E131: 2024 Fantasy President picks, debt ceiling agreement, Dollar dominance & more

00:00:00.000 | freeberg punchy now. punchy office a punch drug salty

00:00:03.920 | freeberg reminds me of a story for this weekend. Okay, we're

00:00:06.560 | waiting in line to go to the encore beach club to see Kygo.

00:00:09.360 | And I go me and freeberg are at the back of the line. Everybody

00:00:13.360 | else has gotten through all you guys are filtering into the

00:00:16.120 | booth. I go was tight. And he said, So I put up my phone.

00:00:22.960 | That's all I have my key card. He takes out a phone his key

00:00:26.600 | card, a small bag of the salt and vicar salted pistachios. Oh,

00:00:32.160 | he travels. He will leave home without his little bag of

00:00:36.740 | pistachios. And they're like, no food in the guy says no food in

00:00:40.560 | the club. Now and he goes, What do you mean no food? This is in

00:00:43.840 | a bag. It's like it's just pistachios. Just pistachios. They

00:00:47.160 | get in an argument back and forth back and forth. He's like,

00:00:49.260 | I'm gonna take a stand. This is outrageous. I said freeberg

00:00:51.880 | Come on, let's just go. So we go inside. This is where he takes

00:00:54.400 | a stand. And then he's like, Can you believe it? They took my

00:00:56.760 | fucking pistachios like these are my pistachios. Tilted easily.

00:01:00.840 | And then and then on the way out. He's like, if I see that

00:01:03.880 | guy, this is a fucking curb your enthusiasm skit right here.

00:01:10.560 | Where's my pistachios? salty pistachios. I was walking through

00:01:15.440 | the casino later eating the pistachios. I fell in love with

00:01:18.360 | freeberg this weekend. I had so much fun with this fucking Oh,

00:01:21.000 | my god. He's so he was he was living his best life in the

00:01:25.960 | clinic. Show the bigger picture. Nick just zoom out so you can

00:01:28.360 | see Oh, there I am. Yeah, right next to him. There's me look at

00:01:31.720 | how huge my ass looks. God. That's a lot of that's a lot of

00:01:34.640 | s. That is a show that look at that huge dumper. Wow. That's

00:01:38.920 | incredible. And what's going on with those? Those underwear?

00:01:41.840 | Who's good is that Jekyll's? That's my dad. But I think it's

00:01:45.360 | just the t shirt. I think it's just the t shirt. You obviously

00:01:47.640 | stopped the Ozempic sideways. I'm still sideways. 175 right

00:01:52.600 | back on to you. Nope, no, you stopped the Ozempic and it came

00:01:55.760 | right back. Vegas was so fun. I gotta say I gotta shout out to

00:01:59.000 | those guys that run that Delilah joint. I think that's like the

00:02:01.440 | best new restaurant. It's a really great place. A little

00:02:04.280 | loud. I wish we just go like one notch lower on the volume for

00:02:07.840 | the world. Good scene. Once you hit 50 all the clubs are

00:02:11.160 | too. Rain Man David

00:02:16.920 | with us again on the all in podcast the architect himself.

00:02:31.440 | Crazy hair doesn't care. David Sachs. Friedberg is committing

00:02:36.400 | suicide in the bottom of a pool. Apparently he just cannot take

00:02:40.280 | all the adulation and inside. That's a leaving Las Vegas

00:02:43.520 | scene. Exactly. That's you leaving Vegas down 150 dimes,

00:02:48.240 | which you could have given to DeSantis like Sachs did. And hot

00:02:52.720 | off of his wonderful weekend. The afterglow of Vegas. Chamath

00:02:59.080 | Polly. We went to Vegas to play cards. It was a wonderful

00:03:01.880 | weekend. We had a great time. Everybody bonded. A lot of laughs

00:03:05.600 | were had wonderful time. Wonderful, wonderful time. I got

00:03:09.960 | into craps. I was never a craps guy. But I had a great was Jay

00:03:14.240 | Callen craps. Oh my god. I got 40 I had a 40 die roll run. It

00:03:18.760 | was incredible. There's something about that game that

00:03:21.200 | is like super addicting to me. Oh, when you just go on a 40 die

00:03:25.520 | roll. I think craps really is one of the best gambling games

00:03:32.120 | ever created. So exciting. It's so exciting. It's so exciting.

00:03:37.360 | It's like hitting the hard ways. And then the feature bets feature

00:03:41.440 | bets. Features are such leaky bets. No, but when they hit

00:03:45.320 | they're just so far when they hit they just all the dopamine

00:03:47.800 | gets released loved it. I spiked aces for the max bet. It was

00:03:51.200 | like, Oh, I saw that you put 500 on it. Yeah, they only let me

00:03:54.320 | bet 500 but I bet 31 to one on aces hit it.

00:03:57.160 | Table went crazy when that 15 dimes were pushed. Speaking

00:04:02.200 | about pushing 150 dimes, Sachs you've been getting a lot of

00:04:05.040 | press for being the architect. I saw some stories. Let me ask you

00:04:09.000 | a question. Total fake news. All fake news. We know that

00:04:12.000 | everybody's emailing me to try to get answers about you. I just

00:04:15.360 | see see you on this but the press has been trying to cover

00:04:17.880 | your role architecting the Ron DeSantis presidential. We talked

00:04:21.960 | about last week. What's the color? Well, the press wants to

00:04:25.120 | know what 150 dime skis is. They can look it up in the Urban

00:04:28.920 | Dictionary. I think that would be easier. Let me ask you a

00:04:32.360 | question about your giving strategy or your donation

00:04:36.160 | strategy. I noticed that you're donating to RFK for president

00:04:41.480 | and you're donating to Ron DeSantis. Are you donating to

00:04:44.880 | any other president? And why are you betting both sides of the

00:04:49.240 | aisle? This is confusing to me. How about you want to one side

00:04:51.360 | to win? I mean, I've already explained this on previous pods.

00:04:54.000 | I don't know the answer. What's the

00:04:55.400 | the simplest way to understand my political giving is just to

00:04:58.920 | watch the all in pod. And I always end up describing who I'm

00:05:02.960 | supporting, and why and which causes on the pod first. And

00:05:08.320 | then I back it up, I put my money where my mouth is. So

00:05:11.000 | there's no mystery. There's no like backroom deals going on.

00:05:14.160 | It's just me writing checks and support of things I've almost

00:05:17.160 | always really talked about on the pod.

00:05:18.760 | Okay, so what about this question of betting both sides?

00:05:23.760 | So you're betting for both teams in a basketball series? Like, I

00:05:28.560 | don't know, I don't understand that.

00:05:29.600 | Well, I've said that it's not competitive. At this point, I've

00:05:32.280 | said that I would support RFK Jr. For the Democratic Party

00:05:36.360 | nomination, and I support the Sanchez on the Republican side.

00:05:39.200 | There's no contradiction, I guess, if they both made it to

00:05:42.800 | the general, then I'd have a real dilemma. But let's face it,

00:05:46.960 | they're both underdogs in their lane. Okay, it'd be a high class

00:05:50.920 | problem to have if it ended up being a DeSantis Kennedy race

00:05:54.200 | instead of a Biden Trump repeat.

00:05:56.600 | Well, I mean, I've played blackjack with you, you do play

00:05:58.680 | multiple hands at once. So I guess this does. This does

00:06:02.360 | track. It's not enough action for you to just play one hand.

00:06:05.360 | I don't really see a contradiction there. Right now.

00:06:07.680 | There's a Trump DeSantis race going on. And there's a Biden

00:06:12.280 | Kennedy race going on. Okay, now you hold a lot of fundraisers.

00:06:15.960 | tomas and I are actually doing an event for Bobby Kennedy. Soon

00:06:20.440 | in the next two weeks. Got it. Let's go to you tomorrow.

00:06:22.800 | Well, I think it's important to just acknowledge an uncomfortable

00:06:28.000 | truth. And I come at it from a person who's independent. I'm

00:06:33.040 | not registered Democrat or Republican, but I've donated

00:06:35.560 | millions of dollars to the Democrats in the last couple of

00:06:38.080 | cycles. But I'm concerned about Joe Biden's mental acuity. And

00:06:47.400 | recently, when you look at how the White House behaves, the

00:06:55.600 | thing that I'm worried about is that there's almost like this

00:06:58.200 | sensation that there's a shadow government that's actually

00:07:01.040 | running the country. And we didn't elect any of those

00:07:04.920 | people. And this is nothing to say anything bad about Janet

00:07:08.680 | Yellen, or Jeff Zients, or anybody else. But I think it's

00:07:13.320 | very important to acknowledge that, you know, other presidents

00:07:17.240 | have typically seen turnover in the highest ranks of government

00:07:21.280 | every two years or so. And there's been incredible

00:07:26.200 | consistency. Now, one could say, well, that's a good thing. The

00:07:29.680 | other side of it is, well, that's what allows more

00:07:32.680 | vibrancy in government and to make sure that the President

00:07:35.160 | remains always in charge. And so I think it's very important in

00:07:40.200 | this moment, where we have a president who's 82 odd years

00:07:43.440 | older, however old he is. We need to have a chance the

00:07:48.480 | American public to re underwrite his mental acuity. And I think

00:07:52.040 | that's a judgment that we should all be allowed to make. And I

00:07:55.240 | think the fairest way to do that is to feel the candidate who can

00:07:59.720 | be on the debate stage with him, and who can actually just go toe

00:08:03.360 | to toe on the critical issues so that we as an American electorate

00:08:07.000 | can decide for ourselves, where does this issue land? Is he

00:08:12.560 | mentally super sharp and ready to go for another four years, in

00:08:15.760 | which case a lot of folks will support him? Or is this a moment

00:08:19.320 | where we actually need to be very responsible at the future

00:08:21.640 | of the country and not create some puppet government

00:08:24.600 | situation? I don't think it's funny that we have this weekend

00:08:28.320 | at Bernie's like mean that goes around about him. This is the

00:08:31.360 | President of the United States is the most important person in

00:08:34.400 | the world. We can't be in a situation where like, that is a

00:08:38.160 | 30% probability that people joke about. So my support of Bobby

00:08:44.360 | Kennedy is in part because what I've heard from him, I find

00:08:47.080 | intriguing. But the more important thing is, somebody

00:08:50.880 | needs to be in the arena on the democratic side, and put to test

00:08:57.400 | this mental acuity construct here and get us to an answer.

00:09:01.000 | Because otherwise, I am worried that there's a bunch of folks

00:09:05.080 | that were not elected, who are actually running the government

00:09:08.000 | and I'm not sure how much Biden actually knows or doesn't know.

00:09:10.400 | And I want to know the answer to that question.

00:09:11.960 | I think everybody wants to know the answer and feels like

00:09:14.000 | Democrats would like a different candidate. That's what the

00:09:16.560 | polling is showing to be, you know, put on the field here. And

00:09:21.200 | there is the issue of he's had the fewest number of news

00:09:23.800 | conferences, we don't get to hear from him directly, which

00:09:26.720 | then fuels I think, this perception Friedberg, that he's

00:09:32.680 | in cognitive decline, and perhaps the cognitive decline

00:09:35.920 | has increased. Republicans love to, and the right love to, you

00:09:40.720 | know, make these images of him confused on stage, who knows if

00:09:44.640 | he's actually confused, or if those are being selectively

00:09:48.000 | edited. But it certainly doesn't look good. When you don't put

00:09:51.720 | the person out there to face the music. And to take hard

00:09:55.200 | questions. I can't imagine he would do very well in a town

00:09:58.960 | hall or in an extended number of debates. And so this is the

00:10:03.200 | thing that I find truly scary is, if the guy can't make it

00:10:06.440 | through the debates, and he can't debate RFK and 10 other

00:10:09.320 | people, and he can't do news conferences, and we haven't

00:10:13.680 | heard directly from him or had him like face some really hard

00:10:17.240 | questioning. He had he did one thing on MSNBC or CNN, and it

00:10:20.600 | was so pathetically sycophantic. And it looked like it was highly

00:10:25.240 | edited. I kind of like that the host who did it up, pull up her

00:10:28.480 | name in a minute. I forgot her name right now. She's actually

00:10:30.800 | pretty good. She's kind of funny. And she's kind of

00:10:32.960 | insightful, but she just so through softball to softball. Is

00:10:35.160 | there an age, Sultan of science that we should have a cognitive

00:10:38.640 | test for? For office in your mind?

00:10:41.520 | I don't have an opinion on that.

00:10:44.320 | You don't? On an age? I mean,

00:10:48.000 | yeah, like, should we or should we have a cognitive test?

00:10:50.440 | A cognitive test? We cognitively test the President

00:10:53.880 | of the United States for office. Like, there's also

00:10:55.720 | a thing which I'm often saying is that when you hold debates,

00:10:58.240 | and you do town halls, and you do rallies, then that is a

00:11:01.800 | cognitive test. You'll see, you'll be able to take the

00:11:04.800 | cognitive measure by seeing how quick on their feet they are.

00:11:08.040 | But if Biden doesn't debate anybody, we won't see it. And

00:11:13.080 | right now, they're saying they won't debate Kennedy. So that

00:11:16.240 | tells you right there that they're afraid of something.

00:11:18.720 | I just want to reiterate this. This is the single most

00:11:22.200 | important person in the world, in the single most important

00:11:26.240 | job. If it breaks your brain in a moment like this, to not be

00:11:32.840 | partisan and think what would you do if it was the other side?

00:11:35.720 | I just think you're like an unpatriotic rube. And you're

00:11:40.960 | gonna get tricked. I'm not saying you Jason, I'm saying

00:11:42.760 | anybody that thinks that I'm in your camp, I want to see him

00:11:45.440 | debate. Yeah,

00:11:46.040 | especially if the Ukraine war is still going on, because we're

00:11:48.680 | that close to being in a direct shooting war with Russia, which

00:11:51.800 | could lead to a nuclear war. So you need somebody to be

00:11:55.640 | contained, I'll be more worried about the relationship is

00:11:58.160 | contained. I think it's escalated. I don't think it's

00:11:59.840 | contained, it's escalating. And as of yesterday, there seems to

00:12:02.680 | be some conflagration between Kosovo and Serbia that's kicking

00:12:06.160 | up. So all of a sudden, we're talking about a totally

00:12:08.640 | different European land war. And we have fiscal instability.

00:12:13.480 | We're about to talk about it today. But the home market could

00:12:16.760 | implode in the United States, the commercial real estate

00:12:19.840 | market has already imploded. There's all this complexity. And

00:12:24.680 | I think that the idea that you can't demand the most important

00:12:29.200 | person in the world to be on top of their game, I just think that

00:12:33.280 | that's outrageous. You expect the best player in the NBA to be

00:12:37.040 | elite, right? Yes, of course. Yes, they have to get good

00:12:40.400 | sleep. They have to have good fitness. They're measuring every

00:12:43.120 | single dimension of an NBA players life. They measure their

00:12:46.360 | sleep now their diet, their shooting percentages,

00:12:49.280 | everything. And we're not doing that for the president states,

00:12:52.320 | by the way, the MSNBC host who got the one interview I've seen

00:12:55.720 | with Biden in years was Stephanie rule. Are you HLE from

00:13:00.800 | 11th hour?

00:13:01.800 | Well, they give them the questions. That's how she gets

00:13:04.320 | the interview. Have you seen that like Biden has these cute

00:13:06.840 | cards when he goes with the podium, and literally it's got

00:13:09.640 | the questions and it says who to call on. So they script the

00:13:12.320 | whole thing. That's a stack. That's a stack deck.

00:13:14.200 | But Trump did that as well. If you remember,

00:13:15.920 | in fairness,

00:13:17.840 | nobody gave him the questions.

00:13:19.600 | He said a PR the McEnany lady. She had a huge binder and she

00:13:27.760 | would flip to the talk. My point is that's okay.

00:13:30.160 | We never did the same thing with the stance. What are you talking

00:13:32.200 | about?

00:13:32.560 | Didn't you pick the first five speakers? First five questions

00:13:35.000 | were people you knew. You said that he didn't stack the deck.

00:13:37.800 | Jason, come on, stop.

00:13:38.800 | We didn't have a script.

00:13:40.680 | You pick the first five speakers. My point is not a

00:13:42.840 | press conference. That's an introductory event. That's

00:13:45.600 | someone announcing

00:13:46.360 | Okay, fine. Whatever. Same thing. You're

00:13:48.200 | no, it's not. No, no, no, we're talking about a White House

00:13:51.760 | press conference. And he goes up to the podium. And secretly

00:13:56.200 | when they zoom in on the camera, they're seeing that literally he

00:14:00.280 | knows who to call on and what the question is going to be. So

00:14:02.880 | in other words, the media is cooperating with the Biden

00:14:06.720 | administration

00:14:07.520 | for access,

00:14:08.360 | for access, and they're giving him the questions.

00:14:11.280 | All right, anyway, let's let's move on. I think it's very

00:14:13.680 | important to just acknowledge that you're

00:14:15.160 | trying to normalize it by comparing it to

00:14:17.000 | completely different kind of event. I am saying that is

00:14:19.960 | something I never did that with Trump. They never give Trump the

00:14:22.080 | questions. He loves to mix it up. I mean, that's winning.

00:14:25.480 | That's how you know he's still mentally fit. I mean, a mentally

00:14:28.120 | unfit Trump would be a scary proposition. You may or may not

00:14:30.760 | like his personality or temperament, but no one is

00:14:33.320 | accusing him of being not. No, he's sharp or having dementia.

00:14:36.440 | I think it's important to get on the record. I don't think we are

00:14:38.800 | saying that he is unfit to be president. I think at least what

00:14:43.080 | I'm saying is, we have a right to underwrite the president

00:14:47.400 | every four years. And on this dimension, this is the biggest

00:14:52.720 | issue that I see with Biden. And I'm concerned in the lack of

00:14:58.960 | turnover in the White House. And I want to know that he is

00:15:04.640 | actually in charge day to day and making the decisions versus a

00:15:09.000 | shadow government. That's all I want to know. And I want to see

00:15:13.400 | him live on the debate stage. So that he can validate. Yeah, he

00:15:19.040 | is firmly on the controls. 100% of Americans want this. The only

00:15:22.520 | people who don't want it is people who are in power, who are

00:15:25.840 | part of his group.

00:15:26.800 | That's not 100%.

00:15:28.840 | There's a I'm talking about America's who vote. They all

00:15:32.480 | want to see him debate is I don't think I don't know

00:15:34.400 | anybody who doesn't want to see a vibrant debate. So I think

00:15:37.560 | this is something the Democratic Party needs to the Democratic

00:15:41.920 | Party needs to rethink their stance on this, put them out

00:15:44.240 | there, put them on the field, up or down, left or right, he has

00:15:47.400 | to debate at least three, four debates in the primaries, you

00:15:51.320 | know, earn a slot.

00:15:52.200 | It'll do real damage to the Democrats if Bobby Kennedy gets

00:15:56.120 | a ton of steam. And they ignore him. I'll give you a different

00:15:59.320 | example of how Bobby's being roadblocked, which is when you

00:16:01.800 | go to 538.com. And you look at you know, Nate does a great job

00:16:05.440 | of pulling up all of the polling that happens from all of the

00:16:08.800 | polling agencies. There are many instances where the democratic

00:16:13.600 | fields won't even include him when they ask him questions. And

00:16:18.360 | so there is definitely a concerted effort here. And I

00:16:21.200 | think it's not that I don't want Joe Biden to win. I think he's,

00:16:24.280 | he could be fantastic. Again, I voted for him. And I think that

00:16:28.800 | if he's mentally sharp, and his hands are on one of the chances,

00:16:31.320 | you think he's sharp, Chama? No, I'm saying, I don't know. I

00:16:35.120 | know. I want to know for myself, what do you think the chances

00:16:37.600 | are? I don't mean just using logic here. I think they could

00:16:40.280 | be pretty good, actually, you know, there's a lot of like, if

00:16:42.720 | you look at Buffett, he's 92. He's sharp as attack mongers 96.

00:16:46.080 | He's sharp as attack. I think that if you live reasonably

00:16:48.360 | well, and Biden's got some great things working for him, he's

00:16:51.520 | he's been a T total of his whole life. So all the things that

00:16:54.440 | would have caught up with you in your 80s Biden has avoided. So

00:16:58.000 | from a health perspective, he has the best chance of being on

00:17:00.280 | top of his game. Can he be physically frail? I don't care

00:17:03.320 | about that. You know, that happens to everybody. So I think

00:17:07.760 | it's important to disambiguate those two. And so it is very

00:17:11.840 | easy to tell when you're standing on a debate stage, hell,

00:17:15.120 | you can sit on the debate stage, I don't care. But I want you to

00:17:19.000 | be able to explain what you think, in a way that's cogent

00:17:22.920 | and coherent. And you walk away thinking, I feel safer with him

00:17:27.000 | with his hands on the controls here.

00:17:28.240 | Saks, what do you think? Is he? What do you think the chances

00:17:31.040 | are? He's sharp as a tack? He's not in cognitive decline?

00:17:34.600 | He's not. We know that. The question is whether he can serve

00:17:40.600 | at all.

00:17:41.280 | Should people have to take a cognitive test? You think that

00:17:43.440 | would be a good improvement?

00:17:44.320 | Look, I think the debates the cognitive test,

00:17:46.160 | but the Senate and stuff like that, because it does seem like

00:17:49.080 | people are

00:17:49.600 | the voters are the cognitive test. Okay, the problem is when

00:17:52.840 | the media is cooperating with the candidate by not asking them

00:17:57.080 | tough questions, or even we're sharing the questions with them

00:17:59.840 | to give voters a false impression of how strong they

00:18:02.960 | are. I mean, look, the media's job is to be fundamentally

00:18:06.120 | antagonistic with the people in power not to cooperate with

00:18:09.240 | them.

00:18:09.480 | Here's something super intriguing that happened this

00:18:12.080 | week. Jamie Dimon has hinted at running for office. Bill Ackman

00:18:17.080 | made a case for him to run for president in 2024. This is

00:18:21.240 | getting a lot of steam all of a sudden people are talking about

00:18:23.400 | it on CNBC. And it's trending on Twitter. On Wednesday, JP Morgan

00:18:28.040 | Chase CEO Jamie Dimon made some comments about potentially

00:18:31.040 | running for office in the future quote, I love my country. And

00:18:34.680 | maybe one day I'll serve my country in one capacity or

00:18:37.800 | another. He's 67 years old. He didn't know that Bill Ackman

00:18:42.400 | tweeted his support for diamond running as a dam against Biden.

00:18:46.240 | Ackman put out a number of compelling points. Diamond is

00:18:50.560 | one of the world's most respected business leaders.

00:18:52.280 | That's true. politically centrist pro business pro free

00:18:55.440 | enterprise all true, supportive of well designed social programs

00:18:58.560 | and rational tax policies that can help the less fortunate,

00:19:01.120 | smart, thoughtful, pragmatic knows how to bring opposing

00:19:03.800 | parties together highly respected by right left and

00:19:06.560 | center. I think that's also true. superbly managed JP Morgan

00:19:10.400 | through every crisis, quote, no bullshit straight talking

00:19:14.840 | charismatic leader with an enormous grasp of the world's

00:19:18.360 | issues, and how to address them.

00:19:20.560 | Tomorrow, I'll just ask it to you plainly. If you had three

00:19:24.440 | choices, or four choices, Trump, to Santas, Biden, and the Jedi,

00:19:30.800 | Jamie Dimon stack rank those for us rank them. Who do you got?

00:19:34.320 | Who do you vote for? Those are your four choices?

00:19:37.160 | Probably Jamie Dimon one. Okay. Santa's too. Okay. And Trump and

00:19:47.320 | Biden. It's a bit of a tie. Bit of a tie. Garbage, garbage. Okay.

00:19:51.120 | Not garbage, garbage. Don't Don't say that. But okay, it's a

00:19:53.840 | bit of a time. I mean, it's two people that nobody wants to vote

00:19:57.040 | for, it seems wants to run. I personally believe that the era

00:20:00.880 | of septuagenarians and octogenarians should come to an

00:20:04.400 | end in terms of their ability to run this country. I want that

00:20:08.120 | transition. Now, Jamie is 67. So but he's still much younger than

00:20:12.600 | these two other guys. And again, I go back to yours is a lot.

00:20:15.480 | It's a lot and vitality, energy. This matters. And I think that

00:20:21.200 | he is a very competent, economic, rational actor. So it

00:20:27.400 | would be interesting to see. I mean, look, the reality is, if I

00:20:30.440 | had to be really honest with you, I think that what we should

00:20:32.560 | do is keep chipping away at the establishment and how they pick

00:20:36.640 | candidates, it's going to be a slow process. But I think in 10

00:20:41.280 | or 15 years, the real thing that we should all do is if there's

00:20:44.200 | enough citizen journalism, that we should really just change the

00:20:47.680 | Constitution, so that we can allow people that have been here

00:20:52.600 | for 25 plus years that have paid all their taxes that have

00:20:55.320 | followed all the rules to run for president. And then we could

00:20:59.200 | actually just we could vote Elon in and just have him clean it up

00:21:02.040 | the way he's cleaning up everything else. Honestly, why

00:21:05.760 | not just do that? I mean, who would who would not want that?

00:21:08.920 | sacks, let me ask you to stack rank and then we'll get to the

00:21:12.200 | change in the Constitution issue, which is that is a hell

00:21:16.440 | Mary.

00:21:17.760 | How would you rank those four?

00:21:18.960 | I think that we have run out of topics to talk about if Bill

00:21:24.560 | Ackman's latest political brain fart is a major topic of

00:21:28.560 | conversation.

00:21:29.320 | I think this is inspiring. You guys put Trump in office, the GOP

00:21:34.360 | put Trump in office, he's the outsider is outsider lunatic.

00:21:37.480 | And you can't even consider Jamie Lemon, you're laughing at

00:21:41.880 | that. And you put Trump in office, you guys put Trump in

00:21:44.280 | office, and you're gonna do it again.

00:21:46.160 | You mean you guys listen to GOP? Okay, look, party. Here's the

00:21:50.080 | part about this conversation that sort of makes sense. Two

00:21:52.400 | thirds of the country says that they are uninspired and in fact

00:21:55.840 | fatigued by the idea of having a repeat of the same choice that

00:21:59.160 | four years ago, everybody wants a different choice. So I get

00:22:02.520 | this like fantasy basketball drafting thing that we're trying

00:22:07.360 | to do here. Okay. The reason why I call it a brain fart. And I

00:22:12.000 | look, Bill's a really smart guy. I'm not dragging him. But in

00:22:14.920 | order to win the presidency, you have to get the nomination of a

00:22:17.760 | major party. And the problem with all this like fantasy

00:22:20.520 | drafting is that you're trying to draft people who are anathema

00:22:24.400 | to the party that you're trying to get them the nomination from.

00:22:28.280 | And Trump was able to get the nomination, the Republican

00:22:33.360 | Party, Jamie Dimon would have to get the nomination, the

00:22:35.760 | Democratic Party, that's not going to happen. And it does

00:22:37.960 | remind me of Bloomberg. Remember, Bloomberg spent $100

00:22:40.560 | million on his campaign in late Yeah.

00:22:43.600 | In a way, he spent a lot of money, and he made it to the

00:22:46.040 | first question of the first debate. Remember what happened?

00:22:48.400 | Elizabeth Warren said that this is a billionaire who talks about

00:22:53.600 | he didn't fight, he laid down, he rolled over, she like ended

00:22:56.960 | him with one question, one debate. So my point is that you

00:23:01.000 | got to be able to get the nomination of a major party. And

00:23:03.160 | actually, I think neither party could nominate a banker right

00:23:06.200 | now. I mean, if you saw what happened around the whole

00:23:09.720 | banking crisis, that I think still going on in slow motion. I

00:23:13.840 | mean, the amount of animosity both towards the banks that went

00:23:17.800 | under, and the idea of, you know, potentially bailing them

00:23:21.760 | out, and then also the animosity towards JP Morgan, when it

00:23:25.200 | actually bought First Republic. I mean, both parties have such a

00:23:30.520 | strong populist wing in them right now that I think you could

00:23:33.520 | never get. Yeah, the head of the number one bank in the US to be

00:23:37.840 | their candidate. You're completely wrong. I think in

00:23:40.440 | this case, respectfully, I mean, he could run as an independent

00:23:44.020 | as well. And although you know, you like to think or it seems

00:23:49.100 | like you're proposing that things are going to be as they

00:23:51.500 | always were, Trump shows a wild card and then people forget Ross

00:23:54.600 | Perot, you know, he got 19% of the popular vote, he hit 20

00:23:59.800 | million votes to Bush's 40 million, and Clinton's 44. It is

00:24:04.680 | not unprecedented. And we are in a really struggling time.

00:24:07.600 | You started this off by saying that Democrats should draft Jamie

00:24:10.360 | diamond. Now you're saying

00:24:11.160 | I'm fine.

00:24:12.240 | I don't know what he was independent. There's no

00:24:15.760 | movement to draft the top banker in the country. Like, where do

00:24:21.720 | you see this reality star like Trump in? Okay, that was the

00:24:24.840 | wildcard of all wildcards. He ran, he ran in one of the two

00:24:28.200 | major parties and he hit a nerve. I know that's my point.

00:24:31.280 | So now tell me about Ross Perot. Tell me about Ross Perot. And

00:24:34.740 | how did he hit 20 million votes? And isn't the world much

00:24:37.360 | different right now because of media because of people going

00:24:39.720 | direct? We're talking I mean, Chamath just proposed Elon. If

00:24:42.880 | you're proposing Elon,

00:24:43.920 | I'm proposing a constitutional amendment so that competent

00:24:47.600 | people, sure, who are not in the country. Now, if you've lived

00:24:51.760 | here for 25 years, or 30 years, you've created hundreds of

00:24:55.160 | thousands of jobs and paid 10s of billions of taxes. The idea

00:24:58.160 | that you are less fit than half these politicians to run for

00:25:02.680 | president is insane.

00:25:03.960 | Okay, that well, that's a different question. What do you

00:25:05.640 | think about that? Do you think we should change the Constitution

00:25:08.880 | allow non nationals to run for president?

00:25:11.840 | Not don't stop saying non nationals. It's gross. It's

00:25:14.840 | like, well, you know, it's people that weren't necessarily

00:25:17.560 | born here. But if you've lived your whole life, you're the

00:25:19.760 | majority of your life and you've built value for America and

00:25:22.840 | helped it when all of a sudden, you're less capable of being

00:25:25.920 | president. That's absolutely not true. Oh, I didn't say it was

00:25:29.120 | I'm describing what the Constitution is.

00:25:31.200 | Somebody who's not born called the Schwarzenegger amendment

00:25:34.440 | because you know, when he was governor of California, there

00:25:37.000 | were people who wanted him to run for president. But look,

00:25:39.360 | it's too hard to change the Constitution. That's a very

00:25:42.000 | difficult process. So do I think that's going to happen? No.

00:25:44.760 | Would you be in favor of that? And under what circumstances do

00:25:49.200 | you think that it's about saying we should change that? He's

00:25:51.640 | emphatic, we should change it in fact. So what do you think?

00:25:53.760 | It's not a pressing issue for me. I'd rather have a balanced

00:25:56.520 | budget amendment. I'd rather the president have a line item veto

00:25:59.280 | to control spending

00:26:01.240 | if you want to blow up the government and cut it down to

00:26:04.520 | size and impose the ideals of liberalism, true liberalism,

00:26:08.960 | free speech, well controlled borders, but good immigration,

00:26:12.800 | etc, etc. I feel like there are lots of people who could do

00:26:17.840 | that. And the only difference is, they were accidentally not

00:26:23.840 | born here, except they've created more value in America

00:26:26.880 | than most Americans that were born here.

00:26:29.400 | That's crazy. Actually be foreign born national would be

00:26:31.760 | the most accurate term. Great. Whatever, whatever, whatever

00:26:35.800 | dumb term, I'm just using the ones in the Constitution, the

00:26:38.520 | government is sorry, Jama for using accurate terms. I'll try

00:26:41.840 | to use less accurate terms in the future. So back to Jamie,

00:26:46.880 | Jamie Dimon,

00:26:48.440 | nobody here is questioning whether he is a supreme competent

00:26:52.680 | executive, fully grant that he's done an amazing job. Taking JP

00:26:57.880 | Morgan, it was ready the biggest he's made it even bigger.

00:27:00.200 | How is that possible? Whether that's a good thing? I'm saying

00:27:03.120 | we got to stop the banks from getting bigger.

00:27:04.920 | Yeah, whether that's a good thing for the country, ultimately

00:27:08.160 | is a different question. Yeah, no one questions his competence

00:27:11.000 | and his expertise. But again, I see no groundswell for him in

00:27:14.480 | either the Democratic Party or the Republican Party, or even as

00:27:17.480 | an independent because again, it doesn't fit the populist mood of

00:27:21.160 | the country right now.

00:27:22.320 | Got it. So that's your pragmatic, like path to victory.

00:27:27.840 | But let me ask you about competence, then because maybe I

00:27:29.800 | can frame the question get a better answer out of you. That's

00:27:32.120 | what I thought I was answering when you said who's more

00:27:34.240 | competent? I mean, you guys interpret my questions. How have

00:27:36.960 | you like you interpreted in terms of competence? sacks

00:27:39.720 | interpreted the question of pragmatical ability to getting

00:27:42.000 | into office. But let's ask sacks the question. And I'll ask you

00:27:44.960 | pragmatically unless sacks the question of competence. In terms

00:27:49.600 | of competence, I gave you like four people, right? Is he the

00:27:51.960 | most competent person to run the country right now? No, I

00:27:54.600 | you think the Santa is more competent than him.

00:27:56.640 | I think that of all the major candidates who actually have a

00:27:59.520 | realistic shot. DeSantis is the most supremely competent as an

00:28:03.160 | executive. He's run the state of Florida. He did it during COVID,

00:28:06.840 | which was a major crisis. We all saw what happened. All of our

00:28:10.880 | friends were leaving California because California had

00:28:15.080 | lockdowns, schools were closed, we had the worst learning loss

00:28:17.960 | of any state small businesses were going under our toddlers

00:28:21.720 | had to wear these stupid, pointless cloth masks to school

00:28:24.560 | when they finally Jamie reopen. Hold on. So DeSantis kept

00:28:30.360 | Florida open. They had a great economy. It's number one in job

00:28:33.920 | creation, investment, people moving there heard the speech

00:28:36.560 | balance the budget. And that's why he was able to grow his

00:28:38.640 | majority from under 1% when he first got elected to 20 points.

00:28:42.720 | So you believe he would be more qualified than Jamie dime?

00:28:45.920 | Sat at your mouth? Yeah.

00:28:48.800 | He's actually been tested in a political realm.

00:28:51.920 | Got it. You see, you think that is the better test? I disagree.

00:28:55.200 | And I think probably the number one thing you have to do to be

00:28:58.040 | effective politically, is to be able to understand when the

00:29:01.800 | media, the mainstream media and all their fake experts are

00:29:04.320 | wrong. Because that's why the country's in such a mess. We

00:29:07.200 | keep listening to all these fake experts who are wrong about

00:29:09.640 | everything, including COVID.

00:29:11.280 | Did Trump do a good job as president in your mind?

00:29:13.000 | He listened to the fake experts. He had Fauci in there.

00:29:15.760 | So you don't think Trump did a good job as president

00:29:17.960 | on COVID? He listened to Fauci too much.

00:29:20.040 | But okay, because Trump was an outsider. And you seem to think

00:29:22.360 | he did a good job as president. And a lot of Republicans do. So

00:29:24.600 | that's my point. He was an outsider.

00:29:26.240 | You love putting words in my mouth and characterizing. I'm,

00:29:29.160 | I'm asking you a good job in ways that I never quite said,

00:29:32.160 | okay, I'm just asking you, I think I think that Trump did a

00:29:35.160 | number of good things in office. For example, he kept us out of

00:29:37.760 | foreign wars. And I think the economy was pretty good until

00:29:41.440 | COVID. But yeah, he had no political. I would say they were

00:29:46.040 | like two big Achilles heels. One was, we had huge deficits and

00:29:50.480 | debt during Trump. And the other was, once COVID happened, he

00:29:53.840 | listened to Fauci. And Fauci was driving the train during COVID.

00:29:57.520 | And hold on gave us the lockdowns. And then Trump never

00:30:01.480 | fired Fauci. And on Trump's last day in office,

00:30:04.440 | He gave him a medal.

00:30:05.040 | Insane. Insane. And just so everybody remembers, June 16,

00:30:12.720 | 2015, Ben Carson and businessman Donald Trump tied in

00:30:16.760 | fourth place with 5%. So things can change.

00:30:19.080 | And now Trump is swinging wildly at DeSantis saying that DeSantis

00:30:22.760 | was worse than Cuomo on COVID.

00:30:25.680 | Oh, gosh, I really do not want to relitigate that. That's the

00:30:28.400 | last thing I want to relitigate is COVID. Man, we got bigger

00:30:30.880 | fish to fry.

00:30:31.480 | DeSantis, I think, has been doing really well over the last

00:30:33.640 | week, because Trump has been making all these wild attacks on

00:30:36.360 | him. And DeSantis has been responding. So now like they're

00:30:41.240 | they're really punching at each other. It's really interesting.

00:30:43.440 | Let's pivot to the debt ceiling real quick here. The House

00:30:45.280 | voted overwhelmingly to pass the debt ceiling agreement 314 to

00:30:49.120 | 117. It's in the hands of the Senate can be passed by the time

00:30:53.120 | you're listening to this. Some Republicans think the spending

00:30:56.320 | didn't go far enough. No shocker there. But Speaker McCarthy

00:30:59.720 | called it a first step projected the bill would reduce budget

00:31:03.240 | deficits by 1.5 trillion over the next decade. Some

00:31:07.360 | highlights, non defense spending flat in 2024 at 704 billion only

00:31:13.840 | increases 1% in 2025 and aims to limit federal budget growth to

00:31:18.880 | 1% for the next six years. For since 30 billion in unspent

00:31:24.400 | COVID relief money. That seems logical fully funds medical care

00:31:28.400 | for veterans. That seems like a good idea. reallocates 20

00:31:32.920 | billion from the IRS over the next two years to put towards

00:31:35.960 | non defense programs. That's that crazy idea to hire 80,000

00:31:41.160 | or something IRS agents pauses on student loan repayments will

00:31:44.520 | now end in August. We've talked about that on the show. Biden

00:31:47.680 | student loan forgiveness plan will be settled in the Supreme

00:31:49.960 | Court. Some stats on us debt, put up two charts here and then

00:31:55.360 | I'll get free birch position because he's very passionate

00:31:57.920 | about this US annual surplus or deficits through end of year

00:32:03.480 | 2022. See those great years. I think those are the democratic

00:32:08.160 | calm Clinton years. Did ran it up. Well done Clinton, US

00:32:14.160 | national debt, end of year 2022. My Lord 32 getting close to 32

00:32:21.720 | trillion US annual federal spending up around breaking six

00:32:27.000 | trillion a year and tax revenue by deficit here.

00:32:30.680 | You have it go to that the red chart. This is the our national

00:32:33.920 | debt. This is a upside down hockey stick. So this is what's

00:32:37.360 | concerning about it is we're going exponential on this thing.

00:32:40.040 | The problem with this, just to reframe it once again for the

00:32:45.320 | 100,000 time. Wait a sec. Wait, this red chart isn't this free

00:32:48.400 | birds losses in Vegas this weekend.

00:32:49.880 | I think that's, oh, no, that's our collective losses in Vegas

00:32:54.440 | this weekend. I think we did the math. This group was accounted

00:32:57.880 | for 10 minutes, 10 minutes of Vegas is blackjack revenue for

00:33:01.800 | the year. So good job, everyone. Good job, people. Everybody in

00:33:05.640 | Vegas is now completed their q3 quarter targets early.

00:33:09.560 | So the problem, obviously, with mounting debt is the interest

00:33:14.840 | payments on the debt cause you to take out more debt. And

00:33:17.600 | there's a tipping point where it becomes insurmountable. And

00:33:21.440 | there are many people sounding the alarm that we may be

00:33:24.280 | entering that point that in order to fund the interest

00:33:26.760 | obligations on the debt, we need to take out more debt. And then

00:33:30.920 | there's more interest payments, and therefore there's more debt

00:33:33.080 | and it just keeps getting bigger and bigger. And so this chart

00:33:36.400 | I'm sharing here is actually from the federal government's

00:33:40.280 | GAO, the government accountability office, which

00:33:43.280 | acts almost like an independent accounting and forecasting body

00:33:46.040 | trying to provide some outlook on the fiscal condition of the

00:33:49.920 | federal government. And this is an analysis I think they put out

00:33:53.720 | a few weeks ago, showing that as of the fiscal year 22, 8% of the

00:34:00.080 | overall federal budget was going towards interest spending by

00:34:03.560 | fiscal year 25. It'll be 26%. And then net interest spending

00:34:08.560 | will need to grow to half of the budget. But if you go to the

00:34:11.560 | other side,

00:34:12.200 | why don't you say that? Why don't you say the years because

00:34:14.400 | it's important to know what years they're talking about.

00:34:16.880 | 2051 2096 is what they're showing. This is a long window.

00:34:21.600 | Yeah, I get it. But let me show you this chart. Just pull up the

00:34:24.080 | first chart. So this is our federal government's interest

00:34:26.800 | payments per year. And so this is how much the government pays

00:34:30.880 | on interest for the debt. By the way, most of the debt is getting

00:34:33.960 | refinanced now at the higher interest rates, because a lot of

00:34:36.680 | this debt was sitting in Zerp era since 2008. But as the debt

00:34:42.800 | has to get refinanced, and more debt is taken on to fund the

00:34:46.520 | interest payment obligations, the interest payment actually

00:34:48.680 | starts to mount more significantly. And that's what

00:34:50.920 | we've seen in the last two fiscal years in particular. Now

00:34:54.600 | when you take this chart, and you overlay how much we spend on

00:34:57.880 | defense. So here's defense spending. We are, I think, as of

00:35:03.320 | this month or last month now spending more, the federal

00:35:06.680 | government is spending more on interest payments on the federal

00:35:10.000 | debt than they are on national defense. Whether we believe we

00:35:13.720 | are spending money on national defense in a smart way or in an

00:35:16.880 | accountable way, or whether these are good strategic

00:35:18.920 | priorities and good strategic decisions. The fact remains that

00:35:22.600 | at some point here, our ability to actually fund the programs

00:35:26.160 | that we want to fund, whether they're social security,

00:35:28.440 | Medicare, or defense, the major cost outlays for the federal

00:35:31.960 | government, it's going to get further hindered, and continually

00:35:35.600 | more hindered by the fact that these interest payments are

00:35:37.760 | climbing so significantly. If you go to the third chart, I

00:35:40.440 | think it kind of provides the final point, which is social

00:35:43.360 | security. And we're very quickly seeing interest payments mount

00:35:47.240 | to the point of where social security spending lays. And when

00:35:51.240 | that happens, obviously, as you guys know, everyone talks about

00:35:54.040 | that as being the golden program, the right and the left,

00:35:56.720 | the Democrats and the Republicans simply will not

00:35:58.600 | touch social security, from a policy perspective from a

00:36:02.800 | getting elected perspective, but the economic and arithmetic

00:36:06.800 | reality is running up against them, which is that the interest

00:36:09.560 | payments on the debt are starting to threaten our ability

00:36:13.040 | to fund social security and Medicare. There's many more

00:36:16.360 | charts we could pull up to highlight this, the Republicans

00:36:19.160 | in announcing the debt deal this week, made a lot of

00:36:23.080 | proclamations about it being a win and showed how we were able

00:36:25.840 | to reduce spending by $2 trillion. I think the statement

00:36:30.520 | they made the deal cuts $2.1 trillion in spending over the

00:36:33.960 | six year life of the bill and one and a half trillion dollars

00:36:36.160 | in statutorily mandated savings over the next two years, $2.1

00:36:40.000 | trillion over six years, remember, we're talking about a

00:36:42.760 | seven million $7 trillion per year budget. So that's $42

00:36:47.600 | trillion over those six years, we're cutting 2 trillion of 42.

00:36:51.440 | So it's a 5% impact to start. It's a start. But what leverage

00:36:56.680 | do they have now? And I think that

00:36:58.680 | census Friedberg that they actually did decide to make

00:37:02.800 | cuts. And that feels to me and we did predict here that they

00:37:05.320 | would get this done. Does feel to me like this is some amount

00:37:08.360 | of progress, right? I mean, do you feel good about it or

00:37:11.080 | indifferent? Friedberg?

00:37:12.840 | I think you guys know, I think that there's, we have to tackle

00:37:17.720 | the structural problem of revenue spending interest rates.

00:37:23.200 | Those are like, very big numbers that are challenging each other,

00:37:29.160 | chipping away at the spending doesn't quite get us there. And,

00:37:35.120 | you know, it doesn't seem like there's a clear path here. Even

00:37:38.440 | you know, the argument that RFK made when he came on our show,

00:37:41.040 | RFK Jr. made when he came on our show, that cutting military

00:37:43.920 | spending would have an impact. I mean, you guys see military

00:37:46.520 | spending is already starting to get

00:37:48.000 | overtaken by the interest payment spending. So does that

00:37:52.520 | really move the needle? I think it's going to be an economic

00:37:55.040 | reality that all programs are going to need to be cut back in

00:37:58.480 | order to fund the debt obligations, or we're going to

00:38:01.560 | see massive inflation.

00:38:02.680 | Not do you feel I guess, my question was, do you feel like

00:38:06.200 | this was a good step or a good signal that maybe the government

00:38:11.840 | is, and our representatives are getting the message that they

00:38:15.080 | need to make some cuts at some point,

00:38:16.760 | I don't think that there's any way to provide the necessary

00:38:22.040 | fiscal security for the federal government, without bipartisan

00:38:26.520 | unitary support around the objective, which is to get to a

00:38:31.120 | balanced budget and to reduce the overall debt and interest

00:38:34.080 | payment obligations. And if you can't start from that point,

00:38:38.080 | it's this push and pull over what programs get cut, but I

00:38:40.960 | want more money being spent. I want to have a pipeline. I want

00:38:43.720 | to

00:38:43.800 | you're not super enthused by this. I thought it was a

00:38:46.040 | positive step. Chamath, you have talked about refinancing the

00:38:49.400 | debt, putting the hundred year trillion dollar coin, whatever

00:38:52.480 | we wind up doing refinancing this on a long arc 50 year 100

00:38:56.760 | year arc. What does this debt ceiling, reconciliation or

00:39:02.160 | whatever, we're going to call it, but they came to some sort

00:39:04.920 | of agreement here signal to you, you predicted they would get

00:39:07.880 | through this pretty easily. So yeah.

00:39:09.520 | Boring, nothing burger, nothing, move on.

00:39:13.280 | Okay. So,

00:39:14.560 | would you buy 100 year bond from the federal government?

00:39:19.320 | If I was a foreign government? Yes.

00:39:21.040 | What interest would you need to get paid on that? To take that

00:39:24.560 | on?

00:39:24.800 | Probably one to 2%.

00:39:26.960 | One to 2% for 100 years?

00:39:29.240 | Yeah. So it would be downside protection, you just feel like

00:39:31.680 | this is a secure place to put some amount of money.

00:39:35.160 | This is how any, any country with a turbulent currency would

00:39:41.800 | make this decision. And you could actually get close to zero.

00:39:45.120 | I think that when we had Zerp, you probably could have charged

00:39:48.160 | a negative interest rate, because you would have

00:39:50.240 | effectively been charging countries, third world

00:39:52.840 | developing countries, even first world countries that just wanted

00:39:55.560 | a protective mechanism against their currency volatility, they

00:39:59.040 | would have probably paid you just like today, you can get BOJ

00:40:02.480 | debt. That's negative yielding. So it's no longer negative, but

00:40:07.320 | it's still probably in the realm of one, one and a half percent.

00:40:10.280 | It's nothing if you just do the math, it's nothing. And this is

00:40:13.600 | why I don't understand why everybody just gets their

00:40:15.800 | underwear in a bunch here.

00:40:16.840 | Okay, non gender underpants, put the red chart up there.

00:40:20.400 | Nothing. It's a nothing. It's a nothing. It's a nothing. It's a

00:40:26.960 | hockey stick. Nothing

00:40:28.200 | means nothing. I think you guys see here is an accelerating

00:40:31.440 | problem. Yeah, cut revenue, the debt is getting bigger and

00:40:34.400 | bigger at the same time that foreign governments and

00:40:37.920 | investors in general don't want to fund our debt. So therefore,

00:40:41.840 | interest rates will rise, our interest costs will keep going

00:40:44.040 | on why interest rates are going up? Well, if they're going up,

00:40:47.080 | because the Fed is raising rates of inflation, but at the same

00:40:49.240 | time, that's happening. Foreign governments are not as

00:40:52.160 | interested in having dollar reserves and US Treasuries said

00:40:56.680 | who does demonstrated by what

00:40:58.600 | you look at the foreign reserves of these countries, these

00:41:03.200 | sovereigns, they are much less interested in holding us

00:41:05.600 | treasuries for China, starting with China and all the BRICS

00:41:08.760 | countries,

00:41:09.360 | foreign reserves are up. These guys are banking us dollars like

00:41:12.920 | nobody's business.

00:41:13.800 | I don't think so. I think it's been going down since 2008. I'll

00:41:16.600 | find you a chart.

00:41:17.360 | Yeah, maybe from 2008. I don't know from the great financial

00:41:20.800 | crisis at the absolute depths. But what I'm saying is that in

00:41:23.520 | general, the anchor currency for governments and central banks

00:41:27.680 | has been will be and will likely be in the future, the United

00:41:32.920 | States dollar. And we get back to the circular argument, which

00:41:36.040 | is, I don't think it's possible for politicians to cut expenses.

00:41:40.160 | So I am just an advocate for cutting revenue, because I do

00:41:44.080 | think it's the simplest way to force people because the next

00:41:47.600 | time they go through these machinations and all this

00:41:50.240 | theater around a debt ceiling, they'll just have less revenue

00:41:54.200 | to play with. And it'll just become a harder and harder and

00:41:56.600 | harder problem. Meanwhile, I do think that you have to take the

00:42:00.280 | ball where it lies and take these 24 or $30 trillion and

00:42:03.920 | refinance it well out into the future and make a bet on us

00:42:07.920 | exceptionalism and us GDP. And if you don't want to believe it,

00:42:10.760 | don't fucking be here. Move to some other country where you

00:42:13.400 | think it's so much better and go do it there.

00:42:15.120 | But tomorrow, what if the market's not there? What if the

00:42:17.440 | buyers are not there and you're wrong?

00:42:19.440 | Sure. I mean, you know what an asteroid could hit the earth in

00:42:22.680 | the next day, we could talk about all kinds of long tail

00:42:25.080 | consequences. But there is there you have to be able to

00:42:28.040 | probably wait these things and then spend your time thinking

00:42:31.320 | about the things that are more probabilistic, and be able to

00:42:34.200 | compartmentalize the anxiety of the less probabilistic things.

00:42:37.600 | So I think that could there be a scenario where there is no

00:42:42.320 | interest? Sure. Is there one? No, because you see every day

00:42:45.160 | the government's in the market doing auctions, and there is a

00:42:47.760 | robust demand for United States government debt. And until there

00:42:52.240 | isn't, this argument is specious. And all I would tell

00:42:55.880 | you is just keep trying. Put out more try a 45 euro bond and see

00:43:00.680 | how it feels like try a 50 year you don't have to do 100. If it

00:43:03.600 | makes you too anxious, that's fine.

00:43:05.080 | Let me just ask you at some point, if the market isn't

00:43:06.920 | there, the buyers are not there, then you know,

00:43:10.040 | but let's just go through the analysis, because I know that

00:43:13.040 | you think it's it's a zero chance. But if it's as low

00:43:15.400 | probability, do you agree that the severity is high, that the

00:43:19.280 | significance of that being the case, I don't

00:43:21.160 | again, I am not going to give an iota of breath to a long tail

00:43:25.920 | five sigma outcome, it is a waste of time. Okay, because it

00:43:30.360 | occupies I don't tell you why I don't do it, it occupies my mind

00:43:33.800 | share, which takes away from me figuring out how to make money

00:43:37.120 | and win on the field today. So I have, you know, I wake in a 24

00:43:41.920 | hour day, okay, just to give you a sense of it, I sleep for eight,

00:43:45.400 | you know, I'm eating for another one or two, all this bullshit, I

00:43:48.920 | have four or five hours a day of useful thinking time. And I try

00:43:54.320 | to think of the belly of the probable. And I try to

00:43:59.000 | compartmentalize these dumb long tail sigma events, because it

00:44:02.840 | distracts me from making money and winning. I actually try to

00:44:06.440 | think about long tail sigma events that could make me money.

00:44:09.080 | This isn't one of them. So I just don't spend time thinking

00:44:13.680 | about it. I could be totally wrong. Pull up this totally

00:44:16.520 | wrong. Pull up this chart work for me so far. And I'm going to

00:44:19.160 | stick to what works guys. Saxe has been on Google for five

00:44:21.680 | minutes. He's got something for you tomorrow. Go ahead.

00:44:23.320 | You should stick to the investing strategy that works

00:44:25.480 | for you. I'd like to talk about the status of US treasuries. So

00:44:31.000 | if you look here, this is total foreign treasury holdings as

00:44:34.400 | percent of marketable treasury securities. So it's gone down

00:44:37.160 | from the mid 50s to the low 30s since 2008 2009 as a percentage

00:44:43.920 | so foreign governments don't want our treasuries as much as

00:44:48.320 | they used to starting with China, they are diversifying

00:44:51.040 | into other currencies and gold. And there are a bunch of good

00:44:55.400 | reasons for that. By the way, this comes from a blog, which is

00:44:58.520 | really interesting. It's a crypto guy named Arthur Hayes.

00:45:01.520 | And this is actually a pretty interesting piece called exit

00:45:04.320 | liquidity. He writes interesting pieces on the banking system and

00:45:08.240 | de dollarization. He's got a little bit of a doomer thesis

00:45:11.080 | with respect to the US dollar. And obviously he's pro Bitcoin,

00:45:14.760 | his views are sort of similar to apologies. But in any event, I

00:45:18.080 | think one of the points he makes that's really interesting is

00:45:20.360 | that if you're to zoom out 30,000 feet, and think about the

00:45:24.720 | regime that we had during let's call it the unipolar moment

00:45:28.840 | where China and the United States were strong trading

00:45:32.840 | partners, and we had this close relationship with them. The way

00:45:36.480 | the global economy worked is that China would sell goods to

00:45:40.800 | the United States, they would have huge trade surpluses. And

00:45:44.560 | then they would take those dollars, and they'd use some of

00:45:47.320 | them to buy raw materials like energy that was called the

00:45:50.000 | petro dollar. And then they would take other dollars their

00:45:54.200 | surplus and instead of repatriating at home, they would

00:45:57.400 | have to have then convert that money into RMB and brought it

00:46:00.160 | home. They didn't do that that actually would have increased

00:46:02.720 | the value of their currency thereby making their exports

00:46:05.000 | less attractive. This is why they are accused of currency

00:46:07.560 | manipulation, they took their surplus dollars and bought us

00:46:11.320 | assets, mainly us treasuries. So we had this trading relationship

00:46:16.000 | with China, I think everyone understands the physical world

00:46:18.640 | side of that trading relationship where you had us

00:46:20.720 | manufacturing jobs got exported to China, they basically made

00:46:23.600 | everything a lot of cheap goods came into the US, they had a

00:46:26.080 | trade surplus. What I think people don't understand is that

00:46:28.840 | a huge part of that trade surplus was used to finance us

00:46:32.880 | deficits and debt. And so you had this like cozy relationship

00:46:36.800 | between us, elites, US politicians and China, where

00:46:41.360 | they got to rack up these huge deficits, the government got to

00:46:43.640 | spend a lot of money. And China would fund it very cheaply. But

00:46:47.920 | now that's all ended that stopped, because we're basically

00:46:50.680 | starting to decouple from China. So China doesn't want to do its

00:46:54.680 | business in dollars if they don't have to, obviously, for

00:46:57.360 | the products they sell at the US, they'll take dollars, but

00:47:00.280 | they're already trying to do as many transactions as they can.

00:47:04.280 | Buying oil, for example, or energy in RMB.

00:47:07.760 | I don't want to dispute this chart, because this chart is

00:47:10.680 | true. But it's a small part of how the entire puzzle works. And

00:47:14.640 | so this is a Bitcoin maximalist, who cherry picks a few data

00:47:18.600 | points to try to make a point. But if you look at the IMF data,

00:47:21.640 | and I put it to you in the group chat, you can't just look at us

00:47:24.280 | Treasury securities, you have to look at actual absolute dollar

00:47:27.280 | reserves. And when you look at that over time, it hasn't

00:47:29.840 | fluctuated that much. And so for all the dopes that don't

00:47:32.720 | understand how this shit works, it's not just securities, it's

00:47:35.640 | actually also money. And the actual amount of US dollar money

00:47:40.040 | hasn't changed that much gone between 60 and 70%. So it's just

00:47:44.160 | and so sure, I just find this argument, again, one of these

00:47:47.720 | long sigma arguments that are anxiety riddled, and I just

00:47:51.680 | don't want to waste my time thinking about it, because it'll

00:47:53.480 | distract me from winning on the field today.

00:47:55.360 | You got to be able to block things out if you want to be a

00:47:58.080 | capital allocator. I agree. But an interesting discussion

00:48:01.120 | nonetheless.

00:48:01.920 | I don't think these things are just noise. I think you're

00:48:04.400 | seeing a trend. I mean, look how many headlines are about the

00:48:07.760 | BRICS countries getting together and starting to

00:48:10.280 | transact in currencies other than dollars.

00:48:13.040 | Yeah, you know what, those are very cherry picked as well. And

00:48:15.040 | you said before, you don't trust the press. So you trust the

00:48:16.960 | press on these headlines, all of a sudden, I don't think that

00:48:19.600 | that's actually

00:48:20.560 | I don't think anyone's disputing the fact that China and Saudi

00:48:23.800 | Arabia and China and Brazil are doing energy transactions in R

00:48:28.320 | and B

00:48:28.720 | I think it's very tiny. They're doing or putting all their money

00:48:31.280 | into venture capital in the West, private equity in the

00:48:33.360 | rest real estate in the West,

00:48:34.880 | the Middle East.

00:48:36.480 | That's where they're, that's where they're focusing their

00:48:39.320 | energy.

00:48:39.600 | There's a different issue. Look, no one is disputing the fact

00:48:42.920 | that China and the BRICS countries more generally are

00:48:45.640 | trying to create a trading block that is not dependent on the US

00:48:48.720 | dollar. I think they are gradually the same rattling. It's

00:48:52.760 | like, I think they're trying to just let the US know like, hey,

00:48:56.000 | we have other options here. And I think it's China just trying

00:48:58.160 | to it's China on their heels, trying to make deals with other

00:49:03.040 | folks trying to pursuing their self interest, which is not to

00:49:06.520 | be dependent on a dollar that's been weaponized and controlled

00:49:10.080 | by the US politically, you can be sure that Saudi UAE and the

00:49:13.160 | entire voting bloc in the Middle East are shipping their money

00:49:15.560 | West not East.

00:49:16.560 | I think you have a very accurate assessment of what China wants,

00:49:19.400 | but it doesn't mean it's going to happen. And I think you have

00:49:21.560 | to make a bet. What do you think it's going to happen or not? I

00:49:24.240 | bet it's not going to happen. And I think the reason I said

00:49:26.360 | this before is China is in a demographic time bomb. And that

00:49:29.960 | will dominate everything else that is a country that is in

00:49:33.200 | floating and they're anti capitalist, they're anti

00:49:36.680 | capitalism. No, no, I'm going to say that they are capitalists.

00:49:39.600 | I'm not going to make these judgments. But I'm going to tell

00:49:41.360 | you practically speaking is they are demographically imploding.

00:49:44.040 | They do not have enough people, the country will be halved by

00:49:48.160 | the death rate and the lack of birth rate by 2300. Okay, so in

00:49:52.800 | another 70 odd years, that is a problem that is going away. And

00:49:57.040 | that is just mathematical. And if you just again, you just have

00:50:00.760 | to take a deep breath, look at the data and just extrapolate

00:50:04.000 | and you see, this is not a problem. China is not a problem.

00:50:07.480 | China has real problems. There's no question about it. They've

00:50:10.120 | got demographic problems. They've got problems in the

00:50:12.560 | banking system. They've got a real estate bubble, startup

00:50:15.520 | problems. There are questions about whether the leadership now

00:50:18.720 | is turning away from the capitalism that got them to this

00:50:21.200 | point. So there's no question that China has problems. But you

00:50:25.600 | want to talk about trends. There is a major trend in the world

00:50:29.040 | right now where you again, the BRICS countries, Brazil, Russia,

00:50:32.840 | India, China, South Africa, and you can put Saudi Arabia in that

00:50:36.240 | bucket and a lot of other countries, they are looking to

00:50:40.040 | diversify off of the dollar. I'm not saying that the dollar is

00:50:43.240 | going to stop being the world's reserve currency, because I

00:50:45.640 | agree with you that there's no ready replacement at hand. But

00:50:49.600 | they are trying to do as many transactions they can off of the

00:50:53.360 | dollar. And they do not want to hold treasuries like they did 10

00:50:57.280 | or 15 years ago. I don't

00:50:58.800 | transactions off the very loaded statement. I don't think that

00:51:03.880 | statement is true. What are you talking about? This is like

00:51:06.480 | major. No, they tried to do one trade, China and Saudi and China

00:51:10.400 | and no, Saudi and China talked about it, and they didn't do it.

00:51:13.840 | They talked about Yeah, I would like to see on that not just a

00:51:16.640 | couple of headlines, because I think everybody wants to

00:51:19.160 | know what are you talking about? It was the data, the Brazil

00:51:22.080 | thing happened, but I think it was a small trade, David. Yeah,

00:51:24.960 | that's what Yeah, that's exactly your first you're saying it

00:51:26.880 | didn't happen. And now you're saying, I'm saying the Saudi

00:51:28.960 | Arabia, China thing did not happen. Your statement was

00:51:32.400 | they're trying to do as many transactions as possible off the

00:51:35.120 | dollar. I don't think they're trying to do as many

00:51:36.640 | transactions off the dollar. I don't have never seen any actual

00:51:41.280 | data. You don't know support is making shit up. No, you're

00:51:45.240 | forcing the dollar. Of course, they want to get off the dollar

00:51:48.480 | if they can't. No, I think Jason saying you're right, what they

00:51:51.080 | want to do, but what they are doing China is what he's

00:51:53.400 | debating. They're trying to sending their money west. I

00:51:57.000 | don't think they're trying to send it. I don't think that's

00:51:59.360 | all.

00:51:59.600 | Hold on a second. You're right that Saudi Arabia is investing

00:52:03.240 | in the US. They're, I'd say, highly diversified. That's a

00:52:06.720 | little different than what China is doing. Yes, we are in

00:52:10.880 | agreement. China wants to get people off the US dollar. China's

00:52:14.960 | in decline. China's got big issues. We all agree on that.

00:52:17.640 | The Middle East has a lot of cash. I think if they're going

00:52:20.200 | to decide what to do with it, they'll appease China to have a

00:52:23.560 | solid relationship to ship oil there. But I think

00:52:26.080 | China's the number one customer now.

00:52:27.480 | China's the number one customer.

00:52:28.680 | And their hearts are in the West. That's where they're

00:52:30.360 | going to take China's money.

00:52:31.600 | There's been a giant local realignment. Haven't you noticed?

00:52:33.560 | I think the realignment is

00:52:35.440 | The Chinese just negotiated

00:52:36.280 | The Middle East becoming westernized and being accepted

00:52:38.680 | in the West and moving towards an investor in the West in

00:52:40.960 | technology. That's actually the trend.

00:52:42.560 | The Chinese just negotiated or approached Mao between Saudi

00:52:45.960 | Arabia and Iran. Did you notice that?

00:52:48.920 | That's a fine idea. I'm just talking about where they're

00:52:52.080 | putting these things are all connected. Where are they

00:52:54.320 | putting their chips? I think what you've explained and I

00:52:56.480 | think we're in agreement. They'll sell their oil to China,

00:52:59.560 | then what do they do with the bag? They take that same bag,

00:53:02.280 | and they want to put it towards

00:53:03.360 | it's even worse. Again, the thing is, even if you settle a

00:53:06.880 | trade in the yuan, I think you guys keep forgetting this key

00:53:10.200 | thing, which is the yuan is pegged to the US dollar. So it

00:53:12.880 | is a proxy dollar. So if you really want to decouple, you

00:53:17.080 | first have to let this currency free float. They have no desire

00:53:20.400 | to let them do that, especially in a moment where they're

00:53:22.640 | economically imploding internally. So again, you go

00:53:25.160 | back to the circular argument where everything goes back to

00:53:27.680 | the dollar. So yes, they're saber rattling sacks. I

00:53:30.360 | acknowledge what you're saying. I think you're totally right

00:53:32.440 | that they would love a free floating currency.

00:53:34.720 | The Chinese would love

00:53:35.600 | Chinese and they want that free floating currency to not be

00:53:38.080 | pegged to the dollar. But right now, they have kept it pegged

00:53:41.040 | to the dollar.

00:53:41.680 | So I just do that. And it says not it says, I just googled is

00:53:46.800 | you on peg to USD and it says the Chinese yuan is not pegged

00:53:50.600 | to the US dollar was pegged from 94 to 2005. But in 2005, China

00:53:54.800 | made its currency a floating exchange currency.

00:53:56.600 | It is not a floating currency. Yeah. And then do you trust

00:54:00.000 | that? Yeah, who's

00:54:00.800 | highly manipulated? I agree with that. But I don't think it's

00:54:03.720 | pegged. It's not a floating currency. It is not a free

00:54:06.000 | floating currency. China controls the exchange rate

00:54:08.920 | between themselves and the US dollar.

00:54:10.840 | Let's move on. I think we've covered this. It'd be actually

00:54:16.000 | one thing that might be interesting

00:54:17.200 | reality, you have no basis for declaring that things like the

00:54:21.720 | moves that China is making with Brazil and Saudi Arabia, you're

00:54:24.800 | just declaring that to be fake news.

00:54:26.400 | Nobody's saying fake news. We're saying it's happening. But it's

00:54:28.800 | probably minor. And it's probably more described.

00:54:30.840 | What's your basis for believing that?

00:54:32.880 | Because we have no evidence to prove that it's occurring. We

00:54:36.040 | just have a couple of headlines and some small. But I mean,

00:54:39.400 | where is it? I mean, all we're seeing is the the, the money in

00:54:43.040 | Saudi Arabia is they're selling oil to China, correct, they're

00:54:46.400 | doing deals there, then they're taking that money. And then they

00:54:49.440 | want to invest it in the West.

00:54:50.760 | Who are you talking about?

00:54:51.760 | The other thing to keep in mind is that the Saudi real is pegged

00:54:54.480 | as well to the US dollar. And that's been there since I think

00:54:58.040 | the mid 80s. So China's is a very opaque, manipulated

00:55:02.520 | currency market where they keep the dollar yuan spread quite

00:55:06.840 | fixed. On the other side, Saudi has kept the same peg 3.75 to

00:55:11.400 | the dollar since the mid 80s. So again, it all just goes back to

00:55:14.720 | the US dollar. It's all proxies for the dollar. So there's some

00:55:16.880 | symbolic value, I suppose, in trading in yuan. But everything

00:55:20.840 | goes back to the dollar, because that's what it's measured in. So

00:55:23.640 | it's not

00:55:23.880 | I suppose it's not symbolic, what's happening is deeply

00:55:26.360 | geopolitical, you've got a couple of things going on. One

00:55:29.120 | is that the US has now instituted sanctions on over 40

00:55:33.400 | countries. Moreover, the whole world saw that in the case of

00:55:37.560 | Russia, we froze their foreign reserves, and basically seized

00:55:41.000 | the property of their oligarch. So if you're an oligarch in the

00:55:44.880 | Middle East, you think you want to keep all of your money on all

00:55:47.120 | of your reserves in dollars, you understand that the dollar has

00:55:50.000 | been weaponized as a political instrument in the United States.

00:55:52.600 | That's just a fact. So you're going to look to diversify,

00:55:55.680 | you're going to look to put your money in gold, you're going to

00:55:57.080 | look to put your money in other currencies. Is there like I said,

00:56:00.360 | a currency at hand that's ready to be a replacement for the US

00:56:03.640 | dollar? No, and it can't be the one they don't have an open

00:56:06.280 | capital.

00:56:07.080 | Where would you diversify if you were the CIO? Where would you

00:56:11.800 | diversify?

00:56:12.320 | Well, what I would do if I were the Secretary of the Treasury of

00:56:16.240 | China, is I would say that, okay, for the exports, the US

00:56:21.320 | we're going to keep getting dollars, and we'll do something

00:56:23.080 | with those dollars. But for everybody else, we're going to

00:56:25.600 | try and do as many transactions and RMB as possible.

00:56:27.960 | But what about the sellers of oil to China?

00:56:30.280 | What would they do?

00:56:30.960 | They get RMB. So you would tell them to keep the trades that

00:56:34.840 | we're talking about.

00:56:35.520 | You tell them to hold RMB over us and euro.

00:56:38.360 | China is seeking to pay Saudi Arabia and Brazil.

00:56:41.520 | If you're the CIO, I do understand it. I do understand.

00:56:44.880 | What I'm asking you is, let me ask you a question. Would you

00:56:48.920 | as CIO of Saudi or UAE, would you want to keep RMB? Would you

00:56:53.440 | want to keep euros or US dollars? Where would you want to

00:56:56.600 | keep your money? And the question is, if they sell that,

00:56:59.280 | would they want to keep it in RMB? I don't think they would

00:57:01.240 | want to keep the one

00:57:02.080 | honestly, to answer your question, I want to put it in

00:57:04.320 | gold. That's right. I would I put it in gold. Okay, here's

00:57:08.640 | what China is proposing. Okay. They're saying to Saudi Arabia

00:57:11.840 | and Brazil, we're going to pay you for your oil in RMB. And

00:57:16.960 | then you are going to take the RMB. And you can buy our

00:57:20.160 | products. Yeah, because again, we make everything we're the

00:57:22.960 | factory of the world. And if you still have a surplus, after

00:57:26.760 | that, you can settle that surplus in gold. Because Beijing

00:57:30.880 | has a very liquid, you know, gold exchange market. They're

00:57:34.160 | giving them. That's what they're proposing. Here's your gift

00:57:36.240 | cards. Spend gift cards,

00:57:38.920 | two data points on this axe that I just read. It's in this

00:57:42.140 | Barron's article that I included, Nick, you may just

00:57:44.000 | want to link to it in the show notes, which I thought was

00:57:45.820 | pretty good swift, which is sort of like the international

00:57:48.360 | payments backbone, the share of yuan transactions briefly rose

00:57:53.440 | above 3%. In 2022, that was the peak, and it's now off 26%, down

00:57:59.840 | to about 2.2%. So actually, the share of yuan transactions has

00:58:03.320 | actually been shrinking in the last year. And then the second

00:58:05.840 | is that what this article states, which is interesting is

00:58:08.280 | that all the belt and road loans that China gave into all these

00:58:11.480 | developing countries in Africa, the Africans were like, we don't

00:58:14.160 | want this you want and so they just dollar swapped. And so now

00:58:17.320 | the BRI loans are all serviced in US dollars as well. So all

00:58:20.120 | the trillions of dollars China spent. I'm just saying that

00:58:23.280 | again, I'm not judging their own alternative swift. We weaponize

00:58:27.040 | swift as well. So

00:58:28.200 | swift is still 98% of the of the world of how it works. All I'm

00:58:31.040 | saying is, I just like to look keep things simple. I think the

00:58:35.040 | US dollars here for a while, I think that debt suck. I would

00:58:38.480 | love to have no deficits. But I also think these numbers are

00:58:42.280 | roughly like we're playing plus or minus on the margin two to

00:58:45.320 | 300 basis points. We talked about that last week. And so I

00:58:49.040 | want to keep my brain open to the simple, obvious things like

00:58:53.640 | you know, selling.

00:58:54.560 | That's what it's come to is CPG for you. trumath. You're like,

00:58:59.200 | it's a downmarket CPG guy. Now. Yeah, that's where trumath

00:59:02.320 | focused.

00:59:02.800 | Why don't you pull freeberg into this debate? I have one more

00:59:04.920 | that's what I was about to do. I'm a doctor doom. Go ahead.

00:59:07.120 | Dr. So I think I'm a doctor doom. I'm just Dr. reality, or

00:59:10.280 | at least I try to be I don't know, like there was a deal,

00:59:12.240 | you know, China had a big visit with Brazil in March, we talked

00:59:16.160 | about it briefly, I shared a couple of these articles that

00:59:19.200 | covered the transactions, they signed $10 billion of trade

00:59:22.280 | agreements and cooperative agreements, all of which were

00:59:25.280 | meant to settle in yuan. Brazil's kind of made the

00:59:28.240 | statement that they're going to start to settle in local

00:59:29.920 | currency. And, you know, they're doing this multilateral trade

00:59:35.440 | program globally, with partners where they're going to trade and

00:59:39.040 | transact in local currencies, they're not set to the dollar,

00:59:42.280 | they're not fixed to the dollar. And I think that's just part of

00:59:44.600 | a general movement. I don't think it's about, hey, we got to

00:59:46.760 | get off the dollar as soon as possible. But I think it's about

00:59:48.960 | we could diversify. And there are other stable economies

00:59:51.600 | around the world, they might be having, you know, demographic

00:59:54.360 | issues or various economic issues. But gosh, man, don't we

00:59:57.520 | all Europe, China, the US, everyone's got debt problems,

01:00:01.520 | demographic problems, over leverage problems, growth

01:00:04.640 | problems. And fundamentally, I don't think that there's as safe

01:00:07.880 | a haven as there has been historically. And as a result,

01:00:10.640 | I think a lot of these governments and a lot of the

01:00:12.080 | business leaders in these countries are very much open to

01:00:15.120 | doing transactions in multiple currencies. And that's the

01:00:18.060 | beginning of the end, it's the beginning of a set of

01:00:20.920 | transactions that isn't about, hey, we're all getting against

01:00:23.920 | the dollar, it's over, let's crush the dollar. It's like,

01:00:26.800 | we're just going to do trades and other currencies. No big

01:00:28.800 | deal.

01:00:29.080 | Beginning of the end. Doctor Do. All right. Shout out. It's the

01:00:36.360 | end of the dominance, right? It's the end of you every

01:00:38.360 | talking about the end of the dominance and China imploded

01:00:40.880 | during that same time period. So I forgive me, I still believe

01:00:43.760 | in American exceptionalism.

01:00:45.120 | From American exceptionalism. When there's another article

01:00:47.680 | from Bloomberg bricks, this is from April 24. All of a sudden,

01:00:51.760 | this guy loves the mainstream draws membership bids from 1984.

01:00:54.800 | Listen, Jake, I'm fine. If you want to say this is fake news,

01:00:58.080 | go for it. Are you saying it's just funny? Believe it's fake

01:01:02.160 | news? No, I need information about the world. When they write

01:01:08.040 | an article about me, that's completely made up. I'm going

01:01:10.080 | to call it fake news. Why are you treating like every press

01:01:13.200 | article is like the same. That makes no sense.

01:01:15.560 | By the way, it does make sense for the bricks to expand, right

01:01:18.160 | sacks, because it's like if NATO was purely an economic

01:01:21.040 | organization, that's probably what bricks evolves into over

01:01:24.000 | time. And it makes a ton of sense for them to do it.

01:01:25.880 | They're creating a competing China setting up an alternative

01:01:28.640 | to the IMF. They've got this alternative to the IMF that

01:01:31.960 | they're setting up. That's not dollar denominated. And they've

01:01:35.000 | got seven nations in this thing. Now. It's it's, you know, and by

01:01:38.320 | the way, Jason, when I say the beginning of the end, I don't

01:01:40.080 | mean the end of the world or the end of the US, the US will

01:01:42.800 | continue to be the innovation hub of the world, the US will

01:01:45.080 | continue to have freedom and civil rights that no that no

01:01:48.000 | other country can parallel. The US is an incredible place to

01:01:50.880 | live better than anywhere else on earth. But the economic

01:01:54.480 | status of the US given how we have spent money, and how we

01:01:57.640 | continue to operate our federal government with this

01:01:59.560 | extraordinary deficit and debt spiral problem means that other

01:02:02.600 | people have to be protective of their currencies and their

01:02:05.360 | assets in a way that's thoughtful. It doesn't

01:02:07.560 | necessarily mean it's all over and everything, but the

01:02:09.680 | dominance you said beginning was has had economically,

01:02:12.480 | you can already see this in all the trade barriers and tariffs

01:02:15.800 | that are going up the decoupling that's going on. Look, the

01:02:18.840 | United States set up a system of global free trade, basically in

01:02:23.400 | 1945. And we had a bipolar world with we have the Soviets and

01:02:28.680 | you and in America, but the Soviets basically opted out

01:02:31.880 | because they were communists, they had their own system, but

01:02:34.400 | it wasn't a compelling economy. Then we had the unipolar world.

01:02:38.600 | So basically, for, you know, over half a century, we had

01:02:42.880 | this completely open system where there were no trade blocks

01:02:45.640 | in the world. Now we are seeing the rise of trade blocks with

01:02:49.440 | multi polarity. Yes, the US is pursuing a contradictory policy

01:02:54.200 | because on the one hand, yeah, hold on, the here's the

01:02:56.200 | contradiction. On the one hand, we run these massive deficits

01:02:59.880 | and debts. So we are a debtor nation who needs to make its

01:03:04.320 | debt attractive to debt holders or our interest rates going to

01:03:09.560 | keep going up. Okay, so that's on the one hand. On the other

01:03:12.920 | hand, we are doing things like weaponizing the dollar and

01:03:16.120 | weaponizing swift and imposing sanctions and engaging in

01:03:21.360 | geopolitical fights that are highly antagonistic to the

01:03:26.920 | nations that are would be holders of our debt. So one of

01:03:32.200 | those two things has got to give either we reduce our debt and

01:03:38.640 | our deficits and the need we're remember we're not this is not a

01:03:41.480 | stable situation. We continue to issue what is it somewhere

01:03:46.040 | between one and 2 trillion a year to government debt. So we

01:03:50.400 | have to constantly find more and more money out in the world to

01:03:54.000 | support our debt at the same time that we're weaponizing the

01:03:57.000 | dollar in the financial system so that these sources of global

01:04:00.480 | capital don't want to participate. And I agree with

01:04:02.480 | sex. This is why I think the disappointment to me is that

01:04:06.200 | there isn't bipartisan recognition of this being as

01:04:08.920 | severe as a war. It is the sort of thing that the government

01:04:12.760 | that both parties need to get behind and say, let's figure out

01:04:15.920 | a path to solving this problem. This is the objective. We've got

01:04:19.040 | to get our fiscal affairs in order. And then all the other

01:04:21.520 | stuff, the social stuff, the policy stuff we can fight about

01:04:24.560 | we can argue about later. But we have to put some gas in the

01:04:27.440 | tank, we have to be able to drive where we want to go. And

01:04:29.720 | we can't drive right now. Here's what I'll say to you,

01:04:32.040 | Friedberg. Since you said the beginning of the now maybe it's

01:04:37.360 | a poor choice of words. It's not the end. You said

01:04:40.160 | don't miss

01:04:42.080 | Yeah, but but don't miss

01:04:44.360 | dollar dominance in global trade. Okay, I disagree with you.

01:04:49.080 | I think dollar dominance will continue for some time.

01:04:51.280 | Jay, are you disputing that the world is becoming more

01:04:53.440 | multipolar? Do you think we're still living in unipolarity?

01:04:56.640 | No, and nor do we need to live in unipolarity for America to

01:05:00.680 | still be the champions. We still are winning at a pace that

01:05:03.800 | nobody else is. Space, energy, cars, AI, we're probably going

01:05:09.560 | to win chips. And we're going to probably win material science

01:05:13.680 | and batteries. And we're obviously going to win biotech.

01:05:16.160 | We're winning in every one of these categories. We're the

01:05:19.240 | clear winner. The only thing we're not the clear winner in is

01:05:21.560 | factories and mass producing schlocky stuff that's sold on

01:05:25.000 | Amazon. China's completely imploded. And the Middle East is

01:05:28.280 | taking their last 20 or 30 years of capital, and they're

01:05:31.920 | investing it in the West in space, energy, cars, AI, chips,

01:05:36.680 | basic materials, batteries, all the stuff that's happening here

01:05:39.680 | on our shores, we are in the most winning position we've

01:05:42.240 | probably ever been in as a country. We took a bad beat, we

01:05:45.040 | spent too much money, we got a dysfunctional government, we got

01:05:47.400 | a culture wars, we got a lot of bad stuff distracting us. But

01:05:50.040 | the truth is, when you look at brass tacks, when you look at

01:05:52.480 | innovation, we're winning on almost every dimension. We're

01:05:56.240 | just a little caught up in the fog of culture wars. And you

01:06:00.800 | know, thinking that we're going to be dominant and perfect in

01:06:03.960 | terms of our budget, we do have to fix our budget. We all agree

01:06:06.400 | on that. But we are winning. And China is currently stalled out.

01:06:11.160 | And it's because of freedom. It's because we support

01:06:14.360 | because of the basic human freedoms we have. You two guys

01:06:19.040 | are Dr. Doom.

01:06:20.120 | This is so stupid. I'm hopping off. I'm done with this. Just

01:06:23.000 | strike my shit out of this episode.

01:06:24.320 | Is there anything else you want to talk about today? Because I'm

01:06:27.320 | done. This is gonna be done.

01:06:28.680 | I'd love to talk about Nvidia. But I don't know if you guys

01:06:31.000 | I'm sick of being characterized as Dr. Doom. J. Cal, it's

01:06:33.720 | fucking stupid.

01:06:34.440 | We want to have a real conversation about it. Instead

01:06:40.000 | of your

01:06:40.240 | like, but what I said, I'm not fucking extreme. I'm not I'm

01:06:44.800 | trying to have like, an actual discipline conversation about

01:06:47.920 | where things are going. It's not black and white. It's not about

01:06:50.440 | Oh my god, the US is gonna win. Everyone's gonna lose. It's not

01:06:52.920 | a win lose situation. We cannot afford to continue to spend the

01:06:56.400 | way we're spending with our federal government. That's it. I

01:06:58.400 | agree with that. We have to solve that problem winning on

01:07:00.440 | all these other dimensions. So why are we winning? It's not the

01:07:02.440 | conversation. Why is the federal government is different from us

01:07:05.920 | innovation? There's a difference. The federal

01:07:07.880 | government, these are the voters, voters elect to tax and

01:07:11.760 | spend. And voters elect people to create a system that can

01:07:15.800 | legally go in and take assets and spend assets and borrow

01:07:18.880 | money. And we've done it in an extent now that is becoming

01:07:22.000 | almost a runaway train. It is a problem. We saw the negative red

01:07:26.000 | chart that sacks had you pull up several times that has nothing

01:07:29.040 | to do with us dominance and fucking electronics and chips

01:07:32.960 | and biotech, and all this other sort of stuff. We have a problem

01:07:36.320 | with how we spend money at the federal level. I agree with

01:07:38.640 | that. I agree. That's the conversation. I believe that the

01:07:41.720 | dominance that we have in entrepreneurship and every one of

01:07:44.320 | these categories is what will pull us out of this.

01:07:46.680 | The free enterprise system is a wonderful system that produces a

01:07:49.840 | lot of good prosperity for America. Okay, that's great. I

01:07:54.400 | agree with that. And it remains to be seen if China can sustain

01:07:59.520 | its remarkable economic growth that's had over the last few

01:08:02.600 | decades. So that remains to be seen. However, the United States

01:08:06.600 | is behaving like a late stage empire. And that is separate

01:08:10.240 | from the system that got us here. We have unsustainable

01:08:14.880 | fiscal deficits, we spend way too much money that we don't

01:08:18.160 | have. We have an uncontrolled southern border, our cities are

01:08:21.480 | in decline. We've got hundreds of 1000s of people living on the

01:08:25.520 | streets. Have you seen it? We look like a third world country.

01:08:28.680 | There's three or four crimes. That's we are we're all we're

01:08:33.120 | meddling in countries all over the world engaging in wars or

01:08:35.880 | proxy wars. We are behaving like a late stage empire. So J Cal,

01:08:39.800 | it's true that the United States has a wonderful system. And

01:08:42.680 | that's what got us here to me, it got us to unipolarity, we were

01:08:46.600 | the world's only superpower. But now we're in a world in which

01:08:50.000 | other countries are rising to, it's more multipolar, agreed,

01:08:54.360 | and whether we continue, our dominance will depend on whether

01:08:58.080 | we make the right decisions right now. And right now we are

01:09:00.760 | not making the right decisions. Adding 2 trillion to the debt

01:09:03.400 | in peacetime a year makes no sense. Yeah, you're a little

01:09:08.280 | ran. It's like Wile E. Coyote, going off the cliff, and

01:09:12.440 | pretending like if he just doesn't look down, there's

01:09:14.600 | nothing to worry about.

01:09:15.600 | I have said from the beginning, we need to get spending under

01:09:18.280 | control. But I am also incredibly enthusiastic about

01:09:21.800 | how we're performing in innovation and capitalism right

01:09:24.400 | now. It is off the charts how well this country is doing on

01:09:27.000 | those dimensions. Chamath, you have any thoughts? While we wrap

01:09:29.600 | up the same?

01:09:30.120 | No, I think we ended up conflating a bunch of issues

01:09:34.400 | into one. I'll just say what I've said before, which is that

01:09:37.880 | the United States is kind of the simplest, safest bet and that

01:09:41.560 | these decisions are made on a relative basis. China,

01:09:46.040 | unfortunately, for them have has a huge demographic problem that

01:09:51.160 | will diminish them economically. And you're already starting to

01:09:55.520 | see it, but it's going to get really exacerbated in the next

01:09:57.800 | 10 or 15 years. That's just the mathematical reality for a

01:10:01.280 | country that has literally zero immigration and no solution.

01:10:05.880 | Europe is not in a very great situation. And the only place

01:10:10.000 | that's really firing on all cylinders is India. But it has a

01:10:12.600 | long way to go to build the infrastructure that can really

01:10:15.000 | scale and make it as predictable as United States. Could it do

01:10:18.600 | it? I think so. But it's going to take a long time that, you

01:10:21.640 | know, 50 60 100 years of investment. So I don't know, I

01:10:25.720 | just kind of like try to simplify for myself, I think the

01:10:28.000 | US will be fine. I think the dollar will be fine. I don't

01:10:32.240 | think it's right to spend this much. But I think that

01:10:34.080 | politicians are incapable of cutting expenses. And so I would

01:10:37.040 | like to cut their revenues. That's it.

01:10:39.320 | It's a great discussion. freeberg. Yeah, I don't think

01:10:45.440 | you are. I don't think you understand what the audience

01:10:47.560 | actually wants to hear. This is actually the core of the of the

01:10:51.120 | debate that we just had. Well, just do what Friedrich asked

01:10:53.560 | you, which is just to play his clip in his words. And then I

01:10:56.960 | have right here. I think that the Saudi China trade if this

01:10:59.160 | happens, and oil is sold in one is the beginning of I think the

01:11:04.040 | end of the assumption that the US dollar is a global reserve.

01:11:06.480 | That's all. Yeah, that's what you said. That was your

01:11:10.760 | prediction. That you said in the beginning of the end, you said

01:11:15.040 | it twice. So if you don't believe it's the beginning of

01:11:16.760 | the end, it's fine.

01:11:17.320 | The US dollar as a global reserve.

01:11:19.120 | Yes, you believe that that it's the US dollar will not be the

01:11:21.320 | global reserve. You said it twice. Yeah. And I just think

01:11:26.480 | that will be will remain the global reserve for a lifetime.

01:11:28.680 | That's a fundamental difference. Let's move on. Yes.

01:11:34.040 | I'm reticent to bring up the culture wars, but these have

01:11:36.960 | become prominent. So maybe we could have a meta discussion

01:11:39.800 | about these. There are three things going on. One, we touched

01:11:44.320 | on the book banning, I'm using air quotes there. And there's

01:11:49.280 | been a lot of feedback that's come in since then. Just to

01:11:52.160 | follow up briefly on it. Books are not exactly being banned.

01:11:56.720 | It's a much more granular and nuanced issue. There was a bill

01:12:00.920 | 1467 that happened that Ron DeSantis did sign. This said

01:12:06.960 | that parents reasonably should get to see what's being put into

01:12:10.480 | classrooms. And as you might suspect, this is being done at a

01:12:15.880 | very local level. When you put all that control at the local

01:12:18.800 | level, you will have different constituents, banned books that

01:12:24.080 | maybe shouldn't be. Some of them are obvious ones that were too

01:12:28.760 | graphic that I think most parents would agree shouldn't be

01:12:31.280 | in a school library. Other ones were horror books or young adult

01:12:35.680 | books, you can look at all this stuff, just search for pen and

01:12:40.560 | books report, pen America. And if you there are instances of

01:12:46.080 | books that shouldn't be banned, being banned and instances of

01:12:48.400 | books that we'd all agree on, but it is not exactly book

01:12:51.120 | banning. It's letting each of the school districts make their

01:12:54.760 | own decisions. And they're not going to make perfect decisions

01:12:56.840 | when you put them out in the edges. So just to make that

01:12:58.880 | super clear,

01:12:59.680 | I think you're right to focus on the terminology here, because

01:13:03.440 | this is a question of what is put in the school library,

01:13:08.280 | that's it. So that's not a ban. Right? A ban would be if you

01:13:12.360 | couldn't purchase the book for yourself or your kids. Any

01:13:15.760 | parent can buy any book they want in Florida. We do have an

01:13:18.600 | issue, I think, with the curriculum, where really

01:13:23.480 | important classic books are being removed from the

01:13:25.960 | curriculum for political reasons, mainly in California,

01:13:28.600 | books like to kill a mockingbird or a huck. That was weird.

01:13:32.360 | They're being removed because they're being accused of being

01:13:34.440 | racist, even though the whole point of those books is to, I

01:13:39.000 | think, call it out, call it out and teach kids about racism. So

01:13:42.440 | there's a lot of stupid things happening from the left in

01:13:45.680 | terms of removing books from the curriculum, which I think is a

01:13:48.080 | much bigger deal than removing books from a school library.

01:13:51.200 | There's also things happening with like, you know, Ian

01:13:55.080 | Fleming's James Bond books being rewritten, like posthumously

01:13:59.800 | because to sex, accused of sexism, or raw dolls books are

01:14:04.840 | being posthumously edited. So like books are literally being

01:14:09.120 | rewritten in a way that their authors never intended that is

01:14:12.000 | positively Orwellian. That really is. That's really bad.

01:14:16.080 | That's really wrong. Now on this on this this thing. I mean,

01:14:21.120 | look, this is this is getting to the level now of being a hoax.

01:14:24.600 | One of the stories going around is that there was this book of

01:14:27.680 | poetry, this totally innocuous book of poetry that was being

01:14:31.000 | banned in Florida. And I wanted to say, yeah, so I wanted to

01:14:35.440 | find out the truth of it. Well, as it turns out, like you said,

01:14:38.640 | J. Cal, this is in Miami Dade school district. A decision was

01:14:43.040 | made. This is not by DeSantis is made at the level of individual

01:14:46.560 | schools,

01:14:47.160 | which are voted on and their parents on the school boards. So

01:14:50.280 | it's going to just follow the demographics and whatever that

01:14:52.000 | local community is.

01:14:53.560 | Right. So basically, what happened is this, this book of

01:14:55.880 | poetry was literally moved from the elementary school library to

01:14:58.720 | the middle school library. That's what happened. But all of a

01:15:01.440 | sudden, this was spun on social media, and by the mainstream

01:15:06.120 | media as if DeSantis had banned this book of poetry, to the

01:15:09.920 | point where Miami Dade school district had to put out a tweet

01:15:12.920 | correcting this. So never banned or removed. It was just moved

01:15:16.800 | from one library to another.

01:15:18.400 | For me, I think this is a super interesting point, David, where

01:15:21.240 | you and I are in agreement, you and I are both for freedom of

01:15:23.960 | speech, and we're big advocates of that. And then there are

01:15:27.560 | decisions. And you could reasonably make this decision,

01:15:30.400 | hey, let the parents decide. Great. When you let the parents

01:15:33.560 | decide, you have to take into account that these school boards

01:15:36.960 | could be hijacked by different groups of people, or they could

01:15:39.560 | be very small, monocultures of, you know, little towns or

01:15:43.560 | cities. Here's the list, by the way, if anybody wants to look at

01:15:46.480 | this, you could actually look at the very granular list,

01:15:48.520 | Pan-America keeps an index of all these, I put the thing in

01:15:51.120 | the chat here, and you'll see things in left, right, everybody

01:15:55.240 | in between. Some places are banning all the LGBTQ books,

01:15:58.760 | some are banning the critical race books or books by people of

01:16:02.680 | color, other ones are banning, you know, the James Bond novels,

01:16:06.360 | etc. So it's it's a free for all of parents executing their

01:16:09.720 | rights at a very local level. And, you know, I guess if you

01:16:14.280 | want parents to have a say in their schools, it's going to be

01:16:16.920 | slightly imperfect and variable. But it's not like

01:16:20.720 | there is censorship going on, I guess, in some ways,

01:16:24.480 | the political question is, do you allow government

01:16:29.160 | bureaucrats to dictate to parents what their kids are

01:16:32.400 | going to see or have access to? And I don't think that's viable.

01:16:37.320 | I mean, look, parents could take their kids out of the school and

01:16:40.640 | homeschool them if they wanted. Yes. So at the end of the day,

01:16:43.600 | so they have that right. So why would you deny parents the right

01:16:47.560 | to determine what's in the school library?

01:16:49.960 | And it does seem like all of this goes by the way, some of

01:16:53.520 | these books that have been removed are actually Lord. Yeah,

01:16:57.600 | Lord of the Flies will probably get removed because they don't

01:16:59.720 | like somebody being labeled fat piggy. No, oh, I just lost the

01:17:05.040 | weight. Take it easy. No, no, I'm saying right. Like there are

01:17:07.480 | some great books that were written in an age where, you

01:17:12.400 | know, you just say things in a certain way that aren't meant to

01:17:14.800 | be offensive. But these books are very powerful. And I don't

01:17:17.960 | know about you guys, but I had a bunch of books that I read when

01:17:20.080 | I was younger, that had a huge impact on me. And then I don't

01:17:24.360 | want I don't want those books getting removed from the

01:17:25.600 | curriculum. You're right, Lord of the Flies, incredible,

01:17:28.800 | killer mockingbird, those are all important books that I read

01:17:30.840 | as part of the curriculum. But all we're talking about, I think

01:17:33.400 | is this even this very minor issue of what's in the library,

01:17:36.600 | obviously, the parents should get to decide. And some of the

01:17:38.920 | things that have been removed from the library are pretty out

01:17:41.120 | there. Like, for example, there was one book that was educating

01:17:46.080 | kids on like, how to get a grinder date, which they're not

01:17:50.320 | even supposed to be able to do right, like grinders for 18 and

01:17:52.880 | up.

01:17:53.200 | There are other topics that, like suicide and harm and other

01:17:58.160 | ones. When do you introduce that to a child? Is that something

01:18:00.800 | that's third grade or, you know, a suicide discussion? When

01:18:03.600 | should that reasonably occur?

01:18:04.640 | This is a crazy question, but I'll ask it to you guys. I would

01:18:07.000 | rather Lord of the Flies be removed from a library than

01:18:11.840 | edited because then at least there's a different place where

01:18:14.120 | you can get your original book. Oh, for sure. The idea of

01:18:17.280 | editing a book is so insane. It's so mind control. Yeah, it's

01:18:22.120 | really bad. That idea is very, very bad because you're reading

01:18:25.840 | something thinking that this is what the author intended. And

01:18:30.560 | all of a sudden, it's manipulated by some rando false

01:18:33.160 | expert under some guys that you had no decision making in that's

01:18:37.600 | really bad.

01:18:38.400 | What's really I think, important of this discussion is what's how

01:18:42.960 | the press frame something how politicians frame them and then

01:18:45.560 | how they're actually executed on the ground can be very

01:18:47.920 | different. So this has become a Rorschach test for what cause

01:18:51.840 | you back. And when you actually look at just the list, you'll

01:18:55.120 | see people in California, people in Colorado banning quote

01:18:58.880 | unquote banning or just not including certain books in

01:19:01.160 | libraries. It's parents having age old debates about when do

01:19:04.400 | you introduce certain topics to your kids? That's your job as a

01:19:07.240 | parent. What happens in the library is going to be

01:19:09.920 | variable. Alright, Nvidia is going for vertical integration,

01:19:13.640 | they unveiled their GPU CPU superchip called Grace Hopper

01:19:16.600 | after the Navy Admiral, obviously, Nvidia grace, GPU

01:19:20.000 | uses 72 arm universe v2 CPU cores, whatever that means. The

01:19:24.320 | CPU can deliver up to 370 square on a spec crate 2017 in base,

01:19:29.440 | whatever that means. I'm sorry, I'm not familiar with all the

01:19:33.400 | benchmark.

01:19:34.440 | Is the peak of humor on the show?

01:19:37.800 | Listen, we're talking about Pentium chips. I could have

01:19:40.320 | kept up here. But I haven't kept up with this since the 90s.

01:19:42.840 | We're talking about the Intel inside Pentium chips. Yes, I

01:19:45.920 | could. I did keep up with chip stuff. I'm sure. Yeah, yeah, no,

01:19:50.680 | I mean, when we got past gigabit, I stopped. I think

01:19:54.520 | what's really interesting here is this is a really important

01:19:58.080 | moment. We're like that design that Grace Hopper design, which

01:20:00.520 | is basically a massive system on chip. It's an entire rig. It's a

01:20:05.240 | GPU and CPU and memory and interconnects. This is like them

01:20:08.880 | going for the jugular. This is what's crazy in a moment like

01:20:12.240 | this, like that is basically them trying to create an

01:20:15.520 | absolute monopoly. Because if you have these rigs, and these

01:20:19.760 | rigs are the most capable for learning, and you have their

01:20:23.240 | SDK CUDA, which is becoming the de facto software layer now that

01:20:26.880 | you use to write to their h 100s, or Grace Hopper when it's

01:20:30.120 | available, and the 100s, that could create a level of lock in

01:20:34.600 | that I think people should be thinking about. So if you're the

01:20:37.440 | hyperscalers, like Amazon and Google and Microsoft, what is

01:20:41.200 | your reaction to this? If you're Facebook, what is your reaction

01:20:44.320 | to this? And I think it's really important because if these guys

01:20:48.440 | continue to innovate at this scale, you're not going to have

01:20:51.160 | any alternatives. And it comes it goes back to like what Intel

01:20:54.960 | looked like back in the day, which is an absolute straight

01:20:57.960 | up monopoly, except the difference is that even when you

01:21:01.000 | wrote something to Intel CPUs, you could actually run it on an

01:21:05.120 | AMD processor, and it would work with no changes. But that's not

01:21:11.040 | necessarily the same. So if you go from an A 100 to something

01:21:14.840 | else, an FPGA, or some other silicon, you have to translate

01:21:18.800 | the model. And so it's very important to understand that

01:21:21.680 | there's no extensibility here. So like if Nvidia continues to

01:21:24.560 | drive this quickly and, and continues to execute like this,

01:21:28.480 | it's a one and done one company monopoly in AI at the hardware

01:21:33.240 | layer. And I think that that people are probably thinking

01:21:35.920 | about how to blunt that competitive outcome. But that's

01:21:40.840 | what I took away from that, from that announcement from them,

01:21:43.840 | which is like, they are ready to go for the juggler here in what

01:21:46.880 | looks like the most important market that's emerged in like

01:21:50.520 | what do you think about the valuation to math trading at 200

01:21:53.640 | times or 50 times?

01:21:54.760 | I'm in your camp. The simple thing about price to equity

01:21:57.920 | ratios is if you take the price equity ratio, and you invert it,

01:22:00.800 | that's your implied earnings price earnings, price earnings,

01:22:04.520 | or and you invert it, that's your yield, right. And so Nvidia

01:22:09.640 | is yielding at these prices, I think it's somewhere like two to

01:22:13.640 | two and a half percent, which is less than and it's almost half

01:22:17.640 | of a typical two year bond. And so when you have a yield that

01:22:22.040 | that's low, you have to see it just grow absolutely massively.

01:22:25.680 | But there's this principle in capitalism, which is in order to

01:22:29.840 | grow like that, you're generating so much profit, that

01:22:33.880 | competitors look at it and say, Hold on, you don't deserve that

01:22:36.440 | much profit, I'm going to take some of that.

01:22:37.960 | Your profits, my opportunity, your margins, my opportunity.

01:22:40.560 | I think that your margin is my opportunity is exactly what

01:22:43.760 | happens. So I think what I'm waiting for freeberg is like in

01:22:46.840 | the next two quarters, if AMD, Facebook, Google, Microsoft and

01:22:51.880 | Amazon don't announce something substantive, there's a very good

01:22:57.040 | chance that Nvidia runs away with this. And I think that

01:23:00.720 | that's very problematic. But in that case, that price is cheap.

01:23:05.080 | My bet, though, it's a different version of your bet, but we get

01:23:09.280 | to the same outcome is that I don't think that that's going to

01:23:11.320 | happen, because it's just too important. And so I think that

01:23:14.440 | everybody other than Nvidia wants vendor diversity, right,

01:23:18.920 | you don't want to get locked into one person, or one set of

01:23:22.520 | hardware, or one cloud, you know, one SDK, you don't want

01:23:25.960 | that nobody wants that, except Nvidia, and Nvidia shareholders.

01:23:29.520 | So my bet is in the next two quarters, you start to see some

01:23:32.760 | real action so that folks start to have to balance their

01:23:36.520 | forecasts, where it's not just 100% Nvidia, but it's Nvidia

01:23:40.400 | plus plus plus. And that's sort of what I would bet. Because it

01:23:45.920 | just seems like logical and right, because I, otherwise it

01:23:49.480 | would it would be pretty derelict of these hyperscalers

01:23:52.360 | to just throw their hands in the air and just give the whole

01:23:54.680 | market to them. And it would be derelict of AMD. The other thing

01:23:57.360 | that's happening is, and you know, AMD is AMD is a great

01:24:00.480 | memory solution. But they really don't have a deterministic AI

01:24:03.760 | chip. And I think that Lisa Sue needs to get needs to act

01:24:06.920 | decisively here and build something announced something by

01:24:10.280 | something, but she needs to be really aggressive here.

01:24:13.920 | If you look at the language models, a lot of them are taking

01:24:17.880 | less and less CPU GPU to actually build them. So this has

01:24:22.040 | been like a bit of a race or competition on hugging face. I

01:24:26.480 | showed the leaderboard on another episode, maybe two

01:24:28.480 | episodes ago, but I've been talking to some of the people

01:24:30.280 | who are doing these language models to math and they said

01:24:32.400 | there's massive inefficiency. And so yeah, and by the way, the

01:24:36.040 | other thing I mentioned, J kal is also happening, which is like

01:24:39.080 | the freeberg you talked about this atomization of these models

01:24:42.120 | is happening, I think even faster than when you first

01:24:45.480 | brought that up.

01:24:46.080 | Yeah, so what took two or $3 million last year is now taking

01:24:49.960 | $200,000 just through software improvements and code

01:24:52.800 | improvements, crazy. And now they're thinking a number of the

01:24:57.320 | other thing people are coming to is because of so much what's the

01:24:59.960 | term hallucinations that people are using because of the

01:25:01.840 | hallucinations, people are making narrower models that are

01:25:04.760 | deeper in legal or just, you know, stack overflow, just core

01:25:08.800 | or just a vertical and core. They take less GPU, but they get

01:25:12.160 | better results because you've constrained the data set. And

01:25:15.480 | that's resulting in, you know, better outcomes. So I think this

01:25:19.400 | could also be where maybe people don't need as much GPU or CPU at

01:25:23.280 | the same time, so many people are going after it. So that

01:25:25.320 | could flip where the demand could actually decrease because

01:25:29.440 | of software efficiencies or hitting some benchmark that's

01:25:32.160 | reasonable enough. What do you think? freeberg?

01:25:35.280 | Look, I think as performance improves, as cost declines,

01:25:39.480 | like any economic model, there's a pretty nonlinear relationship

01:25:42.880 | with demand. So we'll find new ways to apply this technology. I

01:25:48.080 | think the demand is only going to go nonlinear.

01:25:49.880 | Having this happening is people are starting to build like

01:25:54.600 | mosaic ml. They're building cloud independent models. So you

01:25:59.480 | can take the same model build it on your own proprietary personal

01:26:02.720 | cloud, not educate chat GPT for not educate barred, but do it

01:26:06.440 | with your own model. And then you can move it from

01:26:10.520 | reduction and fine tuning seems to like, get to the point that

01:26:15.800 | we can run these things on small machines, cheaply, quickly. And

01:26:21.840 | it just, it'll change the it'll change the applications.

01:26:25.640 | You're saying run inference cheaper, not run training,

01:26:28.640 | run inference. That's right.

01:26:31.240 | No, this is not good. Biden just had a big fall on stage at the

01:26:35.800 | US Air Force Academy graduation.

01:26:37.720 | Oh, no. I think he'll be okay. But whoa, it's not like he fell

01:26:42.080 | off the stage. He just tried. Oh, it doesn't doesn't look good.

01:26:46.000 | But he could have broke something. Well, hope he's okay.

01:26:48.040 | I hope he's okay. Yeah. I mean, we just had this whole talk

01:26:51.000 | about it. Yeah. I mean, it's just again, I think like physical

01:26:53.280 | like these kinds of physical things are, are normal. And I

01:26:56.360 | think people need to be much more empathetic about that kind

01:26:58.520 | of stuff. I mean, he was riding a bike over the summer last year.

01:27:01.080 | I remember. And you look great.

01:27:03.200 | FDR was in a wheelchair. So I don't care about that. All I

01:27:08.160 | care about is mental acuity. Yeah, me too. Okay. By the way,

01:27:11.680 | I want him to be well enough to run because I'm scared of some

01:27:15.600 | of the other democratic candidates they might put up

01:27:18.000 | same. Like, I don't want to get a president of Newsom. Or

01:27:22.720 | President Harris. I mean, I don't think Biden is very good.

01:27:26.200 | But I think he's better than Harris or Newsom.

01:27:28.960 | Biden drops out who's the lead candidate in your mind?

01:27:31.400 | Okay.

01:27:32.360 | Really? Wow.

01:27:34.520 | I would prefer RFK to Biden. But I think what will happen if

01:27:37.760 | Biden drops out is we'll get a flood of establishment

01:27:40.680 | democrat candidates in the race. Newsom, maybe JB Pritzker,

01:27:44.640 | Harris, for sure.

01:27:45.800 | There's a lot of differences between the left and the right.

01:27:48.200 | But the one similarity is that there's a large amount of

01:27:50.520 | voters in both of those blocks who don't fundamentally like

01:27:54.600 | these establishment candidates. And I think that that sentiment

01:27:58.760 | is exactly the same. And so you know, you can have a pro Trump

01:28:01.320 | wave on the right, just like you could have a pro RFK wave on the

01:28:04.360 | left. And they are solidified by the same idea, which is, I think

01:28:08.920 | you're going to see more and more outsiders have a chance

01:28:11.800 | through the nomination process to get in.

01:28:13.640 | I think the Democratic Party will stop it. I mean, they

01:28:17.160 | should Bernie Sanders. Remember that? It was Sanders against

01:28:20.720 | Clinton. And they, they shipped him. They rigged the primary

01:28:26.560 | against him. Let's use that word. Oh,

01:28:30.120 | labeled are just labeled the episode.

01:28:33.800 | No, but look, I mean, the the establishment has in the

01:28:39.160 | Democratic Party has a huge influence over the outcome

01:28:42.040 | because they control the superdelegates, right? They'll

01:28:44.480 | never

01:28:44.920 | wouldn't do some supercharged the Republican base. I mean,

01:28:48.360 | being like a coastal elite. And what's happened with San

01:28:51.680 | Francisco and LA, I think that just drives out the Trump

01:28:54.280 | voters in a massive way that

01:28:55.560 | I said, like over a year ago, I thought that the wow, that

01:28:58.640 | 2024 would be a Newsome to Santa's race. I still think

01:29:02.520 | there's like a 10 20% chance of that.

01:29:04.520 | Wow, that would be wild. Be wild.

01:29:08.280 | Maybe 10%.

01:29:09.200 | What about Joe Manchin? What's the story there? Anybody have

01:29:12.840 | any insights on Joe Manchin?

01:29:14.080 | We had a phenomenal dinner at my house last week. He is so

01:29:18.120 | wait, charming. Okay, so what do you know this? What are you

01:29:21.200 | talking about? I don't know if you publicly disclosed it.

01:29:23.800 | Well, it's already happened. We had a we had a fabulous dinner.

01:29:27.880 | And he met a lot of people here. And he's amazing.

01:29:31.760 | Did sacks come to that? And Heather, and Heather's amazing.

01:29:35.360 | Heather's amazing to his daughter, who she ran, I think

01:29:39.280 | was my land pharmaceutical, incredible executive.

01:29:42.080 | Joe Manchin would jump in. Yeah. You think trauma matches

01:29:45.920 | fabulous. If Biden wasn't in Joe Manchin would jump in. You

01:29:48.520 | think? I don't know. I don't want to speculate any on

01:29:51.840 | anything like that. But I think he's I think he's an amazing

01:29:54.120 | American patriot.

01:29:55.320 | Is that your guy? freeberg? Would you go Joe Manchin?

01:29:58.480 | Because he wants to control spending?

01:30:00.040 | I don't know. I don't know.

01:30:03.080 | I'll tell you one of the reasons why I like RFK Jr. Is that

01:30:08.360 | there's so many issues that he is deviating from Democratic

01:30:11.280 | Party orthodoxies in favor of free speech, and against

01:30:14.120 | censorship. He's in favor of civil liberties and against

01:30:17.200 | this, like massive surveillance state that we've created. And

01:30:20.560 | on foreign policy wants to end all the crazy wars. And I would

01:30:23.560 | say that of all the candidates I've heard, he understands the

01:30:26.920 | situation in Ukraine the most deeply. Now, both Trump and

01:30:31.600 | dissenters have called for a ceasefire. And that's good. And

01:30:35.280 | I think RFK would work towards a ceasefire to the RFK Jr. goes

01:30:39.760 | deeper and explains how the whole situation Ukraine came

01:30:43.560 | about. And so he understands it very deeply.

01:30:46.520 | All right, folks, they have it. Another episode of the online

01:30:49.440 | podcast for the dictator, the architect David Sachs. And I

01:30:56.040 | will call him Kingmaker. No, he's

01:30:57.440 | I'm sorry. Kingmaker. I like architect. Okay, Kingmaker. Sure.

01:31:00.520 | Kingmaker.

01:31:01.120 | News.

01:31:02.880 | You like architect or King? It's crazy. The whole thing was

01:31:06.400 | just like made up. But I know but as a nickname, which one

01:31:08.760 | does your name? What do you prefer? architect? Do you

01:31:10.720 | prefer? Okay, what are the articles say? Kingmaker?

01:31:14.440 | articles of Kingmaker I said architect. I think architect is

01:31:16.920 | more Svengali ish. The articles about a call that never happened

01:31:20.400 | sickness with a person you don't know with a person I don't know.

01:31:23.040 | Right? Okay, that aside, what? What nickname would you like us

01:31:28.840 | to use going forward? Kingmaker?

01:31:30.480 | The whole article was made up.

01:31:33.000 | Yes. Putting that aside, architect. Can I go with

01:31:35.680 | Kingmaker? I like Kingmaker. I like architect.

01:31:37.640 | But it's silly.

01:31:39.680 | Mr. Secretary, please tell us which one. Yeah. Secretary of

01:31:42.840 | State. Look, I'm I'm a I'm a mid level donor. Mid at best. You're

01:31:48.120 | mad. Mid.

01:31:49.200 | Reddit subreddits are going crazy right now.

01:31:52.000 | And then influencer I'm mid at best. So I'm a secretary of

01:31:57.640 | state. I'm mid mid. However, there it's true that there are

01:32:01.800 | very few podcasters you probably donate anything.

01:32:03.840 | You could be Yeah. Henry Kissinger and Madeline Albright.

01:32:07.200 | highest ranking foreign born citizens to lead.

01:32:09.960 | Yes, I think that you would be an exceptional Secretary of

01:32:12.640 | State. I'm just gonna put that you could be Secretary of State

01:32:15.160 | cabinet. I think you would kick ass. Because you have the

01:32:18.880 | intellectual firepower to actually not get bamboozled on

01:32:21.720 | this stuff. You'd hold your ground.

01:32:22.760 | You know, actually, I think was pretty good on on foreign

01:32:25.680 | policy doesn't get any credit was was Jared Kushner. I was

01:32:29.840 | listening to an interview with him. And this happened like

01:32:33.760 | eight months ago. And he was describing the whole situation

01:32:36.080 | in Ukraine. And he says very clearly, that he and Trump

01:32:40.480 | understood that bringing Ukraine into NATO was a red line for the

01:32:44.000 | Russians, and they never went there. So they armed Ukraine,

01:32:47.640 | but they were very careful to not make any statements about

01:32:51.560 | Ukraine coming into NATO. He understood that that was a

01:32:54.280 | serious provocation. I'll post the interview in the chat. But

01:32:58.480 | it was with I think Gerard Baker for the Wall Street Journal. So

01:33:02.440 | Jared understood the situation better than most of these, you

01:33:06.200 | know, foreign policy elite establishment types who don't

01:33:10.320 | understand how their actions can be perceived as provocative by

01:33:13.760 | the other side.

01:33:14.560 | Well, he, he sure secured the bag after getting out of that

01:33:18.360 | gig. 2 billion.

01:33:19.720 | And he got the Abraham Accords done. And now, binds his flush

01:33:24.520 | out down the toilet because he's alienated the Saudis so much

01:33:26.880 | they've gone to the Chinese.

01:33:29.000 | I mean, the fact that there's flights between Israel and the

01:33:31.840 | Middle East nations now and they seem to have a common. It's

01:33:36.520 | pretty awesome.

01:33:36.960 | Me in

01:33:37.840 | I don't think you understand how much Biden has alienated the

01:33:40.560 | Saudis. Shake, bind, wouldn't shake the man's hand. What was

01:33:45.480 | the point of that?

01:33:46.280 | I'm not in favor of

01:33:48.240 | buying. What was that like a fist bumpers? pre negotiated

01:33:52.120 | fist bump? Yeah, it's a little

01:33:53.400 | how insulting is that

01:33:54.840 | the one thing I loved about Trump was he was willing to meet

01:33:57.160 | with anybody. My idea of foreign policy is meet with as many

01:34:00.160 | people as possible, as often as possible, and not go to war, I

01:34:04.160 | would meet with Kim Jong Un, Putin, Xi Jinping on the

01:34:08.240 | regular, every country we should be with, because that's how

01:34:11.080 | progress gets me not meeting with him is, yeah, I mean, it's

01:34:15.160 | not a reward. I think there's a part of this military industrial

01:34:20.680 | complex that believes a meeting with the President is a reward

01:34:24.320 | or an endorsement of the worst things anybody's ever done. It's

01:34:28.120 | not, it's a meeting to try to make the world safer, or to try

01:34:32.120 | to build common ground. And so that is not me or Jim Cramer,

01:34:35.480 | however, you want to try to frame it. It's intelligent. And

01:34:40.520 | I'm for intelligent foreign policy, which is talking to

01:34:42.800 | people. Let's talk about some people who said yes to come to

01:34:46.440 | all in summit. Let's just do a quick speaker. I gotta go. I

01:34:50.520 | love you guys. I love you. Yeah, fuck this. I'm done with this

01:34:53.120 | shit. Freeberg. I love you.

01:34:55.520 | Thank you. See you tonight. Total Sip Lord. Rain Man David

01:35:03.920 | Satterthwaite. And it said we open source it to the fans and

01:35:09.720 | they've just gone crazy with it. Love you. I'm Queen of quinoa.

01:35:13.560 | Going on.

01:35:14.680 | Besties are

01:35:20.880 | dog taking a notice your driveway.

01:35:24.920 | We should all just get a room and just have one big huge orgy

01:35:33.280 | because they're all just like this like sexual tension that

01:35:36.120 | they just need to release somehow.

01:35:38.560 | What you're about to be

01:35:42.520 | what we need to get mercy is our

01:35:46.080 | dog.

01:35:46.600 | Oh, man.

01:35:48.640 | Oh, man.

01:35:50.280 | Oh, man.

01:35:51.320 | Oh, man.

01:35:52.920 | I'm going on.

01:35:54.600 | ♪ I'm only human ♪

01:35:56.600 | [BLANK_AUDIO]

E131: 2024 Fantasy President picks, debt ceiling agreement, Dollar dominance & more

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