Provoked with Darryl Cooper and Scott Horton - EP:59 - Bob Murphy Cracks Wise

Episode Date: August 21, 2026

Bob Murphy joins Darryl Cooper & Scott Horton to discuss the U.S. debt situation, rising interest rates, and the Treasury’s reliance on shorter-term borrowing. They also talk about the dollar’s role as a reserve currency, Japan’s rising rates, and how these shifts could affect demand for Treasuries. They then cover possible responses to the debt problem, including inflation, default, and spending cuts. Finally, they discuss inflation’s social effects and the impact of AI and automation on jobs, productivity, and inequality. Chapters: 0:00 Intro 0:48 Welcoming Bob Murphy to the Show 2:11 Treasury Bubble Talk 5:35 Japan’s Warning Sign 10:36 Dollar Rescue System 14:46 De-Dollarization Accelerates 23:10 Trump on Rates 25:25 Interest Rates Explained 33:23 Default or Print 35:45 Yen Carry Trade Ends 40:19 Forced Treasury Demand 41:37 Debt and Empire Risks 44:21 What Happens if the Dollar Falls? 47:32 Inflation Changes Behavior 51:26 How Bad Could Collapse Get? 54:38 AI, Jobs, and Disruption 1:08:29 Preventing Civilizational Breakdown 1:10:52 Planning for Secession 1:14:12 Russia’s Hyperinflation Lesson 1:19:14 Gold, Yuan, and Bretton Woods 3 1:22:52 China’s Dollar Exit (Cleaned up w/ the Podsworth app. ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://podsworth.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠) Sponsors: Expat Money: Secure your international Plan B: ⁠⁠⁠⁠⁠⁠⁠https://expatmoney.com/provoked⁠⁠⁠⁠⁠⁠⁠ Agorist Tax Advice: Pick up a free copy of the brilliant Matthew Sercely's Agorist Tax Toolkit at: ⁠⁠⁠⁠⁠⁠⁠https://AgoristTaxAdvice.com/provoked⁠⁠⁠⁠⁠⁠⁠ Scott Horton Blend Coffee: ⁠⁠⁠⁠⁠⁠⁠https://moondoesartisancoffee.com/products/scott-horton-supreme-breakfast-blend⁠⁠⁠⁠⁠⁠⁠ Provoked show site: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://provoked.show⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Darryl's links: X: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@martyrmade⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://subscribe.martyrmade.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Scott's links: X: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@scotthortonshow⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://scotthortonacademy.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://libertarianinstitute.org⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://antiwar.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://scotthorton.org⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://scotthorton.org/books⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.scotthortonshow.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Tonight, I'm provoked. Hey, Rabbi Shmoy, I don't like the way you imply that people should be killed just for doing a show with Daryl Cooper. Hey. All humans break. The difference between humans and gods is that gods can break humans. Negotiate now. End this war. You're watching Provoked with Daryl Cooper and Scott Horton, debunking the propaganda lies of the past, present, and future.

This is provoked. Yay, it's the show with me. And the great Daryl Cooper, Martyr Made. Good evening, sir. How's it going? Good, good. And our guest, The Heroic, and great.

Bob Murphy, author of a great many books. Of course, well, here, let me share a screen. Watch this. This guy, but I already hit the button. There it goes. he is of course a senior fellow at the Ludwig von Mises Institute of Austrian Economics

and also he is the host of the Bob Murphy show and I owe you a solid apology here Bob I interviewed you on my show the Scott Horton show a couple of weeks ago and I forgot to mention that you have a show and it's a great show and I've been on it and also I listen to it quite often when I'm traveling

so there's that too and then also look at all these great books man Less is for a young economist, understanding money mechanics, the politically incorrect guide to capitalism and the politically incorrect guide to the Great Depression and the New Deal. Choice. And he has the study guide to human action and the theory of money and credit.

And yeah, you know, it's some nieces as perfected by Rothbard as crystallized by Murphy, the great Austrian school economist. great to have you here on the show, sir. And I guess what I want to ask you about is that the government is pruning money to buy up their own bonds, but everything's cool, right?

No, it's not, actually. Let me just mention thanks for having me, guys. It's great. I watched the show, and it's kind of weird here in the intro and realizing, wait, I got to be alert here because I'm going to be talking. You are, yes, you were a guest on my show,

and for a while you were the most listened to episode. And then you got edged out by Jeff Herb, because you were talking about Waco. And then you got edged out by Jeff Herbner talking about the pure time preference their adventures to show how nerdy my audience is. That's cool, though. I like that stuff. So, yeah, they're printing money again.

Just to clarify for your listeners, like, I know we have the means about money, printer go burr and all that stuff. But actually, the balance sheet did start shrinking a few years ago. So, like, under Powell, like, he did try to bring it down. But then, you know, they had to flip it back with COVID. and then more recently, it started rising again. So they have been printing money. And also what's going on too, I'm sure you guys have seen,

is they're doing a deal where they're trying, the treasuries trying to like soak back the longer dated treasuries and refund them with shorter dated ones. My guess is they're doing that to save on the interest cost, right? Because it's really starting to bite now that rates are rising, just to give people a quick back of the envelope. The interest right now on the debt for, you know, there's $32 trillion that held by the public.

So is the yield curve rise to just one percentage point? That's an extra $320 billion a year in just interest expense. That's extra. That's not the total bill. The total bill right now is over a trillion. Just every one percentage point, the rates go up. That's an extra $320 billion, just an annual servicing costs, even if they balance the budget going forward forever, just of what they've already

accumulated, right? That's more than most government spend, period. So I think that's partly why they're flipping to try to, you know, because the shorter bonds have a lot. lower rate than the longer one. So I think that's partly what they're doing. But of course, that just means they're way more vulnerable down the road because now they're debt is shorter term. So as it rolls over, you know, they get hit with rate hikes more quickly. Oh, go ahead. Yeah, thanks. Bob, it's great to have you on here for all the people who

were looking forward to having him come on and beat the snout out of me. You'll have to wait for me to go on his podcast for that because today I'm here to learn. So last week we saw, I was reading a couple headlines from 2004 when Bush ran a $432, I think, billion dollar annual deficit. And all the headlines were just apocalyptic, you know, this just can't. This is crazy. There's never been an annual deficit this big. I went back and watched that press, or I guess was like an Oval Office address back in, I want to say, 94. So when Bill Clinton had to go live and tell the American public after he sat down with Alan Greenspan, look, I know I made all these promises, but the debt's just too big and we just we're going to have to cut back on some of that. And so where we are now,

I think if you would have asked any sane person in 1994 or 2004, they would have said, there's no way. This is impossible. Like, things will break down before we get to this point, right? And this is where you get the MMT people, people who are saying, it doesn't matter. You just keep printing as long as we're the prettiest girl in the ugly shop and, you know, that kind of thing. So can you help me understand that a little bit? I mean, Yeah, definitely. And I saw your guys' episode. And yeah, everything you're saying is spot on, Daryl. And it's, what's interesting is I think my case, I'm in much more solid ground right now because of the situation with Japan and how they were doing the ballot of the yen. If you guys had asked me on a month ago, like your topic, you know, that would have been the same, but I would have been, you know, people might have thought, oh, come on, you're just basically saying. But my quick answer is, yes, the fundamentals are there. But I mean, markets, its value is subjective. And as long. as people think the party can continue, it kind of can. You know, people use the analogy of Wiley Coyote and all that stuff. If you remember the scene in the big short when, you know, Christian

Bale is, his character, you know, has made all those bets against housing because he's run the numbers. Like, this is crazy. This can't be sustainable. And then that one lead investor from that his fund comes in and just choose him out. And then Bail's like lying on the floor like in agony because, oh, people are like, how come the market? Because he's surprised at how long the market's moving against him, even though he knows he's right. So I think that's that kind of a situation where, yeah, I mean, that's, like what you're saying, back when they were excoriating Bush and everything for his recklessness and all these Republicans with their tax cuts for the rich and whatever in the midst of a war, this is crazy. The debt to GDP back then was like 33%. And now it's

just broken 100%, right? And so that's, you know, part of it is, you're right, the fundamentals just keep getting worse and at some point it's going to flip. And so what I want to, the reason I brought up Japan is just for people who, you know, I know that was probably like you saw the headlines. Japan's debt to GDP is like 220 percent, something like that, right? Whereas ours is just the debt held by the public just recently broke 100. So that was like the Trump card that the Keynesians and MMTers would always play against the hard money types, like in the 2000s, especially after 2008 at the QE and, you know, guys like Glenn Beck were losing their minds. And they would just say, you guys, Japan has been doing QE forever.

And, you know, their debt's double ours in terms of the economy. They're fine. The yen isn't crashing. So what's your deal? interest rates are like negative what the hell and so that is finally i think that you know the chickens are coming home to roos for japan on that that their interest rates are rising that's you know now their government isn't a huge pickle a kind of twice as bad as ours in the sense that now that interest rates are moving away from zero their annual interest expense is going through the roof

the yen was falling it was at 40 year lows against the dollar so that's partly and their inflation finally picked up so that's my long way of saying darrell that they could get away with it because ultimately, hey, if our central bank just prints money and buys the government debt and keeps interest rates low, tell me what's the problem is? You know, you guys are worried about, oh, printing money, but what's the big deal? Well, ultimately, once price inflation for consumers starts getting out of hand, then the natives get restless. And so, you know, if we want to discuss what was the deal, but that was part of the problem. After 2008 interest rates, or sorry, prices weren't skyrocket. We didn't have $10 gasoline like some people thought we would. And so it looked

like, oh, I guess you can print trillions of dollars and nothing bad happens, whereas after COVID they did the same trick and all of a sudden we had the worst price inflation since the early 80s and then the Fed had to back off and so on. So it's in terms of why, you guys brought up some of the points last time. I mean, it is the, you know, the cleanest shirt in the hamper kind of deal where I've been at conferences like smart people, financial, you know, savvy people doing presentations on stuff. And I mentioned, you know, I'll show them all this stuff and, you know, I'll lighten the mood by saying, okay, after this, you're going to have to go to the bar, ha, ha, and, you know, we'll do all that. But afterwards, people, and I'll, you know, show him the fiscal

situation, hey, the CBO says blah, blah, blah, and it's awful. There's no way out of this. That's not going to be painful. And yet people would come up to me afterward and say, but what are we going to do? We're not going to go on. We're not going to go. You know what I mean? Like, so their point was was just where else are people going to go? And paradoxically, when there was a crisis, what do people do when they panic? They would go to treasuries because that was considered the safe asset. So I think now, though, finally, that's starting to unravel. I know I've been talking a lot here, so I'll stop. But a lot of the stuff with Iran, I think, if we can get into it,

is partly why those military outcomes, I think, have implications for what we're talking about here, too. Well, let me just, before we do that real quick, you know, some of the headlines, it depends on who you look at and I don't understand this stuff well enough, but I guess maybe it was I was watching Sager and Crystal and Sager was saying, look, they're trying to bail out Japan a couple of weeks ago. they create all this money to buy up this Japanese debt. Now, a sudden, a couple weeks later,

they're having to create a bunch of money to buy up their own debt. So what position are they in to bail out Japan or Argentina now or anybody else? And so, you know, I don't know. And I guess the implication being that this is like potentially the unraveling of the empire now. If only Uncle Sam is left to buy his own junk at this point, then how bad of a crisis is it for America? and benevolent global hegemony and the liberal rules-based international order.

Yeah, so I can pull on that thread for a bit. So, right, it was like back during the financial crisis in the wake of that, the Fed set up like swap lines and stuff with the ECB, the European Central Bank, where, you know, they could post euros and get dollar bet treasury backing and stuff like that. And so that was the way we were putting out fires in Europe

is this, yeah, because everyone rushed to the dollar, right? Everyone's freaking out. They want dollars. and treasuries in terms of assets, right? Because even like money market funds and stuff were in question in September 2008. Like one of them broke the buck is the expression. And so people were like rushing into literal checking account balances.

That's why they, do remember, they raised the FDIC insurance from $100,000 to $250K. Like, like, you know, rich people were just opening up multiple checking accounts. Like that's how panicked everybody was in the fall of 2008. And so again, that kind of explains. So how could the Fed, I mean, if you look at charts of their balance sheet, they like doubled it in a couple months. so normally you would think

well geez wouldn't that make eggs and gasoline and stuff go to the moon but no it didn't but it's partly because everyone wanted to just hold dollars right I guess another way of putting is if they didn't inject that much then prices would have fallen a lot as everybody was holding dollars panicking right so um they did that and then like you say in late july early August the fed fed tag teamed with the Japanese to prop up the euro or sorry the yen and so yeah you had this thing

where the U.S. slash, you know, Fed goes around rescuing other currencies, even now major way, like the euro in the end, this isn't like podunk little currency somewhere. And the other question is, okay,

but what happens when it's the Fed in trouble? What does that look like? If it's the dollar that's in trouble, oh, what it looks like is yields start rising on treasuries, gold and oil start shooting up like that. You know what I mean? In other words,

the thing you go into if you don't want to be in the dollar is like gold, or, you know, Bitcoin, I guess. So, yeah, that is what we're seeing. I mean, not so much Bitcoin, but gold certainly has been responding aggressively. So I think that's partly what you're seeing. And then just to make the point that I, you know, hinted at a minute ago, one of the things people, and Scott, I know you know this, I don't know how much in your radar over the decades,

you know, people say, geez, it looks like anytime some foreign leader wants to get away from dollar dominance, something bad happens to him. It gets regime changed and whatever. And there's, I was never sure if that was, like, if that was too cute because like the French famously wanted to, you know, get their gold back. And we didn't go to, you know, we started bombing Paris back in the day, right? So it's kind of like, in other words, if somebody's such at odds with the U.S. that we're willing to regime change him, probably that guy doesn't like being dependent on the dollar also, right? So those things would often go hand in hand even it wasn't a literal cause and effect.

But in any event, to the extent that that's true and that some, you know, government officials, around the world for a while have been thinking, I don't like our dependence on the dollar here. They can just flip a switch like they did with Russia. This kind of sucks. But maybe they were a little bit worried about what would happen if they really moved too aggressively. Well, right now, like Darrell, like you keep saying,

the major powers have realized, oh yeah, the U.S. isn't as strong maybe as we thought a year ago. But it's even more interesting than that. They realize, oh, yeah, we could have stood up to them as of February of 2026, but now imagine as of September, 26 when they have no missiles left or anything. So, you know, the analogy I've been using,

it's like the bully broke his arm and he's in a cast for six weeks. And everybody knows we can kind of do what we want for six weeks at least. And so I'm saying here, I think people know there's a two-year window where the U.S. can't really do anything. And so a lot of these alternative arrangements, you know, like the, they call it the chip system, like the China and Russia and everything have set up to be like alternative to the SWIFT system and all the BRICS nations. I think a lot of that stuff, especially with like,

blockchain technology coming to the fore and more and more, becoming more and more standard in the financial sector, I think it's just going to be a lot easier for countries to wean themselves from the dollar. Not to say, we won't use dollars, we're just say, hey, here's a pulled-on menu, denominate this transaction, whatever currency you want, and it's real simple. And like the U.S. can't really do anything for two years about that, even if they wanted to. So I think it's going to be a Faya Complea over the next two years, and this is going to unravel really fast is what I think.

I've seen a lot of people, you know, predicting that for the reasons you just sort of laid out, you know, China's going to go after Taiwan now because who's going to stop them? We've just proven that we can't. My read on China, I mean, they look like they're being very conservative and their foreign policy and just their general diplomatic approach, which I assume, I could be wrong about this, but, you know, that they're looking at the long term and realizing that we're over here committing Sepuku on live, you know, live TV. And they're sort of setting themselves up, like the Americans, you know, you get into a war they don't like. You'd do something they don't like, they seize your assets, they do, we're not doing any of that,

we're not going to war with anybody. Kind of, because the issue, right, is, I was having a conversation with my friend's dad a few years back, you know, retired international finance guy, a lot of knowledge. And we were talking about, I was asking about the causes of the global financial crisis in 2008. And, you know, without downplaying the government. action side of it and all that kind of stuff. You know, he's, one of the main things that he said was when the communist world and a lot

of the developing world started to come online with the global, you know, get involved with the global economy, started having all these export economies, all these resource economies, you just had this massive amount of capital just sloshing around the world that was looking for a home. You know, it's not as if people can take that money, you know, and bury it in mayonnaise jars in their backyard. It's got to go into an asset. and there's just only so many places you can put a trillion dollars.

You know, you can't put it in stocks because now you own that company. You can't put it in Belgian debt because they don't have that much, right? So you have maybe like the EU, you have a few economies of scale that can soak up a lot of that and that it's really sort of a competition between those ones to present themselves as stable alternatives relative to the others. and it seems like, I mean, like, it seems like even if China does play this as cool as they possibly can, that would take,

it would take, first of all, like a rewiring of their economy in general, but still it would take a while for them to change global perceptions enough to be able to supplant the U.S. dollar, even present a serious, credible alternative to it. But on the other hand, I mean, if we get to a place, right, where I think the number we read last week, Scott, was the interest on our debt this year is projected to be $1.3 trillion. The interest in the month of July that we paid

was something like 30% higher than the month of July last year, which goes to your point about, you know, I know we're only just now shortening the maturity date of our debt by buying up long-term debt with shorter-term debt. But I think the, maybe you know this off top of your head. I think the last time I looked,

the average maturity was like 5.6, 5.7 years or something like that, which, you know, means that we're affected by interest rates a lot more rapidly. And if we do get to a point where it's just obvious that, you know, we can't pay defense

and other just basic functions of the federal government and the interest on our debt without printing money to do it, then, I mean, we might, people might not want to put their money in China. They might not want to invest it in some of the other places. But, I mean, there's got to be a hard limit, right? Yeah, yeah.

So a couple things, yeah, I agree with everything you just said there, just to respond with some more specific numbers. Right. I did look up for fiscal 2026, yeah, they're estimating that the interest on the debt is about 14% of the budget. Defense spending was only 12%. Social Security is, I think, 22%. So, Scott, you had thought that it was higher.

So there's that. And then if you do Medicare plus all the other federal health spending, that's about 26%. So partly the reason I'm going over that is the one thing again, I remember back in the day, like people are just saying, hey, you know, we don't turn this thing around. Pretty soon the interest on the debt is going to be more than like military, or they called a defense spending back then. And, you know, that was kind of like, oh, that would be crazy, right? Surely the adults in the room won't let that. And yet now here we are. So there's that, but also, too, just to connect it historically, one of the other, I told you, like one of the Trump cards that like the Keynesian MMT types would play is to say, Japan's got a way bigger debt to GDP.

It's funny is they weren't fine. Like, they had the lost decade and their economy sucked. So it was kind of weird to say, it was almost like they were saying, oh, our medicine is safe but not effective. Like, you know, the thing they talk about medications. They won't hurt the economy. It just won't help. But it was after World War II. the U.S. had a debt to GDP that was higher than it is right now, not much higher.

But the reason we got out of that is they cut spending by like 40% in one year, right, when World War II ended. Whereas right now, you say, oh, well, if we just cut federal spending by 40% next year, we'd be fine. And well, yeah, but are they going to be able to do that, not when no, the percentages you just listed of just those four outweigh are more than 60%. Right. It's crazy. It's going to be painful. Like people complaining. It's not just, well, the war's over.

I guess we can't keep making battleships like we've been for the last two years. It's not going to be like that. So, right, that's part of the issue. This is all baked into the cake now. It's going to be incredibly painful. So you're right. There's no way out of this. And then, like, the projections from the CBO that are very concerned.

Like, they can't factor in a recession or a financial crisis because that would be kind of arbitrary. You know, they could kind of goose the numbers. They kind of just have to assume if the things continue like this and the debt just keeps going up. it's like 144% of GDP, I think by 2040, something like that, right? Just do trends continue? And interest rates just gradually return to their historic norms. Because that's the thing, too, is interest rates are still relatively low compared to what they've been, you know, the last 30 years. This is a, so another analogy I use a lot, it's like you can have huge credit card debt if you keep getting the offers to roll it over at 0% APR.

But once that stops and, you know, rates reset, you're dead in the water. And that's kind of where we are. And so to come back to what you were saying, Darrell, right, I think people are going to realize we can't just keep dumping it into treasuries and assuming that's a safe asset that now, you know, whether you're worried about explicit default or what's more likely is just that they're going to print money. And so, yeah, you're getting paid back, but it's in much weaker dollars than you were anticipating. You can do that. But in the Chinese, they're smart. They've been doing this clever technique where I think in the near future, they're basically going to be back in their currency by gold.

Right. So they're already kind of doing it where Luke Groman is a financial analyst guy that talks about this mechanism where they have all the depots and everything set up in Shanghai and wherever where it's like countries that instead of having to to like ship capitals to China like can just buy gold. It's like a way to kind of just settle. So China can keep having net exports. And then the people like, well, what are we going to do?

And they said, we'll just buy gold. And you can kind of do it that way. And we get the gold kind of deal. So anyway, I think the last thing I'll say here is that's why I mentioned the blockchain stuff earlier, that as stuff becomes more tokenized, it'll be a lot easier just to say, yeah, there's gold being held in a vault, even in Switzerland or something, but technically someone, you know, getting exposure to Remnambi is getting a token that gives them claims on that gold in the Swiss vault or something. And that's going to be so much easier mechanically to do

that I think a lot of these things that, yeah, would have been tough in 1995 are going to be really simple now. And people are going to say, well, yeah, why we don't trust the U.S. anymore? So another way to put that, I think, is that the president is in an impossible position and one that he's made obviously much more difficult for himself through the Iran War. But I want to play this clip for you. We don't usually play too much on this show. But I have some kind of half-educated questions I'd like to ask you based on what he says here. But also I'd just like to really hear your response, Bob, to the president's comments,

essentially expressing his frustration about the way this is all playing out right now. And y'all let me know if you can hear this okay. Hopefully you can. 25 years ago, when the country announced good numbers, interest rates went down because we had a stronger country. Now when we announced good number, the better they are, the worse it is for interest rates. So we could have a GDP of 10 times. You know, they say, oh, it's going to be three times or 4.1. we could have a GDP of 10, 12, 15 times if they just leave us alone.

Let us, let the rates go down. We should pay the lowest interest rates. You know, every point of interest is $600 billion. Think of that. Every point of interest is $600 billion. Two points means we make a fortune, but we keep driving it up. It's a very unfair system, and I've said it now for a long time. When our country does well, interest rates you should go down.

Every time I hear our country is doing well, I say, oh, it's too bad because they've left up interest rates. They should drop interest rates because it means we have a strong country. And it's all based on credit, meaning good credit, and we have the best credit. And we'd pay off the debt very easily, very quickly. But if somebody's paying a half a point, we should be paying a half a point, not somebody else. Right now, I think it's Switzerland as the lowest. Again, and I don't want to single them out, but if you take it. our business away from Switzerland, they have problems. So why are they paying a half a point,

and we're paying much more than that? Does that make sense to anybody? It seems pretty simple to me, but it's a killer. You know, I almost like to hear bad numbers. I'm saying, I hope we have bad numbers that are interest rates. It doesn't make sense. Twenty-five years ago. All right. Now, I would say we need to send him a bunch of Bob's books if I thought he'd read them, but there's a 0% chance of that. I was going to say, unlike a lot of things, he sounds like he maybe knows what he's talking about here a little bit or something that there are things that seem very obvious to him

that are not playing out that way, Bob, that he's very upset about. So if we can zoom out and say, all right, we got some 17-year-olds tuning in for the first time, what's his complaint here? What is he rambling about there? Sure. And you're right. Like what he was saying, like I quote made sense,

but it was him complaining about it. It would be like a mob boss be like, if they would just stop shooting at us, we'd stop shooting at their family. What the hell? You know, like that's kind of where he's like, yeah, of course this is the situation. And that's why hard money,

you know, Austrian types all along the way have been saying stop doing this because you're going to end up in this kind of a situation. So yeah, what he's complaining about is he's saying that on a typical day, yeah, if there's a good economic news, like, oh, companies are reporting higher earnings

and things like that, that then interest rates move up. And he thinks that doesn't make any sense. Shouldn't it be a good, healthy country, you think they'd have low interest rates because it's cheaper, you know, loans are secure and you aren't worried about defaults and stuff, like especially from the government. So that's what he means on that little narrow point. And then he's saying, so what does he care?

Because like you're saying that he knows that there, it sounded like the numbers he was using was double if he's referring to interest on the federal debt. So I'm not sure why, you know, I mean, because I was saying a minute ago, a point about $3,320 billion. He sounded like saying $600. So I don't know if he's referring to something else. Or maybe he means like the unfunded liabilities too.

I don't know what he's talking about there. But yeah, in general, when you're sitting on as much debt as a federal government, slight moves and interest rates have massive implications like we just said 10 minutes ago. So I think that's what his complaint is. Now, why is that? Well, partly what's going on is the Federal Reserve is so powerful. And like that influences markets. So, like, you know, anything the Fed says they're even like watching to see what's his body language, you know, did he hiccup or something?

You know, it's, do he scratch his nose when he said that? I mean, I'm being serious about the scratch the nose part. Like, there are people like that are fed watchers that literally get into that stuff depending on the Fed share to try to see. Are they communicating more than what they're reading to us? And so I think part of what's going on is the thinking is, oh, if there's a strong economy, then you might see inflation picking up and then the Fed's going to raise interest rates. but if the economy's in the crap or the Fed's not going to raise interest rates because they're going to realize all that we would tip us in a recession. So I think that's what it means.

So interest rates are rising partly just in anticipation that oh yeah, we think we're anticipating what the Fed's going to do at its next meeting and every day's information on the market gives us more of a guess

and we just update our guess and that's what makes the interest rates move in anticipation of what the Fed's going to do. So I think that's part of what's going on there. And isn't he right though that so the better the economy's doing the say like if they cut taxes

and that spurs more business, then that means they're taking out more loans of more new money. And they're helping to multiply bank credit out into the economy. And so, like, yeah, that's right. Higher interest rates than are required to, like, that's the bind that we're always in, right? Is success a healthy economy causes a bubble when the money is funny? Yeah.

I mean, so that's true. Even in a totally free market economy, it depends. Like you'd have to be specific about the scenario. Like, what is it that's causing the prosperity? But like if they discovered, you know, a bunch of coal mines and stuff like that or oil deposits that they didn't realize

it was there last week. And it meant, oh, we think five years from now, our standard of living is going to be way higher than it is right now, but it'll take some time to bring that online. Other things equally, I'd probably predict interest rates would go up because people would be trying to like,

consume more now on borrowed money because, oh, we're going to be so much wealthier starting in five years. Just like student loan, you know, if you're in medical school and you think you're going to be a brain surgeon in five years, you might run up your debt now. So there is that kind of phenomenon where it's not crazy to think prosperity might mean there's higher injury. But on the other hand, the richer you are, you might save more. And that pushes just raised down. So it could kind of go, you'd have to be specific about what you're saying. But in general, like, it's kind of weird. He's almost arguing in a circle.

Like, oh, I wish the economy was back. because if the economy's good, then they're going to raise rates, that's going to make the economy bad. And so, you know what I mean? Like, it's kind of like, well, what do you want? Well, I mean, that's honestly the reason many years ago I stopped, like, actively managing my meager savings myself. I hit this point where it was, I mean, this was one of the main reasons is, you know, a good jobs number would come out and the market would go down.

And for the reasons that you're saying, everybody was hoping for, you know, a Fed interest rate cut. and they figured they weren't going to get it if things weren't that bad. And I just realized at that point, this was probably 2010 or so, I just realized that, you know, what they're telling me when that happens

is that the people who really know what's going on, the people with the big money to move, they understand that government action in this economy is more important than whatever else is going on. You can do all the fundamental research you want. You can do all that kind of stuff. Talk about price to ask.

equity ratios and go through, you believe in this new prop. At the end of the day, if the Fed decides, if the government decides to bail somebody out, when they should fail and you shorted them, or if they, just any of these things seems to swamp everything else. And so I just, ever since then, I'm a just ETF guy. I don't even bother. Yeah, what you're saying for sure is true, like just the general stock market, that, yeah, they, if a good jobs number comes out and then the market goes down again for that reason,

And it's not, there's no mysterious thing behind it. It's, oh, if they're going to, they have this ability, this engine of printing money, like, you know, metaphor electronically now, nowadays. But, and so, yeah, if you get a sense of, oh, if this number is one way, they're going to print more. And if it's another way, they're going to print less. Of course that's going to affect, because the stock market is just, it's not like inflation adjust. You know, I mean, like you're trading on the actual level price. And so if the market's going up because they're printing money, then is there's what's going to happen. Is there some logic to Trump's, I mean, forget about the details of what he was saying and the mechanisms, his descriptions of them,

but is there some logic to, you know, just the idea that we're at a point right now where you're not going to fix this problem by cutting spending. It's just, it's too big, it's too much. It would, it would, if you did do that, at least in the short term, it would decrease GDP because government spending is such a large percentage. of the GDP now that, you know, it would probably lower tax revenues for a while, but that you're not going to cut your way out of this. We're too far down the road. And that the only hope we have is something, whether it's AI or some new miracle is going to come along that's going to grow the GDP so much that the debt doesn't look so big, relatively speaking. And so cut interest rates all the way down, just give everybody all the money that they want for any

project or idea that they've got and just let them go to town, build the data centers, do all this stuff and hope that one of these things that you throw against the wall sticks and becomes the thing that sort of like that's a that's a bad strategy. But when you're surrounded by, you know, an army that's got 10 times as many soldiers as you and you don't have a way out, you're reduced to bad strategies, right? I mean, I'm assuming that that's in his ape, you know, brain way of thinking, that that's kind of what he's getting at. I mean, is that like, I guess my question is,

as bad of an idea as that is, is it more plausible than any of the alternatives? Right. Well, in fact, if you're going to put it that way, let me add a second half to that question, which is I interviewed Dr. Paul the other day, father. And I asked him,

so what are we going to do about this debt anyway? Are we going to just print money to pay it all off, or we're just going to repudiate it and forget about it, or what, and he talked about the different options there. So I guess I would just tack that on to the end of Daryl's question. Uncle Sam could also just say, hey, if you're a bondholder, that's what you get for trusting this guy, you know? Okay, yeah.

So it's funny. I actually, someone had asked me to do an analysis of Malay, and he didn't do it, but I was saying, I thought when he came and he should have just repudiated a bunch of that and just said, you know, that you don't lend money of the government. That's the lesson. So like in terms of morality, just, I know, that's not the thing that we're talking about here,

but there is an argument among the libertarian circles to be made that if the government does have to screw some people over, it's the people who voluntarily lent money to the government. Like, no one's forcing them to buy bonds, whereas you're forced to contribute to Social Security, you're forced to pay your taxes. It's like if something's got to give defaulting on the outstanding bonds as opposed to cutting Social Security,

arguably is more moral. And also then, like it says it, and in terms of the economics of it, I mean, no matter what they do, there's going to be a fallout and people are going to be hurt. And the question is just where would you want to steer that carnage? And there is an argument to be made that, you know, okay, well, having it primarily fall in the people that voluntarily lent to this institution, you know, they should probably bear the brunt of it as opposed to just printing money. And then everybody who is exposed to dollar assets gets hit.

You know, even like some widow getting a pension, you know, from her husband's working for the car company or something. And, you know, she didn't lend money the government without. So there is that element. they could if they wanted to like it would be mathematically possible right like so if you know Thomas Massey wins or something and people and they didn't this plane didn't crash yeah he could he could do it they could mathematically cut spending enough here and there

they also are sitting on a lot of assets the federal government like offshore deposits they could do fire cell it would never politically go through but I'm saying they could turn this around if they wanted to I don't think that's going to happen I think the dollar's going to crash and you're going to see you know states kind of whether literally or just de facto breaking away is kind of the future I see for the United States that I don't

see how else. I will say too, Daryl, in terms of what, like making sense. You remember that period where Trump was just talking about invading Greenland? He was just like, what the hell is going on? I think they, I think he was briefed and people just showed him on this timeline we're just, the noose

just keeps tightening or the walls keep climbing in in the U.S. We're going to lose the empire. We've got to do something crazy. Like we got to shake the box and yeah, it's a long shot, but maybe it'll work. Like, I think that's what they were, you know, partly telling him and why he is doing things that seem so, quote, crazy. The, um, the Japan issue is interesting because you did see a sort of, a panic response

in a lot of circles once that started to go down a few weeks or a month ago. And I'm not, I'm not by any means an expert on this. Maybe you can just kind of help us understand in broad terms. Like, my understanding is the so-called yen carry trade, right? Japanese bonds have been cheap for a long time. People would buy those at low interest rates or borrow against those, rather, at low interest rates to buy treasuries or things that pay to higher interest rate in other places. And so that provided sort of a constant downward pressure on interest rates over here, right? And if that starts to unwind, if Japanese yields start to rise to a point that the carry trade no longer makes any sense, I mean, that's a pretty big portion of,

of the demand for for assets over here. And if you factor in also that all of these Gulf countries are going to spend probably the next 10 or 20 years spending hundreds of billions, if not trillions of dollars, rebuilding all their infrastructure that, you know, previously would have been invested in Apple or whatever, I mean, those two things together

seem to be like two massive portions of demand, both to drive down interest rates and to drive asset prices up in the U.S. What do you think the cons? I mean, what are the consequences if they can't get the Japan thing under control? And their interest rates do start to rise to what we consider a market rate

or at least in this world market rate. Yeah, all valid points just to unpack that a bit. So, right, for people who aren't, you know, everyone's heard the term, but what is the yen carry trade right? For a long time, interest rates in Japan were very low. And there was a stretch there

where they were literally negative. Like they were bouncing around. So I mean, we say low, we would mean low. And so the idea was right, you would borrow yen at basically zero percent, sell the yen and go by dollars or Australian dollars or whatever,

invest in safe asses like treasuries or whatever in those countries, earning whatever, four percent or whatever the time period was. And then boom, you're earning four percent of your money right there, like basically guaranteed. The only way that would move against you is if like the yen appreciated, then when you come back,

you'd lose that way. But basically, that was almost guaranteed money. money. And then that's what happened. But then inflation started rising in Japan. And so then they were forced to start raising rates. And they did it pretty aggressively. They just jotted it down. So their 10 year was at 0% in 2022. And now it's up to 2.7%. Right. So that's a big move just in a few years there, 2.7 percentage points. And so that cuts into. So yeah, a lot of the people start unwinding the carry trade. And you're right. So that's part of the implication is that that's going to

weaken the demand for the treasuries and whatever that people were rolling it into. The other thing, too, the reason I think there was so much quick action back in late July, early August, when Japan came in, they spent something like $85 billion over two days propping up the yen, and the U.S. got involved as well. And I think partly they did it because Japan's sitting on something like $1.2 trillion of dollar assets. And so I think U.S. officials were like, we don't want them in a position where they feel like they got to just start liquidating that to support their currency because, again, we need people to be holding treasuries right now. That's the only way this is going to work. We can't have people run it for the exits. Another example of what they did, if you guys are familiar with the Genius Act that they passed like last summer, it's a blockchain thing. It's for what's so-called stable coins. And one of the provisions was if you're a U.S.-based issuer of stable coins, you know, things that purport to be one dollar that live on blockchains, then you have to, if you're not a bank, you have to have it backed up by like,

T-bills. So they kind of just built in there, I think, realizing, oh, let's get ahead of this and kind of, you know, grab this growing stable coin market and make it just attach it to that, oh, you got to have, you know, you have to have a match dollar for dollar with treasury. So they're kind of trying to

come up with ways. I remember a few years ago, you know, something similar was touted as a, you know, a consumer safety or investor safety measure. They were going to, it was just floated. I don't think it went through or anything, but they were going to try to make pension funds and mutual funds and stuff carry a certain percentage of their balance sheet

as U.S. treasuries just to force them to buy U.S. debt like that. And similar sounds like. I mean, the fact that you're even talking about that kind of stuff really kind of shows you where things sit, right? Right. And because you had asked, like in this episode, but also last one you guys were talking about just all the different, like, why are people sitting on them? And yeah, I didn't mention it here earlier. There's a lot of regulatory reasons right now that, U.S. institutions, you know, oh, if you're holding treasuries, then that counts as, you know, tier one capital and blah, blah, blah, you know, and you got to have all this stuff. So there's a lot of inbuilt factors where people kind of have to hold the treasuries and they're not just free to

diversify away from that next Tuesday if they wanted to. I wonder, like, how much of the demand for that is artificial like gunpoint in that way, like a significant amount? I mean, I don't want to overstated. Like I said, it is guys who are totally free market, you know, love, nieces and everybody would come up to me at conferences over the years saying, where else we're going to go about? You know what I mean? So I don't mean to over. It's kind of like I would go give talks for the Mises and soon people would ask me afterward, do they pay you in gold? I was like, no, I'd have to sell it for dollars. My landlord doesn't take gold. So it's kind of like if everyone's using the dollar, you kind of have to use the dollar.

You know what I mean? So I don't mean to over stuff, but I'm saying there are a lot of things like keeping it rigid that makes it hard to pivot. it, but it's the kind of thing that when it starts going, it's going to go fast. Just like when the housing bubble, like people are like, housing seems overvalued and, oh, you've been saying that you're chicken littles. And then once it crashed, like, yeah, that was kind of obvious. Yeah, just as timing is everything there. You know, this is something that I don't know where this fits in the conversation,

but it just seems like it's important somewhere is something that I remember Dr. Paul brought up during the presidential campaigns is that some, I think, pretty significant percentage, as in trillions of dollars worth of the, national debt is actually debt that the different government departments owe each other. And that it's like intra-governmental debt that Dr. Paul said then, we could just write all of that right off. There's no reason the world why we got to be collecting interest on that and, you know, are paying interest on that. And that would save, you know, if it's $40 trillion, that'd bring us at least down a 37 or something if we just weren't playing that particular bookkeeping trick.

But can you explain that? Sure. So. And I just made up those numbers. by the way, I have no idea. They're close. So right now, the gross federal debt just broke 40 trillion. Like actually, I think just happened this week or something. Yeah, yeah, the other day, yeah.

Yeah, so that's the gross amount. Then the debt held by the public is like $32 trillion in change. So recently, when the headlines were saying, oh, the U.S. debt surpassed the size of the economy, they meant the smaller number because the U.S. GDP is like $32 trillion. And so the rationale, like economists typically talk about debt held by the public. for the reason you're saying, because there is a sense in which it's like, oh,

one arm or the government owes another arm money. And by the public, the South Korean central bank counts as the public? And the U.S. The Federal Reserve also counts as the public. They mean not federal government

and the Fed is considered a distinct entity. Just making sure I understood what you were framing it. So, yeah, it's true. They could just write that off,

but on the other hand, I mean, it kind of would offset because, like, the so-called Social Security Trust Fund is 1.5 trillion or something like, don't quote me on that one. The other numbers I said I'm sure of, that one, I might be off a little bit, but it's over a trillion, but that's one of the elements of the debt that's not held by the intra-government

debt is like the so-called Social Security Trust Fund. So yeah, they don't have to pay interest on that, but then if they didn't, that just means now when Social Security isn't a deficit, which it is, where like they're paying more to beneficiaries and they're collecting in payroll taxes, that they would just, the government wouldn't have to make that up a different way. You get what I'm saying? So it's not, it's just how they do the accounting. So it wouldn't, if you get what I'm saying. Or in other words, like, yeah, they can pay interest on that, but then that means that that cushions the blow from the overspending because now that at least they have that interest coming in on the

death that they ostensibly hold. So it's not changing like the net position of the outsiders vis-a-vis the U.S. federal financing machine. one more thing real quick is in regards to something that you were saying a minute ago about the fall of the empire overseas and the whole thing kind of unraveling. Let's just say worst case scenario, the crack up boom

and they have no choice but to either inflate away the debt or putiate the debt and it's a massive market crash and all the troops have to hitchhike home from Germany because the U.S. government is just flat effing broke, right? And you said

what could be a mixed thing, you seem pretty certain about that. This would not just be the United States losing its empire, but this could even be the end of the USA altogether, and that the national government in Washington wouldn't be able to, like, more or less pick up where they left off and at least, you know, hold their 50 states together,

that the whole damn middle part of this continent would be in such disarray that we'd be looking at entire new forms of governance and maybe a war over who controls the Mississippi River and God knows what. So, but like when the Soviet Union fell apart, Russia still got to be Russia. They just lost their empire, which it wasn't exactly the Russian Empire, but it kind of was, right? But they still got to keep Russia.

It didn't have, you know what I mean? The Russian Federation, they just had to give up the Warsaw Pact and the republics and all that to stands. So anyway, can you mix my metaphors and tell me what the hell to expect in the future here? Okay, so I'm definitely more confident that the U.S. won't have a strong presence in the Middle East than that it, won't have a strong presence in Texas 10 years from now, right? I'm ranking my certainty of these outcomes. But like if you ask, like I wrote a pamphlet a couple years ago on Texas secession. I called it the case for an independent Texas, right?

I didn't use the scary assword. And you talk to people and get the reaction. And a lot of them will say like, yeah, that would be awesome. But the number, you know, the two biggest objections are they'll bomb us. And, well, would I get my Social Security? and so I'm saying if the situation changes such that you're not getting paid for you know you're not making money from Washington you know because they're just the dollar credit like they can't you know people realize no are people like us paying taxes to Washington for them to you know have some overhead and send us some back that's kind of a stupid idea we can just keep it ourselves so that goes away if they don't have you know if the dollar crashes and then if they're really on the ropes because you know there's uh you know desertions and things like that the equipment's not working and and everything. The military hasn't been funded well and blah, blah, blah. And, like, you have a bunch of troops that live in Texas. Like, you know, that's also just like we're thinking China and Russia and everybody could realize, oh, yeah, Washington is a paper tiger. Maybe the Texas governor would think that too. So that's kind of what I mean. So again, I'm not saying it's going to happen next Thursday, but I think there's, let me put it this way. Whenever I bring up secession, nobody says, except like, you know, national, review writers. Like, no, I just love everything the U.S. government stands for right now, and I want to

be married to it forever. That's not usually what they say. There's all these other reasons that I think are going to change pretty sure. Go ahead, Dar. Last week, you heard Scott make a good point about sort of the behavioral effects of an inflationary environment, just sort of moving everybody to a high time preference mindset, you know. And it seems like this latest move to start buying up 30 years by taking on more 10-year and shorter-term debt is just sort of the instantiation of that

at the highest level, right? Can you talk a little bit about just the social effects of, forget about maybe a a Weimar situation or a collapse of the U.S. or something? But, you know, we start running 10, 15, 20 percent

headline inflation, you know, not the shadow stats version, but the CPI has to be admitted to be that high. What are just some of the social consequences that always result from that environment? Sure. And so one thing, let me just back up. Like you saw it when I was reading like Mises

and I would catch passages, he would say things like, just matter-effectly like, oh, households save, you know, they can buy savings bonds or life insurance or like maybe railroad bond. And it was like the idea of people in, as it used to save in their life insurance. You remember it's a wonderful life when Jimmy Stewart's character runs to the rich guy and he says, well, I got my life insurance. That's, whereas now, like, no people don't think like that. And what happened is that change in the 70s, right?

Like once consumer price inflation started ripping and people were stuck in these instruments that were very safe and dependable, but, you know, had a modest yield and they were getting crushed. And that's partly why people thought they had to get into the stock market. So people in the 1940s, it wasn't that they met with their financial planner and said, okay, yes, I have a well-diversified portfolio and my retirement's going to be paid for because I got the Dow Jones. It's not, you know, it was like, no, rich people invested in stocks or whatever. It wasn't something households. Whereas now you have to invest in the market.

Otherwise, inflation is going to kill you. So I'm saying even just with the modest inflation we've had over the decades, like that's totally changed the mentality and people feel like they've got to be in the market. And you see stuff too with like pension funds and, whatever. I think actually, Darrell, didn't you make this point, too? That they had to reach for more aggressive yield because otherwise they couldn't, you know, their obligations had a higher value than their assets. Like, they had to go get a higher yield. And that was part of the problem, like after the 2008 crisis when interest rates were really low on, you know, safe things, the people,

they had to go out, you know, on the risk-reward spectrum to, you know, stay alive. So I think there is all that element. Another, this is anecdotal, but if you remember, after the 2008 crash, And they had the bailouts. And then there were ads about like hard dealers and stuff saying, hey, time to get your bailout. Bring in your used car and blah, blah, blah. You know, and that we just became a thing. Like, yeah, I want my bailout.

And then like, after COVID with the, you know, the stimmies and stuff. Like, yeah, it's just like the public is just being conditioned. Like, yeah, money's not real. It's, they can just print it. You know, there's being going on about. Why do I pay tax? They can print money. Yeah.

So that's not good. Like, like, yeah, the money is fake, but that doesn't mean the underlying economic realities and all of a sudden don't count. Like there's still scarcity. Like you can't build stuff without factories and farms. So that's all still real. It's just people are making very short-sighted decisions and, you know, doing stuff that might keep your standard of living high for a few years.

But there's going to be this giant crash coming. And like I said, for a while, guys like me was just like, yeah, you guys, I mean, you're always saying that way. But at least what's going on with Japan, it looked like with Japan. Yeah, they've been doing QE and whatever forever. And they've got, you know, falling prices. What the hell? now finally things are moving around there too so it looks like these things lasted a lot longer than

guys like me would have thought but ultimately it does look like they're you know reaching the end i guess that kind of goes to my last question about the fall of the empire and everything too is how far is the united states of america itself have to fall i mean even back i remember in ohate bob higgs counseled that like well remember obviously like the obvious comparison is the soviet union which is maybe an unfair comparison because it's such a dang basket case, but the United States of America, we already have a lot of highways

and a lot of machine tools and a lot of engineering departments and a lot of R&D departments and a lot of corporations and just so many trillions of dollars worth of real wealth already and infrastructure and everything else already built up in this country that you can,

the government, right, there's almost no limit to the amount to which they could distort the economy through all of their messing with the money and taxes and whatever. But even when the worst bubble pops, we still are standing on some pretty solid foundation here. And so we don't necessarily, you know what I mean? All the farm ran, I didn't mention that. We got lots of places where we can grow wheat and corn and feed it to each other, you know, these kinds of things. So I guess that's what I'm wondering about. Like, just how worried do we need to be? Even in the worst case scenario,

where the dollar itself falls apart, but we're still sitting here in our country, wondering what's next, you know? Sure. So, yeah, I mean, the fundamentals are there. And certainly, like, you know, if Texas were allowed to break away and they said, okay, you guys can be like extreme libertarians

in California, you can break away and you can try being democratic socialists and, you know, let a thousand flowers bloom and we won't interfere with coercive, you know, the places that had relatively free economies would do well. That's certainly true. I would say the one one problem with that glib analysis is I think American standard of living right now is dependent on cheap imports and that if you turn those off like if the dollar order crash and all of a sudden everything in Walmart was five times more expensive than it is right now. That would be tough for people. So, so there's- Do we need an empire to have cheap imports? No, you don't need an empire, but I'm saying having a strong dollar is what means. Oh, right. You know, or.

and running massive trade deficits year after year. Like so foreigners are sending, you know, they're sending us TVs and, you know, clothing and whatnot. And we're shipping them treasuries. So that's a good deal while it's lasting. And I'm saying turning that off is going to have a real impact, even though, yeah, we still have farms and factories

and computer programs or whatnot. I forgot. I think was a darely mentioned AI. I think AI is a bigger deal than like the people who just say, so this is just, you know, silly stuff. I don't think that it's going to like take over Earth next Thursday or anything. But I do think that is something that if they would just not meddle and just let that work, you would see productivity, you know, increasing very rapidly over the next 10 years.

And that could help us dig out of this. But again, with all this stuff, they're not going to, they'll just print more money. You know what I mean? Like if that provides a respite, then they'll say, oh, okay, so we can continue doing this. Like you guys are checking little's once again. So that's kind of the thing with all this. Yeah. Okay, so now this isn't fair to ask it all other things being equal because all the things are chaos, right?

But a compelling point, a protectionist friend of mine made recently, you may have heard Tucker Carlson in an argument with Ben Shapiro, I believe it was actually, said to look, man, if we can invent trucks that drive themselves and for the sake of argument perfectly safely, then no, we should outlaw that. We should not let that happen because this is the number one source of jobs for non-college educated males in this country. And this is going to be just an absolute massacre of people and their entire livelihoods and ways of life and of everything. And it's easy to see how the numbers work out, man. This is going to increase productivity and drive down prices that otherwise would be higher for everybody else. And like after all, I've heard you say the argument before. if the AI can invent a nanobot that just goes in there and murders

any tumor of any cancer in any person, are we really going to lament the fall of the cancer industry, they're just going to have to get other jobs. And this is obviously a huge benefit to mankind. If you can eradicate this horrible form of illness, even if it does

lead to some structural unemployment. But I guess what I'm asking you is, what are the limits of that? Because what are all these truckers supposed to do? You know? Yeah. So, yeah, that was a rare time when, like, I was like, I was like, I have to agree with Ben Shapiro on that Tucker on that particular exchange, given my, you know, libertarian upbringing.

Yeah, so it's... Which he was just pretending to believe in free markets that Shapiro. It's nothing but laundry for his Zionist public relations campaign. But anyway, go ahead. What makes you say that? Yeah. Right. So, yeah, I mean, you just summarize the argument in general,

yes, if there's an innovation in a particular sector, it might hurt the workers in that sector, but it makes everybody else richer and their rate wages are higher and then you can just keep doing that that means everyone keeps getting richer on average and it benefits the winners more than it harms those particular losers

and so yes you keep doing that everyone in general keeps benefiting. It's my concern is that the like I think this ties into why some of these billionaires, briefly trillionaire, are pushing the UBI stuff is because I think they realize the public isn't happy with this.

Yeah, there's going to be major dislocations. And like if I'm Elon Musk, I'm thinking, I just have to stay alive and not in jail for the next 10 years. And I'm unstoppable. I'm going to have 50,000 robots that, like, do my bidding. And so, like, they'll be workers, but you could give them rifles if you needed to, right? So I think that's how he's thinking. And how do I placate this?

Yeah, do you. I. Go ahead and tax me. Yeah, go ahead. Just give people checks. And that would, so, like, the productivity of everybody on planet Earth is going to go through the roof if this AI stuff is even one-tenth of what some people are saying. So more total stuff will be produced. And the issue is just, is it going to go to like 10 people who own all the robots of the AI engines or is it going to be more broadly distributed?

So I think that's why some of these tech guys are talking about UBI just to kind of say, hey, we're willing to share it. But then in that new world, that's like that's kind of dystopian where in league with the government, they kind of control everything and everyone's just getting their pittance from the government, you know, getting their monthly check. So that's what I think is, you know, one element where it could go because of these concerns. But in general, I know we don't have a free market. But if we did, yeah, there's innovations. And some people would get dislocated.

Everybody is way more productive now with the new AI tools than they were before. And I don't just mean coders and stuff. But like I talk to guys that they're like handy repair them in kind. And they say, yeah, I can do all kinds of stuff now because I just go and talk to the AI and I can, you know, rewire the lamp that before I could try to watch a YouTube video, but I can ask very specific questions. So I think people are underestimating how much this is going to make everyone so much more productive in general that you're going to be able to find a job doing something, maybe not

what you were doing before. You know, I think obviously Tucker understands the arguments against what he was saying. You know, you end up as India under Nauru or Cuba driving 1950s cars or something when you don't allow price discovery and you, you know, gum up the works of innovation for sure. But, you know, I think his broader point, and I've probably made this arguing with Scott here before, is that, you know, I think that in the U.S.,

just because of our geographical blessings, because of the social situation, the, you know, immense amount of land that people could move to, et cetera, we have a little bit of a rose-colored idea of the consequences of economic disruption. You know, let the chips fall where they may. It worked out before, so it'll work like that again.

But it didn't work out like that everywhere. You know, it didn't work out like that in Russia. It didn't work out like that way in a lot of places. It went through the trauma and the disruption of the industrial revolution. A lot of those countries ended up communists. They ended up fascists. They ended up just because, you know, you reach a certain point of instability, even if you can predict with complete certainty

that down the road it is going to lead to a more prosperous society and a better life for your kids maybe. You know, in a society where we ostensibly vote on things, there's just, you know, there are, and I know that this is kind of tough. I got into this discussion with Art Laffer one time, you know, it was kind of growing up about a lot of these questions.

He's the best guy, by the way, I love that guy. He's like 95 or 80, 90 or something, and he's still like 10 times smarter and better spoken than I am. I love that guy. But, you know, I was kind of going through all this stuff as he's making, you know, a lot of the arguments that you would expect Laffer to make. And, you know, the point, I guess, of all of my critiques was that, you know, as an economist making policy suggestions, you kind of have to take into account the political consequences of that down the long. And he, to his credit, I think, he just said, that's not my job. Like, that's why you elect politicians. Go talk to them about that. And I'm just here to tell you what works and what does. And what's going to happen if you do X, Y, or Z? And I appreciate that.

But it is something, I think, that we have to take into account. I mean, you, especially that happens so rapidly. I mean, if we were to put truckers out of business, put increasing numbers of white-collar email jobs just out of business like that. So that, I mean, this is happening so fast that, you know, people barely have, I mean, where it becomes a social problem, as opposed to just an individual family or community problem, you know, that you're just, it's inevitable.

We're going to get our Bernie Sanders times 10 or whoever who's going to come up and say, you know, it's the rich guy's fault. It's the Jews fault. It's the this fault. It's the that fault. And people are going to listen to that. You know, if things, if they look forward and they realize that they don't, They can't predict with any kind of, you know, real certainty or even a hope of certainty

what their lives are going to look like in five years. I mean, we know how people respond to that. And I think that that's where kind of Tucker's coming from with that, is we need to be careful. Like, I don't think he would necessarily say Ban it, even if he did say it in that interview. I can't remember. I think you would say, make it roll out in stages, like take your time, at least, because this is something that's going to be so massively disruptive. But yeah, I mean, I think that these are impossible questions really to answer up front

because we just, in my opinion, I think we just as it just the same as we don't have a political system that is really designed to do the things necessary to avoid the catastrophe that's coming. We also don't really have a political system designed to allow the government to make hard choices that will disrupt people's lives in the short term without reaping, you know, massive political problems. you know, in their wake. So that's something I struggle with a lot because, you know, you've watched the show. And like, I went through my, you know, my phase. I've read Mises.

I've, Rothbard's my favorite guy in the world. And I don't doubt any of their economics. Like I, the Austrians especially, they convinced me. And I've never changed on that even as I've sort of moved away from the movement, say, or if you want to say movement libertarianism. But this is the reason why. Like without doubting the logic of their economics, just sort of trying to look down the road

at potential political consequences and not being able to think of any other way other than government action to try to put the brakes on things or slow things down enough so that it doesn't become that crisis. Okay, yes. So just the response to that,

I used to work for Arthur Laffer, by the way, And yeah, he was amazing. Even like I had to go on business trips and stuff. And in the airport, I was like jogging to keep up with it. He was so spry and like zooming in and out. So yeah, he's surprisingly nimble. He's getting up there in the years. Yeah.

So on the one hand, you're right that I could make the argument that, yeah, in general, nope, it's going to shower benefits on consumers in any particular, you know, industry where half the workforce loses their job within 18 months, that everybody else gains more. then they lose and it just keeps happening. But that isn't much solace to those people. And even to the extent that there's just this angst, and then they go ahead and elect, you know,

Mamdani or whatever, we don't want that to happen. And so certainly, you know, I don't want to come off as callous or something. But, I mean, I guess to say, the way to make people better off is to have policies that raise their standard of living. And to say, hey, we have this new technology

that would enhance productivity and allow like 10 drivers to do the work of what used to be 10,000, should we use it or not. To say not to use it, just like, I mean, I know you know this, Daryl, but like, oh, a lot more people used to be on farms than now. And now we grow way more food with fewer people and that frees them up to do other stuff and, you know, that kind of stuff. So, right, well, actually, that's a good example that, you know, maybe I'd like you to talk about a little bit is, you know, people as industrial machinery made farming more, made farming more efficient and commodity food, food commodity

prices went down to the point that economies of scale really were the only ones that made sense. You had this massive move of people from the countryside into the cities, but, you know, at that stage of development of the industrial revolution, they were moving into cities where you had, you know, the biggest companies in the country were, you know, General Motors, Ford, which are, you know, if you count all their downstream suppliers and everything else, I mean, they were employing millions of people, whole regions of the country, they were able to basically employed with their downstream supply chains. And nowadays, I mean, there was a point, I know they have a lot of, a lot more employees than this now, but, you know, back in the day,

I can't remember how long ago it was, but I was looking at how many employees Facebook had. And, you know, they have, again, they have a lot more projects. They probably have diversity staff, all these other employees that they could cut in a recession if they needed to. But they still, back when I saw this number, they had all the core functionality that they have now, as far as their platform and everything. And they had something like 9,500 employees. And so, you know, if you can be a hundred billionaire,

a trillionaire, you know, in 20 years, thanks to just AI and other robotic technologies and employ 100 people, you know, that's a very different work. world, then you get to be a hundred billionaire by employing the entire, you know, the entire Midwest, basically, because, you know, they, and so, like, it seems like almost inevitable that, yeah, could, like, it's going to lead to higher productivity, but also, I don't, I don't want to say inevitable, but it seems like a, like, reasonable, plausible that it could lead to a much, much

greater concentration of wealth than anything we've ever seen. Just because it is going to, you know, it's going to favor economies of scale and people who can get out in front of the move first, you know, um, but, you know, I, I'm,

I'm kind of like, I'm kind of with you guys as far as like, you know, I think that it is, uh, I think that it is kind of crazy to put the, assume that we can put the brakes on critical technological innovations because of feared social or political outcomes.

Um, just because, I mean, well, we just, we had a whole 20th century that kind of showed us how that plays out, right? You can do it. You can have the smartest people in your country on it. It doesn't really matter. Eventually, you're going to fall behind the rest of the world and, you know, it's just going to go badly.

On the other hand, I'm very sensitive to, like, Bob, like you're talking about the United States coming apart, states breaking away. It's like there's a theoretical way that that could happen without blood. every street in every city in the United States. But man, we would be walking a real, real tight rope to hope for anything like that. I mean, when we look at Russia, for example, it got bad enough, obviously in the 90s in terms of life expectancy and just all the things that were going on in the 90s. But the fact that they got through all of that without a massive civil war, where one side just had to, I mean, that by itself to me, it marks Putin as, as, you know, not to change

a subject, but as one of the great leaders of our era, just the fact that he navigated through that and reestablished the authority of the Russian state without giving up any territory or having a massive civil war, that is not like an inevitable outcome, right? And so I'm very sensitive with all this stuff, especially since, you know, in the U.S., I said this before, like, we have a, we have a sort of, you know, we think of our own civil war when we think of civil wars, which was not really typical civil war. It was like a, you know, we split into two countries and had a regular war. But go ask people in Ireland or in the Balkans or in places, you know, the Beirut who had real civil wars. And man, we do not want anything like that here. And it's almost, like, figuring out

how to avoid an outcome like that while still facing the unavoidable, you know, crises that we've created for ourselves that are coming down the pipe is really like my singular. focus in politics or economic policy or anything like that. Okay, yeah, just to respond to some of that stuff. The inequality point, I agree with you entirely. Like, I think that is going to happen. And so the question, like, just to go back historically, like, yeah, going from the late 1800s in the early 1900s, like people's homes, you know, they got kerosene and whatever,

people all of a sudden had indoor lighting and electrification and people, you know, were getting refrigerators and whatnot. And a few people like John Rockefeller, where we got. fabulously wealthy. And so, you know, some people would look at that and just say, that's not fair. I don't want some guy being so much wealthier. And some of the people might look at that and say, look at how much prosperity was, you know, showered on the masses and their standard of living so much higher than 50 years ago. So I do think that would happen even under unfettered markets that, yeah, there would be, you know, a handful of quadrillionaires 30 years from now,

but everybody else would be living like the Jetsons. And so, you know, is that good or bad? I guess people have different takes on that. So I guess that's my reaction. With the secession stuff, ironically, perhaps, the reason I was pushing that is, because I think that's the only way to minimize bloodshed is if people right now start talking about it and doing the, you know, thinking through. How would we, you know, would the U.S. troops withdraw from Austin? Like, how would that? What about the nuclear weapons and what about Social Security?

Like, let's talk about that now, not after the dollar crashes and people are looting grocery stores. You know what I think for you guys. There's a reason the biggest military base in America is 100 miles up the road from Austin, Fort Hood. And it's not closing. No, but unfortunately, the feds did make the fatal or potentially fatal mistake of constructing the military in a way where you can't have an infantry without the state of Texas. That's true. We'll see where, you know, the car and the horse and which one comes first and all that. All right, so we're over an hour here.

Do you guys want to do some chats, or we got to go, or what do you think? I'm good. I can do it. All right, let's do some chats. I guess, let me start at the top here, try to. If I can, there's a big yellow chat thing out, man. I need my seeing eyes, spectacles on here, right? I can't see us here.

This one says, Evening to us, happy 91st birthday to Dr. Paul. Well, you got that right. I said that during the other day, too, which was nice. Good old Ron, Paul. That's YouTube.com slash Scott Horn. Oh, my God. You know what I forgot to do, guys, was I forgot to point out that this show is sponsored by the great Matt Sersely.

He is a tax lawyer who will keep your ass out of jail and keep your money out of the government's revenue streams and in your pockets. Basically, he deals with small businesses and with high income professional salary types. To help you avoid the revenues, no gimmicks here. you have to obey the law, but he knows the law better than anyone, and he will make sure that you don't pay one red cent, if there's any even such a thing anymore, more than you absolutely have to, to the revenues at the IRS.

That is agoristtaxadvice.com. Agaristtaxadvice.com. And tell him Daryl and Scott sent you so that he likes us and keeps giving us some money. And then, well, what the hell, I might as well go ahead and mention our coffee. Scott Horton flavored coffee. It tastes just like me.

It's wonderful. It's just go to scothorton.org slash coffee. and then drink it in the morning so that you can wake up and function. All right. I don't really have to do any more advertising. Okay, one more. LibertyStickers.com. I used to own Liberty Stickers, and now I own it again.

And you can get great stickers for the back of your truck, like government school, like you and your kids are so stupid. And other great stickers like that. LibertyStickers.com, everyone else's stickers suck. Okay, sorry. Had to do that. Got to make some money, or we can't do a show. What are we, communists?

I mean, me and Bob are not. I just miss Robbie the Fire Porster in my town because my son was born. Hey, congratulations. Dude, that's great. Bob Murphy with Daryl and Scott is good consolation. Dang it better not poop his type or make me miss this live. Well, that's funny. Daryl, the camera's still watching you.

Be careful. What you do over there? I do the person. I'm good. I'm good. Daryl in his revisionist history. What do we got here? Said I'd donate if Bob was on.

Wow, I didn't even notice that. So I did not get this bribe until after the fact, just so you all know. I cannot be bought. Daryl said, we should talk to Bob, and I said, I like talking to Bob. Proof of that as I talked to him the other day, too. So, yeah. Read Bob's book, Stop the Wars, Drink Scott Horton Juice and Prosecute, Fauci, and Fed. This is all perfectly agreeable sentiments here, yes.

Somebody, Bob, one of the commenters mentioned, you know, listening to Jeff Sacks talk about his experiences in Eastern Europe. Wrote a book about it. Had to kind of do a version of what you're talking about as a potential future in the U.S. and doing it in a time of high inflation and monetary instability. I think that would be, that's valuable for sure information and perspective. But, you know, the big, huge difference there is that there's no, you know, Europe and United States sort of overseeing the situation if that happens here. There's no, you know, there's nobody to bail us out.

There's not going to be a Jeff Sachs coming from China or some conglomeration of countries to come help us oversee and go through that process and go back to, you know, an IMF or or a World Bank or something if we need help. Like that's not going to exist. And so, you know, I think that there's probably a lot of lessons there, but, you know, maybe they're limited. Yeah, just on that, this isn't directly responding to what you just said there, but Scott,

I remember when I was reviewing the draft of your book where you're, you know, you asked to we talk about the privatization and everything that went wrong in Russia. And I was, I like Jeff Sachs. We interacted briefly like, Kroovin was being a jerk to him and I kind of intervened. It's like, come on. And sex, like, thanked me, you know, so that was

kind of interesting. Oh, that's cool. That's the time we've ever, like, formally interacted. But I do think because if I remember his narrative was something like, oh, they deliberately wanted the Russians to go down because my brain trust and I could have gone in and done the same. And I don't, I don't think

his policies would have worked over there if you get what I'm saying. So yes, they definitely did the Russians dirty and the smart guys, smartest guys in the room from Washington going over there. But I don't think in other words the top down solutions from Washington the IMF coming in are good.

Even though I get what you're saying, that, right, things could get ugly here. And my point is I think breakups are going to happen no matter what in the long run. And it was better to do it orderly and ahead of time and say, okay, we all agree, right? That if 80% of the people in Texas voted to leave, you couldn't like just bomb them, right? Can we all agree on that? And like, yeah, that's not going to happen. Sure, okay, we won't bomb you.

And then say, okay, that's kind of my deal. And as far as on the Sacks thing, I think it was you, Bob, that recommended that I read Peter Betke, who was a great Austrian, who was very interested in the fall of the Soviet Union and the reform of the Soviet or Russian economy in the aftermath. And he and Sachs both said the same thing, though Sax is a neoliberal type. He's not one of us. But they both were absolutely adamant. And I proved this. I went back and found articles that he wrote in 91, 92 about this, that we need a tight monetary policy. And even though they had Guy Dar and all of those guys in there, they still. still had a communist in charge of the central bank, and there was nothing that they could do

to get that guy to stop printing money. And then plus, the IMF decided, which maybe that's Washington and I don't know how deliberate it is or what, but insisted that all of the former Soviet republics all keep their central banks and keep their own rubles. So they were all inflating rubles too at the same time that the Russian government

was inflating like mad. And so it just taken for grand, like, who knows, but take for granted that Sacks might have had a shot at it. Well, he didn't have a shot at it when they would not stop bringing money. And like one of the first things he did was lift wage and price controls. And he said, yeah, that caused prices to shoot up. They had to. That's how you end the shortages. But then you got to let the prices settle and then we can move forward from here. And he had his different plans to tinker. But then it's super hyperinflation, whatever, you know, through the roof. And that just made, he didn't have a chance to fail. You know what I mean?

it wasn't even his fault. Oh, yeah. To be clear, it would have been much better to let him play around with it than what they did in practice. Don't get me wrong. But I'm just saying,

like, Ron Paul be quote in charge. Right. I was actually surprised. I could only find two good articles by Murray Rothbard about what should be done over there. And I would have thought that that would be something

that he would have been very interested in at the time. So maybe I'm missing something. Anyways. You're not going to read a lot of the guy that said I rule? Oh yeah, we need that on the right now.

You see that like it's nothing? Yeah, that's not that important. Breton Woods 3 is a macroeconomic theory popularized by financial strategies Zoltan Pozar. It predicts a massive shift in the global financial system away from Fiat get back currency. So you know about that? Is there more to it or did he not end with punctuation?

Is that a whole chat? Okay. I mean, to be honest, no, I haven't heard this guy's name. but definitely, I don't know if this is talking about, but it sounds like it might be. I definitely have seen people saying, I mean, there was years ago, I don't know if you remember,

it wasn't Putin, but there was some Russian guy that was like the head of state that holds up a thing. He said, this is going to be the new global reserve currency. And it was like a gold-backed, you know, Russian piece of money or something. And then people have been just talking for a long time.

What the bricks really need to do, if China would just back you on with gold. So I think the Chinese know that. I mean, like you were saying, Darrell, they're just kind of minding their own business, just sitting back and like, I know, well, like, fun people and we own a bunch of bridges and dams and stuff like that. They built a railroad connecting to Iran.

I mean, they're doing all kinds of smart, long-term thinking that, yeah, yeah, that's what you would do. They're exporting stuff and loading up on gold. So I do think that eventually, like I said, they've been loading up on gold, even if you look at the official numbers, and Russia has been as well. So I do think the next obvious thing is they're going to say, at least if they, even if they only intend to do it for a while, just like the U.S. only did it for a while to say, hey, why don't you get into Yuan denominated assets because we're backed up by gold? And then if they got the whole world, you know, shifting over to that, then they could, you know, pull the rug down the road like the U.S. did if they wanted. But I do think that would be the thing that would get people to jump. How we were talking before, like, yeah, why would people move over? If it was backed up by gold and they could prove it, then that would be a good reason. It almost, it almost seems like it would be, you know, maybe. be an evil genius idea, but just, you know, that it would be a good idea, and I say this again,

an evil genius kind of way, to precipitate what's coming while the entire world is still so dependent on the dollar, you know, where it can't be, this, like, if the dollar really collapses, if we reach a point where we lose control of interest rates or however it works out, that's not an American problem as of today. That's a global problem, and it's going to, I mean, be an absolute basket case all over the world. And under those circumstances,

you know, we could call together a G20 or whatever, call together the largest economies and say we need to sit down and redesign a financial system like for everybody and kind of try to do this in an orderly way where we still have, maybe our role gets reduced,

but we still sit at the head of the table kind of thing. or like try to do that from a position of some kind of strength. I don't think anybody is doing that. I think that, you know, the politicians have the time preference that we were discussing earlier. They don't think that far ahead. Because once it gets to the, if we wait to get to a point where a lot of the, where there are alternatives and a lot of the world has started to rotate out of dollars and do global exchange and other currencies or commodities.

I mean, at that point, then it can become a U.S. problem and maybe a few other places. But I mean, and so the rest of the world would have a lot less incentive to kind of work with us to come up with something, you know, something that comes after. Just two quick points on that. Another thing I remember like around 2010, let's say, again, when guys like me were freaking out about quantitative easing and stuff. And one thing people said was like look at how big China's holdings of treasuries are. and they used the joke about, like, when you owe the bank a million dollars, it's your problem,

when you owe the bank a billion dollars, it's their problem. And we're saying, you know, we got them over a barrel because if they tried to dump treasuries, it would crash the dollar, and then your asset would be worthless.

Well, they've, I don't remember the numbers off the top of my head, but they've significantly reduced the value of their holdings. Part of it is misled, part of it just because interest rates rose. And so, like, the market value of their treasuries went down, so it's not like they literally dumped them.

But my point is they stopped accumulating it, whereas they were doing that for while and they stopped. So I mean, just on paper, they are clearly pivoting away from the dollar and letting that dwindle and they're loading up on gold and doing other things. So you're right. Like they don't want to panic. They're going to win. You know what I mean? Like they're up three pieces on the chess board. They don't want, you know, they can just keep playing this out and they they don't need there to be a panic because they're, you know, they're moving. And the last thing I'll say, too, is I don't mean to be suggesting it's a zero sum. Like, we don't need to be hostile with China,

but that's kind of how U.S. officials have made it. So. Yeah. All right. That's it. We're over time. Let's wrap. I'm gone next week,

but we'll find a good co-host for Daryl. And you all have a good old time. So thank you, Bob. Appreciate you joining us tonight. Thanks, Bob. I really appreciate it. Thanks, thanks,

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