay, 20 employees. All right. So what percentage of decisions we make as leaders do you think we succeed in? What percentage you think?

• 1:48:37Speaker 04

  I think they get, the percentage shrinks probably with the bigger the organization. And there is no bigger organization than running the United States.

• 1:48:42Patrick Bet-David?

  Exactly, but here's the part, so to me, as a leader, you look at it and you came off a winning streak, Venezuela, smooth easy, you got all these good things that's happening, so maybe you trusted your military and said, this is gonna be easier, it's gonna be going in, ba-ba-ba, we're out, and you're like, oh shit. Iran is a lot more capable and stubborn than we thought they're going to be.

• 1:49:03Speaker 04

  Which his generals told him, by the way, in a very reminiscent and other bad military decisions.

• 1:49:07Patrick Bet-David?

  But I want you to know, generals told them both sides.

• 1:49:10Speaker 04

  That's fair, that's fair.

• 1:49:11Patrick Bet-David?

  To say like, if I'm gonna be in a room, someone's gonna say, you know, you have to pick interests, so I think, I think he made the decision. But now that you're in it, it's like you buy a company, you're like, I should have never bought the company, the guy's a frickin' womanizer, he goes to the casino every night, why didn't I do a $20,000 background check, I would've seen the fact that he's got three DUIs, shit, but we already bought this company, let's make the best of it, we're in it now. So let's rebuild it and sell it, or deploy, or whatever it is, right? Okay. My date for him is June 14th. If they can find a way to get it done by June 14th, I think that's a good thing, if they can, and the reason why I'm saying June 14th, after June 14th, new cycle's gonna change, we're gonna move on very quickly, and we're gonna go to all the other stuff. And then you got the World Cup that's coming, then you got his birthday that's coming, then

• 1:49:56Patrick Bet-David?

  you got Fortuna, if this goes the way it's going right now, by midterms, it's gonna be a very different story. Now, I'll give you the other part that nobody is thinking about, and then Richard, I want to come to you for your thoughts. You know what's the other thing that they got, that it's weirdly this guy keeps winning? In the weirdest way this guy keeps winning. What's one of the biggest victories they had in the last few weeks? What's the one topic that we're not even talking about today, but what's one of the biggest victories these guys have had the last few weeks? That no one's talking about? What do you think it is? Tom, what do you think is one of the biggest victories they've had the last few weeks? Well, let me help the question a little bit better, that gets him to not be as worried about the midterms. What's one of the biggest victories they've had the last few weeks that gets him to not worry about the midterms?

• 1:50:40Speaker 04

  Trump?

• 1:50:41Patrick Bet-David?

  Yeah.

• 1:50:42Tom Ellsworth?

  Thirty-nine and oh.

• 1:50:43Patrick Bet-David?

  No, no, what, what is it? What, what is it?

• 1:50:46Tom Ellsworth?

  Thirty-seven and oh.

• 1:50:46Patrick Bet-David?

  What, what, redistricting?

• 1:50:48Tom Ellsworth?

  Oh, oh, oh, okay, yeah, yeah.

• 1:50:50Patrick Bet-David?

  Do you guys know how big that is? Are you following like the redistricting stuff? What it's gonna do? No. You're not following it? No, I've never seen it, no.

• 1:50:57Tom Ellsworth?

  The South is gonna look like the North has looked like for decades.

• 1:51:01Patrick Bet-David?

  The plus minus of picking up just because of redistricting could be twenty seats. Wow. Twenty seats. So the, and by the way, the, the, the lady comes out yesterday, Rob, can you play this? I don't know what her name is, I think Stacey Abrams. It may be something else, it's a clip I sent to the group yesterday. That one right here, watch this clip here, okay? This is Stacey Abrams, talking about what just happened to the redistricting push, and how big and how negatively it impacts Democrats. Go ahead, Rob.

• 1:51:28Speaker 05

  Your ability to use those same Democratic institutions to your benefit. With these new maps, we know that analysis by Fair Fight and Black Voters Matter show that we could lose nineteen to twenty congressional seats, but we could lose up to a hundred and ninety-one state legislative seats.

• 1:51:45Patrick Bet-David?

  Luke, nineteen to twenty.

• 1:51:45Speaker 05

  And in the South, those state legislators draw city council districts, county commission districts, school board districts, and they draw state legislative lines. And so if you want to know if your child is going to have fair and equitable access to education, that will be diminished if your families can't participate in elections and elect leaders who value your education. If you want healthcare in the South, it's the state legislature that decides whether you have access. All of the things that disproportionately harm communities of color will now be decided by people who disproportionately dislike and vote against the needs of people of color. But what we have to remember, and this is why I started the Ten Steps campaign, this is a national fight. It may start in the South, but it has now...

• 1:52:30Patrick Bet-David?

  They're panicking right now. They know what's happening. So in my opinion, my, because you know Trump's a card guy. Remember he sits with Zelensky, what does he say? You don't have the cards. Yeah, yeah. And he says, I'm not playing poker with you, right? This is not about cards and levers. It is, but you know Trump is a leverage guy. He's sitting there saying, I just picked up nineteen, twenty seeds. Midterms, no matter what it goes, worst case scenario, we're still gonna be fine. I am... Hoping that's not what he's thinking.

• 1:52:54Speaker 04

  I think it's exactly what he's thinking.

• 1:52:55Patrick Bet-David?

  I'm hoping he's not.

• 1:52:57Speaker 04

  It's so interesting you point out because I've been watching his actions based on what I know and what I'm being told about how there Hormuz ain't going to be open on June 14th. And I've been wondering why he is so okay with that. This would explain why he's so okay with that.

• 1:53:10Patrick Bet-David?

  I'm 20% it opens on the 14th. If it does, we will move on. If it doesn't, you are not using the World Cup, the 4th of July 250 year anniversary as an incredible, sometimes in life you need great positive distractions. The greatest positive distractions he could have asked for are around the corner. It's 250, everybody's like, oh my God, the greatness of America, the industrial revolution, look what we did and look look at the people that we produce and the amount of wealth and jobs and innovation and the history and lining on the bottom. Okay, and then boom, World Cup, oh my God, look, you know, Neymar and Messi and Portugal and da, da, da, da, US and these are the, and then boom, midterms. Okay, so I, I am hopeful, that's why I said 20%.

• 1:53:55Patrick Bet-David?

  I'm 20% by June 4th. Is there a calcio on this to say that thing ends by? Because if there is a calcio on this.

• 1:54:01Speaker 04

  Yeah, I'm gonna bet it, I'll bet against it. It ain't happening. It ain't happening.

• 1:54:05Patrick Bet-David?

  You don't think.

• 1:54:05Speaker 04

  I think it's, I would take the under on 20.

• 1:54:07Patrick Bet-David?

  Do me a favor, what do you think?

• 1:54:08Speaker 04

  But I think you're right about the, oh, I think it's.

• 1:54:10Patrick Bet-David?

  Percentage that it's June 14th?

• 1:54:11Speaker 04

  I would take five.

• 1:54:12Patrick Bet-David?

  Oh shit, you're that low? Okay.

• 1:54:14Speaker 04

  The other guy gets it. We started a fight and in a fight, if you don't knock him out early, the other guy gets a say.

• 1:54:19Patrick Bet-David?

  But look at this, calcio's on your side. I'm just saying, if they're sitting around, calcio's even saying before August is 31st. Before 2027 is 50%. That means 50% of people think this is going into 2027. They're on your side, just so you know that. Yeah.

• 1:54:33Speaker 04

  That's interesting.

• 1:54:34Patrick Bet-David?

  So we'll see. Uh, Richard, thoughts?

• 1:54:35Speaker 03

  Yeah, well, let me just come back to the, the bond market and monetary policy. Um, there is, I mean, the, there is an official narrative in, um, central banking, monetary economics and the markets and the media perpetuating this. Um, namely, lower interest rates lead to higher growth.

• 1:54:56Speaker 03

  If we raise rates, this slows down the economy. And haven't we heard this dozens of times? I mean, you hear it daily. What's the empirical evidence for this? I did the first empirical study of this question. The relationship between interest rates and economic growth. Because this has been repeated for half a century. Actually, you could even argue going back to David Ricardo 200 years. It's been repeated without empirical test. There's been no study actually checking what's the relationship between growth and interest rates. Turns out it's not a negative relationship. It's a positive relationship. What about the causation? Which one causes which? You can Google this published study, actually.

• 1:55:36Speaker 03

  It's called reconsidering monetary policy, published in a leading finance journal. The conclusion is, so interest rates and growth are positively correlated. So we get higher growth and higher rates happening together and lower growth and lower rates happening together.

• 1:55:55Patrick Bet-David?

  Probably especially when you have high levels of debt like we do.

• 1:55:58Speaker 03

  And now the next question is, OK, which causes which? What's the causation? And we also did the statistical test for, you know, Granger causality, statistical causation. And it's not from interest rates to growth. It's from growth to interest rates. So how does the economy really work? We've been told interest rates move everything. That's the key tool. It's not true. Interest rates follow nominal GDP growth. That includes inflation, nominal growth, OK? Real growth plus inflation is the nominal growth. And what's driving nominal growth? It's credit creation in the monetary system, which is largely banks, but manipulated mostly by the central bank that can, you know, move total credit.

• 1:56:39Patrick Bet-David?

  Richard, you know what you and I need to do? Because this is the third time you brought banks up. Why don't we just start a bank together? Let's start a bank. How about we start a bank together? Maybe from somewhere in France or something like that and find a way to bring. What do you think about that?

• 1:56:51Speaker 03

  Good idea.

• 1:56:51Patrick Bet-David?

  Please continue. I'm just, you got me thinking there for a second.

• 1:56:54Speaker 03

  Well, they are the key players. And, you know, of course, there's a reason why they're not in the textbooks. And central banks, you know, the economics models don't have banks in them. It's because you're not supposed to know this. This is like secret knowledge, how things really are run. So but what are the implications for monetary policy now? So.

• 1:57:14Speaker 03

  Kevin Walsh wants to steep in the yield curve. Well, that's happening, I think. So, okay, he's okay on that. You can get a tick. The markets are doing fine. Because the Fed reacts to the bond market and the bond market reacts to nominal GDP before it's published. You know, we just, we don't know the official figures yet, but the bond market is a very good indicator of where we're heading. So why is it going up? Well, because of inflation. Why is there inflation? You see, and that goes back to the, the real cause behind this. This is money creation, credit creation. And that's not surprising because we have this problem of record national debt and massive spending, just the servicing costs, as we all know by now, you know, exceeding military

• 1:57:57Speaker 03

  budgets, which of course are very bloated and are going to rise further. Just servicing, you know, the, the interest on the old debt is already massive. So, and we're on this trajectory where we, it's exponential, basically. The time it takes now for another trillion to be added to the national debt. I mean, it used to be decades, then it became a decade, then it became less than a decade, then it became years. Well, it's months now, but soon it will be weeks and then it will be days. Literally, that's where we're heading. So, and the, the, the pressure is on the Fed, which will not advertise this and it will not be discussed and will be not be in the minutes.

• 1:58:40Speaker 03

  But, you know, it's working on ways to, to do a monetization without people realizing. Of course, we do have the stable coins as another policy venture to get demand for treasuries. But as Luke mentioned, I mean, foreigners are selling, Japan is selling, China is selling US treasuries. And they have good reasons, they have arguments, oh, you would like to help, but actually, sorry, we have, you know, Japan, the yen is so undervalued.

• 1:59:05Tom Ellsworth?

  Richard, we talk about international buyers and sellers, okay? Including a small island in the Caribbean that owns a disproportionate amount of US treasuries, shockingly, right? So, let me ask you a question. But the majority of US treasuries owned by us. All the municipalities in all the states, are they holding, are they selling, are they buying? Are they playing with the Fed balance sheet? What are they doing?

• 1:59:26Speaker 03

  Well, I mean, point taken, but we have growth of the debt and that means we need new buyers. It's at the margin where the pressure is on. Do they have the capacity to add on to their holdings of Treasury?

• 1:59:41Tom Ellsworth?

  Well, people talk about China as a big boogeyman, but it's actually Japan that owns more than anybody else.

• 1:59:45Patrick Bet-David?

  1.4 trillion, that is 1.1.

• 1:59:48Tom Ellsworth?

  And they've got a, they have a lead, a solid lead.

• 1:59:52Speaker 04

  Yeah, but the two biggest holders are the Japan and the UK. And both of them, look at the bond yields of Japan and the UK, they are going vertical, their bond yields. So they are having bond market problems themselves. Now, why is that important? It's important for two reasons. Number one, the higher a UK yield goes for a Britain, the more likely they are to buy a British bond than an American bond. Ditto the Japanese. The more, the higher a Japanese yield goes, the more likely they are to buy a Japanese bond than they are to buy an American bond. And so generally speaking, if you want to know where the US interest rates are going, just look at Japanese and UK yields. Those two countries hold 25% of the total of the foreign held portion of our Treasuries. Now, the other thing that's a little bit more inside baseball, but probably more important,

• 2:00:36Speaker 04

  is if you look at the spread of the Japanese 10-year yield minus, excuse me, the American 10-year yield minus the Japanese year yield, right? 10-year yield. So how much more is the American bond yielding than the Japanese bond? And then chart that against the yen. Normally, you would expect a narrowing spread between what you can earn in America versus what you can earn as a rate of interest in Japan, to lead to a higher yen. Starting in the third quarter of last year, this relationship flipped. This has always been a positively correlated relationship. All of a sudden, a higher Japanese bond yield, which should drive capital from America to Japan, is leading to a weaker yen.

• 2:01:19Speaker 04

  That is emerging market bond price action. That's a currency crisis coming to the biggest debtor nation in the world. But they're a creditor overall. They have the most debt in the world. Same thing. Britain, our second biggest creditor, forever, higher 10-year yield, you know, mid-10-year American yield minus 10-year UK yield, gilt yield, relative to the pound sterling against the dollar. Narrowing yield or higher relative yield in UK drives capital, drives the pound up against the dollar. Starting last year, also roughly in the third quarter, maybe early fourth quarter, that relationship flipped. Now, the UK is also demonstrating emerging market price action with a currency or bond. In other

• 2:02:03Speaker 04

  words, what the market is telling us about Japan and the UK, who own collectively 25% of our foreign-held portion of our debt, they are our two biggest creditors, is saying yields are already too high in Japan and in the UK. They are going to cause a currency and debt crisis.

• 2:02:23Speaker 05

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• 2:02:53Speaker 06

  Now, more than ever, we need someone on our side. But Rob Whitman? Whitman's votes drove up costs, cut Medicaid, and risked 350,000 Virginians' healthcare to pay for tax breaks for himself and his donors. He's not on our side. Shannon Taylor will fight corruption, cut taxes, and bring down costs. This November, vote for Shannon Taylor. She's for us. Paid for by HMP, the HouseMajorityPact.com, not authorized by any candidate or candidate's committee.

• 2:03:22Tom Ellsworth?

  Which is why they're protecting their currencies.

• 2:03:24Speaker 04

  Which is, but ultimately, then, what do they sell when they have to protect their currencies? They sell US Treasury bonds to raise dollars, to buy pounds, and to buy yen. And that's why the 10-year yield is rising so much. And part of all this sort cycles back to, this discussion did not happen.

• 2:03:40Patrick Bet-David?

  You seem skeptical, Tom. You're not joining the fear porn camp. Why are you not joining the fear porn camp?

• 2:03:45Tom Ellsworth?

  Because I think this is true, but I look at the total amount of the debt. The Fed owns 10, Social Security and Medicare own 20, and then Goldman Sachs, BlackRock, and all the states own 45. Am I right?

• 2:03:58Speaker 04

  Uh, yes, internally, so if foreigners hold, I don't know, it's probably.

• 2:04:03Tom Ellsworth?

  But we're in the zone, right? I'm not.

• 2:04:04Speaker 04

  I, I think so, I think so. I'll, I'll grant it, we can, we can, yeah, yeah.

• 2:04:07Tom Ellsworth?

  So, yes, this stuff happens internationally, and yes, it's a quarter of the total debt, and yes, they're gonna sell it.

• 2:04:13Speaker 04

  No, just a quarter of the foreign help portion, so it's all at 10% overall.

• 2:04:16Tom Ellsworth?

  Correct.

• 2:04:17Speaker 04

  Yeah.

• 2:04:18Tom Ellsworth?

  So, I, I see them, and I see them defending their currencies, okay, but I look at how much is owned by us, and what we print, and what we owe ourselves, and I, I don't see those two, I see what they're doing, and what they have to do themselves, and I see what their problems that they have, but I, I, I don't see them as having the cataclysmic effect on the stack.

• 2:04:41Speaker 04

  Oh, it will. It's absolutely priced on the margin. You're seeing it in the 10-year. Now, to your point, we own it ourselves, who, the Fed is one of the biggest holders. How did they, how did, where did they get the money to buy it? They printed the money. And ultimately, that's where this is gonna go. The 10-year yield's gonna go 4.66, 4.7, 4.8, and they're gonna come in, and it'll probably regulatory, under WASH, where they'll come out and they'll go, okay, um, we're gonna cut rates at the front end, and we're gonna sell rates at the back end, because that will sort of be enough magical hand waving to say, listen, we're shrinking the balance sheet, this is Main Street, not Wall Street.

• 2:05:12Tom Ellsworth?

  And we can flip, and then we can flip the debt to a lower rate, which I just did.

• 2:05:16Speaker 04

  Well, hold on, they will then cut, they'll, they'll change the regulations, because right now, if they change regulations, they will allow the banks to buy more treasuries. Right now, if they buy more treasuries, though, it counts against their capital ratio. So, banks right now, is that the regulations are written, they can lend to the government by treasuries, or they can lend to Main Street, they can't do both. WASH will lower the regulations, so they can do both, they can double count. It's very inflationary, very growth, pro-growth, uh, and I think that's some version of what they're going to do. And so, then you get into, um, who owns the bonds? We all own the bonds. Who's gonna pay for all of this? We all are. Inflation is gonna go from 4% to 6%, to 8%, to 10%. It won't be reported as such, but you'll see it. And that's where it'll get tricky later on this year, perhaps, maybe not.

• 2:06:01Speaker 04

  If they control the, through a districting, it doesn't matter. This is what has to happen, but this is what's going to happen.

• 2:06:05Tom Ellsworth?

  So, you sound like you're arguing all the way down the street to... The inflate out, right?

• 2:06:10Speaker 04

  Well, that's what's going to happen. There's no question. It started.

• 2:06:12Tom Ellsworth?

  All the, all the debt will be ultimately inflated out um at the, at the expense of the people.

• 2:06:17Speaker 04

  Yes.

• 2:06:18Tom Ellsworth?

  And, and right now, the, the one argument is on that side is we are just cross 23 cents on the dollar. I think of the budget is paying the interest. And if the rates stay up, next year's budget will be 25 cents on the dollar.

• 2:06:32Speaker 04

  Think about what the old Wall Street trick is, right? When you have a bad bond, when you have a bad deal, what, what is Wall Street famous for? Who do they get to buy their bad deals? Retail. What has happened to the US's treasury holdings over the last 10 years? You can see it. They publish it every quarter. Foreign and international as a share has dropped from every year for the last 10 to 12 years. Who's been the biggest marginal buyer? Mom and pop, Fed and US banks. So Fed, they can create the money. They don't care either way. But if you look at every, every disaster in my career, I've been doing this 30 years. From a finance standpoint, every bubble that bursts, who are the last people into the bubble? Commercial banks and US mom and pop retail. Who's been the biggest buyer of treasuries?

• 2:07:15Speaker 04

  Particularly at the seven to 10 year duration, seven to 30 year duration? Mom and pop and the commercial banks. And that's just how it's gonna go. And so you're gonna have, it's manifesting as political divisiveness, right? Why, cost of living is rising. Cost of living's gonna keep rising. Can Trump overcome it? Maybe because of some of these very astute political moves he's making with the redistricting, et cetera. But this-

• 2:07:36Patrick Bet-David?

  Not with cost of living. I, I don't think cost of living, that, I mean, you saw what Anthropic CEO said the other day. He's saying unemployment's gonna go to 10% and GDP's gonna go skyrocketing. So if unemployment goes up and the, the perfect storm here is you're fighting these language learning models now coding in ways that makes no flipping sense. You watch how they're coding right now. It's insane to me. Like when you're talking about younger entrepreneurs can come and out compete with the other guys. Because you can run a company as if you have 20 engineers based on these language learning models. So take that- Which you can't put the blame of that on Trump. You can't say, well, AI taking jobs away, that's on him. So that's the perfect storm.

• 2:08:21Patrick Bet-David?

  Then you got the war. Then you got the debt. Then you got interest rates. You got all of this stuff combining together. You know.

• 2:08:28Speaker 04

  Yeah.

• 2:08:28Patrick Bet-David?

  Good luck with affordability.

• 2:08:30Speaker 04

  Yeah, and I want to be clear. Once interest rates hit a point, they're not going to let them go higher. I don't think the 10 year is going to, you know, could it go to six for a cup of coffee? Six percent for a cup of coffee? Sure, anything can happen. But above 5% empirically over the last five years, every time the 10 year treasury yield in the United States goes up to 4.6 to 4.8% or higher, we immediately start to have dysfunction in the US treasury market. You can see that.

• 2:08:53Patrick Bet-David?

  Yeah.

• 2:08:53Speaker 04

  And so they will stop it there. And the release, it's simple. The release valve is the dollar. The release valve is higher inflation. That's just how it works. You can control the price of money or the quantity of money. You can't control.

• 2:09:03Patrick Bet-David?

  Where's your money in right now? Where do you invest in your money right now?

• 2:09:06Speaker 04

  I am in a blend of gold, T bills, electrical infrastructure in the United States is a huge area that benefits both from the growth, real growth and inflation. And.

• 2:09:20Patrick Bet-David?

  So short term, you're in T bills?

• 2:09:21Speaker 04

  T bills, gold, and a lot.

• 2:09:24Patrick Bet-David?

  What's the ratio? What's the percentage?

• 2:09:26Speaker 04

  What's that?

• 2:09:26Tom Ellsworth?

  Like Fermi?

• 2:09:28Patrick Bet-David?

  Fermi, the announcement, I don't know if you saw what happened with Fermi? The story that came out.

• 2:09:32Speaker 04

  No, I didn't see that.

• 2:09:32Tom Ellsworth?

  Electrical infrastructure, keep going.

• 2:09:33Speaker 04

  Okay, sorry.

• 2:09:34Patrick Bet-David?

  So what percentage is gold? The way you're looking at it?

• 2:09:36Speaker 04

  Gold is probably a quarter.

• 2:09:37Patrick Bet-David?

  Oh, really?

• 2:09:38Speaker 04

  Oh, yeah. Because, look, what we're talking about here is really good for the stock market in dollar terms. It's really bad for the stock market in gold terms. We can go back to 2022. The United States stock market is up, whatever it is, the S and P 500 total return is up, I don't know, 60, 70% in dollar terms. It's down 40% in gold terms. You go back to 2000, the S and P 500 is up 1,700%. It is down 50%, 60% in gold terms. And so to me, it's just a currency issue ultimately. Really, we have too much debt. We're not going to default. They will do what they have to do to make the money.

• 2:10:13Patrick Bet-David?

  Let's, that's an inflationary setup. Can you do it in 30 seconds? Because I'm going to do one more story before we wrap up.

• 2:10:18Speaker 03

  Okay. It is possible to control the quantity and prices separately because. It's not possible in equilibrium, but we don't have equilibrium. Of course, the solution would be to create hundreds, in fact, thousands more banks that would create credit, fund productivity. You get more growth, which solves your, you know.

• 2:10:37Speaker 04

  That's a good point. Productivity is the key.

• 2:10:39Speaker 03

  And so on, and so on. But so, but the conclusion really is it's, it's, it's going to be key what the Fed is going to do. And we have to see how, you know, what Kevin Walsh is going to do. But, you know, just on past Fed performance, we have to assume unfortunately that maybe they're not yet catching on that they need to help create many, many banks that will be the way out. But instead, there will be more monetization, money creation. By the way, I, I covered this in my Substack, r-werner.substack.com, if you may just mention that. But that's what I think we have to watch. And my forecast has been that we're going to get another huge bout of inflation, similar to what we had before. And it's a replay of the seventies.

• 2:11:23Speaker 03

  You know, we had seventy-three, first bout, and then seventy-eight, seventy-nine. And this is really playing out again. And the constellation is very similar, you know, Middle East, oil, and, and, but central bank money creation was then the key and remains the key now. And I think the money printing is going to be on.

• 2:11:42Patrick Bet-David?

  By the way, if you've got questions for Richard Werner, he's on Manact as well. Luke, where can people find you?

• 2:11:46Speaker 04

  They can find me at Luke, at Luke Gromen on X, and they can also find me at F F T T dash L L C dot com.

• 2:11:53Patrick Bet-David?

  F F T C.

• 2:11:55Speaker 04

  F F T T, yep, there it is.

• 2:11:57Patrick Bet-David?

  Okay. Rob, can we put the links below as well? So if people want to go find, great conversation as usual. I loved it. The debate is what's great about it, where the audience gets to learn. And I think we had that. Gang, great being with you guys today. Rob, what do we have tomorrow? Do we have anything tomorrow? Nothing tomorrow. Friday, we're back. Friday, we're back again with the podcast. And don't Manact Rob today. He's lost his voice. If you want to, he may respond back. You will not hear his voice if he does respond back. God bless everybody. Take care. Bye-bye, bye-bye.

• 2:12:25Speaker 06

  Now, more than ever, we need someone on our side. But Rob Whitman? Whitman's votes drove up costs, cut Medicaid, and risked 350,000 Virginians' health care to pay for tax breaks for himself and his donors. He's not on our side. Shannon Taylor will fight corruption, cut taxes, and bring down costs. This November, vote for Shannon Taylor. She's for us. Paid for by HMP, theHouseMajorityPac.com. Not authorized by any candidate or candidate's committee.