#1109 Vivek Ramaswamy On Using Money As A Weapon

Vivek Ramaswamy is the Co-Founder of Strive Asset Management. In this conversation, we discuss capitalism, pursuing excellence, how money is weaponized, how woke capital became the system, if the free market exists anymore, how China took over American companies, and the geopolitical tension between China & Taiwan. ======================= The number one name in NFT domains and the world’s most powerful wallet are teaming up to bring something new to the crypto and Web3 world: That’s right, Unstoppable Domains and Blockchain.com partnered to create NFT domain names ending in . Blockchain. It’s the perfect ending to show that you’re a believer in a decentralized future. The Blockchain.com community can get one, for free by signing up for the waitlist here. Free NFT domains provide all the benefits of premium Unstoppable Domains, including fee-free, lifelong ownership. Don’t have a Blockchain.com wallet? No worries, these new domains are available to everyone for as low as $5. Either sign up for a free blockchain.wallet or visit Unstoppabledomains.com to buy your domain today. ================== Exodus is leading the world out of the traditional financial system by building beautiful and user-friendly blockchain products. You can instantly exchange around 100 different cryptocurrencies straight from your wallet. Interactive charts let you view an asset’s price history and your portfolio’s performance over time. And maybe the best part, Exodus is integrated with the Trezor hardware wallet - making advanced security easy for everyone. Visit exodus.com/pomp for your free download or search Exodus on the App Store or Playstore. ======================= Bullish is a digital asset exchange that offers industry-leading order depth, consistently tight spreads, and new ways to earn, with world-class security. Combining innovations of DeFi with the performance of a traditional, centralized order book, Bullish lets you trade with certainty across variable market conditions. All in a regulated environment. Learn more at Bullish.com and follow @Bullish on Twitter today. ======================= Valour (formerly DeFi Technologies) represents what’s next in the digital economy -- providing simplified, trusted access to crypto, decentralized finance and Web 3.0 investment opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols, through a single stock purchase on a regulated exchange. Currently listed on U. S. (OTC: DEFTF) and Canadian (NEO:DEFI) exchanges. For more information or to subscribe to receive company updates and financial information, visit our website at valour.com ======================= Compass Mining is the world's first online marketplace for bitcoin mining hardware and hosting. Compass was founded with the goal of making it easy for everyone to mine bitcoin. Visit https://compassmining.io/ to start mining bitcoin today! =======================

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

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Vivek Ramaswamy is the co-founder of Strive Asset Management. In this conversation, we talked about being a capitalist, a citizen, how they pursue excellence in the corporate boardroom, why money is a weapon, how woke-ism doesn't challenge the system but may actually have become the system, whether the free market exists or not, China, Taiwan, and many other geopolitical topics. I really enjoyed this conversation and I hope you guys enjoy it as well. Once you get done listening, jump on Twitter and let us know what you agreed with, what you disagreed with, where we could have done better, and generally, what you

• 0:47Anthony Pompliano?

  thought of our various conversation and topics. Alright, let's get into this episode. I hope you guys enjoy this one.

• 0:52Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:16Anthony Pompliano?

  Alright guys, bang, bang. I thought a great spot to start is your Twitter bio. You got two words, citizen and capitalist. Why are those two things what you identify with and like why in that space where so many people go every single day to see who the hell is this guy tweeting all this stuff on the internet? That's what they read. Like, what is the importance of those two words?

• 1:36Speaker 02

  Yeah, I mean, I'm probably overthinking the Twitter bio there, but what was going through my head when I wrote it is, you know, I mean, look, there's, there's this question about what does it mean to be American in the year 2022? And I think being an American is a, is a pretty core part of my identity. But American is just a word. What does the actual identity mean? And, you know, I write about this in one of my books, but I spent a good amount of time thinking about it. I think there are, there's basically two parts of what it means to be an American. Okay. I think there's the part of our, you know, part of our brain that wants to be an individual, pursuing our own individualist dream, the rugged individual, the American dream through the system of free market capitalism. I think if we're being honest, there's a side of every one of us that is that rugged individual

• 2:20Speaker 02

  that wants to pursue our own individualistic dreams, full stop. And that's what it means to be American. And that's an important part of the story. But there's also the other half. And I think that sometimes, especially people on the right, but you know, across the board, are afraid to admit there's the other half, but there's the other half too, that thinks of and wants to be part of a whole that is greater than the sum of its parts, that strives and hungers for unity as well, and that identity as a citizen. And so the beautiful thing I think about American identity is that it's not one of those things, it is both of those things. Right? I mean, 1776, funny fact, not a lot of people know, obviously it was the year of the Declaration of Independence. It was also the year of the Wealth of Nations. And the way I look at it is, these are both of our parents, right?

• 3:05Speaker 02

  Individualism and unity, capitalism and democracy. The tension between the two is what produces this unique child of this country we think of as America. You know, myself, first generation American, think of myself as an American. And so, you know, my way of saying that I'm American, the way I say it is I'm capitalist and citizen, and that's what it meant to me.

• 3:25Anthony Pompliano?

  So, when I see you tweeting, when I see you on television, when I see you writing things, when I see people quoting you, I go, wow, that guy's got a point of view. And the point of view is sometimes on markets, sometimes on politics, sometimes on social issues, and it kind of cuts across. But you run a business that is very much an asset management firm. It's literally got asset management in the name of the business. Talk about this like intersection of all these different topics where maybe our grandparents or our great grandparents, it was kind of like, hey, shut up, we don't want to hear about all this other stuff, like, just do your job, right?

• 4:03Speaker 02

  Yeah, yeah.

• 4:04Anthony Pompliano?

  That like shut up and dribble, you know, type approach, versus like, well, now it feels like there's like a little bit of an information war going on around an asset management firm, but also other types of businesses as well.

• 4:15Speaker 02

  Yeah, so it's funny, because it comes full circle, and there's even a certain version of it where I might even be hypocritical relative to the direction I want to see the economy go. I do separate what one believes as a citizen from what one believes as an executive or a CEO or an asset manager. And so for me, I think keeping those lines straight is pretty important. It's actually, I did not know that I was going to Start an asset management firm. So Strive, this company I started this year, brand new. I thought I was done starting businesses. So I ran a biotech company for seven years. That was the thing I did till January of 2021. And I stepped down because I actually was pretty bothered by the rise of, you know, what I view as this cancerous mix

• 4:57Speaker 02

  of politics and business in our economy. And so that's what led me to actually say that, you know what, I can't be an effective biotech CEO. And by that point, you know, the company had been, you know, in its own world, reasonably high profile and, you know, had developed a number of drugs that were on their way to approval. There was no way I was going to be the CEO of a multi-billion dollar biotech company. And also be able to speak freely as a citizen on the issues that I felt that I needed to speak out on without having an adverse impact on the business. So what I did in the beginning of 2021 was actually step down from my role as CEO, pass the torch to, you know, my good friend who was the CFO for years, he now runs the company, to say that, okay, I'm going to speak as a citizen.

• 5:38Speaker 02

  And if you want to hear about the biotech company, great, listen to Matt. And that's, that's, that's what, that's what that looked like. So I thought I was done, actually, with my career in business. That's when I wrote the couple of books that I wrote. I wrote Woke Inc., you know, we can talk about that. I wrote a sequel to Woke Inc., which, you know, Woke Inc. was about the merger of business and politics and makes the case that that's a threat to both capitalism and democracy. But there was an objection that I never fully answered in that book, which was, okay, why are companies, some companies still selling this narrative? It's only, they're only selling it if people are willing to buy it. You know, victimhood identities and the kinds of one-sided progressive agendas that were pushed through corporate America. And so the second book was about, well, asking what it was about our cultural state and our national psyche that caused an entire generation, you know, generally people your and my age and younger

• 6:24Speaker 02

  to eat up these narratives that corporate America served them. But anyway, that's what I thought I was doing, is writing these books. I ended up getting back to starting an asset manager because one of the things that, one of the epiphany moments for me in writing these books was that, you know, there is one industry that is basically upstream of all of the others, that directs the flow of capital into basically all sectors of the economy. And that is the large-scale, predominantly passive asset management industry.

• 6:51Speaker 02

  Three big firms dominate it. BlackRock, State Street, and Vanguard. Those three manage, depending on the given day, at least as of a few months ago, over $20 trillion. That's more than the US GDP or on the scale of the US GDP. That were using those dollars to advance social and political agendas that most of the people whose money they were investing didn't agree with, or at least many of them didn't agree with. And so as much as I enjoyed writing books and writing on the pages of the Wall Street Journal and sort of making observations about this problem and the threat that I thought it posed to American democracy. At the end of the day, I built my career up to that point as an entrepreneur and I said, you know what, I'm going to put the hat back on, but this time, I'm going to

• 7:32Speaker 02

  start an asset management firm that competes with those big guys along the axis of voice and vote. So to say that we're going to launch index funds, but the key difference is going to be the voice and vote we bring to the table. And this is the part where it's ironic is the voice and vote we bring to the table as an asset manager is to mandate that companies focus exclusively on their products or their services. Do it for profit without apologizing for it and leave politics to the politicians. And so in a certain way, if you look at it in a full circle sense, there's a certain way in which it's kind of a meta hypocrisy where I am actually, as a citizen, unconstrained and vocal on a wide range of political, cultural, and social questions.

• 8:14Speaker 02

  But when I'm wearing my hat as the leader of Strive, the sole message I'm bringing to the table is mandating that companies focus exclusively on their products and that companies actually stay out of politics. And so that's the distinction I draw is, you know, if I'm speaking at my capacity as an investor, I'd like to think that I have some authority and maybe because of my experiences and education in capital markets and whatever, in the areas where I have a view, maybe my view might be better informed than the average person whose expertise is somewhere else. But if I'm opining about a political question or about a question that relates to how people vote at the ballot box, my voice absolutely does not count any more, any greater importance than, you know, my neighbors in central Ohio or the people I went to school with in Cincinnati

• 8:59Speaker 02

  or my, you know, former colleague. colleagues at a hedge fund in Manhattan, everyone's voice counts equally. And so that's the kind of the distinction I draw.

• 9:06Anthony Pompliano?

  So when you go to these businesses and you basically say, knock off the nonsense, right? Stop trying to virtue signal and kind of do all these other things. Just focus on what your business was set out to do, which is drive profits by serving your customers with great products and services. What's the response? Are they like, no, no, no, no, it's not really what our business is about like? And they have some other responses? Or is it like a thank you? We don't have to like bend the knee to asset managers that are like pressuring us to do things we don't want to do.

• 9:36Speaker 02

  So behind closed doors, it's closer to the latter. Okay. But my view is if you bring a diversity of voices to the table, that's strictly a good thing. Right now, the thing they hear is one monolithic voice from the, especially if you're a public company in the United States. The big asset managers are all pushing an agenda wrapped around with fancy three letter acronyms today. ESG is the chosen acronym of the day. And so, so, you know, if you're going to have an influence on underlying companies, I think there are basically three things that allow you to have influence. Okay. One is just the quality of the arguments that you make. These are human beings on the other side, after all, making these decisions, right? The, the second is, is just the selection of the companies you engage with. Not all companies are the same, not all industries are the same. Right?

• 10:20Speaker 02

  I mean, Elon Musk can be a new shareholder of Twitter and bring a new shareholder mandate to Twitter. That's harder than it sounds when you have 10 or 15,000 employees who don't want to do the thing that the new shareholder wants them to do. But the inverse is true too. That if you have an industry, say the oil and gas industry in this country, where people who work in that industry, including as executives, as CEOs or as board members, presumably, and it turns out, I think this is true, did not actually enter that industry because they thought they were destroying the planet or raising an existential threat for the future of humanity. But because they thought they were contributing to human prosperity and human flourishing. And guess what? If they've been told top down by the other public shareholders,

• 11:02Speaker 02

  and I use shareholders in air quotes, because they're not the real shareholders, we'll come back to that. But if they're told by their air quotes shareholders that they need to adopt. Emissions caps or net zero pledges by 2050 or scope three emissions reductions plans or whatever has been imposed and we can talk about the specific examples in the oil industry. Actually, if somebody else comes to the table and says, you know what? If you're an oil company, you should drill, you should frac, you should do whatever allows you to be most successful over the long run as a company. A lot of them are hungering for someone to come to the table with that message. And I even think they haven't said in so many words, but I think basically they're looking for

• 11:42Speaker 02

  cover would not exactly be the word I would use, but enough latitude to say, well, some of those shareholders, shareholders are saying that we need to focus on ESG. Some of those shareholders are saying we need to focus on our exclusively on our products and services without regard to those agendas. So you know what? We're just going to make our own business judgment. And in the industries where people who joined that industry cared about those products, they're going to end up doing a better job. So that's actually the play is just bring a diversity of voice to the table that at least empowers the kinds of people who are quietly thinking in the boardroom, the things that I'm saying out loud in the letters that I'm writing to these boards. I mean, you see the letter I wrote to Chevron by chance?

• 12:21Anthony Pompliano?

  Yes.

• 12:22Speaker 02

  Are you talking about that one or Disney or Apple?

• 12:24Anthony Pompliano?

  Explain the Chevron one.

• 12:26Speaker 02

  Yeah, since we're talking about energy, yes. So I wrote a letter to the board of directors of Chevron, which, you know, we, you know, my firm owns a position in. And the basic message to Chevron was, listen up, over the last couple of years, last, the last year in particular, you've taken some interesting steps. Coming out in favor of a carbon tax, coming out in favor of the Paris Climate Accords, adopting scope three carbon intensity targets that look like they were the product of shareholder pressure on your business, tripling the amount of investment into Chevron new energies relative to what your prior targets were. And there was a turning point when, when this happened, which was after a shareholder vote in 2021

• 13:10Speaker 02

  on a so-called scope three emissions reduction proposal. Okay. So what happened in 2021 was there was a Dutch nonprofit founded by a former refrigerator salesman in the Netherlands. And, you know, I respect anyone following their passion. So as is his right to do as a shareholder of Chevron, that nonprofit put up a proposal. That proposal called for what's called a scope three emissions reduction plan at Chevron. So what's a scope three emissions reduction plan? And my, my general rule of thumb is the more boring the nomenclature, the more you probably want to pay attention to what it is because

• 13:45Anthony Pompliano?

  Yes.

• 13:45Speaker 02

  It was designed to be anodyne and boring for a reason. So, so let's, this one sounds pretty anodyne and boring. That means let's pay attention to it. Okay. So scope one emissions refers to your own company's direct emissions.

• 13:55Anthony Pompliano?

  Hmm.

• 13:55Speaker 02

  Okay. Scope two refers to indirect contributions to emissions through your use of electricity and power and so on. But scope three refers to the emissions along your entire supply chain, all the way from your suppliers to your customers.

• 14:11Anthony Pompliano?

  That's not real.

• 14:11Speaker 02

  No, no, this is, this is, this is real. So, so scope three emissions, this is like, this is the new parlance. It's the new hot topic in ESG. So what a scope three emissions cap requires an oil company to do is effectively cause its own customers to reduce the utilization of the core product that they sell. It would be like the equivalent of, it, it, like, not the equivalent of it, it really would involve Chevron taking responsibility for every unit of fuel that it sells to Caterpillar. And Chevron is responsible for actually reducing the emissions contribution from that fuel without asking Caterpillar or an Amazon Prime truck or anyone else to share any of that responsibility.

• 14:52Speaker 02

  That makes about as much business sense as McDonald's voluntarily committing to reduce the adult body weight of anyone who's eaten a Big Mac without asking customer to share in any of that responsibility, even if that was a desirable thing to do. Right? So, so the question I asked to the board of Chevron was not why is a scope three emissions reduction target in, in, in society's best interests? That's a separate question for politics and politicians and leave politics to the politicians. That's my philosophy. But why is it in Chevron's best interests for Chevron as a firm to adopt this scope three emissions cap? And the funny thing is, the nonprofit, the Dutch nonprofit that proposed it, they didn't

• 15:34Speaker 02

  claim that it had much to do with shareholder value. What they claimed was that this is how they, what they need to do to fight climate change. The board of Chevron initially, is a keyword, initially opposed the proposal. They thought it made such little sense that they petitioned the SEC to leave it off their shareholder ballot. The SEC denied that. They then recommended to all of their shareholders to vote against it. But then sloppily waddling into that debate are none other than BlackRock, State Street, and Vanguard, who in 2021 voted for that scope three emissions reduction plan. And so the question, and then by the way, Chevron, now these shareholder resolutions are technically non-binding, so the board can still take its own action, but very few times will you find a board that stands up to a majority shareholder vote that goes in

• 16:19Speaker 02

  a given direction. And so what do you see the board doing? They, you know, adopt the tripling of their target to Chevron New Energies, which is, you know, I don't think competes, is unlikely, even based on things they've said on their own right, to definitively compete for returns on capital with the rest of their core oil and gas business. You have a number of steps that they took in the public adoption of scope three intensity targets, the public embrace of the Paris Climate Accord, the public embrace of a carbon tax, a lot of which was emphasized following this shareholder vote. So our point was, okay, that's the voice those shareholders are bringing to the table. Well, we have a post ESG mandate, and our post ESG mandate is that you ought to focus

• 17:02Speaker 02

  exclusively on what maximizes long-run value for your shareholders. That scope three emissions target, as best we can tell, makes no business sense. We'd like to see you rescind that scope three emissions target. Now, here's the rub, right? It's hard for you to do that when your other shareholders are pressuring you in this direction. You want to know the mystery at the heart of this? The people who claim to be your shareholders, BlackRock, State Street, Vanguard, they're not the actual capital owners of your firm. The actual capital owners are the everyday citizens whose money is being managed by BlackRock, State Street, and Vanguard. And the irony at the heart of this, all right, is that those firms, and firms like them,

• 17:46Speaker 02

  I mean, Invesco is no better, in my opinion, but these firms have aggregated massive assets largely because they said, "We're going to offer you low fees through these passively managed index funds because we're too dumb to pick your stocks. Okay, we're too dumb to pick stocks. We'll just give you low fees." And this is not a crazy idea. I mean, there's good logic behind this. "We're not going to beat the market. We're going to give you very low fees, offer you exposure to the market." But the very people who said, "We're too dumb to pick stocks," have somehow become sagacious enough to know how to design an entire social universe, weaponizing the money of everyday citizens to do it. And the irony is that they're using the money of everyday citizens, many of whom even disagree with the underlying agendas that they're pushing with their own money. So our view is, look,

• 18:31Speaker 02

  if you want to advance an environmental agenda or a social agenda with your own money, you're free to do that. This is a free country, and you can invest accordingly. Strive would not be a good home for your capital. And that's cool, right? This is a free country, diverse opinions. We ought to have those diverse opinions represented by the diversity of people who wield their capital accordingly. But if you want, with your money, to deliver a message to corporate America that's exclusively focused on maximizing your bottom dollar and say, "You know what? I might be on the left, I might be on the right. I want you to make as much money as I can so that I have enough to support the causes I want to support in my private life in other way." Well, for you, we would hope that Strive is actually,

• 19:15Speaker 02

  is hopefully, a good home. And that was what the premise was for launching Strive, but it's also been the premise for some of the public shareholder letters I've written to Chevron and some of these other companies. And I should say, by the way, I mean, Mike Worth, the CEO of Chevron, he responded that night. Cody's reply, he asked his CFO and other executives who offered to fly out to meet. We, I think, the next week had an extensive dinner where we had a healthy exchange. That is what's missing in corporate America's boardrooms today is right now, if you have the view that I'm articulating, you shut up and keep it to yourself. If you have the prevailing ESG orthodoxy beholden view, great, you voice that. And then there's a disproportionate airtime with respect to who gets airtime in that

• 19:59Speaker 02

  public debate, be it in a boardroom or be it in our capital markets, that creates the illusion that this is actually what most people want, when in fact, there's a big asymmetry between what most capital owners actually want versus the capital owners who are actually willing to speak up actually say they want. And I think that that's what tilts the scales of public debate.

• 20:16Anthony Pompliano?

  So when you write a letter like that to Chevron, you said that the CEO responded. He is responding publicly or privately?

• 20:22Speaker 02

  He replied on email. I sent it to him by email. He replied to me privately by email. Now, to his credit, he was on Bloomberg TV, I think, like, the next day when he was... I was on CNBC that the next morning. He was on, you know, or whatever, that week, whenever it was, he was on Bloomberg TV. And he was asked about it, and I appreciated some of the things he said. I mean, I think that people generally expect you to criticize, you know, a so-called, apparently activist investor. I forget exactly what he said, but it was basically at the end of the interview to the effect of, you know, this is him speaking that, saying that, you know, "Look, I want to take a more balanced... I've been trying to take a more balanced approach to this energy debate, and engagements like this help us take a more balanced approach." I said, "Okay, great. I'm glad to hear him saying that because that's part of the point, is to, by bringing

• 21:06Speaker 02

  a diverse voice to the table and a diverse mandate to the table." You know, I intentionally use the word diverse here because there's been a monopolization of what diversity means in corporate America. We bring a diverse voice to the table, diversity of thought to the boardroom, then, you know what, good things can happen. And so, in that sense, I'm a big believer in diversity. That's actually what's been missing.

• 21:26Anthony Pompliano?

  And so, when the executives come out and they have dinner with you, and I'm using them as just an example, but I'm assuming they engage in conversations when you write these letters across a bunch of different kind of engagements.

• 21:37Anthony Pompliano?

  What are they seeking? Are they like, oh, we never thought of this? Are they, okay, you know, help us understand your viewpoint? Like, what is that conversation?

• 21:46Speaker 02

  It was a multi-hour dinner. In this case, I was, I happened to be in the middle of, I think they offered to come out to Ohio where I am. I happened to be in New York that next week launching my, launching my second book. So I was in the middle of the book tour, but we said we'd take an evening in the middle of the book tour and, and, you know, have dinner with these guys. So the CFO and then there was another executive from their team, you know, had dinner. They booked up a place and, you know, I, you know, showed up at 7:30 or whatever. They were both there and we spent a few hours together. And the purpose, it seemed to me, was to actually hear the view, to actually understand what was the premise of this engagement? What was behind this view? To give them a chance to respond to some of those arguments. And my sense was they agreed with certain things. They had a different point of view on other things.

• 22:28Speaker 02

  But I think that one of the things that was interesting to me about, about, you know, the range of engagements we've had, not just this one, is that there's such pressure on these companies to justify the steps they've taken in the language of long-run shareholder value. When in fact, for many of these socially motivated actions, long-run shareholder value had a little to do with it. Now, why is that? We have this fiduciary canon in this country, fiduciary duty, fiduciary law in this country, that says that if you're an asset manager investing someone else's money, or even if you're a member of a board of directors or an executive who has a fiduciary duty to your shareholders, you have to operate with what's called a sole interest.

• 23:08Speaker 02

  It's called the sole interest rule, which says that your sole interest has to be to maximize long-run value. If it's your sole interest, that means there's no room for mixed motivations. Maximize long-run value and X, long-run value and Y. No, there is no and X and and Y if you're operating under the sole interest rule. That, that's a pretty demanding standard. And I think there's reasonable room for debate about whether that standard should even be framed the way it is. That's a public policy debate. I have views on this. Nonetheless, that's what the sole interest rule demands. And so if you want to get to the heart of what happened, I think, over the last 10 years or so, and I think a lot of this dated back to the 2008 financial crisis, and I can

• 23:49Speaker 02

  talk about that at length, but on the back of the 08 financial crisis, anyway, this trend began, what happened was there was a newly ascendant camp in public discourse about the future of American capitalism that said that, you know, the greed is good mantra didn't work, that's what got us into the 08 financial crisis. I disagree with that diagnosis, but nonetheless, that's a, it's a worthy point of view. And so we need something new out of American capitalism. And you know what? Milton Friedman, who in 1970 famously said that, you know, the social purpose of a corporation is to pursue profit, he missed something. And this is, this is, I think, the most powerful argument in favor of the ESG movement and stakeholder capitalism. It's an argument that deserves to be carefully considered, okay?

• 24:32Speaker 02

  What they said is Milton Friedman never responded to the following, and they're right, he never responded to this, which is the idea that, you know what? In that state of nature that the libertarian fantasizes about, there was no such thing as limited liability. What is limited liability? Limited liability is a legal creation. It's a law. It's a set of laws that basically say that the owners of a corporation, the shareholders of a corporation, are not liable for the debts or other liabilities of that corporation, legal claims made against it and so on, but they enjoy all of the upside, all of the profits that come out of that corporation's activities. That doesn't exist in the state of nature, it's a legal creation.

• 25:16Speaker 02

  And so the argument for stakeholder capitalism goes, as it goes, is that, you know what? There's a quid pro quo. There's a grand bargain at the birth of the American corporation, which says that in return for those great gifts that society bestowed upon corporations and their shareholders, like limited liability.

• 25:35Speaker 02

  We have an ask, and the ask is that you, corporations and shareholders, have to at least be charitable in taking those social responsibilities into account, too. You have to act in society's best interests at times, especially when it comes to containing your negative externalities. And you know what? That's part of the grand bargain, the social bargain that allows capitalism to exist. I don't actually agree with that view, but I respect that view. It's a worthy view. I think that the legal history is mostly wrong there. Okay, so for the actual legal history, and I traced this in Woke Inc., is actually the fact that there was a grand bargain at the inception of the American corporation codified in American corporate law.

• 26:17Speaker 02

  But it wasn't the one presupposed by the stakeholder capitalists, that it was an unspoken grand bargain. They say, "No, no, no, this was an explicit grand bargain. It's written into the law." And the explicit grand bargain is, in return for these great gifts like limited liability, which would otherwise make corporations incredibly powerful, you're shielded from liability while corporate shareholders, you know, enjoy all of the upside. With that great power comes a responsibility to stay in your lane. To actually, you can be Frankenstein's monster, but Frankenstein's monster has to stay in his cage, the cage of the market, without wielding undue power over the political process by engaging in a wide range of social or political issues. And there's great proof for that in the legal history. Actually, back in the day, you know, 1800s, even early 1900s, if you got a charter from

• 27:02Speaker 02

  the state to have a corporation, a charter gives you the benefits like limited liability, which you would need in order to raise money. If you went beyond the charter that the state granted you, let's say you had a charter to be a bridge-building company, and you tried to build a toll road instead, you lose those benefits. So they say you lose your limited liability and you lose all of this if you go beyond the narrow purpose for which that corporation got its charter. Over the years, that got expanded to any profit-seeking activity. But that was baked into the grand bargain. So, anyway, that's Woke Inc. stuff and, you know, legal history I could tell you about. But back to the argument for stakeholder capitalism. So even though I disagree with it, it's at least a coherent view that deserves careful consideration and debate.

• 27:43Speaker 02

  That's what Larry Fink, is the CEO of BlackRock, I believe it is what he meant when he repeatedly said for years that businesses have to earn their social license to operate every day. Refers to this idea of the grand bargain between businesses and society. There's something interesting that happened in the last couple of years. Like this is in the last 12 to 24 months. A lot of this, I think, is in response to the arguments I made in my book, In Woke Ink and Elsewhere. So I made the counter case. And I expected, I'm a big believer in get the best ideas on the table. Be open to changing your mind if a better one comes along. You know, your ideas aren't like your kids, okay? If a better one comes along, you can just take it instead, right? More like a set of clothes. You try it on, now that something else fits better, you try that on instead. I try to bring that attitude to the table.

• 28:28Speaker 02

  I hope my peers in public discourse do the same. So I was waiting for, maybe there's a better idea. Maybe there's a better counter argument to the case that I made. It turns out that the other side made a really interesting move. They didn't come back with a different argument. What they said is instead, no, actually, forget everything we said before. We didn't really mean that. Stakeholder capitalism is really just capitalism. It's just about long run value. So all that stuff about earning the social license to operate and the quid pro quo and the grand bargain at the inception of the corporation, nope, forget about that. You don't know why, because their in-house lawyers told them actually there's the sole interest rule in the fiduciary duty in the United States demands that you actually act in financial interest. So he was kind of right about that.

• 29:12Speaker 02

  And if you keep saying this, you're going to get us in trouble. So they said, okay, actually, you know what? Disregard that, it's just about long run financial value. And so what happens is you then get these shareholder proposals like that Dutch nonprofit whose motivation has nothing to do with long run financial value. It's about addressing climate change, worthy goal perhaps, but nonetheless, okay? That's not a goal that relates to the best interests of Chevron as a business. And the board of Chevron initially says that, okay, yeah, we agree that's not in the best long run shareholder interest, so we stand against the proposal. So if you've just flash freeze that, the guy who is in favor of the proposal and the board who's against it agree on one thing, which has nothing to do with long run shareholder value, yet when BlackRock and Vanguard and State Street waddle in and then have to vote and then choose to vote in favor of that proposal, they have to justify it.

• 29:56Speaker 02

  And then the management team and board of Chevron, which then bend the knee to BlackRock and State Street, have to change their story to say that, no, no, no, actually, never mind. This is just about long run value maximization. That is a farce. It is a lie, I believe. It is mostly intellectual jujitsu that has no truth at its core. By the way, same thing at Apple, just as a side note, I wrote a shareholder letter to Apple. There was about a racial equity audit proposal. Okay, the group that was advancing the racial equity audit proposal at Apple. That one of their stated objectives is to hold companies like Apple accountable for their role in perpetuating white supremacy. Noble goal, perhaps. Debate for another day. I have my views on that, too. But that's as is their right.

• 30:40Speaker 02

  Apple's board initially said, that doesn't make very much sense for us to adopt. So, thank you very much, we won't. But then waddling in our BlackRock and State Street in that case, that vote in favor of it, that's just this year, in 2022, vote in favor of it nonetheless. And then Apple, lo and behold, months later, is now conducting a racial equity audit. And so, I think we should just be honest about what the motivations are. Maybe businesses shouldn't just focus on maximizing overall value, but if that's the case, let's have that debate. But instead, I think failing to win that debate, what this camp did instead, the pro ESG camp, is they completely changed their justification in tune to say that actually it wasn't about making society a better place, it was just about long-run value maximization

• 31:22Speaker 02

  all along, which just introduces this dishonesty in the debate and confuses the public as to what's actually going on. And so, what I'm trying to do with these shareholder letters and engagements with boards, etc., is pierce through that. Okay? Where it's a farce, let's actually get into the specifics and smoke out what's actually going on. Because once you smoke out what's actually going on, we can all agree or disagree, and some of us might agree and others might disagree, but at least we can understand exactly what we're debating, as opposed to creating this smokescreen, which I think leaves us all worse off.

• 31:52Anthony Pompliano?

  This episode is brought to you by Unstoppable Domains. They've partnered with blockchain.com to create NFT domain names ending in .blockchain. It's the perfect ending to show that you're a believer in a decentralized future. The blockchain.com community can join a short waitlist to get one for free at blockchain.com/weightlist/blockchaindomain. Free NFT domains provide all the benefits of premium unstoppable domains, including fee-free lifelong ownership. If you don't have a blockchain.com wallet, no worries, there's new free domains available to everyone. Either join the waitlist for a free blockchain.com domain, or visit unstoppabledomains.com to buy your domain today, starting as low as $5. UnstoppableDomains.com.

• 32:36Anthony Pompliano?

  This episode is brought to you by Exodus. Accessing Web3 across multiple networks just got a hell of a lot easier. Exodus is one of the most popular crypto wallets for mobile and desktop, and they just added Chrome and Brave web browsers to the lineup. The new Exodus Web3 Wallet is a multi-chain browser extension that lets you safely navigate Web3 and DeFi apps on Ethereum, Solana, and Algorand from one wallet. Manage Mint and Sell NFTs on multiple networks in one wallet. You can swap Solana and ETH tokens natively right within the extension. And if you ever hit a snag, world-class customer service is available 24/7. More of your favorite chains are on the way, so run, don't walk, over to exodus.com/pomp to download the Exodus Web3 Wallet right now. Again, exodus.com/pomp.

• 33:21Anthony Pompliano?

  Go check them out today. One of my big questions here is you guys have $400 million, give or take, in assets. Many of these other organizations have trillions in assets. Why are they responding to you? Like, is it the power of the idea? Is it the fear that you are going to whip up, you know, public support? Is it they reply to everybody who writes them a letter? Like, why do you think it is that whether Chevron, or I don't know if Apple or others, you know, have responded? Like, why are they engaging, given, you know, in the grand scheme of things, you guys are still growing, but small compared to the Black Rocks and the NFTs?

• 33:56Speaker 02

  Yeah, I mean, so we launched our first fund in August, right? So I would say one thing is I think, you know, most people who are, who will be in the industry would tell you if you have a firm that launches its first fund in August, and then it's at, you know, at $400 million by whatever, mid October or where we are right now, two months later, you know, that's, that's considered to be actually a sign of the velocity. Well, yeah, I mean, more, I mean, I think it would defy industry norms, but it's tiny in the scheme of, of the multi-trillion-dollar asset managers that are out there. So like I said, I think these are human beings. On the other side, human beings, I think, are persuaded by arguments. I mean, you can read the Chevron letter and, and judge for yourself what you think about the quality of the arguments made in that letter. But, you know, I have spent, you know, some, some time on this

• 34:41Speaker 02

  over the last couple of years analyzing these issues. You could read Woke Inc., you can, you know, evaluate what the quality and merits of the arguments are in their own right. You know, every reader can come to their own judgment, but that's a factor that independently matters irrespective of the weight of capital behind it. I think a lot of people forget that, right? I think that at the end of the day, when it comes to debating ideas, the quality of the ideas and the arguments that back them up inherently have value in their own right. Okay. And then I think, you know, selection of which companies you engage with, look, I think Twitter is not Chevron. I think that there are companies that in many cases, I mean, Exxon appears to be a company that also had bent its knee after an activist campaign. And that, and that actually brings me to, to the next point, which is Exxon in

• 35:22Speaker 02

  part bent its knee on the back of an activist campaign run by a tiny shareholder, engine number one, who led an activist campaign that then got BlackRock and others on board, but nonetheless influenced America's largest energy company, a company that as recently as 2013 was the largest company in the world by market capitalization. So I know people forget that. And now it's whatever Apple, Facebook, Google, or no, not Facebook, whatever, Apple, Amazon, Google, and Apple, Amazon, Google, Microsoft. Those are, those are four big, but four US tech companies. And then Saudi Aramco are the top five is at least as of a month ago. Yet as recently as 2013, it was Exxon and Exxon's own direction was changed by a tiny activist investor that had its own success.

• 36:07Anthony Pompliano?

  Explain this, what kind of what happened here, right? Because I think this is like a very interesting one. And then maybe we'll talk about Netflix, which kind of, you know, changed its course, then now it's almost reversed its course a little bit. But in the Exxon example, business is the largest business in the world. An activist investor shows up tiny in size, makes a lot of noise and kind of persuasive arguments. What does Exxon do differently? And then how did that impact the business?

• 36:31Speaker 02

  Yeah. So, so they basically put new directors on the board of Exxon to vote for a revised change in its climate change strategy. So when BlackRock cast its decisive vote to say they're going to vote for three of those dissident directors, it was basically a done deal that there was going to be a new board at the table at Exxon.

• 36:50Anthony Pompliano?

  And who makes the decision inside of these large organizations, these large asset managers?

• 36:55Speaker 02

  So opaque. It is so opaque. So they have these Governance departments, these stewardship teams. But it's like, you know, people talk, people joke about the deep state in government. This is like deep corporate within the private sector, right? Like, these are the people, they're not the ones with skin in the game. Many of them aren't even professional investors. They're professional bureaucrats hired within the so-called governance departments of these organizations. The shareholder stewardship or shareholder engagement arms, whatever each firm calls it, that are professionally making the decisions to say that this is the right thing that the company must do.

• 37:29Anthony Pompliano?

  Is that a problem, that it's not the investors making the decision and it's something, somebody else?

• 37:33Speaker 02

  I think it's part of the problem, absolutely. Now, some firms are saying that they would take more input from their portfolio managers, who are at least closest to the investments. I mean, if you had to pick, that's definitely a better approach, right? Now, now, I think that this-

• 37:46Anthony Pompliano?

  If, if you are optimizing for shareholder value, but if you are optimizing for other things, maybe it's not the best approach, right?

• 37:52Speaker 02

  Exactly, and so that's actually making the statement. And, and again, that gets back to the debate that's going on is, maybe businesses shouldn't actually optimize for shareholder value. It's not my view, but, but that could be a coherent view. But if that's what's going on, that's definitely consistent with the way the behaviors have played out, with the way the organizations are structured. But then they claim after the fact and wrap it in the veneer of long-termism or whatever. But, yeah, there's, there's basically professional bureaucrats, a lot of people who are populating these new ESG ranks, are basically people who bring the technical appearance of doing finance, right? It's like, it's like a, you know, Guy Goldman's daughter or whatever, son or daughter, that would have otherwise gone to work at a nonprofit or Greenpeace or whatever. And then they say, oh, no, you don't have to do that anymore.

• 38:36Speaker 02

  You can actually just go do that Greenpeace stuff inside the private sector, and I can be more, more proud of you because I think you have a real job. And then they join the ESG department, where they probably don't know how to run a discounted cash flow analysis of how you actually value a firm, but they do know how to create spreadsheets. And they knew that you do a discounted cash flow analysis on a spreadsheet, so it feels like I'm doing finance. Like, I'm making a spreadsheet for a different thing, I'm doing ESG scoring on the spreadsheet. And so it creates this illusion of, oh, yeah, yeah, those people who did finance, I'm doing finance now too, except it's actually, has nothing to do with the actual financial attributes of assessing the value of a firm, but the veneer, the look and feel of finance, that the quasi-rigor associated with investment analysis, to bring that-

• 39:19Speaker 02

  Masquerade to actually just implementing what is a political or social agenda that they would have otherwise done at, you know, at a nonprofit or at a political organization. So it's kind of a funny cultural thing that's happening.

• 39:30Anthony Pompliano?

  Yeah, so this is fascinating because I don't think that any large asset manager is all Democrats, all Republicans, or frankly, it's probably not even 50/50. There's people who have all kinds of differing views.

• 39:45Speaker 02

  Totally.

• 39:46Anthony Pompliano?

  Some of them think American politics are stupid, right?

• 39:48Speaker 02

  Yeah, exactly.

• 39:49Anthony Pompliano?

  Some people think that that is literally life and death, right?

• 39:52Speaker 02

  That's right.

• 39:53Anthony Pompliano?

  Do they have disagreements internally on some of these issues?

• 39:55Speaker 02

  I think they do. I think that there's, especially now that it's resulting in backlash to these organizations, I think that there is more dialogue, at least, and I'm talking very recently, I think, coming up in the ranks of these big asset managers. We've recruited some people out of, and we had two co-heads we took out of State Street, who joined Strive that run our institutional business now. They clearly did not agree with the direction that State Street is a firm.

• 40:16Anthony Pompliano?

  Well, what's interesting is because you're providing the diversity of opinion and thought inside of the boardroom, and now they can sit there and say, well, this group of shareholders thinks A, this group of shareholders thinks B, we've talked about what the pros and cons of that are. But if you also provide an opinion, a different opinion inside of the asset management firms, in some way, I think of it as career, like, cover, you're allowing people now to voice the opinion that may have otherwise been quiet. And what it does is it creates dialogue, discussion, debate, and people who disagree with the other side will say that's bad, right? But I think the objective view would be, well, don't we want people to discuss and debate which way should we vote before we vote, rather

• 40:59Anthony Pompliano?

  than just say, we're always going to vote one way on every single topic because it is a social or political, you know, leaning.

• 41:08Speaker 02

  So, so I will say this, I mean, it's one of the things I said in the opening to my first book, is I think the best measure of the health of any democratic society. Is the percentage of people who feel free to say what they actually think in public.

• 41:24Anthony Pompliano?

  How is it matters? How is America doing on that?

• 41:26Speaker 02

  I think we're doing pretty poorly is the answer to that question.

• 41:28Anthony Pompliano?

  I think I believe I agree.

• 41:30Speaker 02

  We might, we might have hit our, we made, we might have hit our nadir in like the summer of 2020 through 20, summer of 2021, that might've been the low point. I think we're on the beginning of a rebound, actually, and I feel good about that. And whatever small role I have played in that, that, that's probably one of the most important things I've done.

• 41:46Anthony Pompliano?

  I think about a pendulum.

• 41:47Speaker 02

  But I think that that's, but more of us need, but we need, it's, it's a little bit of a pendulum.

• 41:50Anthony Pompliano?

  Swinging back.

• 41:51Speaker 02

  You know, so, so swinging back. And, and this is, this is something I talk about in my more recent book too, is people do analogize, you know, even, even I did this before I refreshed myself on the history, analogize the rise and fall of the American experiment to the rise and fall of the Roman Empire. If you actually study the history of Rome, there wasn't one rise and one fall. There were many rises and many falls. And I think the same goes, if you, if you just take a careful study of American history too, there were many rises and many falls. And so, you know, I, I think, I think we might've hit a nadir on this attribute that I think is the, I, I think is the most important hallmark for a democracy. People think it's about, there's a lot of discussion these days about our democracy. What does it mean to defend our democracy? People, I think some ways fetishize the number of ballots that are cast every November. And I'm not, not saying that's not important, but that's just the, that's just the final act

• 42:36Speaker 02

  at the end of the process. The real litmus test of the health is if you have an opinion, do you feel free as a citizen to share that in public or not? And if you don't, I think that's an indictment of the health of, of a democratic society. So, so part of my mission, I mean, this is even pre-strive, just as a human being, what is part of the impact I want to have on the country and the world is at least to create the space where we close that gap between what you believe in private and what you're, what you're willing to say in private, what you're willing to say in public. The smaller that gap is, the healthier our body politic is, the healthier capital markets are, the healthier system of American capitalism is. That I, I, I could, I think that's, I think that's, I mean, we could, we could just talk about that for hours.

• 43:18Speaker 02

  I mean, I think that, just to close the BlackRock theme up for a second, one of the things, the story would be incomplete if I didn't know one of the reasons why they're doing what they're doing.

• 43:29Anthony Pompliano?

  Okay.

• 43:31Speaker 02

  Is that some of their clients actually want them to be doing it. In fairness, right, you know, the state streets and Vanguard's and BlackRock's of the world will tell you, our clients are demanding it. They're not, they're not totally wrong about that. So CalPERS, the pension fund in California and, you know, New York pension funds or whatever, and I'm, I've been traveling so much, I'm losing track of where we are. I'm like, are we in Calif-- no, we're not, we're in Florida. But, you know, Florida's very different. But, but, you know, CalPERS and, and New York, they're effectively demanding that these asset managers adopt these values. And what they say is, we're not going to do business with you unless you adopt a firm-wide commitment to the Paris Climate Accords, to modern diversity, equity, inclusion standards, to net zero pledges, et cetera.

• 44:14Speaker 02

  So what that means is, a firm-wide commitment means, not only with our money, but with everyone else's money too, you have to vote accordingly. See, that's where, that's where this hit a rub, which is, you know, put yourself in BlackRock or State Street's shoes. These are big clients. They're demanding it. They want me to be a signatory of the Climate Action 100+ Network. Look that one up, right? It's a horizontal network, representing $68 trillion of assets under management globally. Majority market share in the global asset management industry. Usually, if the actors with majority market share in a sector get together and sign a common set of commitments that affect consumers, we have a word for that. We call that an antitrust violation or a price fixing violation, but somehow today we call that ESG, if it's the Climate Action 100+ Network's pledge.

• 44:59Anthony Pompliano?

  Has anyone gone after it from an antitrust standpoint?

• 45:01Speaker 02

  Just started to very recently. So Arizona's attorney general's opened up an investigation. I think numerous other states are, are expressing concern about this as well. So, so that's a whole separate, you know, angle here. I think, I think the title of his op-ed in the Wall Street Journal was that ESG may be the largest antitrust violation hiding in plain sight. I think it might have been the opening line of his piece. I think he had a good argument for it. I've spoken extensively about this as well. But anyway, that's part of the reason guiding this behavior is there's a cynical economic force lurking behind the scene too, which is, you know, the way this basically goes is Europe adopts some disastrous energy policy that caused them to live a second world lifestyle. Californians think it's cool to be like Europe, so California adopts those disastrous policies,

• 45:44Speaker 02

  but they don't want to be uncompetitive as a state, so they use their pension fund dollars to make sure that the private sector is the vehicle and investment dollars are used as the vehicle to ensure the rest of the country suffers their same fate. That's what we're seeing basically in this so-called green energy revolution that we're watching unfold in plain sight is as a, you know, slow motion disaster. But anyway, that's part of what's driving this too, is it's not just the culture of fear, there's an economic component to this. But anyway, back to the more important point is, I just think that, I just think that our capital markets are better off, corporate decision-making is better off, and American democracy is better off. If people don't feel like they have to choose between the First Amendment and the American dream, between speaking their minds freely and putting food on the dinner table, say

• 46:29Speaker 02

  if you're an employee at one of these firms, or an executive at one of the underlying companies, but where people feel like their experience of being a citizen, part and parcel of it is being able to disagree in the open, to dissent with a prevailing view, that's, I think, the real, the real thing that matters. We started a conversation about what it means to be American, I think that's, that's a pretty darn important part about what it means to be American, and I think we've been missing it for a few years.

• 46:55Anthony Pompliano?

  So, when these pension funds are doing this, right, it's kind of interesting, because you have companies that are receiving pressure from asset management firms, the asset management firms have very opinionated views in terms of what they want the companies to do, but then they point and they say, "Oh, well, that's because our pension fund people are telling us to do that." Do the pension fund people say like, "Yep, I am the CIO, the director, the, you know, executive at the pension fund, and this is what I believe we should do?" Or are they then kind of passing, you know, the hot potato and saying, "Oh, no, our pensioners are the ones who are demanding it." Like, how far back does it go?

• 47:27Speaker 02

  I think we're getting pretty close to where the buck stops, but then what they do is they just point all around them. So it's just like, it's a point. Pointing game at somebody else. So, you know, S and P or Moody's or, you know, Morningstar. These are ratings kind of agencies. They're adopting these ESG factors. And so they'll say, this is the way the world is going. So we're just guiding the underlying asset managers to go in the direction the world is already going. So I talked about the Climate Action 100 plus network of asset managers. There's a very similar industry association of consultants. Indeed, the very pension fund consultants who tell pension funds where to invest. And that horizontal industry association says they will not make a recommendation to a pension

• 48:10Speaker 02

  fund to allocate dollars to an asset manager that isn't a signatory of the Climate Action 100 plus network or that isn't on board with the Paris Climate Accords. And so it becomes a one giant circular reference. But you're right, the asset managers are basically pointing upstream to say that this is what our clients are demanding. So there's a funny little story about this even the last few weeks. So, so a bunch of, I think, like 19 state attorneys general, generally from, I think, red states, sent a letter to BlackRock saying that they were concerned with BlackRock using its investment dollars, its client dollars, to pressure oil companies to reduce production. And BlackRock issued a response, you know, some number of weeks later, said, ah, you guys are wrong. We're not doing that. We don't use money, client funds

• 48:54Speaker 02

  that we manage for clients, to pressure oil companies to reduce production. Just wrong. You got it wrong. There's our refutation. Within a week, the comptroller of the city of New York says that, you know what, I find BlackRock's response alarming. That's the word he uses, alarming. And basically, that's not what you told us. That's not the commitment you made to us. So in a certain sense, you, you just see, you see a bifurcation in this market is inevitable. Okay. You have clients with diverse interests. It's like, you know, I went to law school as well along the way, part of my, you know, winding background, but Basic point in law school, you can't represent the plaintiff and the defense in the same case. It's a basic conflict.

• 49:39Anthony Pompliano?

  Shocking.

• 49:40Speaker 02

  Yeah, shocking. Especially if you're going to be a vocal advocate, you can't vocally be an advocate for the plaintiff and the defense. Well, I'm not sure that California and Texas have aligned interests on energy policy right now and the energy policies that are in part implemented really through the companies that operate respectively in those states. Well, if you have clients with fundamentally different underlying interests, I don't think you can be a vocal financial fiduciary for those clients with divergent interests at the same time. If one state wants you to pursue profit and another state wants you to pursue social agendas that are orthogonal to profit, you can't be a good fiduciary to both at the same time if you're only bringing one voice to the table.

• 50:16Anthony Pompliano?

  So are the pension funds that disagree with the way the asset managers are voting or their perspectives, are they not pulling their assets because there's no alternative? Or are they simply, they don't want to rock the boat? Or they are thinking it in private, but if they pull the funds, then that's basically a public expression of their viewpoint? Like, why is it that California and Texas, if they have diverse views, but the asset manager, which is kind of a central point of failure, if you will, in this system, is voting one way? Well, obviously, one of those two state pension funds disagrees with the way that the vote goes, and so why is the dissenting voice not pulling the funds?

• 50:54Speaker 02

  Short answer is it's starting to happen slowly, right? So even this issue, people forget this sometimes, it's a relatively recent issue, right? I mean, BlackRock only changed its posture on voting, you know, using aggressive social agendas in its voting practices, starting, I think, like 2018. And 2018 is when a lot of this ESG steam picked up a new fervor. Okay. Why 2018? I don't know. But I think Donald Trump had something to do with it. He pulled out of the Paris Climate Accords or sort of rejected joining the Paris Climate Accords. For some reason, there was something about that moment that really caused this behavior to pick up. This came in, that's not that long ago, right? It takes a couple of cycles to even see what voting behavior looked like.

• 51:33Anthony Pompliano?

  Around then, he was firing off tweets talking about little rocket man and our North Korean dictator friend, right?

• 51:38Speaker 02

  Yeah, exactly.

• 51:39Anthony Pompliano?

  Like doing the whole thing.

• 51:40Speaker 02

  Something about Donald Trump, right, that just made everyone.

• 51:43Anthony Pompliano?

  Yeah.

• 51:44Speaker 02

  Especially the people politically on the side of him, lose their ability to otherwise engage in constructive rational thoughts. Smart, intelligent, often even brilliant people. It's like, it's like you hit them with like mad cow disease or something like that. They just lose their ability to think and process thoughts as a grown adult and human being.

• 52:00Anthony Pompliano?

  It goes back to your comment about democracy. Like now, uh, somehow in public discourse, almost on a daily basis, I see someone on one of the sides of the aisle talking about threat to our democracy.

• 52:11Speaker 02

  Yeah.

• 52:12Anthony Pompliano?

  And I'm like, there's a lot of threats to democracy that just popped up over the last four years, five years, right?

• 52:16Speaker 02

  The threats to democracy are plural.

• 52:18Anthony Pompliano?

  Yeah.

• 52:19Speaker 02

  And, and, and the, the people who are most fervent, uh, wherever they're on the debate, the most fervent defenders of our democracy are almost uniformly posing a significant threat to it that they fail to see themselves. I mean, I think this merger of state power and corporate power that we're seeing in the last four years, including between large tech firms and, and the government. I mean, this is, this is to me where the biggest threat to democracy lies.

• 52:44Anthony Pompliano?

  Okay, explain.

• 52:45Speaker 02

  Yeah, I mean, look, I mean, I think most of what's going on in the private sector today, this is true in the ESG debate, but I also think it's true about censorship on the internet. It's all part of this broad discussion we're having.

• 52:55Speaker 02

  Is effectively the government using private companies to do through the back door what the government could not get done directly through the front door under the constitution. This is frightening stuff, right? So, so if you take a look at like, you know, this guy, I mean, I don't, I don't know him, but this guy Alex Berenson or whatever, was taken down on Twitter, okay? I mean, my full extent of knowing the guy's exchanges on Twitter, never met him outside of it, all right? But as I could care less about defending what he said or not. I don't even have any view on the content of what he said that caused him to get taken down. But whatever, Twitter shut down his account. What we discovered in recent months was that that happened after the White House specifically pressured Twitter to take down his account.

• 53:39Speaker 02

  Just, just pause on that for a second.

• 53:41Anthony Pompliano?

  Explicitly said his account.

• 53:43Speaker 02

  There's a meeting that Twitter executives have, are having in the White House, and they're asked multiple times, why haven't you shut down? Alex Berenson by name. This is the stuff of founding fathers rolling over in their graves. What did Alex Berenson do? He was a critic of the government. So the government censoring critics of the government. This is the paradigmatic First Amendment violation that the founding fathers had in mind when they wrote the thing called the First Amendment. It's pretty damn important. That's why they called it the First Amendment to the Constitution of the United States. All right. So now it's even worse, though. It's not the government is censoring those people because there's a pesky thing called, you know, doggone it, the founding fathers put that First Amendment in. This is gonna be kinda hard to do. Here's what we'll do.

• 54:28Speaker 02

  We use private companies and use threats to those private companies and give them some carrots, too. You gotta have the velvet glove as well. Combination of inducements and threats to get them to do what we can't do, to give them our dirty work because they're not bound by the First Amendment. This is the stuff of fascism. Fascism, classical definition of fascism is the merger of state power and corporate power to do what neither could do on its own. The state deputizing the workings of industry to effectuate the state's agenda. And you see that, by the way, in the environmental agenda as well, right? Green New Deal couldn't pass Congress, no problem. We'll just get John Kerry to go around and, you know, travel around in a private jet

• 55:09Speaker 02

  to meet the banking CEOs of this country and pressure them into signing the climate pledge, which includes some of the same policy objectives of the Green New Deal that they couldn't pass through Congress. Why is it that Alaskan drilling doesn't take place? There's no Arctic drilling, almost no financing for Arctic drilling. Is it because it's illegal? Not quite. It's because every financial institution in this country, every mainstream major financial institution, has signed the climate pledge. Banks are not charitable institutions. The question is, what are they getting in return? Right? And this gets to your world a little bit here about, about the corruption of even centralized finance, but that's a separate topic. The thing I'm talking about is...

• 55:49Speaker 02

  The repeated pattern we now see in the private sector is the use of corporations and asset managers and financial institutions included in that to be able to indirectly accomplish what the government could not directly accomplish under the Constitution. And I find that to be, you know, talk about threats to democracy, that I think is the single greatest threat to democracy today. I mean, it goes, different people use different words, you know, it's what Klaus Schwab, the founder of the World Economic Forum, calls the Great Reset. It's the dissolution of boundaries between the public sector and the private sector to do what actually neither one could do on its own. You know, this is, the good version of this is solving shared global challenges that

• 56:32Speaker 02

  government could not itself address on its own, that the private sector needs to step up to the plate, that misinformation and hate speech and the perpetuation of disinformation online and the challenges of a warming planet for the future of humanity, governments are not doing enough. And so this is what requires us to dissolve the boundaries between public and private institutions to address these issues together. I mean, agree or not, that's the view, right? That's the view of the World Economic Forum, it's the Klaus Schwab view, it is the view of the proponents of stakeholder capitalism, it is the view of the proponents of the Great Reset. Let's debate that because I find, I shudder at that world in which that boundary between the public and private sectors is dissolved.

• 57:15Speaker 02

  That's exactly where we find ourselves today. And we talk about threats to our democracy by the very people who are perpetuating that agenda. It's why I say, actually, you might want to actually take a look in the mirror and, you know, engage in some introspection in terms of what contribution you're making to fueling the so-called threats to our democracy as well.

• 57:33Anthony Pompliano?

  How much is that blending received in a positive way by executives at, whether they're private companies, asset management firms, or whatever? Because there seems to be a revolving door between the people from those organizations going into positions of power and influence of the government and back.

• 57:51Speaker 02

  So it's worse than the revolving door. So how much is influencing it? Absolutely, but it's even worse. It's like the revolving door is the second best option. The first best option is, you don't even have to. Go into government to exercise political power. So I was at a dinner a couple of years ago with Jamie Dimon. There was a founders forum, or whatever they, whatever they call it, to get a bunch of, you know, young up and coming company CEOs in a room together with, you know, the big guy, Jamie Dimon, big marketing event that JP Morgan runs. And so this is back when I was CEO of the biotech company that I founded. So I was there in that capacity, but he's spouting off about one political topic after another. And so somebody says, hey, you know, Jamie, would you ever consider running for president? He doesn't miss a beat.

• 58:35Speaker 02

  First thing he says is, of course, I would want to be president. I just don't want to go through the process of running for president. And everyone in the room laughs, not because it was so obviously false, but because it was so obviously true. And, you know, there's a certain honesty in what he said too, which is that I want to exercise quasi-political power without the inconveniences of actually being politically accountable. That's the Jamie Dimon problem. It is the Larry Fink problem. It is the ESG industrial complex at its finest, which is the use of political power, using capital as a force to effectuate normative agendas that ought to be settled through

• 59:16Speaker 02

  free speech and open debate in the public square, where every citizen's voice and vote counts equally. And see, that's the main problem with stakeholder capitalism, woke capitalism, ESG influenced capitalism, whatever you want to call it. That's my main problem with it. It's not just the Milton Friedman problem. Okay, I mean, I love the guy, but, but he only got half the story, in my opinion. Yeah, is it going to lead companies to be maybe less effective at making widgets for profit if they're distracted by their social issues? Sure. But that's, that's old 1980s stuff. Asked and answered, okay? My problem is the inverse. The problem I have is that what this stakeholder capitalist, ESG capitalism movement demands...

• 59:56Speaker 02

  Is that the guys with the gold get to make the rules. Okay, the guys who wield capital set the rules for not only whether it's this bottle of water that rises to the top in the marketplace for products. And by the way, I'm fine with that. That's how capitalism works. It's not a one person, one vote system. It is a $1, one vote system, and that's okay. That's how the market rules work in the marketplace for products and services. But in the marketplace of ideas, how and whether to fight systemic racism, how and whether to combat global climate change. I mean, these are fundamental normative questions where every citizen's voice and vote ought to count equally regardless of the number of dollars, the number of green

• 1:00:39Speaker 02

  pieces of paper they control in the marketplace. And I think what the stakeholder capitalism movement does is it conflates the rules of the market that say that my dollars decide whether my iPhone or my Samsung phone rises to the top of the market, or this bottle of water, or the shares of who get voted in terms of who gets to be on the board of directors of Apple. That's a $1, one vote system, and that's okay. It applies those rules to a different game that's supposed to work according to a different set of rules. That's my issue with it. And so you go back to the beginning, capitalist and citizen. It's not capitalist hyphen citizen. It's capitalist and citizen, because those are two different rules of the road for two different spheres of our lives.

• 1:01:22Speaker 02

  And we live in this weird moment where we've somehow convinced ourselves that the two are commingled and we've jumbled them up where in the end, we're left with neither capitalism nor democracy, but a perverted version of both.

• 1:01:34Anthony Pompliano?

  This episode is brought to you by Bullish. The Bullish Exchange leverages innovations of DeFi and a regulated framework so you can execute fast, reliable trades with tight spreads, even in volatile markets. Bullish's total trading volumes have now exceeded $100 billion since it launched in November 2021. Bullish offers industry-leading order depth. It's one of the deepest markets on the planet for Bitcoin and ETH. And now with its new Longhorn product release, there are more reasons to be bullish. They've got tighter spreads all the time and new ways to customize how you generate income on your idle ass. Learn more at bullish.com and follow at bullish on Twitter today. This episode is brought to you by Valor, which represents what's next in the digital economy. They provide simplified trusted access in crypto, decentralized finance,

• 1:02:18Anthony Pompliano?

  and Web 3 investment opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols, all through a single-stock purchase on a regulated exchange. They currently are listed in the US under the DEFTF stock ticker and on the Canadian NEO exchange under DEFI. For more information or to subscribe to receive company updates and financial information, visit their website at valour.com. That's V A L O U R dot com. The asset management firms, the corporations that I'll say that you're critiquing, right? And you agree with them on some things, you disagree with them on some things, but

• 1:02:59Anthony Pompliano?

  that but generally that you're critiquing, they wield power and use money as a weapon.

• 1:03:06Speaker 02

  Yes.

• 1:03:08Anthony Pompliano?

  It is ironic, but also, I think, important to call out, you have an asset management firm, and the question becomes, if money is power, or money is a weapon, is part of this almost an arms race where you, your colleagues, have to go and get as many assets as possible, so that you now have weapons in the fight?

• 1:03:32Speaker 02

  It's a it's a great question, and this is something I struggle with. If we were starting from neutral territory, I absolutely would not be started have started strife.

• 1:03:40Anthony Pompliano?

  Interesting.

• 1:03:41Speaker 02

  There's better ways to have, there's bigger problems to solve, better ways to, you know, have an impact, to have fun, and, you know, find meaningful work than to do this. But we're not starting from neutral territory. And I'm a big fan, I always say, you know, I don't like to fight fire with fire, I prefer fighting fire with water, water tends to be more effective. So I think that there's the fire with fire version of this, let me give you what the fire with fire version of this looks like, is to say, well, you know what, you're advancing left-wing values in the boardroom? Well, guess what? I'm gonna raise a bunch of capital from Republicans and bring right-wing values into the boardroom. You want to push environmental agendas and diversity, equity, inclusion? Well, we're gonna push, fill in the blank, you know, pro-gun agendas, or, or, or funding

• 1:04:23Speaker 02

  for, for, you know, right to life and pro-life groups. Okay.

• 1:04:29Speaker 02

  Coherent possibility, that's fighting fire with fire. I prefer to fight it with water. And so the voice we're bringing to the table is one that says that, you know what? If we're managing money for somebody who's mandated us to manage that money with maximizing financial value, we say get all politics out of the boardroom. That's the fire extinguisher, okay? We don't want left-wing values, right-wing values, no values. Focus exclusively on products and services for profit to maximize value for shareholders. So, in a certain sense, are we using capital to bring a different voice to the table? Yes, because it's been so weaponized in the way that it has. But I'd like to think, you know, I mean, there's nothing, there's no such thing as

• 1:05:13Speaker 02

  a pure answer to a complicated problem. But on balance, I'd like to think that what we're doing is we're fighting fire with water. And I hope at the end of it, this debate is out of the top 10 issues that we ought to be focused on. I think it's absolutely in the top 10 today. It's probably pretty close to the top, if you ask me, because of this merger of state power and corporate power. But let's get it out of the top 10. And, you know, I think that we can, we can take the temperature down a little bit and focus on other problems that, that need to be solved in ways that, you know, this has somehow, this problem, I think, has, has gotten in the way of.

• 1:05:46Anthony Pompliano?

  Talk to me about Netflix. Netflix is an interesting case where I think the public conversation was Netflix is awesome. It's $9.99 to subscribe.

• 1:05:55Speaker 02

  Yeah.

• 1:05:55Anthony Pompliano?

  I recently looked, they now charge me $16.99. I'm not sure how we got there, but that's what they charged me.

• 1:06:00Speaker 02

  Inflation.

• 1:06:00Anthony Pompliano?

  They got me. I'm still paying. And over the last, I don't know, year or two, all of a sudden, I saw a bunch of conversation that basically could be summed up as like Netflix went woke, right? And there was different examples, there were certain things people agreed with, didn't agree with, whatever. But like, that was, although small at first, became a louder kind of critique of the company. Then I saw that subscribers, for the first time in their history, decreased rather than increased in one of the quarters. And of course, the people who were critiquing Netflix and saying, you're going woke and all this stuff, they basically were running like ticker tape parades and saying like, we told you, right? Like, your business is gonna suffer, you know, go woke, go broke. And like, I saw it all, right?

• 1:06:46Anthony Pompliano?

  Now subscriber growth has started to re-accelerate. But it seems, at least from the outside, that there has been, I don't know if you call it a shift, I don't know if you call it a refraining of kind of the politics, like, I don't know how you would even describe it, you spend more time on this than I do. But talk a little bit as to like, what happened there?

• 1:07:07Speaker 02

  Yeah.

• 1:07:07Anthony Pompliano?

  And how much of the political conversation, both pro and con, had an impact on the actual results of the business, in your opinion?

• 1:07:14Speaker 02

  Yeah, so it's a, it's a good microcosm of an example. Cause I think it's, it's a good microcosm of a bigger theme and a bigger prediction I have for what's happening in American culture over the next five years. But it's pretty encouraging, right? So as, there's a lot of Netflix's behaviors over the course of the last couple of years that, you know, I might be critical of, the content and programming and obsession with skin-deep attributes or whatever. But when push came to shove, they had a disastrous quarterly earnings report where subscriber growth was down, revenues down, profitability was down, that was, you know, I believe, earlier this year. After which Netflix restated its cultural document. They put "seeking excellence." That was at the top of the cultural document. You'll, you'll know, this is a word that means a lot to me. We, we at Strive talk about excellence capitalism, rather than stakeholder capitalism.

• 1:07:59Speaker 02

  The motto of the company is invest in excellence. The second book, in the subject header, ends with "the path back to excellence," talking about American national identity. So, so when I, that, that stood out to me. They added the word excellence back to the top of their cultural document. And they had a clear message to their employees. And this was after the whole employee walkout, after the Dave Chappelle special that they hosted on some of the transphobia allegations or whatever that Netflix and, and Dave Chappelle faced. When the dust had settled on that, you know, they said, "All right, look, we're gonna put artistic merit first. That's what we do, deliver high-quality content. And that's gonna require working on a diverse range of projects. And if you're assigned to work on a project where you have a problem with that project,

• 1:08:41Speaker 02

  then you can probably find a different company to work at, because that's the kind of company Netflix is gonna be going forward." I thought it was powerful. I mean, this is in the heart of Hollywood. A company that themselves, I think, had been guilty of some of the same sins. You know, I think there was a whole controversy about firing people for using the wrong words or whatever. But taking an affirmative stand to say that, you know what, we are gonna prioritize excellence at the top of our cultural document, our statement of culture of who we are. And so much so, the employees, the activist employees, are gonna whine about, you know, working on a project that doesn't align with their politics, say, you know what? You can show yourself the door and close the door on your way out. If that's the kind of place you want to work, Netflix is in the place for you.

• 1:09:20Speaker 02

  That was powerful. And, you know, is it causally related to the fact that they actually just had a really successful, you know, even rebound in their subscribers? I don't know, but I don't, but it didn't have nothing to do with it? Probably not, you know? I think that this, I think these things are powerful, hard to quantify, but important in customers who want to come back and actually see high quality content without being preached to at every step of the way. Now, why do I say it's a microcosm? I think it's interesting. If you look at what catalyzed that change of heart, it was undoubtedly a form of economic hardship. You know, you lose money, it wakes you up. And I think that a lot of this virtue signaling that we've seen from corporate America in

• 1:10:02Speaker 02

  the last couple of years is totally the product of excess. It's actually, you know, people get mad when I made this analogy in my, in my first book, but, you know, so I got my first job in New York City on the eve of the 2008 financial crisis. And I just think that's the, the big bang, the origin story for this whole explosion of woke-ism in contemporary culture and corporate America. I think the 2008 financial crisis plays a pretty good, pretty good role for the start of that modern origin story. But I got my job in 2007 and I had done an internship in, at a, you know, over the top financial firm called Amaranth in the summer of 2005. And, and so to me, the analogy I draw is the cultural excesses of Wall Street or whatever,

• 1:10:46Speaker 02

  strip clubs, throwing little people off boats, you know, the kinds of stuff that Wolf of Wall Street stuff, right? Cultural excess. The social virtue signaling are the strippers and little people tossing parties of the pre-2008 era. It's just a different form of excess. That you have money raining from on high like manna from heaven, printed by the Federal Reserve for the course of the last 14 years that have allowed an entire culture to ski on artificial snow, forgetting what it was like to ski on the real thing. And that culture of excess created this new moral sanctimony that in many ways...

• 1:11:24Speaker 02

  Caused organizations like Netflix, but other companies like them to forget about the essence of who they were, and it took hardship to be able to remind them that, okay, I don't get to indulge in that excess forever. Strip clubs, little people tossing, or virtue signaling, woke virtue signaling, whatever it might be. I've put all of those in more or less the same category.

• 1:11:43Anthony Pompliano?

  Is it a religion?

• 1:11:44Speaker 02

  I actually, there's a chapter in my first book, Wokeness, that said wokeness is like a religion. Actually, wokeness is literally a religion. It's in a legal sense, it is. Yeah, I think it meets the legal definition of what counts as a religion, and, you know, I mean, a couple of chapters making the legal argument for it. But, but the interesting thing is, I think hardship can be a wake-up call out of that cult. You know, my definite, a cult is in some ways a religion that has not yet withstood the test of time. So if this is a religion, I think we'd be better calling it a cult, because it has not yet withstood the test of time. But, the interesting thing is, economic hardship is a great way to wake you up out of the, whatever cult you're professing allegiance to. And, you know, I think that, in some ways, we're about to enter a really tough time

• 1:12:29Speaker 02

  economically in our country. There's a, you know, prediction I made in my next book. By the way, I had finished writing this book, you know, before even much of this year had played out, right? So, you know, made this prediction, we've already seen it play out over the course of this year with inflation, rising interest rates, the economic hardship, possible recession. I think that's, I think we're in for harder times to come. This is a longer story for another day, but unlike 1980s, early 1980s style inflation busting with raising interest rates, well, that was when we're doing it against the backdrop of Reagan's deregulatory tax lowering policies. Today, we're raising rates against the backdrop of Biden economic policies that actually create a potential one-two punch.

• 1:13:10Speaker 02

  I think we're going to be in for, in an era of a few years of economic hardship, but I think that could actually be a good thing for our culture.

• 1:13:20Speaker 02

  If we remind ourselves hardship is not the same thing as victimhood, as I often say, what does that mean is just like Netflix, you need a wake up call, a quarterly earnings report that's a disaster before you put excellence back at the top of your cultural document as a company. I think the same thing might be true for our entire economy, for our entire country, is it might take us a chance of actually going through a period of economic hardship against the backdrop of not only inflation, but rising rates, reminding ourselves that mana does not fall like heaven from free from on high, but reminding ourselves where actual value creation may come from, from industriousness, productivity of creating goods and services that make people's lives better. That's hard work. It's different than an economy that's effectively fueled by that artificial snow.

• 1:14:02Speaker 02

  That could actually strengthen and create a stronger economy and a stronger culture on the back of it. But I think the path from the victimhood narratives that we wallow in today, ironically, which are a product of actually a period of excess. We wallow in these victimhood narratives, not because we've had it so hard for the last 10 years, but because we haven't had it hard enough. The path from victimhood back to excellence ironically is going to run through a period of hardship. That's what I see coming in the next couple of years, but I also think that could be, that could be, you know, one version of the story at least is good for our culture and come out as a stronger nation on the other side of it. That's what the many rises and the many falls of Rome look like. Hopefully this won't be the last fall of that American experiment, but we still have, you know, a couple, a couple of rises still left in us.

• 1:14:47Speaker 02

  And if we don't, then, then maybe we are in the beginning of that national decline.

• 1:14:51Anthony Pompliano?

  Yeah. I recently had a conversation with Harvard professor Ranjee Gulati and he's done a bunch of study, talked to hundreds of companies about purpose. And so when you first hear that, you think ESG, virtue signaling.

• 1:15:06Speaker 02

  I don't. I actually don't.

• 1:15:08Anthony Pompliano?

  Okay.

• 1:15:09Speaker 02

  Purpose is fundamental to a company.

• 1:15:11Anthony Pompliano?

  So that's his point. It is not that stuff. It is the most ambitious mission attracts the best talent.

• 1:15:19Speaker 02

  Period.

• 1:15:20Anthony Pompliano?

  The, yeah, just, if you have a super ambitious mission, people want to work on hard problems. People want to work on things that are going to be big and are going to work and do all this stuff. If you have a very clear purpose. Going back to Netflix example, Coinbase, many of these companies who have come out and said, "This is what we stand for. There are other things that are important in the world, but they are not important to us. And this is, if you work at our company, this is what we are focused on." That clarity attracts a certain type of employee. It attracts a certain type of business partner. It attracts a certain clarity in action of what we will focus on and what we won't focus on. So he goes through all these things, and I found the conversation fascinating because

• 1:15:59Anthony Pompliano?

  that terminology, that entire mechanism, all this stuff, has almost been co-opted to some degree and pulled, where, to your point, the purpose of companies may not be to maximize shareholder value. The purpose of a company may be to essentially pursue political or social issues, or do all this other stuff. And he's able to just strip it away and say, "Listen, the purpose of the business and the clarity and the ambition of it is maybe one of the most important things in order to make sure that you sustain for very long periods of time, and you continue to succeed regardless of management changes, market changes, competitive changes, product changes, or anything else." And so it feels like you and him are saying very similar things.

• 1:16:43Speaker 02

  Absolutely. I'm a big believer in purpose and mission orientation. Okay? I don't question, even think about Strive, right? We don't second guess a company's true stated mission. Disney's stated mission is to be the world's premier entertainment company, okay? What does that have to do with transgender education in Florida public schools, right? They will disguise that say this about purpose and being purposeful in our action. How does that relate to providing high-quality entertainment for children and their families? I mean, this is a good, worthy question to ask. So I think this idea of purpose and mission, mission comes first. If you want to be a great solar company, great, be a great solar company. If you want to be a great coal company, be a great coal company. That's different from telling the coal company that has to be a solar company.

• 1:17:26Speaker 02

  And so I think that mission orientation comes first. And when all of this discussion we have about diversity, or equity, or inclusion, or whatever, my view is, in order to pursue your mission, there are certain kinds of diversity you're gonna want. You're gonna need. There's gonna be certain kinds of diversity you're not gonna want. You're not gonna need. So, let's say you're running a steakhouse, okay? And your mission is to serve excellent, high-quality, good-tasting steak that delights your customers.

• 1:17:54Speaker 02

  You probably don't want even the ever prized diversity of thought when it comes to viewpoints on whether it is morally reprehensible to kill animals for culinary pleasure. One of the many reasons I would not make for a good employee at a steakhouse, I'm a vegetarian, for that reason. I don't, I don't believe in killing animals for culinary pleasure. For health reasons, if it's necessary, for human health, absolutely. Short of that, for culinary pleasure, I'd rather not do it. I would not make for a good employee at a steakhouse because I would not be mission aligned with the purpose of that organization. And that's okay. That means that different organizations are going to take diverse approaches to diversity itself, right? Diversity or other parameters that contribute to the success

• 1:18:39Speaker 02

  of a mission have to fall out of the mission. And what we've seen happen in the ESG revolution is that one common set of centralized purpose or missions have supplanted and diluted the true, truly diverse missions that different companies and different institutions actually have. So, right now, why is there a common, why are there three-letter acronyms, ESG or DEI, that should govern what a technology company does versus what an energy company does versus what a fast food company does versus what a nonprofit does or a university does? Why do all of them have the same purpose rather than each being guided by their own unique purpose? That's what I call institutional pluralism. Institutional pluralism is the

• 1:19:23Speaker 02

  heart of American pluralism. And yet, what we've done in the name of purpose, right? And so, I actually wrote an op-ed in the Wall Street Journal. It's, it's basically like the place that, I love the Wall Street Journal, by the way, because like, something about my way of presenting ideas jives with the way they present ideas. So, that's basically the only place I publish anymore, but do it pretty frequently. But one of mine earlier this year was on Responding to Larry Fink's annual letter to CEOs where he says companies need to be guided by purpose. And in that same letter says that we want to see from you how you're complying with the standards of the Sustainability Accounting Standards Board. We want to understand what your Climate Action 100 goals are, what your Climate Action pledges are, what your path to net zero by 2050 is. We need to see this information. You can't say both those things at once. Either you believe each company has its own purpose, or you believe that your purpose

• 1:20:08Speaker 02

  is more important than their purpose and all institutions should pursue your purpose instead, but you can't say both at the same time. And yet, that's the ESG doublespeak is in the name of purpose and mission. What they're really saying is that our mission and purpose is more important than yours, and that's why you need to follow it, or else, and we're going to use our capital as a weapon to make sure you do.

• 1:20:26Anthony Pompliano?

  When you see this playing out in the market, it feels like employees don't really have a say at many of these companies. The executives are playing a game of almost like a virtual tennis, right? With these asset management firms. What do the regulators think? How do they kind of play into this? Are they like, oh, the people with a lot of money, like, they're cool to kind of run around and do whatever they want? Are there rules against this stuff? Are there not rules against it? Like, I kind of almost think about, we usually think of two market participants, but there is a third.

• 1:21:01Speaker 02

  Yeah, there's a third. Yeah, I mean, so I can, you know, I have views on this. I mean, I think there's an interplay between what the regulators and the regulated. Sometimes you worry about, you wonder who's regulating who, actually. I think if you look at what some of these new SEC rules are that are coming down the pike, that's in some ways just borrowing exactly from the ESG textbook, but codifying it in law. And it's all one giant circular reference, too. They're saying, well, we need these added ESG disclosures and put them into rule because that's what the investors are demanding. Well, those investors are themselves behaving like regulators in the way they behave, you know, the BlackRock's of the world. So I think that there's a discursive relationship between the two. But I look at it a little bit differently. I think that, you brought up employees, I think that there's something deeper going on here. Okay?

• 1:21:46Speaker 02

  In our moment in American history, modern Western history, I think the defining social, political, and cultural divide is not between left and right, black and white, or even rich and poor.

• 1:22:05Speaker 02

  It is between the managerial class and the everyday citizen. There's an everyday citizen in every organization, be it an employee, a stockholder, a voter in government. That everyday individual agent versus this horizontal managerial class, the professional bureaucracy, the people who staff that 80-person department that decides how BlackRock votes its shares, the middle manager at the three-letter alphabet soup in the federal government that isn't politically accountable and is hired for life under civil service rules cannot be fired, the person who's serving on as a professional director, a rent-a-director

• 1:22:47Speaker 02

  or a rent-a-CFO hopping around seats in corporate America in the executive ranks. This is the rise of this managerial class. This guy, Michael Lind, actually, the center-left guy, wrote about this, you know, a little bit ago. I have a chapter in my last book called "The Rise of the Managerial Class." The bureaucratization of decision-making and the people who staff those bureaucracies, I think they are crushing the will of the everyday citizens who these institutions were supposed to represent, okay? Be it a university, be it a philanthropy, be it a nonprofit, be it a company, or be it our government. And I think that's the real distinction that matters. So when you talk about the regulator, the regulator and the regulated are basically

• 1:23:28Speaker 02

  today more or less run by members of that managerial class, the professional bureaucratized, technocratic, you know, green hat-wearing, square suit.

• 1:23:37Anthony Pompliano?

  Hall monitor.

• 1:23:39Speaker 02

  They're all kind of regu... The hall monitor, exactly. And the hall monitor in America, in the modern West, for the last 10 years or so, the hall monitor is running the show. And I think that that's the... We sort of mix this up by trying to retrofit this into a left-wing versus a right-wing debate. You're missing the point. It's the managerial class versus the everyday citizen.

• 1:23:59Anthony Pompliano?

  Why do the managerial class become the managerial class?

• 1:24:03Speaker 02

  Because they couldn't be creators themselves.

• 1:24:06Anthony Pompliano?

  Okay, so this is an interesting kind of path to get there. We have the benefit of hindsight now. Is it the education system? Is it all the wealthy families of America came together and told their kids, "Hey, we're gonna put you in these places of the managerial class"?

• 1:24:21Speaker 02

  So I'm gonna resist both of those for a second because...

• 1:24:25Speaker 02

  I think this distinction I'm drawing does not map neatly onto the people with money or even the people with education. So like this is where some of the populist right frustrates me at times. I'm very sympathetic to actually people who identify with themselves as everyday citizens being on the populist right. It's a soul separate discussion we can have for another day. But the slogans of the people who lead that movement, when they talk about the elites, I think it's too sloppy. It's too low resolution. So even if you just like double click on one institution, let's take the university. Okay. Modern liberal arts university, whatever. Take Harvard or Yale, my alma maters or whatever. Elite institutions. The students are elites. The professors are elites. The associate deans are elites. But I'm making a different point.

• 1:25:10Speaker 02

  I'm saying that that institution is about educating the constituents of that institution, the students, and the creative minds who are pushing the frontiers of knowledge like the zany professors. Neither of those are strictly speaking in my definition of the managerial class as applied to the university, members of the managerial class. But the members of the managerial class are the cancerous proliferation of associate deans and administrators at universities. I mean, Michigan State, you know, the growth in the number of DEI officials, diversity, equity, inclusion officers, outpaces the growth in professors at that university.

• 1:25:53Speaker 02

  So all of them are elites in some sense, but I'm not even, I'm not even talking about left or right or rich or poor or drawing all those distinctions. I'm literally talking about the people who didn't have the creativity of mind to be a professor, but didn't have the humility to actually know that there shouldn't be exercising power then in a university either. But it's the confluence of

• 1:26:15Speaker 02

  Absence of creativity sufficient to be a creator, but with a power hungriness combined with insecurity that still wants you to be able to exercise control. Those are the features of a member of the managerial class. It's a feature of the managerial class of somebody who staffs the alphabet soup from the FTC to FDA to SEC to FBI to pick your favorite, TSA. That's what characterizes, I think, a lot of the civil service class in this country, the civil servant, unfireable civil servant class in the federal government bureaucracy. It's what characterizes a lot of middle management in corporate America. It's what characterizes the cancerous proliferation of the associate deans in the modern university. The same people who get the ambassadorships

• 1:26:58Speaker 02

  that are sort of mid-level donors to a campaign and get to be sent off to be the ambassador to Lithuania or whatever. You see it in the military increasingly in the United States, too, the rise of a managerial class that didn't really rise the ranks as a soldier, nor actually had the vision to be an outsider that was a general that thought about things differently, but were sort of this halfway house in between. And I just look at one institution after another. People serve on some godforsaken nonprofit's board that gets together to have a boondoggle four times a year because they could care less about the mission, but they will be able to say to their friends at the country club that I'm on the board of a nonprofit, as though we didn't have to fill in the blank about what nonprofit it was. It doesn't matter. The point is they're on the board, right? And if they're not on that board, they're going to make sure they get another one. That's what they call their board card.

• 1:27:43Speaker 02

  I get sick of it when I hear people in corporate America or in the nonprofit world talk about their board card, refers to the card of boards they're on, that their board card is full or that they have an extra slot, like they have to fill it. It's about them and their exercise of power. But there's this sort of, you kind of have the everyday, I think there's kind of three camps here, right? This may make a lot of people uncomfortable to, you know, characterize this maybe this elitist, maybe it is elitist. I could care less, but I'm just telling you how I see it. You have everyday citizens. You got the managerial class. And then you got the third class, who are neither everyday citizens, ordinary everyday citizens, nor members of the managerial class, but the creators, okay?

• 1:28:21Speaker 02

  What we have right now going on is a tug of war between the three and both the everyday citizen and the creators are losing and the managerial class is winning. And that applies whether you're looking at the private sector, the nonprofit sector, the for-profit sector or government, the managerial class is winning. And I think that that's what's fueling the fanning the flames of global populism. Both left-wing and right-wing populism, they'll point each other and think they're different. They're not so different from each other. I think what they're hungry for is reviving that voice of the citizen. And the creators have more or less been muzzled. And that's kind of the current state of affairs that, you know, once you see that problem clearly, it becomes pretty clear what you need to do.

• 1:29:02Speaker 02

  But I think the first step is we haven't really seen that problem with clarity put into relief in its own right because we have these blinders on that have taught us to see this through Republican or Democratic struggles, or black versus white, or intersectional woke narratives of invisible power struggles. No, that's all missing the point. It's the managerial class, the everyday citizen, and the creators. We need creators who serve the everyday citizens and the managerial class are intermediating that at best without exercising independent power of their own. That's the right ordering of affairs in an American society.

• 1:29:34Anthony Pompliano?

  This episode is brought to you by FTX US. They're the safe, regulated way to buy and sell Bitcoin and other digital assets. Trade crypto with up to 85% lower fees than the top competitors. There are no fixed minimums, no ACH transaction fees, and no withdrawal fees. Download the FTX app today and use referral code POMP to earn free crypto on every trade over $10. The more you trade, the more you earn. Go download the FTX app today and use referral code POMP. This episode is brought to you by Compass Mining, the world's largest marketplace for mining hardware and hosting. With Compass, everyone can mine Bitcoin. You can do it at home or in one of their 23 hosting facilities around the world. All you need to do to start mining your own Bitcoin is go to compassmining.io today.

• 1:30:17Anthony Pompliano?

  Again, if you want to get into Bitcoin mining, go check out compassmining.io today. We've talked a lot about the insular critiques and of the American economy of society.

• 1:30:30Anthony Pompliano?

  But also, there are external components to the American experiment. China probably is the biggest one that people talk about. And when it comes to China, it feels like there is also this tug of war. It feels like there are countries who seem to align with China. There are countries who seem not to align with China. But the countries are really just the, like, the warm-up game. Because it seems like the companies are actually the ones who are maybe in the most sympathetic view, you could say, caught in the crossfire. In the most critical view, you could argue that they are the ones who are actually doing the shooting.

• 1:31:12Speaker 02

  Yep.

• 1:31:12Anthony Pompliano?

  And it is not clear to me why some companies are welcome. Some companies are kicked out. And why so many companies in the United States seem so focused on appeasing China.

• 1:31:31Speaker 02

  Yeah.

• 1:31:32Anthony Pompliano?

  Sometimes at the detriment to Americans, American society, with the economics of their P and L and their balance sheet.

• 1:31:40Speaker 02

  So this is the defining threat to the future of American existence, I think, is the way in which China defeats the United States, not militarily from the outside, but from within.

• 1:31:51Anthony Pompliano?

  The 500-year game.

• 1:31:53Speaker 02

  The 500-year game. And so, speaking of going hundreds of years back to learn the lesson. So I'll draw an analogy to the Trojan War, okay? Greece was never going to defeat Troy militarily. The walls of Troy were too strong. What they realized, though, is that there was the Trojan horse that

• 1:32:11Anthony Pompliano?

  Literally the Trojan horse.

• 1:32:12Speaker 02

  Literally, that literally Troy could not resist. The beautiful horse, the gift of that Trojan horse. They offered that as a peace offering. And what happened? They loaded their, they loaded their infantry within, and they burned Troy from the inside out. That's what happened. That's how the Battle of Troy ended. That's what China has recognized to the United States. Global capitalism is the gift we could not resist. It was the sweet fruit whose taste we could not resist. That is the gift they offered us in return, to use that as a vehicle for advancing their agendas, not militarily from the outside in through force, but from the inside out through actually infecting our system from within.

• 1:32:55Speaker 02

  It sounds conspiratorial, I'll just lay it out exactly how it works, okay?

• 1:32:58Anthony Pompliano?

  Let's do it.

• 1:32:59Speaker 02

  We tell ourselves, right? We live in this system of global free-market capitalism, okay? Well, it doesn't work if other actors in that system are playing a mercantilist game of state-directed capitalism. So what China does, they realize they have a big growth area for most companies. Most companies that need growth, the place where they get that growth is by going to China. China's the biggest growth area for our business, or whatever. Fill in the blank, that's what you can hear from half of America's public companies. What China does, though, is they build a great wall, a great Chinese wall, that prevents you from entering the Chinese market. If you criticize the CCP, if you apply any constraints on what Chinese companies are or aren't able to do, you have a great Chinese wall that prevents you from entering the

• 1:33:43Speaker 02

  Chinese market. But if you criticize the United States, or you apply some of those constraints that you don't apply in China to your American counterparts, they will roll out the red carpet. And that is how you get to the farcical world, in which Chevron and Exxon have their large shareholders, like BlackRock, imposing ESG constraints, scope-three emissions caps, emissions reduction targets by 2050, to Exxon's and Chevron's business, without saying a beep, while they're also a large shareholder of PetroChina that operates according to none of those ESG constraints. You all know why? Because if you apply those ESG constraints to a Chinese company, the CCP's gonna tell you, you know what? Again, you can show yourself out and close the door on your way out, you can't do business here.

• 1:34:27Speaker 02

  It's how you get to a place where Disney, okay, will wax eloquent about transgender education of first graders in the state of Florida, or says it can't shoot a film in the state of, in Georgia if, if they pass some kind of new anti-abortion statute or whatever. Disney will be proudly stand on the right side of history over here, while they literally go to Shandong, the ground zero starting point of the Uyghur human rights crisis, where there are over 1 million religious minorities enslaved in concentration camps. A lot of people don't know this, subject to forced sterilization, communist indoctrination and worse. Disney doesn't say a peep as they film Mulan there, until they muster up the courage at the very end of the movie, you can see in the

• 1:35:09Speaker 02

  credits to the film today, where they say, "We thank the local authorities for allowing us the privilege of filming here." The very local authorities that are responsible for some of the worst human rights atrocities committed by a major nation since the Third Reich of Germany. That's how you get to that asymmetry. And, and what does that do? It creates a false moral equivalence between the United States and China. It morally legitimizes China's behaviors relative to those of the United States, because when the new corporations, multinational corporations headquartered in America, become the new international arbiters of moral justice, the people who are always known to criticize injustice, Nike, the NBA critiquing systemic racism and white supremacy in the United States, not saying a peep

• 1:35:50Speaker 02

  about actual human rights atrocities in China, you know, Nike complaining about slave labor 250 years ago in this country, without actually doing a thing to reduce its own reliance on slave labor today that produces $250 sneakers that they sell to black kids in the inner city who can't afford to buy books for school. I mean, this is a two-sided game that's laughable if it weren't for the fact that it was actually a product of China's strategy. And how do you know it's a product of China's strategy? Listen to Xi Jinping when he's pressed, say, by the UN on the Uyghur human rights crisis. The first thing he often says is that Black Lives Matter shows that the United States is no better. His top diplomat, Yang Jiechi, came to Alaska about a year and a half ago, lectured our Secretary of State, Tony Blinken,

• 1:36:34Speaker 02

  for 15 minutes in his opening statement, this guy from China, says, what does he say? "I want to see the United States stop slaughtering," this is his word, " slaughtering black Americans, and that China wants to see the US do better on human rights." I mean, these statements would be laughable. If it weren't for the fact that our own corporations lend implicit credibility to those claims by regularly critiquing injustice on the esprung of the ESG movement in the United States without saying a peep in China. In fact, when they go to China, if the CCP says jump, the number one question they ask is how high? And that erodes our number one geopolitical asset of all. And I'm sorry, that is not

• 1:37:14Speaker 02

  our nuclear arsenal. It is our moral standing on the global stage, creating this false equivalence between Chinese nihilism and American idealism. Thank you LeBron James. Thank you Nike. Thank you Disney. Thank you Airbnb. That's the net effect that it has. And I think that that is how this version of Greece burning Troy from within, that is how you get to a place where Airbnb gets to post a nice little neat black square on its Instagram account and says that black lives matter and they compensate their executives according to social and environmental goals. Yet, every unit of data they gain from a user, even the private messages exchanged between a host and actually a person who's staying at a

• 1:37:56Speaker 02

  host's house, are information that's available to the CCP as a condition for Airbnb's ability to do business in China. But a lot of people didn't know that.

• 1:38:04Anthony Pompliano?

  No, explain that.

• 1:38:05Speaker 02

  Yeah, I mean, Wall Street Journal reporting on this from a year or two ago. I mean, it's staggering stuff, okay? I mean, like Nate Blacharchik, he was a couple of years ahead of me at Harvard or whatever. I don't think I knew the guy. But his quote at the end of this, I mean, I knew of him, staggering. "We're not here to promote American values." That's what he says behind closed doors to their head of privacy who resigned when the company didn't do anything to change this. China's condition for Airbnb doing business in China is that they turn over data from American users, geolocational data. I mean, the private messages like emails between a host and someone who's renting on the platform, those are messages that you can bet if the CCP wants to look at it, it's available to them because that was the ticket for entry. That's the price

• 1:38:50Speaker 02

  for entering the Great Chinese Wall. To cross the Chinese wall, that's your ticket fee if you're Airbnb to go after the Chinese market.

• 1:38:55Anthony Pompliano?

  And what does China want to do with stuff like that?

• 1:38:57Speaker 02

  Well, I'm not sure they know exactly what they want to do, right? They're in a data collection game. Part of knowing data is you don't necessarily know exactly what you're going to use until you see what you find. But it's a long run game of gaining a competitive strategic advantage because they know we couldn't resist the sweet gift, the sweet taste of global capitalism. That's our Trojan horse. When they're not actually playing by those same rules, they're playing mercantilist capitalism, but giving us the Trojan horse that makes it look like we're all playing in the same game of global actual capitalism. And so now companies, you could say my view is that companies should just focus on their products and services, maximize profits. Well, wouldn't they be doing this in China because this is actually their cost benefit analysis that tells them that's what they're going to do? Maybe. Almost certainly yes, actually. But they wouldn't come out of it smelling like a rose.

• 1:39:41Speaker 02

  And the public would be able to, it's like tampering with the smoke detector at the urinal on the airplane. Okay? The reason you don't tamper with the smoke detector is there's a system that's designed to check this behavior. Users would not trust Airbnb quite as much if it didn't pretend to be a Silicon Valley goody-two-shoe ESG compliant DEI promoting company that posts a neat little black square on its Instagram account, which you're supposed to do after George Floyd dies. This is a game. Is it a decoy? It's a tripwire. It's messing with the smoke detector that otherwise would have had the system work itself out, except for the consumer duping aspect of it. Now, we're in the worst of all worlds where they're actually subsidizing human rights

• 1:40:25Speaker 02

  atrocities, selling you and your privacy down the river as a condition for them doing business in China. Nate Blatchek and the other co-founders of Airbnb get to be billionaires in the back of it, but leaving the everyday consumer here believing that they're looking after their societal interests, when in fact, it was all bogus in the two-faced behavior that we're seeing between how they actually behave in China versus how they behave here. I think it borders on fraud. I think it is a direct product of China calling our bluff, our own addiction to what we thought of as capitalism they weaponized back against us to actually advanced agenda that was, you're seeing Xi Jinping's true colors now show, the communist and dictatorial agenda using the temporary, and it was, I think, a fleeting engagement in playing the rules of global capitalism.

• 1:41:07Speaker 02

  Capitalism to really just create the vectors that I think plant the seeds from our demise from within. And I know that sounds dramatic and overwrought, but I think if you just look at, if you just look at, I mean, this is, this is not a conspiracy theory, it's a conspiracy reality hiding in plain sight. And I think the later we wake up to it and the later we do something about it, the more we're heading towards an inevitable, you know, an inevitable shift in the balance of global power between the United States and China.

• 1:41:35Anthony Pompliano?

  Do you guys go short companies or are you only long on?

• 1:41:37Speaker 02

  Not yet. Yeah. I mean, I mean, so, so, so, I mean, back in my old career, so my first job, this is my third career. I could say it's my fourth career, I guess. My first career was as a hedge fund person. So I was a partner in a hedge fund. Did that from 2007 to 2014. I spent three of those years at the same time in law school. That's when I kind of got my law degree on the side. That was just for fun, but I was a biotech investor, you know, foremost from 2007 to 2014. That was long short. So, so I, I lived in that world. I, I stepped down from that job to start the biotech company that I led. So I did that for seven years from 2014 to 2021. Stepped down to then, you know, do the, do the author thing, do the writer, writing and, and speaking and thought leadership thing. And I really enjoyed that. Did that for two years, but then got back to starting this company.

• 1:42:22Anthony Pompliano?

  What you're almost doing is you're putting a social, a social, geopolitical,

• 1:42:28Anthony Pompliano?

  ethical ethos, whatever you're going to call it, kind of viewpoint or, or vector on top of it. And you're basically saying there is a argument that if everyone was playing with perfect information, they knew all these things about these companies are doing or whatever. Then you could actually get an edge in investing in the market because that would have an impact on how these companies perform.

• 1:42:47Speaker 02

  You know, I, I would say, I'd say a couple of things about that. I mean, I think that it's not clear that just because Airbnb does this, it's going to be a less successful company. It might be a more successful company. So I'm not sure that shorting that just because you don't like it, just because you don't like the way a company behaves.

• 1:42:59Anthony Pompliano?

  If the users knew it.

• 1:43:00Speaker 02

  But if the users knew it, right?

• 1:43:01Anthony Pompliano?

  That's what I'm saying. If it's a perfect set, if it's a perfect information set.

• 1:43:04Speaker 02

  I'll give you another, this, this to sort of go on a side tangent here, but, but I'll give you another area where, where something like this might be more even, you know, on the money here. So are you familiar with the notion of Chinese tech stocks that trade on the New York Stock Exchange not actually being stocks? Is this something you know something?

• 1:43:22Anthony Pompliano?

  These are the, what is it called?

• 1:43:23Speaker 02

  Variable interest entities, VIES.

• 1:43:25Anthony Pompliano?

  Yeah, yeah, yeah, yeah, yeah.

• 1:43:27Speaker 02

  So this is the part that shocks me, right? You think about like the regulators, you know, investor protection and all of that you'll hear, okay. Well, let's talk about investor protection here. So China's about to, I mean, I think in the coming years about to invade Taiwan. I wrote about this, you know, last couple of weeks. That's something we should probably talk about, but I think that's one of the unseen investment risks, underappreciated investment risks, probably coming sometime in the next half decade. Okay. But anyway, what are one of the risks that we might be able to think are foreseeable risks that's hiding in plain sight? Well, most people who invest in Alibaba, for good reason, the ticker is B A B A after all, think that they own a share of Alibaba. Or most people that invest in Tencent think that they own a share of Tencent.

• 1:44:11Speaker 02

  Here's the bad news. You don't actually own a share of Tencent or Alibaba if you're an American investor that thinks you're buying Tencent or Alibaba on the New York Stock Exchange. Why is that? Because there's a Chinese law that says that for certain sectors, including the tech sector, you can't be a foreign owner of a Chinese company. It doesn't work. Can't be a Chinese, non-Chinese national who owns that company. So what did a bunch of these financial institutions in the US do? They created what are called these variable interest entities. What's that? It's a Cayman shell company that has a contract with Alibaba or with Tencent to receive a stream of profits. And that Cayman shell company is what masquerades as a share of Alibaba or Tencent on the New

• 1:44:56Speaker 02

  York Stock Exchange or wherever else that investors can actually buy. The problem is that contract is itself invalid, is invalid under Chinese law, because there's a different provision of Chinese law that says that any contract written to sidestep a legal prohibition is itself invalid. And how do we know that it's actually invalid? Chinese courts have held in certain cases where that's been litigated that those contracts are invalid, including, by the way, even in the case of Alibaba, where Yahoo, actually, this is a big funny enough case where, because you can do this kind of thing in China, Jack Ma says that, you know what, the most valuable part of Alibaba's business, or one of the most valuable parts is Alipay, let me just take it out and call it Ant Financial and put that under 100% owned company that I own 100% of.

• 1:45:39Speaker 02

  Well, Yahoo was a shareholder in Alibaba and didn't like that very much, so they tried to sue, in which case the Chinese courts actually say, well, you don't actually have an ability to sue because your whole entitlement to owning a share in Alibaba was itself illegal under Chinese law. So, already been demonstrated how farcical this is. And by the way, Jack Ma almost got to take Ant Financial again because US investors were still going to eat that up, notwithstanding that having happened to Yahoo, crazy if you think about it. But when China invades Taiwan and the US takes steps towards, you know, retaliating in some way economically or otherwise, an easy thing for China to be able to do is to say that, you know, the $1 to $2 trillion of market capitalization of Chinese stocks that trade on your exchanges that are really just variable interest entities?

• 1:46:20Speaker 02

  Yeah, I know, we haven't enforced that very much, but we're just going to tell you that that's wiped out, that's illegal under Chinese law, and those investors are left holding worthless instruments. You might say that we'd go to the WTO and say that, hey, World Trade Organization, you admitted China, aren't they foul playing here? And actually, they would say, well, actually, Chinese law has been pretty clear for a long time, so under Chinese law, that was an invalid contract all the way along. I believe the WTO is likely to side with China on that. That's an investment risk, that's a geopolitical view, an underappreciated risk, an underappreciated

• 1:46:58Speaker 02

  risk because of the, let's just say, the beholden, the ways in which these financial institutions like BlackRock and others are beholden to China. You know, I think that if they warned investors about this risk explicitly, I don't think the CCP would like that very much. If the CCP doesn't like that very much, then they're going to say that you can't be an asset manager in China. You have an undereducated investing public. Does that create opportunities for... Risk mitigation for protection, et cetera. I think it does. I think it can. But, you know, my view is if you want to be an active fund manager, generating alpha is a really hard thing to do. I spent my first part of my career, you know, having some success as a biotech investor. You know, generating alpha is hard.

• 1:47:39Speaker 02

  So I'm a big skeptic of of just sort of armchair quarterbacking an alpha thesis. But that's why, you know, this business is is almost a very different business from running an hedge fund. It's really running a company that offers a financial product that just offers beta exposure to the market, but we're focusing more on the voice and vote. And, you know, in the future, we might have actively managed products as well. That's something we're contemplating for next year. But, you know, at that time, that would be the case where we would sort of take advantage of the market inefficiencies. But for now, we're just focusing on voice and vote to get off the ground.

• 1:48:14Anthony Pompliano?

  If China invaded Taiwan, what do you think the US would do?

• 1:48:17Speaker 02

  Great question. So, so we, I mean, I have a lot of views on this.

• 1:48:24Anthony Pompliano?

  I got a lot of time.

• 1:48:25Speaker 02

  I think it's a pretty important topic that people are way undereducated about. So.

• 1:48:30Anthony Pompliano?

  Once Nancy Pelosi visited and nothing happened, I think people are like, ah, it's not going to happen.

• 1:48:34Speaker 02

  Yeah, well, I don't know.

• 1:48:36Anthony Pompliano?

  Right? Like, I think that's kind of the sentiment online.

• 1:48:38Speaker 02

  Way undereducated. So, yeah, forget online.

• 1:48:40Anthony Pompliano?

  Yeah.

• 1:48:41Speaker 02

  I mean.

• 1:48:41Anthony Pompliano?

  That's my.

• 1:48:43Speaker 02

  You get what you pay for online.

• 1:48:44Anthony Pompliano?

  Yeah, that's my, my read.

• 1:48:47Speaker 02

  Let's do a little, like, a brief history lesson here. All right. So.

• 1:48:50Anthony Pompliano?

  How does Taiwan get outside of China?

• 1:48:53Speaker 02

  Yeah, so a brief history lesson, just because history teaches us a lot. We view the present a little bit differently if you have at least some historical context. So, you know, like the Qing Dynasty, the Ming Dynasty, the end of the Chinese Empire, that was kind of, you know, pre-World War I, 1910s, early 1910s, 1912, that's kind of what's going on in China. Now, Sun Yat-sen is this guy who actually goes and camps out in Singapore. So, think about Taiwan is outside China. We're going to come back to that. Singapore is even further away. Sun Yat-sen goes all the way down to then critique actually the empire and sort of sends a bunch of missives that basically caused the empire itself to come crumbling down. Now, what happens in the wake is you kind of have two parties. You have the Chinese Communist Party and you have the Chinese Nationalist Party.

• 1:49:36Speaker 02

  And there's a power struggle for who actually holds the keys to power. And there's this Chinese civil war that starts, you know, I'm getting the, I mean, I'm, you know, I had to refresh myself before this, but let's call it 1920s, you know, thereabouts. I'm going to get this about right. Post-World War I, Chinese civil war between the two factions. That civil war continues till about like the beginning of 1937. When they put that on pause when Japan actually makes its invasion on China. So people Europeans think about World War II as actually beginning in 1939. Well, the Japan-China theater actually begins starts to begin the clock on World War II a little bit earlier around 1937. They put the civil war on pause and they said, okay, we're going to be united front against fighting against Japan. But then after World War II ends, you know, famously when you go to the story of World

• 1:50:18Speaker 02

  War II ends, 1945, they go back to warring factions. And then they go for four more years of civil war and Chiang Kai-shek, who Chiang Kai-shek, who basically leads the nationalist faction, loses out to Mao Zedong, who is the leader of the Communist Chinese Party. So Chiang Kai-shek flees to Taiwan, but his objective in fleeing to Taiwan wasn't to sort of set up a new nation and a new country there, but to sort of set up a campground or sort of a holding pattern for planning his retake over of China, mainland China, because they were in a power struggle, remember, for who controlled China. You watch Game of Thrones or you watch Game of Thrones or was that a thing? I haven't watched it, but. I mean, whatever. I was like the equivalent of like Dragonstone as like a waiting stone island, if any, for any viewer who's familiar with that.

• 1:51:02Speaker 02

  But whatever, it's a waiting house for then taking over. So if China views this as unfinished business and it's civil war, right? It's a dissident camp. This is unfinished business that they need to tie up. Now Taiwan does something interesting. Chiang Kai-shek actually, and there's a number of interesting dynamics in Taiwan that people forget about too, is that there was actually an indigenous Taiwanese population. So most of Taiwan and the Taiwanese party that Chiang Kai-shek actually led in the nationalist party that came over to Taiwan, they were actually Chinese people that sort of took control of this island. So there's this whole separate dynamic in Taiwan too, between the native Taiwanese and between the, you know, the native Taiwanese and the Chinese nationalist party that came over. But nonetheless, you know, he sets an agenda, rules with an iron fist of his own, decides

• 1:51:46Speaker 02

  to place his bets on the semiconductor industry. So that's where we want to be a leader. Turns out, that becomes a really important leadership position. Good bet. A really good bet that pays off pretty well. Taiwan then becomes the world's leading fountainhead for producing semiconductors, starting with the biggest of those companies, TSMC, which manufactures basically the majority of the world's leading-edge semiconductors. So, like, the way semiconductors are basically the chips that power our iPhones, our TVs, our computers, even the refrigerators that probably kept this bottle of water cold before we're drinking it, powered by semiconductors. And the way a semiconductor works is that, depends on how much detail you want to get

• 1:52:26Speaker 02

  into here, but you can pack more onto a chip the smaller the transistor is. And so in the United States, we make like, you know, 10 to 20 nanometer sort of transistors, semiconductors, that's kind of the most advanced we've gotten to today. You know, in Taiwan, TSMC gets to single-digit nanometers, seven meters, maybe even sub-seven nanometers, semiconductors, where you're talking about the width of the transistor, which means you can fit more transistors on a chip, which in turn gives it a lot more power. So that's what you call leading-edge semiconductors. Taiwan is like the leading island for producing these semiconductors for the global supply chain globally, including, you know, Apple relying heavily, all the major companies you'd know, relying for leading-edge semiconductors from Taiwan, and even the best military equipment relies on more advanced semiconductors.

• 1:53:11Speaker 02

  So Taiwan becomes this leader. Now, China still has this piece of unfinished business, but something's happened in the meantime. Both China and the US, the economies as we know it, our modern way of life comes to depend on the semiconductors produced in Taiwan. So China adopts this industrial policy, you know, pouring a bunch of money into the semiconductor industry with mixed results, and it's still, to me, as, you know, somewhat of an observer of this space, a little bit opaque, okay, as to how well China is actually doing on this front. Okay, so some reports say that they're actually making progress on seven-nanometer semiconductors, others say that actually they've launched these corruption investigations, which is usually a sign that something didn't work in the CCP as they investigate the people

• 1:53:55Speaker 02

  who did it for corruption, they actually were just failed at doing it. So that's what China's doing. Meanwhile, in the United States, we got the CHIPS Act, $52 billion, CHIPS Act passed here, etc., we could debate the merits of that policy, but that's what's going on. But what's actually economically at stake for the invasion of Taiwan is control of that semiconductor supply chain. It's actually related to the theme of one of the more recent funds that we launched.

• 1:54:17Speaker 02

  STRIVE, actually, one of our most recent funds is a fund called SHOC, S-H-O-C, preparing for the shock to the global financial system if and when China does make its move to annex Taiwan. Because if China makes that move to annex Taiwan, what people in the United States miss is that if China controls the global semiconductor supply chain, what that means is that we may lack access, American companies may lack access to produce the very goods that we rely on for our modern way of life. That's going to be a shock to the system. Most of the market is going to probably react very poorly to that. I think that's not a controversial thing to say. But the one potential glimmer of hope in that scenario could be the US semiconductor stocks.

• 1:55:02Speaker 02

  If those companies actually step up to the plate and start shoring up their domestic production capabilities, starting now, which they're not ready to do. And the irony, though, is this kind of relates to the earlier part of the conversation we had, is the top shareholders of those companies, companies like BlackRock, that will add Intel to its climate-focused universe. So Intel is part of BlackRock's so-called climate-focused universe, the universe of stocks that need to focus more on emissions caps,

• 1:55:29Speaker 02

  have underprepared and underengaged with these companies to say a peep about this actual risk, surprisingly quiet about it. And so that's what we point out with SHOC, because, you know, STRIVE doesn't do business in China. We're not beholden to whether China's going to be happy with what we're saying or not. But SHOC is a US Semiconductor Index Fund, a fund that tracks the underlying index of US semiconductor companies, where we tell those companies, focusing on long-run value, this is a risk and opportunity to prepare ahead of China's invasion of Taiwan. Now, when and how is China going to do it? We could debate that extensively, I have a lot of views on that. But this is probably, I think it's probably one of the biggest, if not the biggest, risk factor, if you ask me, that the investing public is undereducated on, is the likelihood. And by the way, we're chatting at an interesting month right now.

• 1:56:14Speaker 02

  This is the month that Xi Jinping is literally taking over his third term as leader of the CCP, breaking the chain of succession in the CCP.

• 1:56:26Speaker 02

  It's a big deal. He's now going to become, as of this week, actually becomes the longest-serving Chinese leader since Mao Zedong. He wasn't going to actually go for Taiwan, and I've been saying, I've said this for a long time, he wasn't going to go for Taiwan before he took that third term over this October because that was a big deal. Did not want to take any risk of internal instability. International backlash could be a source of instability. But now that he has that grip on power, I think that starts the clock for when he's likely to make that move on Taiwan. And I think the global financial system is undereducated and underprepared for it precisely because of this semiconductor issue.

• 1:56:59Anthony Pompliano?

  Talk a little bit about the agreement between Taiwan and China and the independence, but the independence expires.

• 1:57:07Speaker 02

  That's right.

• 1:57:08Anthony Pompliano?

  And when does that happen and how does that play into the calculation as to if and when China would make a move?

• 1:57:14Speaker 02

  So China says what they want to get to is a one-country, two-systems model, like they had for Hong Kong, although that agreement itself has slowly dissolved, right? So I think they want Taiwan to go the direction of Hong Kong. First, bring it into the orbit, one country, two systems, but then eventually, as we're seeing with Hong Kong dissolving that as well. I can't get into Xi Jinping's head, but I think those who are scholars in the area, I think, point to 2049 as like kind of the drop-dead date for doing this. Why 2049? That's the 100-year anniversary of when the Chinese Civil War ended with Chiang Kai-shek fleeing to Taiwan. They think of these 100-year time rises. I don't think he wants to get to that 100-year anniversary without tying up that piece of

• 1:57:59Speaker 02

  unfinished business. Now, I think there are scenarios where it could happen much, much, much sooner than that. I mean, there's a Taiwanese presidential election where a new Taiwanese president takes office in May of 2024. There's a US presidential election where there's a new US president, I could remind you, who could take office as soon as January 2025. It's entirely possible Xi Jinping doesn't want to take either of those risks, right? And now he's past his, you know, past his date of taking that third term over. So I think the clock is actively ticking. And this is a big risk factor. So, I mean, what can you do as an asset manager? Okay, you offer an index fund for the semiconductor index where if you have semiconductor stocks outperforming that scenario, great, that's a good way for investors to possibly hedge their portfolio, fine. But geopolitically, what do we do?

• 1:58:43Speaker 02

  That's actually a much more, much more complicated question.

• 1:58:46Anthony Pompliano?

  What do you think the US would do?

• 1:58:47Speaker 02

  So I'm debating, I go back and forth on this. I think that there's a couple of complicated considerations. I think it depends on whether you think China cares more about finishing its unfinished business of reunifying, that's what they call it, reunification, of Taiwan and the unfinished business of its civil war. Do they care more about that as a national pride issue and a domestic piece of cultural unfinished business more than they care about owning the global semiconductor supply chain, which gives them a great competitive advantage on a forward-looking basis? So if they care about the backward-looking finishing business more, that dictates one US policy, and I'll say what that is.

• 1:59:30Speaker 02

  If they care more about the forward-looking great power struggle with the United States, which allows them to control the global semiconductor supply chain, that dictates a different policy in the United States. So I can go through each in turn, okay? Let's say it's the latter, that they care more about the global semiconductor supply chain and the great power struggle with the United States. My gut is, I think that's what Xi Jinping probably cares more about, looking to the future than to the past. In this case, I think it becomes really important for the US to do two things. One is shore up our own domestic semiconductor production capabilities now, and do it, in the meantime, make sure that they don't invade Taiwan. Full stop, okay? There's some extreme things one could do here. I mean, there's some interesting ideas. I mean, you could buy those semiconductor companies in Taiwan, the US government could

• 2:00:13Speaker 02

  buy them, or fund other parties to buy them, bring those companies over here and prepare for that now, get ahead of that. And by the way, you know, China's probably not militarily quite ready to take over Taiwan in the next six to 12 months, but, you know, 12 months onward, all bets are off. That's something the US could do. The US also, by the way, has, I think, this harebrained policy in the US Navy right now of the divest-to-invest program, where we are literally actively decommissioning ships. Right, you talk about that Nancy Pelosi visit to Taiwan. The very ships that we flaunted in that China Taiwan Strait, the Taiwanese Strait, are probably going to be decommissioned by the time that China actually invades Taiwan. Because the divest to invest program says, we need to up the game of our fleet, the technological

• 2:00:58Speaker 02

  advances, we're behind. That's going to only happen after 2030. So I think Xi Jinping is looking at for when are we going to be at a nadir at our actual naval fleet versus, by the way, China's navy has actually surpassed that of the United States by measured by number of ships in the fleet. When is that delta going to be highest? That could be a pretty good window to go to. That could be in the 2025, 2026, 2027 timeframe.

• 2:01:18Anthony Pompliano?

  Is he anticipating military war?

• 2:01:22Speaker 02

  I don't think either side wants military war. I don't think either side wants military war. So I think the way this works in the version of the world where China cares more about upending the United States, one-upping the United States on having control of the semiconductor supply chain is something like this. China waits for, you know, some window, either maybe it's before the Taiwanese election, maybe it's before the US presidential election, or maybe they wait for both of those to hit the US to hit a nadir on our naval capabilities as part of our divest to invest program nadir. But somewhere in that window, next call it the next, you know, five-ish years, they probably blockade Taiwan. And then Xi Jinping at some point picks up the phone, calls the Taiwanese president, says, okay, here's how it's going to go down. You're going to be completely blockaded

• 2:02:05Speaker 02

  from, from, your economy is going to be sequestered from the rest of the world. We've militarily blockaded you. And on the other hand, if you rejoin, like we did, and this is where the history matters. By the way, remember that civil war I told you they were in civil war for 20 years? They still joined forces to stand up to Japan. They put that on pause for eight years before going back to war. So one of those moments of let's reunify, here's what I can do for you personally. Here's what I can do and will do for your people. Let's make this one nation again, or else you're going to be blockaded and isolated and it's going to be hell and miserable for you. And by the way, if you don't do it, we're just going to invade anyway. I think it's possible, depending on what the carrots and sticks are in that, that they would have a peaceful reunification, to borrow Xi Jinping's, I cringe as I use that word, but I'm looking at from a China perspective,

• 2:02:48Speaker 02

  achieve that reunification. And then they show up to the United States and say, hey, guess what? Rules have changed a little bit, guys. We have a grand bargain for you. I don't think they want to go to war with the United States. I think, I think we have a grand bargain for you. You know, all that intellectual property we've been trying to steal by planting moles in your companies and people running around with notebooks and flying back to China? I mean, that, that wasn't working too well for us anyway. It wasn't that way of great of stealing intellectual property anyway. Here's the grand bargain.

• 2:03:14Speaker 02

  We make your stuff and you give us your IP. See, if China came to us with that grand bargain now, we would laugh them off the stage because we can still have our stuff made somewhere else. But we can't have our semiconductors made somewhere else. And our modern way of electronic modern life depends on those semiconductors. This is what China puts China in the position to come to that grand bargain and say that, okay, now we've got Taiwan, we did it peacefully. China doesn't want to go to war with Taiwan because if there's a risk that even TSMC is destroyed, China's screwed then too. Both China and the US probably go into depression in that scenario. Okay. And Taiwan calls TSMC and their semiconductor industry their silicon shield. What does that mean? They're effectively implying that they would kind of, it's like holding a gun to your own head as hostage, almost like they would turn the lights off if China did invade.

• 2:03:58Speaker 02

  And that screws both China and the US enough. But if China's able to do the bear hug approach, to be able to peacefully do this on a negotiated basis with Taiwan, that allows them to, I think, achieve the real grand bargain with the United States.

• 2:04:09Anthony Pompliano?

  And what would it look like for the US to send IP there?

• 2:04:12Speaker 02

  Well, I mean, everything that we invest in, our competitive advantage on the global stage is then gone. We share that compared, we then share that competitive advantage with China. So our knowledge economy, our key competitive advantage economically on the global stage is completely a shared asset then with China. And China then achieves what its long run next step is, which isn't to be the global, single global hegemon, that's maybe the thousand year plan, but they achieve the hundred year plan, which is to be on equal parity and footing with the United States, where we're mutually codependent on one another. Wasn't where the US was 20 years ago, wasn't where the US was 10 years ago, isn't even where the US is now. We have the upper hand, that changes. That's, that's the version of the world where they care more about actually achieving parity with the United States. And I think that's the right state of the world. But I go back and forth, when you look at this through the Chinese historical lens,

• 2:04:56Speaker 02

  does he care more about the Chinese history and the nationalistic identity and finishing Mao Zedong's unfinished work? In that view of the world, the story completely changes. And it's kind of fascinating. Where he doesn't care about the semiconductor industry. He cares about this unfinished business between the Chinese civil war between Mao Zedong and and Chiang Kai-shek, and we need to reunify for the sake of that legacy. And if he cares about that more, the thing you'd do in China is say, let the US have the semiconductors. Wait for the US to achieve self-sufficiency on the semiconductor industry. Like, give the US time to catch up, such that when we do go for Taiwan.

• 2:05:35Anthony Pompliano?

  They don't care.

• 2:05:36Speaker 02

  They're not gonna stop us. So, so I think it really matters to understand which Xi Jinping is.

• 2:05:43Anthony Pompliano?

  It would be wild, it seems, to care more about the legacy.

• 2:05:48Speaker 02

  That unfinished business. It would, but we don't, but we don't underst-

• 2:05:53Anthony Pompliano?

  Than controlling the equal footing.

• 2:05:56Speaker 02

  That's why I don't think that, I don't think that's what's going on here. But, but this is so important, that you've just gotta try on each set of clothes, right? Each lens, and see it. And, and the funny thing is, you try on the two sets of lenses here, it's a totally different answer, in terms of what we're supposed to do and what China would do.

• 2:06:10Anthony Pompliano?

  Yeah. I, I've, I've never heard anyone talk about the blockade and then, uh, the negotiated,

• 2:06:18Speaker 02

  I think that's what's gonna happen.

• 2:06:19Anthony Pompliano?

  Approach. And when that happens, I guess what becomes interesting about it is like, you basically have to do it so quickly that the US doesn't have time to act to, you know, break the blockade or engage in any sort of military fight, which, uh, I don't think the appetite on either side, to your point, uh, appears, at least from the information we have publicly, uh, to be that high. Um, but if there is that, uh, uh, coming together, there were reunification or whatever, you mentioned the civil war. Well, when they came together and paused that civil war, it was a pause.

• 2:06:50Speaker 02

  Mm-hmm.

• 2:06:51Anthony Pompliano?

  For eight years and they fought, and then they went back to civil war.

• 2:06:54Speaker 02

  Civil war, yep.

• 2:06:55Anthony Pompliano?

  Is the thought process here that the, uh, the olive branch would be, let's come together for five or 10 years, let's fight the US together?

• 2:07:03Speaker 02

  I don't think it's that. I think, I think that, I think that if he's prioritizing this, it would be kind of-

• 2:07:07Anthony Pompliano?

  This is the end game.

• 2:07:08Speaker 02

  This would be, this is the end game, the reunification.

• 2:07:11Anthony Pompliano?

  Yep.

• 2:07:11Speaker 02

  And, you know, they're, they have their thousand-year strategy to supersede the United States, but for, you know, we're talking on century rather than millennial timeframes, this is a pretty good destination. We're at equal parity with the United States, we control the global semiconductor supply chain, we've achieved reunification, get that grand bargain and we're co-equals. I don't think China wants to go to war, and the US, I don't think the US wants to go to war. And so I think-

• 2:07:30Anthony Pompliano?

  Who would win?

• 2:07:31Speaker 02

  So it's a good question. It's a good question right now. I think the conventional wisdom, and so I've, I've, you know, gotten to know a lot of the, you know, top US policymakers, people who served in the last administration, people who are knowledgeable about this. They will all tell me till, till the, you know, till their face goes blue that the US is definitely, you know, set up to win this. I'm not so sure, actually. When it look at, when you look at the, just look at the naval capabilities.

• 2:08:00Speaker 02

  I mean, they have a bigger navy than ours. Ships aren't everything. Quality matters too, but, but I think a lot of their ships are also more technologically enabled than ours. That's why we are embarking on this divest to invest program. We're literally on a downward slope right now in our naval capabilities. So, uh, depends on how much military strategy we want to get into here, but I think that this is where India comes into the story. It's kind of interesting. Nobody, this is a, I haven't had this kind of in-depth conversations. This is fun for me, but, um, but, you know, if we're getting too detailed, just tell me. Why, why does India matter? So, so, so this is where China's vulnerability comes in, is they still need to get their oil supplies from the Middle East. That goes through the Indian Ocean, okay? So, so if,

• 2:08:41Speaker 02

  if India sides with the United States, I think China loses. If India sides with China, I think China wins. And so, this is comp, this is kind of complicated, but if India is, is lock, stock and barrel with the United States, what the United States would want India to do and partner with India to do is to blockade that Indian Ocean passageway for just like Middle Eastern oil to get to China and, and other supplies, you know, cross, crossing through the Indian Ocean. Now, I think that this goes, this gets another question of what the Chinese prioritization is. Do they care more about Taiwan? Or do they care more about some of those regions in Northern India that they took over in the Indo-Chinese wars in, in the, you know, latter half of the 20th century?

• 2:09:26Speaker 02

  You know, they took over a lot of territories in northeast India, areas of Ladakh. You talk about what's happening in Tibet. I mean, China does care about that. They fought wars to to secure that added territory. But the only version of the world in which India, I think, doesn't go with the United States. I mean, India and the US should be natural allies, but there's a complicated history with some love lost there, based on the US's support of Pakistan during the Cold War vis a vis Russia. Right? So, you know, India and Pakistan are famously, you know, arch enemies or historically have been arch enemies.

• 2:09:57Anthony Pompliano?

  One quick comment on this. I went to India and I was blown away that they have the ceremonial face off at the border every single, I think it's morning and night.

• 2:10:07Speaker 02

  That's right.

• 2:10:08Anthony Pompliano?

  And I was watching a video, somebody explaining to me everything. And I was like, wait, hold on a second here. So like, they actually don't like each other, but they still like cooperate in the ceremonial thing or whatever.

• 2:10:19Speaker 02

  And they even play like sports or cricket and they have like cricket matches between the two or whatever.

• 2:10:23Anthony Pompliano?

  I was like, holy shit. Like, I don't understand. Like, I'm just like so out of my element, but it just fascinated me.

• 2:10:27Speaker 02

  Yeah, that has its own history. And, you know, I think that I think that it's gone through rockier times and more peaceable times, but the India Pakistan rivalry is well known. But that dates back to the Cold War where the United States actually sided more with arming Pakistan because India was perceived to be more allied with the Soviet Union. And so that, I think, has eroded what otherwise should and would have been a natural trust between, I think, global democracies like Israel, India, Japan, United States, Australia. I think that I think that there's a possibility for a deeper allegiance between the world's self governing democratic nations than has obtained in the past. NATO, I think, is outdated in its relevance relative to, I think, what what I think could be a pan democratic, you know, alliance vis a vis checking China's power. That's where the US, I think, should go because the Indian Ocean matters in the battle versus

• 2:11:12Speaker 02

  Taiwan. Now, let's say that India gets the deal done with China in reverse to get, say, those territories back, some sort of peace agreement for India to get what it needs out of China and is more skeptical of the United States as a reliable partner. Then I think China wins the war because with the US over Taiwan. And the US may even conclude that, which is why the US may not even go to war over Taiwan. So I think India, if you ask the question of who's going to win, I think China has an edge on us on the ships. China has an edge on us even in supersonic missiles. This is another area where the United States is dramatically behind is in our supersonic missile capabilities. These are missiles that travel faster than the speed of sound and can carry, you know, nuclear warheads if necessary.

• 2:11:57Speaker 02

  You know, war is a game of poker, right? Which you ultimately play the hand you have. I think the US has a weaker hand than we realize in our military. It's not 1946 anymore, right? And so I think that that, you know, tips into the calculus, which makes India's ability to potentially blockade the Indian Ocean a big factor in whether or not the US is in a position to actually win a putative war that we'd go to in Taiwan. But I think it's all this is going to happen more or less in a negotiated settlement in the shadow of what each side believes its hand is in the case of actually going to war.

• 2:12:32Anthony Pompliano?

  Which in conflict, there's a Navy SEAL, Marcus Luttrell, who he's got this famous video, went super viral on the internet. And what he talks about is he says, you know, I'm a warfighter, right? He goes, I do some nasty shit. I was trained by my government to do that nasty shit. You better spend every single waking second doing everything you can possibly do on the diplomatic front before you call me. Because when you send me, I'm bringing hell, fury and death to wherever you send me.

• 2:13:03Speaker 02

  I'm gonna be really honest, I'm happy to hear people like that still exist in our military. That sounds pretty good to me. Because we're gonna need them. That's what they're doing on the other side.

• 2:13:11Anthony Pompliano?

  And so this is a guy who, the movie Lone Survivor, he is the lone survivor. He's the guy, he's one of the four SEALs who ends up surviving. So he's been through a lot of shit and all stuff. And his point in this is everyone wants, when conflict arise, let's send the military, right? The military, the military, all this stuff and everything. And he's like, listen. You don't understand what that entails. You should try everything else and this is the last resort. The violence is the last resort because it's nasty.

• 2:13:41Speaker 02

  Yep.

• 2:13:41Anthony Pompliano?

  And it feeds into, you know, uh, uh, there's all the controversy around the SEAL training now and kind of all the craziness, uh, about how it's too hard.

• 2:13:51Speaker 02

  Yeah, of course, there was this, there was this Yale kid who, you know, joined and then died during training.

• 2:13:55Anthony Pompliano?

  Yes. And so that I've had SEALs on, we've talked about it, right? Like all, all these different things. But what I think it ultimately just feeds back to is this thing of like, if we are going to go to war, uh, that has to be the last resort.

• 2:14:08Speaker 02

  Mm hmm.

• 2:14:08Anthony Pompliano?

  Right? And the reason why we want to have people who are trained in a certain way is because we were asking them to do the most impossible task in the world.

• 2:14:15Speaker 02

  Yep.

• 2:14:15Anthony Pompliano?

  And so the diplomatic kind of, uh, game theory, the chess becomes incredibly important.

• 2:14:21Speaker 02

  Vital, vital.

• 2:14:23Anthony Pompliano?

  Because actually in the outcome, like disparity, like 90% of the outcomes are not military conflict.

• 2:14:29Speaker 02

  Totally.

• 2:14:30Anthony Pompliano?

  It's diplomatic fucking solutions.

• 2:14:31Speaker 02

  Shade of difference and just understanding. I mean, if I had one wish of what I would want to know, right? Let's say, let's say I'm, you know, calling the shots here and someone else calling the shots there. The thing I would, in the see the person's calling the shots for us, the number one factor that we need to understand is which is Xi Jinping's higher priority?

• 2:14:49Anthony Pompliano?

  Hmm.

• 2:14:49Speaker 02

  Is it achieving his unfinished business from the Chinese Civil War of the 20th century? Or is it gaining the technological upper hand in semiconductor production? When it comes to the great power struggle with the United States in the 21st century?

• 2:15:04Anthony Pompliano?

  Hmm.

• 2:15:05Speaker 02

  If we know which one he prioritizes more, and by the way, it's increasingly about this one man, right? It used to be the party system, but he's now taken this third term over. I mean, China's really heading to, is already as of this month, I think, basically an autocratic state. If we understand what that prioritization is, we're going to be able to make a better decision.

• 2:15:26Anthony Pompliano?

  Hmm.

• 2:15:26Speaker 02

  Either way, the path runs through self reliance for us of the semiconductor industry is the thing that we need to do to prepare for either a wartime scenario where DSMC is blown up or whatever, or a scenario where China's just, ten, hurry up, guys, get it done already so that we know that you're not going to actually go to war over this so we can invade Taiwan. In either of the two scenarios, that's, that's what this points to. And, you know.

• 2:15:47Speaker 02

  More mundane matters, but as it relates to capital markets, great way for investors to also at least, you know, achieve a hedge and protect themselves. Yeah, that's why we created this index fund, et cetera. But that's, that's, that's just, you know, boring, commercial stuff. But I think that the, the substance of this, of how the US policymakers are to respond, I think depends on which Xi Jinping shows up when it comes to the debate about what they do in Taiwan. Until very recently, even still, I would say that like, it's so hard for me to be imagined being in his shoes to say that it would be anything other than the forward-looking approach. But it, that, that view presumes a hubris to think that he would think like you or I would think, or like an average American would think, when he has very complex motivations.

• 2:16:32Speaker 02

  I mean, I've been reading, I've been studying his own biography for that reason a little bit more. I mean, he's a very complication, complicated relationship with Mao. Are you familiar with this?

• 2:16:40Anthony Pompliano?

  Not with their relationship, no.

• 2:16:42Speaker 02

  No, so, so his, his father was persecuted by Mao, and he was like banished to the countryside. And, you know, his family was actually, as part of the Cultural Revolution, was, was actually physically harassed, et cetera, by students. He didn't see his dad, his dad went to be tortured, he only saw his dad much later in life, and his dad, you know, barely didn't recognize his kids. I mean, he could, clearly been through a lot that, that no one knows exactly what he went through. There was one instance where apparently Xi Jinping had to like, wear like a tin hat of shame on his head in front of a large audience that was sort of insulting him as a child of sort of the elite class that Mao Zedong actually encouraged the students in the uprising of the Cultural Revolution to turn against.

• 2:17:24Speaker 02

  And so, so he has this complicated relationship with Mao, but then he also kind of idolizes Mao. And, you know, even some of the, some of the clothing he wears emulates the kind of clothing that Mao wore. And so it's this like complicated daddy complex that he's got with Mao. And, and it's, and I don't have all the answers yet, but I think, I think we've got to be able to put ourselves in his shoes to understand whether he cares more about besting the United States, or about completing that unfinished business, whatever, you know, Freudian

• 2:17:56Speaker 02

  Analysis there is to do. I mean, I think human beings are human beings in the end, whether they're Chinese or American and they're, you know, a lot of their motivations date back to, you know, their childhood and their upbringing. And there's a lot going on in his childhood and upbringing. If we can just understand that better, I think we can make vastly better decisions that could, you know, save lives, save our economy. If we can be more precise about wrapping our head around that. And that's why, I mean, it's kind of, I would like to hope that there are, that this is what our policymakers in the State Department, et cetera, are focused on. You'd hope, but you know, I mean, one citizen among many trying to learn as much as I can about this.

• 2:18:31Anthony Pompliano?

  Did you read The Long Game?

• 2:18:34Speaker 02

  I didn't read it, but I'm familiar with it. What was the thing?

• 2:18:38Anthony Pompliano?

  It's difficult to read. I've read most of it.

• 2:18:43Anthony Pompliano?

  Super dense, it's translated. I mean, it's just like, it's just, if you're gonna read anything, this is like one of the harder things to read. But one of the big takeaways is just the long-term thinking. Right. I mean, and it's just like, and it's like little things. It's not even explicit all the time, but like, all of these components, and I was recently having a conversation with a friend and he kept talking about, if that compounds for 20 years. And it blew me away because I don't have a lot of friends who think about, you know, 10 or 20 year timeframes.

• 2:19:12Speaker 02

  Right.

• 2:19:14Anthony Pompliano?

  In contrast of, you know, these guys think a hundred and thousand years. And so it was like, oh, wow. Like this person that I really respect here in the United States, he thinks in 10 and 20 year timeframes, like, amazing how of a long-term thinker. And it's just a different game.

• 2:19:30Speaker 02

  Here's the interesting part about this, though, on the bright side for us, from an American perspective at least, is when you combine autocratic hubris with long-term thinking, you can actually get to dangerous places for yourself too, right? Because Yeah, yeah. At least the short term I can foresee, but she's being, okay, well, now I'm really in charge and I, everything's gonna go exactly as I planned for a thousand years. That's the demise of most autocracies is the ego and the hubris of the guy who thinks he has it all mapped out. So, in a certain sense, that could also be, that could be, their strength can be their Achilles heel too. And so there's a lot of kinks in our system. That they know how to exploit, right? That Trojan horse, our love for that Trojan horse that they served us up that I talked about earlier. But there are kinks in their system too.

• 2:20:14Speaker 02

  And I think a lot of that relates to the ego and the psychological and personal motivations of Xi Jinping. Like, let's say, I mean, let's say it was that second state of the world where he actually cares more about closing up his unfinished business and, you know, the Mao Daddy complex that he has and, you know, invading Taiwan for that or peacefully annexing Taiwan or whatever for that reason. That'd be a big boon for the United States because that means he's letting us and giving us the opportunity to build up our semiconductor industry because his priority is to know that once we're self-sufficient enough, he knows that we're not going to get in his way. That actually might actually be in the great power struggle what would give us that competitive advantage. So I'm not sure that's where his headspace is on that narrow issue. But history would teach us that it is the hubris of the autocratic dictator

• 2:20:58Speaker 02

  who thinks he's also able to plan for 100, 1,000 years that actually leads to the ultimate demise in their calculus. And so far, it's worked all right for his rise. But there will be a point in time where that could itself be a vulnerability too. So we have kinks in our system and kinks in our armor, but they have some kinks in theirs too. And I think the more aware we are of theirs, I think we're less aware of theirs than they are of ours. But the more awareness we gain of theirs, the more we're going to be able to make effective, you know, military decisions and economic decisions.

• 2:21:25Anthony Pompliano?

  Last thing I want to talk about Bitcoin. I have no clue what your views on Bitcoin are. Positive, negative, anywhere in between?

• 2:21:32Speaker 02

  I'm still figuring it out. So I'm not gonna, I'm not shy about spouting off in areas where I think I have expertise, which are diverse, you know, if I may say so myself. But Bitcoin's not one of them. I'm still like a nascent student. I'll give you my impressions, maybe. One of the things I was hoping to do was to learn a little bit from you, even from our chat here. So I'm favorably disposed, very favorably disposed, to the idea of having competition with

• 2:22:02Speaker 02

  Central fiat money. I think that competition is going to be good.

• 2:22:06Anthony Pompliano?

  I didn't think that you would be against that. So yeah, that doesn't surprise me.

• 2:22:10Speaker 02

  But I'm like quite strongly in favor of that proposition. You know, without repeating boring platitudes that, you know, more of your presumably pro Bitcoin audience is already on board with, like, you know, I could maybe focus on one of the areas of limited outsider feedback here that I think that the Bitcoin proponents I worry, ask it to do too much.

• 2:22:37Anthony Pompliano?

  Interesting.

• 2:22:37Speaker 02

  Yeah, we've sort of put too much on Bitcoin's shoulders, right? I think the end of competing with fiat money, sort of that is an end, that is a goal, is a worthy enough goal for what that can accomplish for human flourishing and for economic freedom and for autonomy and for even economic prosperity. And keeping, you know, central governments in check with respect to, you know, Federal Reserve in the United States, et cetera, in check with respect to behaviors that otherwise create a, you know, I think a form of hubris of our own. But I think that, you know, sometimes when I hear from Bitcoiners, is that a term you use, like Bitcoiners? Yeah, it's sort of the belief that like when I'm talking about,

• 2:23:19Speaker 02

  you know, the cultural challenges from ESG to challenges in American culture to the victimhood narratives is Bitcoin is the answer, decentralization is the answer.

• 2:23:27Anthony Pompliano?

  Bitcoin solves this.

• 2:23:28Speaker 02

  Bitcoin solves this. And I think that that's asking too much of a currency. I mean, at the end of the day, you're creating a new form of paper, right? It's a new form of paper that competes with the old forms of paper, but, you know, gold is still paper. Bitcoin is still paper. At the end, maybe, you know, maybe you don't agree with that, but I think that at the end of the day, these are just different forms of paper that compete with one another. And I think that the idea that that's somehow going to solve challenges that are fundamentally cultural in nature makes a bit of an error in conflating cultural or normative challenges with technocratic ones.

• 2:24:02Anthony Pompliano?

  Yeah.

• 2:24:02Speaker 02

  And I think we've got to be careful about that.

• 2:24:04Anthony Pompliano?

  So what's interesting, you're probably talking to the best and worst person about these, because on some aspects, I think that my views align and would be completely 100% agreed upon with almost any Bitcoiner you would talk to. So many of the things around decentralization, around competition with fiat centralized currencies, like all of that stuff.

• 2:24:26Speaker 02

  Yeah.

• 2:24:28Anthony Pompliano?

  In line with and understand and agree with. The part that I think around Bitcoin solves this. What the Bitcoin argument would be is that many of societal problems that we face are all traced back to the corruption of money. So if you basically take a first principles approach, right? The argument would be, why is there an obesity problem in America? Well, you can trace it back through the food system, through corporate greed, through all this stuff. And like you eventually just get to like, there's a corruption of money. And like, if you solve the corruption of money, then eventually you can solve that problem.

• 2:25:07Speaker 02

  Right? Yeah.

• 2:25:07Anthony Pompliano?

  And so like, I see that argument.

• 2:25:10Speaker 02

  Yeah.

• 2:25:10Anthony Pompliano?

  And I am sympathetic to that argument. I actually, in fact, would like it to be that simple.

• 2:25:17Speaker 02

  Yeah, exactly. If only it were.

• 2:25:19Anthony Pompliano?

  But, but it's a weird thing and where maybe I have views that maybe some Bitcoiners don't agree with is that like theoretically that is true. In reality, there's other things, there's additional steps. And maybe this is kind of what you're getting at, which is like, yes, a first principle solution to that problem is fix the money. Right? So fix the money, fix the world is kind of the talk.

• 2:25:43Speaker 02

  The mantra.

• 2:25:44Anthony Pompliano?

  Yeah. And, and for the most part, like actually, like I do think the corruption of money has like immense negative impacts on all sorts of, you know, crazy parts of society that don't seem connected, but they are. But Bitcoin alone, I don't think is enough to solve some of these problems because you need other solutions as well.

• 2:26:01Speaker 02

  Right. And am I wrong? Or do you get the sense that a lot of Bitcoiners kind of believe it is like, it is a little bit of like a panacea to more solutions?

• 2:26:09Anthony Pompliano?

  It's just a theoretical, it's a theoretical belief that if you simply solve the corruption of money, the cascading impact is positive.

• 2:26:19Speaker 02

  So here's where I am. I believe the corruption of money is the source of a lot of problems. Actually, my latest book does talk extensively about this, even in the modern American context.

• 2:26:29Speaker 02

  However, I don't believe it's responsible for all of our problems. And I think that there's a different problem that I'm focused on, that I focused on in my first book, which is that I also think there's a different problem going on in our country and our modern contemporary culture right now, which is that, you know, how old are you, man? Thirty-four. Thirty-four, okay, you're younger than I am, I'm thirty-seven, right? But we're part of this generation. You're old. Yeah, I'm an old guy, exactly.

• 2:26:53Speaker 02

  Late thirties, it's never been, late and early thirties. We're both millennial, you're millennial, right? You're still millennial? Oh, yeah. Okay, yeah, yeah, millennial and youngers. We are hungry, we're so hungry for a cause. We're all so hungry for purpose and meaning and identity and belonging, that the kinds of things, and by the way, we're living in a moment where the sorts of things that used to fill that hunger for purpose and meaning and identity, like the F-word, faith, you know, patriotism, national identity, hard work, family, whatever it might have been. I mean, those things are undoubtedly receding in modern life.

• 2:27:34Speaker 02

  And so my theory of the case is that there's a black hole of identity in our generation, in our American moment, and that's what allows the isms to fill the void. Woke-ism, scientism, which is different from science, right? It's a belief, unquestioning belief in authority. But I worry that actually, if we miss that reality and just put it all in the corruption of money, and there's other, there's other views I have too, of other fundamental social conundrums, one of which is the corruption of money, but there are others too, that if we just pin it all to the corruption of money, Bitcoin becomes a new ism.

• 2:28:16Speaker 02

  And Bitcoin-ism, just like woke-ism or scientism or whatever, is going to fill that void of hunger and purpose and meaning and identity and sense for belonging, that is asking too much of a currency. That's not what a currency is supposed to do. A currency is supposed to fix the corruption of money by competing in the marketplaces. For currencies, that's all good, I'm like, ho-hogging on that. But I think that where we, where we sometimes, you know, I don't think we as, though I feel like a newcomer, but a part of the community anyway, but where we sometimes, you know, might...

• 2:28:48Speaker 02

  might veer a little bit is expecting too much out of it by thinking that that's going to solve problems that are fundamentally normative or moral or cultural in nature. And in the process may actually recreate some of the same cultural failures that led us to that led to the ESG informed world or that led it to the to the DEI influenced culture or whatever it is, that Bitcoinism becomes a new substitute secular religion. That the thing we love about it is the fact that it's not a religion, it's just a rational path to autonomy when it comes to relationship of money, right? And we don't need to and I see this a little bit. Here's the other place where I sort of see evidence of this

• 2:29:32Speaker 02

  a little bit is, and you totally correct me if I'm wrong, because this is like I said at the beginning of this section, not my world, and so I'm still a new student here. But it seems to me like sometimes the Bitcoiners are trying to play the game in the marketplace of ideas and the debates and the critics of Bitcoin. Oh, no, no, we're green too. Oh, oh, no, no, we're doing the diversity thing. We have the Bitcoin diversity thing. And trying too hard to sort of prove to the critics that, no, no, we're one of the good guys, when in fact, you should just be yourself. Being good is being yourself.

• 2:30:05Anthony Pompliano?

  There's a splitting, I think, kind of if, you know, if Bitcoin is the macro idea, there are micro factions.

• 2:30:13Speaker 02

  Yeah, as you'd expect, right?

• 2:30:14Anthony Pompliano?

  Where some people are very much, yes, we are ESG compliant, we are this, we are that, we are, you know, all this stuff.

• 2:30:21Speaker 02

  We're the good guys, you know, exactly.

• 2:30:22Anthony Pompliano?

  And then actually, I think probably the people who are a little bit more hardcore believers, more libertarian in nature, those types of things, they're like, we reject your framework. We, we, you know, fuck you.

• 2:30:37Speaker 02

  Do not impose that on me.

• 2:30:38Anthony Pompliano?

  Yeah, just like, like, consuming energy is good.

• 2:30:41Speaker 02

  Yeah. And by the way, part of the reason I find this attractive is precisely because it is outside of the centralized systems that enforce that one religious ideology, a religion that I don't want to bend the knee to.

• 2:30:55Anthony Pompliano?

  Yeah.

• 2:30:56Speaker 02

  Right? So I'm kind of there. I'm kind of in that camp and I sort of worry a little bit that the Bitcoin solves everything movement. One of the things that's wrong with it is that it also requires accommodating these other agendas as a way of proving that Bitcoin is compatible with, if not causally linked to solving problems relating to racism or climate change. When in fact, that wasn't what Bitcoin was set up to do. It was set up to solve the corruption of money, solve that. And do that through competition and be yourself, rather than pretending to be something you aren't. So that's something that, it sounds like I'm not 100% off then.

• 2:31:28Anthony Pompliano?

  You are closer than you think and I'll even give you kind of a personal anecdote. So, uh, over the last number of years, uh, I was very outspoken, uh, about Bitcoin and talked about it, uh, over and over and over and over again. Uh, and at one point, somebody came to me, uh, and was like, hey, um, you don't have Bitcoin in your bio on Twitter. Well, I never thought about that. I never put an asset in my bio before.

• 2:31:55Speaker 02

  Right? Like, okay.

• 2:31:56Anthony Pompliano?

  It's an asset, exactly. But, but, uh, but I really respect the person I was talking to and they were like, you know, uh, you do whatever you want, but like it may be, uh, a good thing for the community. Like, you know, people would know that you're into Bitcoin. And I'm like, okay, well, that's pretty much all I tweeted about, but like, okay. Yeah. Put it there and then, uh, the whole laser eyes thing started and, uh, kid DM'd me my own photo with laser eyes already on it. And I was like, uh, well, if everyone else is doing it, then like, sure, right? Like, ah, cool, whatever's fine. And so this all continued. I took the laser eyes off this year. Bitcoin out of the bio and I wrote something because when I did it, there was like a concern.

• 2:32:36Speaker 02

  Uh huh.

• 2:32:36Anthony Pompliano?

  Did, did he, you know, did he leave the religion?

• 2:32:39Speaker 02

  Did he leave the church?

• 2:32:40Anthony Pompliano?

  No, no, no one said it exactly in those terms, but like, there was a little bit of like, did he sell his Bitcoin, right? Did he give up? Does he not believe anymore?

• 2:32:47Speaker 02

  Is he not a believer?

• 2:32:48Anthony Pompliano?

  And all this. And so I wrote a piece and I just said, listen, uh, you know, aptly titled, uh, um, you know, uh, did I change my mind on Bitcoin? Right? Just like, let's get right to the heart of the issue. No, uh, actually I have more conviction today than I ever have. Uh, but, uh, there was somebody who, who had, uh, texted me at one point and he said, uh, why'd you take your laser eyes off? I said, because I couldn't see with them on. As a way to basically say, just like, listen,

• 2:33:13Anthony Pompliano?

  I think I am more valuable in talking about it by being able to walk in and say, I don't have laser eyes. I don't have my identity tied up in this.

• 2:33:22Speaker 02

  And this is, this is, it's just so funny. It's not unique to Bitcoin. I think it's unique to our cultural moment where it is this idea that you have to signal the tribe that you're a part of. Bitcoin is, ought not be a tribe. It ought not be a faith. It ought not be a religion. It ought be a currency that competes with fiat money to realize, to solve the problem of the corruption of money, not more, not less. And, you know, I see this sort of cultishness, like, let's just leave Bitcoin for a second. But what you just said is like, you see in the Republican Party with respect to like fealty, to like one man. You see it in like the tech, in certain segments of the, of the tech and investing community.

• 2:33:59Speaker 02

  I think like a lot of the Elon Musk followership has this quality that if you're not believing in like everything that he spouts off on a given day, that somehow you're not allegiance to everything else worthy that he does. And like, I feel this, I, I, I, I feel like I smell, I smell a little bit of that in the, in the Bitcoin is. Here's what I would say. Here's what I would say. I am pro Bitcoin. I'm, I'm, I'm in the, you know, what you called the purist pro libertarian. Don't you impose this centralized set of values on me sense of pro Bitcoin. And I'm mildly skeptical of what I call Bitcoinism,

• 2:34:39Speaker 02

  which is the, which is the religionization of it, that are you with us or are you against us context, concept? I'm against Bitcoin victimhood culture. I'm against all forms of victimhood cultures. You, you probably got from some of our earlier discussion.

• 2:34:56Anthony Pompliano?

  You wrote a book called Nation of Victims. I'm pretty sure that's not your thing.

• 2:34:58Speaker 02

  But sort of, you know, I mean, like, what else are you going to expect? Like, you do something new, you're going to have, you're going to have arrows coming for you, toughen up and get over it. And I think you mostly, I think, I think, you know, the Bitcoin community mostly is. But I'm against, against the religiosity of it. I, I'm skeptical of the religiosity of it. I'm skeptical of the, of the sort of the victimhood culture, that they're, that they're, that they're coming for us attitude, as opposed to figuring out how we actually, you know, achieve the solution to the problem of the corruption of money. But at its essence, what the true thing is, I'm all about it. And I think the, the superstructure we've created, you know, there's, there's the, you use Freudian psychology. There's the id, there's the ego, and then the superego. I think that for the id, the thing itself, the true essence, I'm all in.

• 2:35:42Speaker 02

  For this ego structure that's been created around it, which is the sort of the religiosity and the, you know, the defensiveness of feeling like it's being attacked, I think it's a false structure that's been created. And then, you know, there's the superego, which is the regulators or whatever that say, don't do it. You know, you gotta, you got to, superego always starts with don't, you know, in your head, like when you, when you hear in your own head, you know, don't do X. It's probably your, you know, parental voice or whatever telling you not to, you know, not to be the true essence of yourself. I'm against the don't culture as well, which is to say that just because this is new and uncontrollable, that we're going to be against it. I'm rabidly against that. But I'm also even against the ego shell that's kind of formed around, you know, that's what I call the bitcoinism versus

• 2:36:26Speaker 02

  the true essence of what it is. That's what I think we gotta, we gotta stay true to.

• 2:36:30Anthony Pompliano?

  I, I find when I have conversations with people both incredibly prominent and also no one even knows that they know anything about Bitcoin, the one commonality is that regardless of where you are on the spectrum of the religiosity.

• 2:36:45Speaker 02

  Yep.

• 2:36:46Anthony Pompliano?

  The essence of it is the, the common thread. And if you had to choose, you would want the essence of the technology to be the common thread rather than the religiosity of it.

• 2:36:56Speaker 02

  Totally.

• 2:36:56Anthony Pompliano?

  Right, obviously. And so it gives me hope that although what I find fascinating about the entire community is there's people on the left, people on the right, there's people in the center, there's people who don't give a shit, right? There's, there's every race, religion, creed, just like everything. It, it is this unifying thing for so many different types of people that like the power of the crowd actually is drastically underestimated, or yeah, it's just like underestimated by both the incumbents and even the community itself of like, in 14 years, look what's happened so far. And you have people all around the world working. And I always remind folks.

• 2:37:38Anthony Pompliano?

  Like, there are tens, hundreds, thousands, millions of nodes around the world, these mining machines, etc. There is no CEO, there's no marketing department, there's no board of directors, there's no, you know,

• 2:37:50Speaker 02

  That's part of the essence.

• 2:37:51Anthony Pompliano?

  Balance sheet, right?

• 2:37:52Speaker 02

  That is the essence.

• 2:37:53Anthony Pompliano?

  It's just a

• 2:37:54Speaker 02

  That's part of the true essence of what it is.

• 2:37:55Anthony Pompliano?

  It's just a bunch of weirdos on the internet who all have a common belief in something, and they're doing their part, which I think is part of the beauty of this. But they're voting their own voice.

• 2:38:07Speaker 02

  They're voting their own voice. That's right. That's the true essence to sort of a strive mission as well.

• 2:38:11Anthony Pompliano?

  Yes.

• 2:38:12Speaker 02

  Exactly. Match your voice with your actual capital. That match is what strive is all about creating. So in that sense, we're deeply, deeply, deeply sort of synchronous and aligned with the Bitcoin mission as well, which I think is, which I think is pretty cool. The one, the one area of food for thought, it just occurs to me also, given that we went into such depth with China and Taiwan here, is that I think there's a strand of certainly, you know, the Bitcoin movement that appropriately rejects fetishization of national identities, right? This is, this is, you know, trans partisan, as you said, but it's also transnational, right? And that's part of what makes it beautiful, is it's a community of people that can transcend

• 2:38:55Speaker 02

  national boundaries and reject the oppression of fiat and the corruption of fiat money as a concept wherever that fiat money is coming from. But I would just, I would inject one cautionary note into this, which is to say that in the obsession over the American reluctance to achieve Bitcoin and thereby, you know, I was reading Bitcoin Magazine or whatever, is that what it's called? Did you read this article about like the rise of the Petro-dollar? It was pretty good, pretty good piece. Did you see that one?

• 2:39:22Anthony Pompliano?

  Yeah, I think Alex Gladstone maybe wrote it.

• 2:39:24Speaker 02

  Yeah, that sounds about right. That sounds about right, yeah. So, you know, I learned a lot from that piece, I thought it was pretty good, but it had this sort of anti-nationalist streak to it from an American perspective, which I think can lead to a

• 2:39:41Speaker 02

  Lead to a self-defeating place, where let's say in that great power struggle, let's fast forward it, let's do the Chinese thing and think of longer-term horizons here for a second. Let's fast forward that 200 years. Well, you know who's going to be opposed to decentralized autonomy in non-fiat currency? It's going to be the future Chinese state, it's the CCP, it's Xi Jinping and his progeny of leadership. And I think that if we're, if we're sowing the seeds for, and I don't think we are, but I think we've got to be careful about this, this article had undertones of it, of sort of rejecting the importance of the preservation of American national leadership.

• 2:40:22Speaker 02

  Not only is that something that is personally important to me, as a category of citizen, I'm sort of weirdly American nationally, nationalistic with respect to the ideals that define this nation and all that good stuff. But forget that. Even from a Bitcoiner perspective, I think a world in which China, rather than the United States, is the, is the leading hegemon, 2045 is like 1945, except with China in the position of the United States. I don't think it's a good, or even tenable, future for the future of Bitcoin or anything like it. And I think it's important that people in the transnational, the coolness of it being a transnational community, not lose sight of the fact that the boundaries between the

• 2:41:04Speaker 02

  nation-states that we have today are still relevant to the future of Bitcoin itself too. And that are, the guy who wrote that article, which was otherwise a good piece, I think that's something that he missed. And I don't know if that's representative of the broader community or not, but if it is, that would be one, you know.

• 2:41:21Anthony Pompliano?

  I always just say.

• 2:41:22Speaker 02

  I'd inject into that.

• 2:41:23Anthony Pompliano?

  Bitcoin is unique in that it has a lot of the American ideals and ethos, kind of codified in the system itself.

• 2:41:31Speaker 02

  I think so, I think so.

• 2:41:32Anthony Pompliano?

  And it's interesting, because even if you were to look at like the Bitcoin system and the decentralization, people will talk about the hash rate and mining and that is an important, almost, you know, I would argue, essential piece of Bitcoin and what sets it apart with proof of work and the decentralization, but. There's still checks and balances. It's a lot like the American political system, right? Like, you have three bodies of the US government. In the Bitcoin system, if you want to change rules, you have the miners, you have the nodes, and you have the software operators.

• 2:42:02Speaker 02

  That's right.

• 2:42:03Anthony Pompliano?

  And so you get some of these components that I think are just really, really powerful. And we shouldn't shy away from that. We should... If Bitcoin embodies these American ethos, then we should be a leader.

• 2:42:16Speaker 02

  I think so, right? Exactly. But I think that that's the way I would look at it.

• 2:42:20Anthony Pompliano?

  Yeah.

• 2:42:21Speaker 02

  America should want to be a leader.

• 2:42:24Anthony Pompliano?

  And it's not a zero-sum game. That doesn't mean that nobody else can be a leader, or nobody else can embrace it. It's just like, we want to be a leader.

• 2:42:30Speaker 02

  And so why the heck are we regulating this in a way that rejects the idea that we want to be a leader in going the way of the future? I'm all in on that, and that's exactly the framing I prefer. Versus the undertone, at least in that little article that I read, was more in terms of like, this idea of, you know, the outdatedness of national boundaries, and the idea of this new transnational community that transcends the otherwise American corruption that, you know, created the petrodollar system that perpetuated war and financed war. I think that... He makes some compelling arguments, but I think that that is ultimately a self-defeating route to go all the way down, if it ultimately contributes to the rise of other hegemon's that supplant the position the United States has filled, in a way that's going to be self-defeating for Bitcoin itself.

• 2:43:15Anthony Pompliano?

  If it was the Human Rights Foundation, Alex Gladstein is the chief strategy officer, if it was him who wrote that, they've been very outspoken about the issues in China. So it's interesting in that, like...

• 2:43:27Speaker 02

  Good. So I'm saying it more, less in terms of, less in terms of impugning the goal, but more in terms of my two cents on tactics, you know, to get there.

• 2:43:37Anthony Pompliano?

  Yeah. Makes complete sense. Where can we send people to find you on the internet?

• 2:43:41Speaker 02

  Yeah. I mean, you know, strive.com is a good place to start. So Strive is the company I founded, so that's probably the easiest one to remember. But we have vivekramaswamy.com, where my books are online as well. I haven't been a big social media guy, but I got on social media a couple of years ago with Twitter.

• 2:43:58Anthony Pompliano?

  You're very good on Twitter.

• 2:43:59Speaker 02

  Yeah, thanks. Twitter's the one that I... The only one that I that I use, so I Vivek at Vivek G. Ramaswamy. And you know, check out strive.com if you wanted to know what I'm spending my day job on. But if you want my ideas where I'm spouting off about one topic or another, you know, I usually I usually use Twitter as my as my closet for an idea that I get off my chest once in a while.

• 2:44:21Anthony Pompliano?

  So awesome. Well, listen, thank you so much for your time. I really enjoyed this. I learned a ton. We'll definitely have to do it again in the future.

• 2:44:26Speaker 02

  Cool, man. Thanks for having me.

• 2:44:28Anthony Pompliano?

  Thanks so much for listening to today's episode. I really hope you enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to transition into a brand new job in the Bitcoin or crypto industry, we've got you covered. Head over to thecryptoacademy.io. My team and I have been working with the top HR teams in the industry to develop an intensive three-week training program with over 50 live events. We teach you exactly what you need to know to break into the industry, including live interview prep and resume review. Our students have been hired at over 75 of the world's best Bitcoin and crypto companies. Go to thecryptoacademy.io to learn more. Again, that's thecryptoacademy.io. If you enjoyed today's episode, make sure you share it with your friends and I'll see you all for the next episode.