Transcription
There is something going on right now in the world of economics that is going to have a massive impact on the price of gold. And there are people saying that if gold really is going to replace the US dollar and US debt as the global reserve currency, then the price of gold currently is way way too low. If it's going to be used in the way that Alexander Hamilton meant it.
So, you're going to what we're going to walk through is the Alexander Hamilton um economic model of how to make a strong country, but it puts you into this um threepart trap that we're going to walk through. And America is living through that three-part trap right now. And based on some moves that China is making, you're going to understand how we're going to be forced into this triangle where we need all three things, but we're only going to be able to get two. This is going to have massive consequences for you and your portfolio. So, let's pay close attention.
The biggest buyers of gold on the planet just made their largest purchase in 3 years. And they did it while everybody else was panic selling. There's another signal here I want you to understand. Signal number two is about understanding why the United States government is making the moves it's making right now. Because once you see that pattern, you will never look at the economy quite the same way again.
So, let me take you back a long way back to 1791. America was a baby country just free from the shackles of his British oppressors. [laughter] I just had to say that for our British viewers. Um, it grew tobacco, you know, cotton, wheat, all that sort of stuff. And it was basically a giant farm and it imported almost everything it needed from Europe. A man named Alexander Hamilton. Yes, the guy from the musical. Uh he wrote a document called the Reporter on manufacturers and his argument very was very simple. A nation that cannot make its own stuff is never truly independent. So his solution had two parts. Part one put taxes so tariffs on foreign stuff so they become more expensive. what you're going to hear. So, this is something that Trump has been pushing. You're going to start to recognize and Trump actually gave a speech. He didn't use the word um Hamiltonian though Scott Bessant did. So, I know this is exactly what the the thing that they're running is the strategy and he's going to walk through this. But basically, you've got Trump trying to put tariffs as a way to protect our industry and then you're going to need incentives if you want to then grow that industry up. So as he walks through this recitation of what Hamilton said, please know what you're seeing now is going to sound very reminiscent and it is not by accident. Bessant himself has said this is about Hamilton, right? Part two used that money to subsidize American factories so domestic manufacturing becomes cheaper. And guess what? It worked. It turned the United States from a backwater farming colony. Yeah, sorry, but it's true. Into the most powerful industrial nation on Earth.
This is exactly what is happening in China right now. So, China is running this playbook. It This is one of those things, man. If if this doesn't encourage you to learn more about the founding fathers, the fact that they were on to this strategy so long ago is really pretty breathtaking. But China ran the same strategy. They're they're still running it right now, and the results have been absolutely astonishing. So, you protect yourself from other people so that they can't sell easily into your um territory. Then you direct your tax dollars to incentivize different industries to ensure that you can lower the cost of those goods so that you can then export them out to the rest of the world. And then you hollow out the industry in those other places because they can't do it as cheaply as you if they're essentially paying playing a fair game because this really is viewed as cheating. uh from a a global free trade standpoint, people would consider this cheating, but it is precisely what China is doing, and we have accused them of cheating for this very reason. But you um end up hollowing out other countries because they can't do it as cheaply as you can because you're applying tax dollars to it. That allows you to become the manufacturing powerhouse. And now other people's industries dwindle. And even if they decide they want to get back into it like the US is trying to do right now, you now have a much harder road to hoe because you've got to build all this stuff back up. And that is where the US is at. And this is exactly the playbook that made the US so powerful going into World War II in a way that we are not say by the 70s where we're slowly starting to um make everything financialized. were slowly starting to lose our industrial base, >> right, >> into the most powerful industrial nation on Earth. Only took about a century, which is actually really quick.
But here is where it gets really interesting >> and really relevant for your money today. There's a pattern that every dominant economy in history has followed. And it goes like this. I'll put on the screen here for you. Step number, you protect your industries. You build factories. You make things. You get rich. Right? Check. Step two, you win. You become the dominant economy. And now you think you're so far ahead that you do not need protection anymore. So you switch to free trade, right? Check. Step three. Other countries with cheaper labor, fewer regulations start making things cheaper than you can. Your factories close, your workers lose jobs. But it does not feel bad at first because cheap imports mean cheap TVs, cheap clothes, cheap electronics. >> This is where you're at on the timeline right now. So what America ended up doing was financializing everything. So we realize, okay, we come out of World War II, we're the dominant power. We have all the debt. We can uh bully the world, meaning everybody owed us money, but we hadn't been hit by the bombs and stuff. Glorious geography. So we find ourselves in a position where we can hold the Brett and Woods conference and say, "Listen, uh the US dollar is going to become the world's reserve currency." And by being able to bully everybody else instead of doing something called the bankor I can't remember he's talked about this before. I don't remember if it's in this video or somewhere else but um uh Kanes was putting forward an economist who was one of the guys there arguing he ends up losing but anyway he puts forward this idea of let's come up with like this global reserve currency that's neutral. Nobody owns it but the US has way too much trade surplus which was a big part of the argument. I don't want to derail us now. know that the US had all the reason to want it to be the dollar uh because it was going to put us in a position where we could bully everybody else and because we were in such a strong position we were able to do that.
Now when you do that you run into a problem where you now become the place that's like oh I can trade in all the hard work of having to build all the factories and take all the risk and do all the investment. I can outsource that to the rest of the world. They're buying everything in dollars anyway. So now I can financialize my economy. And what that means is instead of having to um build the thing, you can just trade on betting on the thing and it becomes a totally different game. It is it is a miracle of capital aggregation. It is a phenomenal way for people who understand assets to get wealthy. Like it is a great thing if you do that on top of having a powerful manufacturing base. But every um empire in history ends up doing it instead of doing the manufacturing base because it's just the easier path. And because these things take time to play out like he's saying at first this feels really good. Everything is getting cheaper. People don't just feel wealthier, they are wealthier in purchasing power. And ultimately purchasing power is the thing that matters. And so welcome to this moment in US history. All right. Step four, your economy shifts from making things to trading paper, stocks, bonds, fake gold, mortgage back securities. Right? The country looks really rich on paper, but it's lost the ability to produce. Check.
One thing I want to talk about, he he mentions gold, but we got to really go into gold. This is a huge part of this story. What is happening right now with gold in China, it needs to perk your ears up. I'm not going to tell you what you need to do about it. I will simply tell you how I'm thinking through it. not financial advice yada yada like you guys really have to think through this problem for yourself if for no other reason than I don't know I'm right but here's how I'm thinking through this in my own life okay what is China doing China is closing the ability to trade paper gold and instead what they're doing is they are hoarding physical gold okay why would you want to do that one as trust breaks down the world over you don't know how many pieces of paper are trading against one bar of Now, in high trust times when everything is going great, it really doesn't matter. You can let people speculate on it. And if you don't know this, the following statement is true. Gold works the way that reserves work in a bank. So, if you lend the bank money, they can then lend that money out. And they they actually, as of right now, they don't have to have minimum reserves. Most of them still do, but it's very very small. Call it I think it's like 9%'s the average or something. Call it 10%. We'll be nice and generous. But 90% actually isn't in the bank. And so a whole bunch of people have an IOU in the form of a, you know, a dollar that says, um, in my account, uh, I have the claim on this many dollars or, you know, digital numbers in a spreadsheet. I can go get this many dollars. Now, the normal course of business when everybody's relaxed, the the amount that people take out at any one time is pretty minimal. And so having 9% or 10% um, actual stock is no big deal. But you get a bank run when everybody comes for their money because you have 10 times more claims than you have actual money in the bank. Gold is the same when it comes to paper trading. So you can trade some ungodly number against the actual physical bars of gold that you have. So China's like, "No, world trust is breaking down. We also want to get off the dollar. So we need something to back our currency that's sound money, which for thousands of years now has been gold." Okay. So they don't want to trade on gold. They want the physical gold. So they're bringing it in.
Now why do they not want people trading the paper? Because the trading of the paper obscures like what the real um power, let's say, the real desirability of owning an actual bar of gold is. And so if you have people trading it, it obfuscates the truth of what the gold is. Much like all the speculation on oil prices which moves on the news and not the actual reality, the actual reality is that the demand for longtail oil is actually getting lower. And so looking at the like landed delivery bets that people have is going to be far more enlightening. So when you have people betting on the paper price, China's prognostication is that's obscuring the real value of owning hard gold in the world that's about to be true. So, we don't care if the price of gold is going down right now. That's people betting against the fiction. That fiction is about to go away because what's really about to happen is hard money, physical, tangible. I can bite this [ __ ] borrow of gold is going to be the only thing that matters. And so, they want to get as much gold into China as they can shut down the paper trade so they can find out what the real cost of gold is, the real value of holding that bar of gold in your hands, uh, is the reason they want to do that is they think the that America is completely financialized. we have become completely debt dependent, that we're getting out over our skis, that the interest on our debt is becoming unbearable. And so they know that they and the rest of the world are going to start moving away from that. And that is true. Foreign debt holders is becoming less and less and less in terms of the central banks. Central banks are shedding US debt like crazy. So there is this like hard move on behalf of China and other central banks to move to gold. Gold is now the most held reserve currency by central banks, not the US dollar, which is what it has been historically. You have to understand that. Okay?
Now, you may disagree with me. Maybe you understand it, but you think, "Mah, no big deal." I'm looking at that going, "Uh-oh, this is maybe not a thing that happens over the next year or two years or whatever, but this is a steady move." In fact, I I'm almost certain I pulled the graph. There is a graph of uh China's US debt going down and its gold purchases are almost a vertical line. You look at this graph and look at China's debt. So up through what, like 2010, they're just taking on as much US debt as they can. Now, that wasn't like China used to be dumb and now they're smart. That was China going, "This is where we're at in the world right now. The US dollar is the system. And so we're going to play the game, but on a long enough timeline, we're going to get stronger and stronger as we build out our manufacturing base. As we become what they were back in World War I, World War II, we're going to become that. And now, as they become that, they realize we now have strength and power. We've got the rest of the world essentially by the manufacturing balls. You can't make things unless you come to China. So, we know we're going to keep getting money. And so, now we're going to start attacking the dollar. And literally um Xihinping started saying we need to start being dismissive of the West. And I quote uh again read books about Xi if you think I'm out of my mind. And so Xi starts saying we need to be dismissive uh of the West. You can literally see it. This is them being dismissive of the West. They're like, "Yeah, we don't give a [ __ ] about these guys anymore. We're going to start dumping their debt. We're going to do it slowly enough that we don't crater our own holdings." But if you're not looking at your screen to see how catastrophically low their debt is getting, it is crazy. And then starting in I don't know like 22 23 something like that their gold purchases just start going vertical. And so this is the move of somebody who's like okay I want to get out from the dollar system. I want to create a separate system. I'm going to use gold to do it.
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And now, let's get back to the show. All of this happening nested inside of this Hamiltonian thing that we're talking about here. So, remember right now we're walking through what are the things that empires do? And we're getting to the point now where it's like, oh, you did all the hard things in the beginning. You were disciplined with money. You built your manufacturing base. You block the world from coming in and taking advantage of you. You end up whoever ends up winning. For a long time, it was the US. You hollow out everybody else's manufacturing base, they turn to you. But then times get so good and you guys get start getting so rich that you end up financializing everything. And then you have the other places have opportunities now to beat you at your own game which is exactly what China did starting really aggressively in the '9s. Uh precisely because we broke in ' 71 our tie to gold. So we stop being disciplined with money at all and the financialization takes off starting in ' 71. China starts hollowing us out from a manufacturing base in the '9s into the 2000s. And now you're left in a world where the upper part of the K rich as hell, right? Just money hand over fist. Because if you understand assets, that number is going up up up up as you financialize everything. And then real wages are going down down down down down because you're globalizing and you're spreading uh wages around the world. You're arbiting and finding the cheapest labor ever. And it empires cannot help themselves from running this thing. Okay? So you need to put those two things together. China understands this play. China's getting out from under US debt. China's already humiliated us. humbled us in terms of manufacturing prowess and now they're buying gold, gold, gold. Okay, the gold part of the story is going to make more sense as we go. So, uh, let's go back to our man because this isn't theory.
Let me show you how it played out with the British Empire. Sorry to my Great Britain uh, viewers. Britain used something called the corn laws, trade restrictions that protect the British farmers and manufacturers. And it worked really well for them. They became the most powerful economy on the planet. And then in the mid 1800s, they said, "We're so far ahead. Let us open up to free trade. They repealed those corn laws, tariffs, basically." So what happened over the next several decades? Britain's share of global manufacturing collapsed. Other countries, you Americans, Germany, which is where I'm from, they started out producing them. And by 1931, Britain's industrial base had basically disappeared. So the entire cycle from peak to decline took 85 years. Now here's the part that should make you sit up straight. The United States started its own version of its decline in 1971. When Nixon took the dollar off the gold standard once the dollar was no longer backed by anything physical, no gold, no hard assets, something changed. The economy shifted from making things to financializing things. What does that mean? It means Wall Street figured out how to take real things, mortgages, car loans, student debt, bundle them and sell them as financial products. They call it securitization. The economy started looking richer and richer on paper. But underneath it, the ability to actually produce was rotting away. And this is what hit regular people. Since the year 2000, the cost of things made overseas, your television, your phone, you know, your kids toys dropped dramatically. But the cost of things that cannot be imported, things that have to be made or done right in America went through the roof, right? Hospital services are up 280%. College tuition is up 200%. Child care is up 150%. So yeah, your TV got cheaper, but the things that actually determine whether you have a decent life, healthcare, education, taking care of your kids. I'm not going to derail us for a long time, but understand he's glossing over or is unaware of a complexity of something that uh happened there. So, a big part of that reason is the very thing that Drew is always trying to articulate about whatever you're going to call America's economic system is the government meddles in the um the system. So, 47% of our budget goes to social services and yet people feel like they don't have social services. And the reason that that's true is things like healthcare, which we do so stupidly because we have the um government basically saying uh yes, like we're going to take care of this. We're going to pay for this for you. And so costs just go through the roof because you don't end up getting the competition because there's no demand to drive the price down. So the thing that he just went over there is there is a far more complex reason that I will say is because of America's um the way that we lean socialist is stupid. The government just guarantees too many things. It's [ __ ] dumb. And so we end up breaking the competitiveness of the marketplace. And so anyway, oh god, I'm not going to fractal. Period.
All right, back to our man. when a country stops making things and starts trading paper. And now, and this is the crucial part, the US government has essentially announced, "We're going back to Hamilton, you know, the chap with the musical." The Treasury Secretary Scott Bessant published a piece in the Wall Street Journal laying out five principles for what he called a new American statecraft. One, economic security starts with national capacity, which means we need to rebuild the factories. Two, openness must be matched by reciprocity. So if you put tariffs on our goods, we put tariffs on yours. And three, the US dictates the rules of the next economy. Four, financial leadership, the dollar, treasuries, stable coins are the new weapons. And five, it must serve the American people, not just Wall Street. And you might not agree with this politics. It doesn't really matter. It's going to impact your money. So, the United States is officially reversing 50 years of globalization. And that changes everything about how you should be invested. And it brings us to what I call the impossible triangle. It's what ties everything together. And it's what most people miss. The US government wants three things right now. I put them on the screen here for you. Number one, rebuild American factories, re-industrialize, bring manufacturing home, create jobs. Number two, protect Main Street. So, keep prices from going through the roof. you know, because inflation crushes the lowest income people. Number three, keep the dollar strong. But there's a problem. You can only pick two. Think about it. If you slap tariffs on imports to rebuild factories, prices go up. Hurts Main Street. You keep the dollar strong, American exports become more expensive. It makes it hard to rebuild factories. You weaken the dollar to help the factories. Imports get more expensive. Hurts Mainstream. It hurts Main Street. So no matter how you arrange it, one of those three things has to give.
>> This is where the gold story and what China is doing becomes incredibly important. Imagine that graph, if you were looking at it, China dumping our debt, buying physical gold like crazy as acknowledgment of the truth that we're in that triangle and China knows exactly which one of those three we're going to give up on. Felix is about to say the answer, so I'll let him give the punchline. But when he gives this punchline, think of that graph. >> It's going to be the dollar. Why? Because the dollar doesn't vote. So they're weakening the dollar deliberately. Who benefits from a weaker dollar the most? >> Well, gold. Because gold is the one major asset that is nobody's liability. It is not controlled by any government. Can't be printed. It can't be frozen. It can't be sanctioned. >> All right, those are just lies. So, first of all, we've sanctioned I doubt he means them as lies, but they can and have been sanctioned. Uh, part of the reason that China is trying to get the people in their country to um also buy gold, which by the way, the think of the S&P 500. So, the S&P 500 in the US is um like a massive repository for people that are like, I want to be in the stock market. uh I don't want to have to think about what it is. So, I'm just going to invest in the S&P 500 and I will trust the people that do the S&P 500 to know who to kick out and who to bring in. So, it's usually the single largest place where people are invested. China has a very um comparable thing. for the first time ever or certainly in a very very very very very long time. Uh gold their gold ETF essentially is has more household wealth in it meaning individual retail investors are investing into the gold ETF than the people are the broadspectctrum um Chinese stock market. So there's a huge shift in China in terms of where they're putting their money. China wants people to start buying physical gold. They're building out a much bigger facility to house the gold. And so the reason I think part of why they're doing that is they know that gold comes through a choke point and at any time they can turn it off. Um I think it was Roosevelt though, forgive me if I'm uh misquing that, but there was um Ryan's going to look this up for us. God bless him. So, uh, there was a president back in the 30s, uh, I believe that said, "Hey everybody, you can't own gold anymore. You got to sell it to the government. Don't worry, we'll buy it for you at a fair price." They made it illegal to have gold, bought it off everybody, and then changed the price. So, they basically, not basically, they devalued the dollar compared to gold. Now, most people don't understand, so they didn't notice, and it will take time to work its way through the system before people actually really feel the inflation. But um that China knows it has that option. So I'm very surprised. Felix, who by the way is great. You should definitely subscribe to his channel. I've seen a ton of his content. Um but that one's just incorrect. It can be sanctioned and has been sanctioned before. People will uh grab it when they think that the time is right. So uh this is one of those self-custody things. Again, go read uh about the Rothschilds. Uh literally in times of trouble, they actually buried things in their backyards. Wild but true. Uh, I don't advise you to do that now because people understand how that game works. But, um, yeah, if you don't physically control gold, don't think that the government can't take it from you. They can. But anyway, this is all part of that move, uh, this triangle. China knows that of the three, we're going to devalue the dollar because it's the one people don't understand. >> It was FDR. He issued the executive order 6102 in 1933, setting a fixed price of 20.67 per ounce and making private gold hoarding illegal. >> Yeah. So, our man's Roosevelt who gets way too much positive press uh from the DSA. I'll just say that >> because of this move specifically >> because of this and other [ __ ] So, listen, I haven't done a deep enough dive on this for me to take a really hard stance. But the number of people, credible economists that have said if he hadn't done u the New Deal, we would have gotten out of the uh Great Depression years earlier. >> Um >> so anyway, I haven't done a deep dive on it, so I will just say it's a thing people say without me being able to back it up. Um, Yellow Knight brought a good a good comment up in the chat where he says that this gold buying from China is not as directed about US economy, but it's more directed toward what happened with Russia cuz that was when we sanctioned Russia and we banned them from the Swift network. So, we stole all their money. You can't have access money, you can't trade, you can't stock market like we iced them out and they also had treasuries. They were also invested not as much as the other countries. So, that then let China know, wait a second, at any moment America could flip that switch. So we need to get out from under there. Like >> it is it's an amazingly good point. It is a thousand% true. But I think it would be a mismap of China to think that they did this from a position of oh god we're now scared versus [ __ ] We're going to make the yuan the global reserve currency. And the only way that we're going to be able to do that is to back it by gold. So my read on the situation is both you are correct. That is 100% a part of the story. Uh but I don't think it's the motivating factor. It may have triggered some of the why right nows, but I think that probably even goes more towards China just finally in a very strong position.
Gold gets cheaper when the dollar goes down. And at the same time, China is doing something very significant. Four of China's largest banks announced they're closing retail trading services for precious metals. So, they're shutting down paper gold trading. You can still buy the real stuff. So, China does not want its citizens trading gold on an app like it's a stock. They want people buying the real physical thing. So, they're moving back from the the paper crazy world to the physical stuff. Why would they do that? Because paper gold and physical gold are very different things. Paper gold is some sort of promise, right? The banks make money out of it. Nobody else seems to. Physical gold is a thing itself. And when the trust in the system breaks, it always does eventually. Promises are not worth a lot. And look at the US. Look at the amount of gold, physical gold leaving the US. Starting in late 2025, it hit the highest level recorded in history. Gold is physically moving out of financial vaults, other paper systems, and into the hands of governments who plan to hold it for decades. So what does it mean for you? Well, it means dollar denominated assets, your savings accounts, your bonds, even your stock portfolio face a headwind here. Not because of a recession, not because of a crash, but because of the deliberate policy of the United States to weaken the dollar. At least that's my opinion.
So, here's the key insight. Let's bring it all together and put on the screen for you. Central banks are not buying gold because they think it'll go up next month. They're buying it because they know from centuries of history, there have been empires restructured the economies, and that's what's happening right now. The currency must take a hit. Every single central bank that is loading up on gold right now is essentially making a bet that the dollar will be worth less in 10 years than it is today.
Okay. So, um bringing it all together, the idea that I want you guys to um take on board, decide what you're going to do for yourself, but you have the US government stating explicitly, Scott Bessant said these words uh that this is a Hamiltonian style um return to how we're going to grow our economy again. To do that, what you're going to do is unwind some of the things that we've done that got us here. So, you're going to go back to being a power a manufacturing powerhouse instead of relying purely on financialization and cheap imports to get things done. To do that, you're going to have to tariff. So, you've got to stop people from bringing things in. China is going to be the most important one. So, you're going to tariff the life out of China. Guess what? That's exactly what's happening. So, Trump has been telling you exactly what we're going to do for a very long time. He just wasn't using the word uh about Hamilton. So now Besson is saying, "Cool. We're going to do that. We're going to tear our people, we're going to stop them from coming in. Then we're going to have to start allocating resources to industries that we want to see return because part of this is going to be not only making it viable here within the country, but making sure that those um builders that they can export to other countries. So much of the global economy is outside of the US. We don't want to put ourselves in an isolationist position. We want to be able to sell to the rest of the world." And so now we're going to be um directing dollars at a given industry and try to get out of this. Now the crazy part is this is where I start worrying if we're going to try to out China uh we're going to be in for a bad time. This is one of the things Drew this is more aimed to you. Um I'm very interested to talk to Steve Keane about this who's very like yo China's killing the game. And so I think he does not share my absolute fear of the authoritarian element of China. Um so for me trying to out China is to miss the point when you had Alexander Hamilton building this thing and saying this is how this works. This was a guy that was part of the people putting in all the checks and balances to make sure that we could both do that and not succumb to the human propensity to um try to pathize power, gain control, and then take everything over, which is exactly what we've seen play out in China. So, to me, saying that we're going to play the game like China would be a mistake. seeing how China has added to their repertoire what Alexander Hamilton did. And now we have to do this in a distinctly American way where we're not giving up our republic, where we're not turning into authoritarian rule, where we're not succumbing to, well, it's more efficient to just have one person that tells everybody this is what the [ __ ] you're going to do. We do not want to find ourselves in that position. But we do need to understand America's going to start unwinding this. And the way that they're going to get to that is by weakening the dollar. and do with that information what you will. No one is going to know what the timing is because all of this comes down to how does the world react. Ultimately, economies are about psychology. It's all fake. It's all fake. And I know people are going to [ __ ] have a seizure on that. But it's all fake. And that's why you can manipulate the price of gold with paper because it's all [ __ ] fake. So all of this is gonna come down to the psychology of people and how they respond. So no one's going to be able to get you the timing right. But the direction of travel is by our own admission. We are going to do everything that we can to re-industrialize. So, we're going to do what we have to do to bring manufacturing back. We've just walked through what that's going to look like. It's going to require that we weaken the dollar. We've seen the US weaken the dollar in huge leaps before with FDR when he pulled everybody's gold and then repriced it, which is the same as just inflating the dollar like massively. And then, okay, now you can buy gold again. Uh so we know that that kind of thing does and will happen. We see China is saying, "Okay, we're going to get out of US debt. We're going to get into physical gold either because they're looking at that and saying, "Okay, you guys are weakening the dollar." Or because they saw us freeze assets in Russia, so we don't want to play that game or most likely both. But I think the other thing that you have to take into account is they know how to play the game well. That this has been part of the strategy from the beginning. They said when you're weak, you be quiet, you keep your head down. They did exactly that. as you get strong, you start asserting yourself and then when you get more powerful, you be dismissive. We've seen all that. And you can literally see that from where I'm sitting in the trend of them getting rid of their dollar debt, which they just, if I'm not mistaken, in the last like 36 hours have sold an ungodly uh hundreds of billions of dollars in US debt. And so when you look at just the math, the data of what they're selling versus what they're buying, this is somebody who doesn't believe that the smart way to make money in the future is off the dollar. This is somebody who believes that the right reserve asset to hold, the thing that's going to be most valuable in the future, is actual physical gold and that you've got to get the people buying that gold away from paper speculation and into holding the physical thing. And that means the very bet that they're placing is that holding the physical gold is going to be the most valuable thing in the future. When does that actually hold true? That holds true in a low trust society. I think we can all agree the world is fracturing apart. There's a ton of fighting. So that for sure. And when the dollar is losing value over time and not gaining steam. And when you look at what the US is trying to do, the odds are they're going to be forced to lower the value of the dollar. And so you put all that together and that is incredibly meaningful to all of us as investors. So uh again, the way that I'm thinking about it is increased paranoia. Um, I have started rebalancing my portfolio. I'm not pulling out of stocks by any means. And again, you should assume that I'm dumb and that I don't know how to translate this into money. So, you should be running making these decisions for yourself. Man, I'm paranoid enough in my own life. I want to make sure you guys are equally. And so, when I look at this, I'm like, okay, I'm rebalancing my portfolio. I uh because stocks have been performing so well, my portfolio over time has just gotten more aggressive. And so now I would say for where I think we're going that the amount that I have just in stocks is probably too much. And so I'm starting to take some of my big wins off the table and they have been gigantic. And so you just start rebalancing off of that. I'm doing some I haven't started doing physical gold cuz I'm [ __ ] so paranoid about where can I actually house it. I don't have evidence for the following statement, but it I don't have evidence for it. So, do with my emotion what you will, but the fact that we're not doing a public audit of the gold. We're just doing in Fort Knox, we're just doing a trust me bro from uh Bessant, I I [ __ ] hate that. So, I'm not convinced that we actually have the gold. I'm not convinced that the US government, given its history, is the right person to hold my gold. So, now I've got to figure some solution out. But, that becomes more enticing. I haven't made a full decision, but I am starting to look at that. So, it's just like, okay, I'm not going to get a return on gold, but it might be able to protect me as we continue to devalue the dollar. Again, you need to really think about this for yourself. But if you want to know why I'm beating this drum to death, why I think this one is big, why I'm spending the time talking about this, this one is a foundational pillar. If everything that I just laid out is true, you have the direction of travel of what's going to happen with literal money and the economy. Now, I don't know if this is one year, five years, 10 years, 20 years, I don't know. But this really does feel like the direction of travel. So, unless something stops it, and by the way, we're at war. So, we're going to want to see the dollar get weaker and weaker and weaker, uh, the debt weaker and weaker and weaker. So, we have all kinds of reasons to want the dollar to get weak. Uh, Trump has been talking forever about lowering the interest rates. So, anyway, this one feels important. This one means something. I would really look at this. Uh, by all means, throw out my conclusions. I would not throw out my analysis. You need to figure out if you think I'm wrong with any of those steps. Pinpoint it, dissect it from first principles, and then by all means do your thing. Again, the the final conclusions that I reach, that's so high risk what you do with your money. You're going to want to make up your own mind there. But the analysis is cause and effect. So, walk through that. If you think it's right, great. Make your own conclusions. If you think it's wrong, try to isolate the part that you think is wrong. insert the thing that you think is right. One, I'd love to hear it. Uh but just make sure that you have a cause and effect um chain because times are changing and if you're just pushing forward as if everything is forever going to be the same, boy, do I worry that you will get caught off guard on something that you could just be you could be a little more diversified, be a little bit more strategic on your downside protections. Um no need to sell everything and buy a bunch of gold. That is not what I'm going to do. Certainly not what I think any smart person would do. Uh but anyway, this one's consequential. Pay attention.
>> If you like this conversation, check out this episode to learn more. Steve Kane is an economist. Uh he starts out actually was a a tennis player who could have potentially gone pro. Uh and is also a very left-leaning like with Marxist. He loves Markx. Uh so Marxist views, think