The Glenn Beck Program - Ep 178 | David Sacks: The Banking Crisis Is Even WORSE than You Think | The Glenn Beck Podcast

Episode Date: March 25, 2023

The world may be on the cusp of a serious banking collapse, but many “experts” in the government are insisting that everything is fine (while also moving us closer to a central bank digital currency). On this episode of "The Glenn Beck Podcast," “The Diversity Myth” author David Sacks warns that the banking crisis is even WORSE than you think. As the co-host of "The All-In Podcast," a founding COO of PayPal, and a venture capitalist, Sacks has seen how our “weird” banking system works up close. He gives clear answers about how we can survive this crisis, including why we must have “NO bailouts for banks.” He also breaks down the biggest questions being asked: Who owns our money? Is a Federal Reserve-controlled CBDC the endgame? Who’s to blame for this banking collapse? How will the everyday American be affected? Glenn and Dave also discuss AI, his friendship with Elon Musk, Biden’s reliable incompetence, whether we’re living in a simulation, whether we’ll end up in a war with China and Russia, and why he thinks we WILL figure out who bombed the Nord Stream pipelines. SPONSORS: My Patriot Supply is the nation’s largest preparedness company, with millions of customers, and right now, when you go to https://MyPatriotSupply.com, you can save $200 on a 3-Month Emergency Food Supply kit! When you buy socks from https://grip6.com/beck, you’re supporting American ranchers and American manufacturers and getting a pair of socks that keep your feet warm in the winter and cool in the summer. "The Glenn Beck Podcast" has partnered with Pre-born to help rescue thousands of babies this year. One ultrasound is just $28. Every tax-deductible donation, big or small, helps to save the unborn. Get involved today by dialing #250 and saying the keyword “BABY” or donate securely at https://preborn.com/GLENN If you're one of the millions of Americans who suffer every day from pain, there is hope, and it comes in the form of Relief Factor. If you want a drug-free and natural way to get your life back, go to https://relieffactor.com or call 1-800-4-RELIEF to get the $19.95 Relief Factor 3-Week QuickStart. Learn more about your ad choices. Visit megaphone.fm/adchoices

It's something else here now. Something new. From. Exclusively on Paramount Plus. It's the series Stephen King calls scary as hell. Everything here is impossible, but it's also real. Sci-fi Vision calls it the best show streaming right now. We're running out of time and we still don't know the rules.

Don't miss what the movie blog calls something you need to watch. Saving those children is how we all go home. From binge all episodes exclusively on Paramount Plus. We're filming this episode on the heels of the second largest bank failure in American history. If that weren't enough, the collapse of Silicon Valley Bank was followed immediately by the kind of rescue mission that only ever happens for the elites. In all the talks of T-bills and derivatives, many people find it hard to tell how this SVB situation will affect every man. after all, SVB donated roughly $73 million to Black Lives Matter.

Systemic risk is the phrase that we keep hearing over and over and over again. Systemic is a word that has usually only been used or overused by overeducated leftists who treat BLM like a religion. Today's guest is an expert in all of these areas. entrepreneur, investor. He co-wrote the diversity myth with Peter Thiel in 1998, and he's a founding CEO of PayPal, original members of the so-called PayPal Mafia. Most recently, he has started the All-In podcast with three friends, and it has exploded. People are drawn to the gathering place of economics, tech, politics, social issues,

and poker. Three friends who don't always disagree, but are still friends. You know, like America used to be. The notoriously leftist rag slate recently described the podcast as the infuriating, fascinating, safe space for Silicon Valley's money men. Today's guest is one of those moneymen. He's what I would call an elite who is also anti-elitist. He is a big tech entrepreneur with working class ideals inspired partly by his grandfather's candy factory. Today, welcome David Sacks.

Before we get to David, he might be more optimistic on the banks and these bailouts than I am. If you're one of those people to think, oh, I'll never need emergency food. I don't think you're paying attention. Every day the headlines get worse and worse. is the unthinkable on the horizon. Well, I don't know, but it pays to prepare. That's why I seriously urge you, urgently, to stock up on some emergency food right away.

You never know when the next shoe will drop. And when it does, emergency food will be hard to find. So get yours now. While it's on sale at mypatriot supply.com, check out their popular three-month emergency food kit. Right now, you'll save 200, $200 per kit. Each kit gives you a wide variety of delicious breakfast,

lunch, dinners, drinks, snacks, providing over 2,000 calories a day for optimum strength and energy. Act now and claim your $200 savings per kit. Sleep better, knowing your family is safe. Mypatriotsupply.com. Go there now. Mypatriotsupply.com.

Hey, David. Thanks for coming on. Hey, Glenn, how's it going? Of course. It's good. So it's been, you know, kind of a wild ride here. And I don't, I'm not sure if it's over. But in a nutshell, who's responsible for the mess we find ourselves in and SVB?

Well, I think that what we're dealing with here is obviously a banking crisis that goes well beyond SVB. I mean, you now have Credit Suisse, which was the number two bank in Switzerland. which is a, you know, what they call it a G-Siv, a globally systemically important bank, that basically went under and had to be saved. You've had now four banks in the U.S. basically go under or have to be backstopped to the point where they would have gone under if they weren't backstopped. So clearly something's happening.

Five banks in, you know, under two weeks, there's a larger phenomenon here. And I think it's pretty simple. I think that we've had the fastest rate tightening cycle. ever, or at least in our lifetimes, where the Fed has jacked up interest rates from almost nothing to almost 5%. And they did it in less than a year. They did in like nine or 10 months. And so that's created a tremendous whipsaw effect where, you know, the value of assets that depend on interest rates, which is pretty much all of them. Right. They, they immediately have a massive change in values. So what you're seeing is that on the balance sheet of these banks, all of these assets that

they thought were safe, like mortgage bonds, like treasuries, you know, 10-year bonds, these weren't supposed to be risky assets. Right. You know, these aren't the derivatives of 2008. This is sort of supposed to be the safe money. But you're seeing that they've been massively impaired in value because of the sudden spike in interest rates. And then on the other side of the balance sheet with deposits, there's been a huge sort of tightening of the money supply. So depositors are leaving for a bunch of different reasons. Sometimes they just want to get a higher rate of return in a money market fund. Other times, they're just drawing down capital. Sometimes they're fleeing to go to a bank that they perceive as safer. Right. You know, one of the G-Sibs, we should talk about that. But it's creating

this tremendous stress on the banking system. And I mean, that's basically what's happening. I think SVB was sort of the canary in the coal mine. It was a more extreme example of, this effect, but you're seeing it now play out really across the banking system. You know, I keep hearing, well, that was the canary in the coal mine. I think all the canaries are dead. We may not have many canaries left. Yeah, I mean, you know, I kind of feel like I'm standing in the mine shaft going, guys, all the birds are dead. Because it, it, what we did in 2008, you know, we violated the free market entirely. and then we just started printing this money.

And I think on it, you know, I think people, I'll give them the benefit of the doubt. They honestly thought this would work. They didn't know. They were backed up into a corner. And so they did this. Well, that has never worked. And I think they thought they were smarter than, you know, those who have done this in the past. And aren't we now just rearranging the chairs on the Titanic?

I mean, we might be slowing it down. Maybe we've pulled back a couple of knots so we don't hit the iceberg, you know, as fast. But aren't we going to hit the iceberg? I think the situation is pretty scary because on the one hand, we still have pretty significant inflation, or at least that's what the reports are showing. There's an argument, I think, that there might be significant latency in those reports. But on the one hand, you've got this inflation that the Fed feels like it needs to combat. with even higher interest rates.

On the other hand, you have this tremendous stress that's building in the banking system. And I think these two things are fundamentally irreconcilable. I mean, it's sort of the Silla and Charybdis of our financial situation here. If you want to keep raising rates to combat inflation, you're going to keep turning up the heat on the banks until more of them crack. on the other hand, if you want to stop raising rates or cut rates to save the banking system, then you know, you could have an inflation problem. So this is the real inflation problem.

You have Biden saying $6.8 trillion in spending for his budget. That's insanity. You can't, we can't keep doing this. And that's the thing. I mean, you see now how utterly irresponsible it has been. And I know that the spending and the money printing started before Biden. Oh, yeah, yeah. He took it to another level.

It's a whole other level. And, you know, because the guy's been in Washington for 50 years. So his view of a win, what a win looks like to him is you pass a big spending bill, the bigger the better. You know, the more trillions that you spend, the bigger the win. And remember, I think this whole, this phase of the crisis, you're right that it goes back to 2008. but I think this phase of the crisis really began in Q1 of 2021 when they passed that $2 trillion dollar COVID relief bill for a COVID problem that had winded down. This was the so-called American Rescue Plan.

The economy was already hot. It had already recovered. We didn't need more stimulus. And that's why Larry Summers said, you know, an economist in their own party was like, guys, like you're risking inflation. And they kind of poo-pooed him and said, oh, that's just Larry being Larry. He's just sort of like a mischievous troublemaker or something. Well, sure enough, four months later, the inflation came.

We had that shock 5.1% inflation print, I think was in May of 2021. And what was the reaction? Oh, this is transitory. Don't worry about it. This is nothing. This is a blip. And what that allowed them to do was keep spending and keep money printing. So the Fed kept QE going for another six months.

And the administration kept spending trillions and trillions more. Remember, they wanted even more. than they got. I know. Three and a half trillion build back better. Yeah. I mean, they just couldn't stop spending. And that's why they needed inflation to be transitory so they could keep going with their program. But it wasn't transitory. And so we basically had this bubble of 2021, this massive, frothy bubble that inflated asset prices, that inflated bank deposits. And then finally at the end of the year in November of 21, the Fed finally turned hawkish. By the way, it happened about two weeks after Powell was reconfirmed as Fed chair.

He's the only Trump official who has kept around for Biden's term. And you have to wonder how much pressure he was under during that May or November period to tow the party line on transitory. You know, because I think the second that he was reconfirmed, he basically said he turned hawkish. So, you know, I think there's like politics all over this thing, Glenn. You know, people think the Fed is independent. I don't know how independent it really is. It's not.

And I think, I don't know who leads who on that one. I think I do. But, you know, when you look at inflation, David, I mean, I am, I'm not you, but I'm not a dummy either. We have printed more money. And the Fed has, I mean, at least what they're telling us is about $8 trillion on their books. we have printed money like we're going out of style. I'm shocked that inflation is this low. How high?

What is it going to take to suck the money back in? I don't think you could do it without collapsing everything. And how bad can inflation get with all of the money that we currently have spent? Well, Glenn, I think you're right. And I'm not like one of these so-called banking experts either. or one of these modern monetary theory experts, but they're the ones who are not a sense of this mess. You got to stop.

You don't believe in modern money. Because, I mean, that's like a fairy tale, a Dr. Seuss, modern monetary theory. Yeah, okay, good. I'm saying that that's what the experts believe. Right. They have all these fancy theories to justify this ridiculous money printing. But, you know, it takes a more simple intelligence to understand that, hey, you just can't keep printing all this money. keep going into all this debt. At some point, you've got to pay it back. And you either pay back

the money by, you know, with sort of paying back with hard assets or you print money to pay it back. And if you print money, you can get, you get inflation or even hyperinflation. So look, I think you've been right about this. And, you know, it's just like we saw with COVID. All these so-called experts don't have a clue. So that's one of the problems. I, you know, here in America, they keep saying, oh, it's the Trump voter that is so dangerous and out of the street, whatever. And then you look over in Holland. It's happening. You see it in France.

You're seeing it in England. This is not about parties. In reality, this is about elites and regular people. I really think, and I want to bring this back to Silicon Valley, I think regular people are like, I've played by the rules, my whole life. And it is getting tougher and tougher for me to live. up to all of these rules, whether they're just the woke rules that could destroy me or all the federal government rules, I've paid my taxes, I've worked hard, I've played by the rules.

And you guys just seem to get richer and richer in the banking community and in politics. And you're destroying my life. How do we, how are we going to navigate through that? Well, I think we need, there's always. going to be, I think, in any society, some sort of elite class, but you want that elite to be based on meritocracy. You want them to know what they're doing. You want them to be held accountable if they fail. And I think the problem we have in this country is we have all these experts who are never held accountable for doing such a bad job on foreign policy, on the economy, on COVID, on everything.

I mean, you know, and it's, and I think it's because of the media, you know, the media has become their bodyguard and their protector, instead of holding them accountable. which was their traditional responsibility. I will tell you, I said on the day the bank failed, SVB, and the president came out and said, no, don't worry, everything's great. I said, how many of these so-called experts are we going to listen to? The experts told us we're going to be fine in Afghanistan. The experts said we could collapse Russia in, you know, in no time.

The experts said they could print money and it wouldn't be a problem. and then the experts told us there was no inflation. Everything that has happened in the last 15 years with these so-called experts, look at COVID, look at Fauci. And with no one paying the price ever, I think the time of experts is coming to a close. And, you know, I said this years ago, you don't want the pendulum.

We're really good when we're kind of in the middle. You don't want it swinging weight. to the right, way to the left. And when that happens, and there's a crisis, whichever way it's swinging really far, that side grabs it and says, it's not swinging anymore. And we're kind of entering those days where the regular person is going to wake up at some point and say, my life is being destroyed. And they're going to want some heads.

And I'm not, I mean, I am so against. you know, all of these, the violence in the streets and everything else. I'm not talking about that. I'm talking about how do we navigate? Can we wake anybody up in the elite class to recognize what's happening to people? I think it's scary out there, the anger. You know, I understand the anger and I think it's in many cases justified, but I'm worried that it's getting out of control.

I do too. And it's not, it's going to lead us to a bad outcome. It's certainly not going to lead to. Good policy, but I agree with you. I mean, there's been a profound failure of the expert class. It's not just, Glenn, that they've missed problems. It's that they've actually caused the problems. Yes.

And then lied about the problem. And then lied about it. Exactly. So Fauci's job was to protect us from viruses. What does he do? He funds gain of function research. Right. You know, Victoria Newland, what's her job?

Diplomacy. What does she actually do? Fomack conflict with Russia. Right. You know, these economists who are supposed to get, give us sound money. What do they do? They print so much money that we're in the economic crisis that we're in. So it's just like unbelievable that they're literally doing the opposite of what they're supposed to be doing. I mean, just literally the opposite. And it should be easy to replace

them because it's so obvious that they're failing, but you can't, or it seems like you can't, because again, we can't get honest media coverage of the situation. So it's a really bad spot for the country to be, and I can see the anger just kind of rising up, because I felt it. You know, I was accused of being one of these Silicon Valley elites, you know, and kind of, you know, even though I've spoken out on all these issues, and it's scary just how much anger there is. I know, I know. 60% of the vans on Amazon, proven to venders independent, like Sac Magic. Hello, here Camille, of Sac, Magic.

Our compresses chode-fraud are fabriced here even, with the tissue that we're chate in Newfound and the aviose our troyance on the basin

and the best of clientele to the world entire. Sack magic, it's the compress that all the world prefer. At from here,

we're grandi. Trouve of little enterprises like the own own on oner.

We live in an upside-down world, and as a result, nearly one in every five pregnancies

will end in abortion. Even after Roe was overturned. And with the abortion pill, accounting for over 50% of all abortions, the new abortion battlefield has become, quite frankly, the home front. Preborn network clinics have rescued over 200,000 babies' lives by loving mothers with unplanned pregnancies, and then introducing them to that precious life that's growing inside of them through an ultrasound. It's really a miracle of medicine. Once she hears the heartbeat, the majority of the time, she'll choose life.

Without the ultrasound, the odds are not in favor of life. The ultrasound is a game changer. The Glenn Beck podcast has partnered with Preborn to help rescue thousands of babies this year. One ultrasound is just $28. Every tax deductible donation, big or small, will help to save the unborn. Preborn receives no government funding and is completely dependent on us, you and me, and the pro-life community. For just $28, you can help save a life. Donate by dialing pound 250 and say the keyword baby.

That's pound 250, keyword baby. Or you can go to preborn.com slash glen. Preborn.com slash Glenn. Let's go to Silicon Valley. and the the the what is being called a bailout but it is not the bailout that we saw in 2008 but because of the way the treasury and fdIC did it I can't imagine this is going to make anything better because they have bailed this bank out as far as all the depositors including the people who had 400 million dollars in the bank and I don't want to see anybody go

wonder, but if you're going to do that, now you're on the hook for everyone, but instead they say, no, it'll just be the critical banks. Well, we'll end up with four banks, David. Right. No, I think that's right. I mean, I think this is a perverse consequence of what happened in 2008, is that I think this is something people just need to understand is that in 2008, I think everyone knows about too big to fail that these banks were considered too big and therefore the government had to step in and prevent the failing. What they may not know is that that status was effectively canonized and enshrined in law. They don't call it too big to fail. They call it systemically important bank or sit. Right. There's even, so there's four of these in the U.S. or the trillion dollar club.

They've got over a trillion dollars of assets. It's JP Morgan Chase, Wells Fargo, city, and who am I forgetting? Goldman Sachs. It's not Goldman. It's Wells. Bank of America. on the name of a. Yeah, B of A. Sorry, yeah, that's right. B of A. So these guys are in the trillion dollar club. They're basically too big to fail. And all the other regional banks are not systemically important. And so I think what you start to see last week is that people, is that the deposits started flowing massively to the Sibs because people started to wonder whether their

money was safe in these regional banks. And actually, you can see just today, J.P. Morgan, Chase, announced their new deposit interest rate is 0.01%. So basically they've slashed their interest rate to almost nothing, basically to zero, because so many people are worried that their money won't be safe except in these Sibs. So there's huge money flows happening right now to these systemically important banks. Which people don't understand those, the local and regional, 70% of all of our business loans, it all goes through these smaller banks. I mean, you collapse those small regional banks and the small local banks and the economy goes to hell.

I mean, business is done. Yeah, exactly. And, you know, another thing that people may not know is just roughly half the deposits in the U.S. banking system are uninsured. You know, this is not, I mean, there's always examples you can cherry pick of someone, some company or some wealthy individual being stupid, but this is really about business banking in this country, $250,000 is the FDIC limit. Just isn't enough for, for most businesses. They have to run payroll or do payables at the end of the month. But it's never been, that's why. But it's never been a problem because our banks were stable. Now that the banks aren't stable. Now as a businessman,

you're like, I can't put that money in the bank like that. Right. Exactly. And there's a fundamental mismatch in, I mean, this is where I think the banking system is so crazy, is that what the consumer, and I'm including small businesses in that, think they're getting, is so different than what the bank thinks it's getting. So when a consumer or small business goes to a bank and puts their money there, they think they're just getting a checking account. They think they're getting the ability to write checks, to do payables, to do run payroll, get an ATM card. And it's a safe place to keep their money. What the bank thinks it's getting is a loan. Right. Right. On their balance sheet, it's treated like a loan. And then they can take

that loan and invest it. And they get to keep the upside on that money. I mean, so that's just like a fundamental mismatch. And it's, and this is what leads to problems is that when those banks invest in things that are too risky because they get to keep the upside, then all of a sudden the depositor gets a loss. And then the depositor is like, wait a second, I thought my money was safe in the bank. And, and this is where I actually think that we do need like regulations. Can I can I ask you? It's to solve that. I mean, again, I know nothing about the banking system.

Just looking at it as somebody who hasn't, you know, gone through business school and, you know, and had the indoctrination of, we're fine. The system is grading. It'll never break. Why don't we just make sure that banks can't go out and, uh, and invest. in, you know, stocks and play the games that they're playing. Why can't we have those investments in a separate investment bank and then a bank bank? Why can't we separate those two?

I know. That would make sense to me is that when you, that you should just be able to go get an account that's your, as a consumer of small business, that's just kind of your payments account. And you want the functionality, in other words. And look, you'll take a little bit of interest on that, but your objective is not interest maximizing. It's just getting the functionality. You should be able to get that, you know.

But we have a weird system. I mean, this is kind of the way the banking system works. I think that what you have to do is, I think ultimately the quid pro quo here is going to be that we create some sort of like business plus FDIC, meaning some much higher level of FDIC that makes it accessible. for businesses to use banks. And then the quid pro quo for that is the banks just can't do anything risky with that money. Or you're going to have to be much more tightly constrained. So now, I don't know all the details of how that's going to get worked out. But I think that's kind of where we're headed on this thing.

So SB, SVB didn't do anything risky. I mean, they put it in treasuries, but they were 10-year treasuries. How does this bank that got... an A plus rating from everybody and had a member of the Fed on their board make that kind of mistake. I mean, the only thing I can think of is that they thought inflation would be transitory, that they actually believed Biden, yelling and pal. They were the one. But that was the, yeah, they were the one idiots who believed that.

Or they were just completely asleep at the wheel. Clearly, they did a horrible job with risk management. But just so everyone understands, like, what happened there? So they bought, so in the two years, the last couple of years during COVID, when there was all this money printing, their deposits swelled. It's something like tripled from something like $60 billion to $180 billion. And then they put something like $80 billion in these in 10-year mortgage bonds, which are supposed to be safe. You know, they were bringing like 1.6%. They thought they were doing something safe.

And the Fed at that time was, you know, they do these dot plot projections. And the Fed was saying that, yeah, we don't plan on raising interest rates same time soon. So now, that's no excuse. I mean, they should have been like more aware of what was going on. And they should have hedged the interest rate risk when the environment started to turn. But basically what happened is that they committed themselves to these 10-year mortgage bonds whose value went way down. as interest rates spiked. And then the other thing that precipitated it is they just have a more volatile depositor base

catering to startup. So, you know, they're on pressure on both sides of their balance sheet. And they just mismanaged the whole thing. But so did the feds. I mean, you know, the feds knew there was a problem here going back to the end of 2022. You know, the Monday, like literally three days before, three or four days for SVB got put in receivership, the head of the FDIC testified that banks were sitting on $620 billion of unrealized losses from these types of long-dated bonds as of the end of 2022.

So they've had that information for months now. Well, what have they been doing about it? I mean, they should have been proactively going to these banks and try to work out these situations before, you know, they're put in receivership. And historically, that's what they've done, by the way, is, you know, when a bank gets in trouble, they'll close it down over a weekend and they'll put it in the hands of some other bank. And it opens under a new brand name on Monday and it tells everyone their deposits are safe. But for some reason, they just didn't step in here.

So I think, you know, there was a lot of sleeping at the wheel. But look, I don't want to take blame away from SVB's management because they clearly did a really bad job too. I mean, they spooked everybody. It was on Wednesday after the market closed. This is the, you know, the two-day. before it went into official receivership, they put out an 8K statement basically saying that like oops a daisy, we had to sell all of our available for sale securities. Over 20 billion of securities. We just had to liquidate them. Okay. And we're going to need to raise billions of dollars

of equity. And we're going to have to recognize a huge loss on our long-dated bonds that was previously unrealized on our balance sheet. Well, what do you think happened? Right. That night, after the market closed, their stock was down 30%. And the articles were all over the press by Thursday morning as the bank was in distress. So people have all these wild conspiracy theories about why there was, you know, a run on the bank. People just read the news. Right. The media caused the run. Well, I mean, I can't blame the media because they were just doing their jobs reporting. Right. What SVB had put out there. So let me ask you, because you, um, you might, might remember when the Fed had the discount window, the discount window was kind of a shameful place

to go. You as a bank didn't want to go to the discount window because the other banks would know you're in trouble. Is that right? I mean, you had kind of an internal warning system before that seemed to always work for a long time. And now there's just, there's this, you know, billions and billions of dollars being given to banks all the time for extended periods of time that's new. Yeah, I mean, the thing we don't know, Glenn, I think, is what were the conversations taking place behind the scenes between SVB's management and the feds? You know, when did they, I mean, they must have, I would assume, go to the Fed, go to the FDIC, go to the banking regulators and tell them, hey, we have a problem here.

I'm curious when that happened, and I'm curious what the reaction of those regulators was. I don't think we have that information yet. So credit Swiss goes down, and I called a friend of mine and I said, and Deutsche Bank stands? I mean, isn't Deutsche Bank always in trouble? Do we have other banks that size that are in trouble, do you think? Well, you know, what I would say is the reliable way to figure out which banks are having problems is you just follow the stock market. So even before the media seems to report on problems at a bank, the short sellers seem to, you know, get a hold of it. And you see the stock prices going down. Like I said, as soon as SBB put out that 8K, their stock was down 30%.

And I think by noon, the next day, it was down 60%. So just follow the stock market is kind of like telling you where to look because those guys are really doing their homework. So look, I don't know. I don't want to say any particular bank is in trouble. And here's the other thing is just when you're talking about systemically important banks, the government's already said it's not going to let them fail. Right. So it's kind of more like how much trouble is the system in? Yes.

How much trouble is the government in? because if these banks have have problems, it's not going to be on those banks the end of day. It's going to be on the taxpayer. So can I just take you to a dark place here for just a second, war game something for me? Sure. You know, we are, we could have a serious banking collapse, which would lead to financial collapse all over the world, in the Western world, at least. We have war on the horizon. None of these things have to happen.

But if they do, then the federal government comes in, bails these banks and depositors out with money they don't have, so they're just printing the money. If it has that kind of collapse, businesses go down, you lose jobs, then the supply chain would also, you know, you can't keep people working. So the supply chain goes down, which drives interest rates through the roof. and with as much money pouring everywhere, you got a real problem. It seems to me that the central bank digital currency or digital coin is the end game here in a reset. Does that make sense to you at all if we would hit this kind of a problem? Well, it's hard to say.

I mean, I, here's what I'd say, Glenn, is that you've been ahead of the curve on so many things. The first time I ever heard the word ESG was from you. Oh, my gosh. I didn't know, yeah, I didn't know what that was until I learned it from you. So you've been ahead of the curve in a lot of these things. And I hope it doesn't go that way, obviously. You know, right now it looks to me like the government sees crypto as a threat because it's kind of like an alternative. Right, but the UCC is being updated in, you know, all 50 states now.

And it defines money as a central bank digital currency. And that's a little terrifying because the central bank would have complete control over your money. It's not like Bitcoin, which I can put on a thumb drive and take out and go, screw you. I don't have my money. It's legally would be defined as their money if it's in the bank. And that's the problem. That's the other half of the modern monetary theory that nobody wants to talk about. Control.

Yeah. Yeah. And so I think they're doing this in China with they've got the digital yuan. And so I think that, look, this is definitely one potential dystopian future. future, you know, it's, it's hard for me to assess where, where this all leads. I, you know, I'm just kind of more, in the immediate term, I'm just more concerned about this leading to, you know, a recession. That's usually the result. When you have a massive contraction of the money supply and of credit, usually the result is a recession. I mean, when I talk to my friends

in the real estate industry, I mean, the things they're telling me are just scary because, you know, I've got, well, so I got a friend who just redeveloped a building and he's got a A plus tenant and he can't get his construction loan refinanced with long-term debt. He just can't do it. He's willing to pay the prevailing interest rates. He can't find a bank that's willing to loan right now. I mean, that's scary, right? And the reason why is just because if you're a bank and you're seeing all this instability and you're worried about deposits flowing out for any reason, you're just like, we've got to hold on to our cash here. We can't be putting it in a 10-year loan. And so, like, that's just one example. I think there's also the issue, you know, because I'm here

in San Francisco, we got over 30% vacancy in these office towers. And these office tower... That's happening everywhere. Yeah, exactly. And so... And so... And, Those office towers, you know, are ultimately owned by the bank. I mean, yeah, the real estate developer owns maybe a third of the capital stack in equity, but the bank got up two thirds of the money. Well, how is that going to work? You have all these loans that were supposed to be A plus loans because these office buildings were supposed to be the best form of collateral there was.

And now you have to wonder how impaired those loans are. And so we haven't even gotten to the loan portfolio of these banks, right? all we are looking at are the losses on the liquid securities part of the portfolio. The safe part. The safe part. The T-bills in the mortgage bond. What happens when you get to the loan portfolio? Now, look, I don't think all banks are in the same boat, but I do kind of worry that this whole commercial real estate thing is going to be the next shooter drop here.

And this is, it's just kind of scary. I mean, obviously, I hope they get a handle on it. And I do think the Fed now is in a terrible spot because on the one hand, my view is you've got to protect depositors. I just don't think they thought when they put their money in the bank they were making a risky investment decision. I just think if you tell depositors, sorry, you got to take it on the chin because the Fed didn't do its job. Oh, yeah. If I'm putting too much money, you'll have chaos in this country. Oh, yeah.

On the other hand, to your point. And nobody, you said it earlier, nobody looks. at putting my money in the bank as an investment. I'm not putting it into it. Totally. You're holding it for me. Totally. Totally. But on the other hand, if you do protect the depositors, we don't know how big a tab that's going to be.

Correct. And how much money we're going to have to print to do that. So this is the terrible, they're on the horns of this terrible dilemma. But I'll tell you, I don't, I don't fully like the way that Republicans are handling this issue. I think the right position here politically, morally, regulatory is to say that no bailouts for banks. If bank management does a bad job, they're wiped out. Their stock options are worthless.

We might even claw back these big bonuses they took. The stockholders are wiped out. The bondholders are wiped out. They're all done. However, you've got to protect depositors. I just don't know how you don't protect depositors. and I'm hearing this like Darwinian view from the side that I'm usually aligned with that, well, depositors should have known better. Like, you know, they were just stupid.

Well, you know, or depositors. I had money in Silicon Valley Bank. I mean, it's a safe bank to do business with. So, I mean, you know, I guess I should have known better. Well, I didn't. It's a safe bank. How are you going to know better when Moody's didn't know better? Exactly right.

How are you going to know better when the. Fed didn't know better. I mean, I would separate the average person and me, even you from the Fed and Moody's. That's their job. They should have known. That's their job. But I shouldn't have known unless they said, I'm not watching the bank and have access to all of the information that they have. Totally. I mean, what your average consumer or small business.

is supposed to evaluate the balance sheet of a bank and try to figure out whether they got toxic assets or not when they open a checking account so they can make payroll. I mean, it's not realistic. By the way, that's the system we had 100 years ago. It led to panics all the time. That's why they created FDIC. We've seen this movie before, like Jimmy Stewart's in it. It's not a movie we want to go back to. The problem is that FDIC is not big enough for business banking.

And like I said, half the deposits in the banks are not insured because businesses need more. So I think what we're going to end up here is that there needs to be a business plus level of FDIC in exchange for which these banks just can't take risky investments. Because we don't want the government to be on the hook if they screw up. Right. I want to board of V.A. Embarked and profite. Embarked and celebrate. Rigolet.

Publiere. Amir. And profite. Via Rai. The voice that we love that am. I want to talk to you about the hundreds and hundreds of people that I have personally met that say, I couldn't take my pain anymore. One of our listeners was, I believe, on.

fentanyl. Her pain was so bad. And her husband cried and talked to me and said, she was just slipping away. I didn't really even recognize her anymore. She started taking relief factor. And she was up walking around. She was in my office. It's amazing. Now, it doesn't happen for everybody. 70% of the people who take relief factor find relief and they go on ordering month after month. So I want you to call Relief Factor now and see if you're one of that 70% where you'll find relief, 800 for relief, 800 for relief. Get the 1995 three-week quick start. That's relieffactor.com. So, you know, there's part of the problem that I see, I think I said this in 2010 or 12, because I'm an amateur futurist.

I love, you know, the future and what's coming with AI and everything else. It's terrifying and thrilling at the same time. And it'll be up to us to see which way it goes, I think. It might be up to AI. But, you know, the problem here is that we have the entire industrial revolution took over a hundred years. This revolution that we're going into now, this, everything from our governments to our banking to our individual jobs, all of it is changing because of the Internet and technology. It's all changing. And it's changing now in about a 10-year

period. In 10 years from 2020 to 2030, you will not be the same country. And it's not because of political decisions or anything else. It's because of technology. And I think we're just going through the industrial revolution 10 times faster. Yeah, I think I think you're right. And it's another dilemma here because on the one hand, the change is incredibly disruptive and scary. On the other hand, the only way we're going to get out of this debt or have a hope of getting out of this debt without money printing or a hyperinflation is productivity. That's your only other alternative to money printing is productivity. Well, you're training the people in America to not be productive.

I mean, that's what the government's... Well, the hope would be with these AI tools is that you can power up your, you know, your average employee through the use of these tools to be much more productive. Right. And that it could unleash an economic boom. I also understand the argument that maybe it puts people out of work. So, but, you know, we're seeing, I mean, this is really year one of this sort of commercialization of AI. And the product demos that I'm seeing are really incredible, what it can do.

I mean, you can go into these tools. Let's say you're a marketer and you just want to write a blog post, you know, for your company. You just go in there and type in the headline in the first paragraph and it'll spit out the rest for you as a first draft. easy. And actually you can say, give me five alternatives, and then you pick the one you like best, and then you can just say, give me five more like this, and you do human evolution on it. So in any event, there's like a zil, or like coders right now, there's this, this called a co-pilot, where if you're a coder, you just described, you just talk to the AI because I understands natural language, say, here's what I'm trying to do, give me the code. And code that would have taken weeks to write,

you'll just spit out in a minute. it and you can kind of go from there. Now, I think, again, the optimistic scenario here is this doesn't put coders out of business. It makes them much more productive. Correct. And so if we can get a productivity boom out of this technology, that could be the way out of our current mess. The problem is, though, again, in other revolutions that we've had, you've had time to adapt.

This is just going to make some people more productive and also. destroy other jobs and you have to retrain and rebalance and it's going to happen so incredibly fast. Here's the here's been my biggest problem and I talked to Ray Kurzweil about it. I've I've talked to several people that are into AI. No one is seemingly seriously asking the philosophical questions that we have to decide right now. What is life? Already you could convince people with chat GPT. Today, you could get people to go, you know what?

It's alive. Well, then what happens if that's actually life? So we have to decide some of these things. We have to decide when we can download a person's thinking, is that life? Or if they've got cancer or something that's, really expensive. Can we just off them because they'll always be here?

There is no death because we've downloaded them. We're not asking the questions on work. Does that mean anything to the psyche of man? And you've got Yval Rari, who is, and the W.EF talking about a lot of useless people. and what are we going to do with them? And his answer seems to be drug and entertain. That's not good. No, that's not good.

That's not good. That's not good. Yeah, I mean, now, I'll tell you one thing that's interesting about whose jobs are getting disrupted is that it's actually the white collar jobs, is the knowledge worker jobs. You know, they just did a test on the new GPT. and it can pass the bar exam. I know. I mean, it does better than most lawyers. And the GPT 3 passed the bar exam.

GPT 4 is 90% better. 90% better. Yeah, exactly. So it's interesting because one of the things that's interesting is that the people who got disrupted and took it on the chin the hardest over the last 10 or 20 years because of tech, let's call it more of the blue collar. Yeah, the robotics. Exactly.

Automation, the people who were impacted most by automation or by the exporting of jobs to China, which I think in hindsight was a huge mistake. But now it's different. It's actually knowledge workers and coastal elites who are being disrupted. So it's interesting. But I still think it's going to be hard to know exactly how it plays out. And, you know, it's hard to stop these technology waves. Oh, you can't.

You can't. The question is just whether you can guide them in a positive direction. And like you said, I don't think anyone or not many people are asking, you know, the hard questions. Although, you know, Elon did. You know, the whole way that Open AI got founded. I know. Was back in 2016, Elon said that like, hey, guys, I think AI is going to take over the world. This is like way further ahead than people think.

And so they created Open AI. to ethically guide the development of AI. That was the purpose of it. And to put it in the hands of everybody. So no country or company would have it. Well, that's over. I know. And it started as a nonprofit.

And somewhere along the way it became for-profit. It became more like a company. About the time he left. So it's, yeah, you can't make this stuff up. I mean, it's just a testament to human nature, you know, is that if there's an opportunity, people are going to want to exploit it. You could say either exploit it or develop it positively or negatively,

you know, however you want to see it. Talk to me a little bit about Elon Musk. He's a friend of yours, right? Yeah. I mean, I think what he's done at Twitter with the Twitter files is incredible. I think what he's done with pretty much everything. Yeah. I mean, he is, I would put him in the category of a Jefferson or a Franklin.

I mean, that's what all of those guys were like. He is just in a different category. What is what is he like as a person to be around? Is he always way ahead? I mean, what's he like? Well, you know, I've known him for, I guess, over 20 years now. And so to me, he's just, you know, before he got super famous. So to me, it's just, you know, my friend Elon, you know,

I would say that, you know, what you see is. is really what you get with him. I mean, I remember a conversation I had with him many years ago where I think we're to sing on the couch and he's sort of ruminating about, you know, you know, I wonder if we're living in a simulation,

you know, is this really based reality and just starts like riffing on this idea? Things that really used to only be asked by people on either pot or LSD. He just thinks that way. Yeah, he's just thinking about it. And I remember thinking, well, this is really interesting,

but I'm glad that, the public doesn't think that Elon thinks we're living in a simulation because, you know, they'll think he's crazy. And, you know, but then, you know, a few months later I hear him like basically talking about it in an interview. And so, like, he's, you know, what I'm saying is that what you're seeing from him is in public interviews is what he's saying in private too. Maybe just a little bit before we just hear it first. But what you see is what you can. You know, I have a daughter of special needs. She had strokes at birth.

And I have been following what he is, the research he's doing on the brain because that would repair all of the pathways. I try to remember the technology that he's, anyway, he's basically putting beacons into your head. and it can it could repair all the pathways so she could think faster and and think the way you know a healthy brain would think

and it would change her life and we've had conversations about it and I'm I'm as her dad I'd love to see that she is not willing to go there

And for as great as it is, it's a two-way street. Eventually, you'll not only be able to help, but you'll be able to see into the brain. You'd be able to connect with the internet, which is one of the things that I know that Elon wants to do. And that's a whole different. Now you're into transhumanism. Yeah, I mean, we're going into sci-fi-type stuff. But I think the reason why he found it in neural life, is because he saw that the AI was going to evolve very quickly to be, you know, smarter than

human intelligence. And the only way for humans to catch up would be to have some sort of, you know, brain computer interface. And now, I mean, that's the long-term vision and the short term. It's about fixing these types of maladies, you know, that people have serious, you know, issues. And so, you know, he's starting with those, you could call them use cases in a way. And, you know, this is, I think, a common denominator of all of his companies is he starts with a really grand vision, but then makes it, he figures out the tangible first step. So you take SpaceX, for example, the vision was to go colonize Mars.

But the first step was just to, like, get a rocket to launch into space. And then the middle step is to get a satellite network working. So we have, you know, internet from space. and then finally you can do space exploration. So he figures out, like he's got this grand vision, but then he figures out how to break it down into stepping stones. But you're right that, you know, you mentioned like a Franklin or Jefferson. I mean, he's kind of a throwback to an earlier time

where you had these great individuals, inventors who, you know, would create these great things and build these enormous enterprises, these great companies. And, you know, it's so different than what we have today where it feels like everything is decision by committees. And, you know, and everybody's a professional manager who went to go get their Harvard MBA. And what did they build?

I mean, they didn't really build. They didn't really take risk. They just manage. And, you know, they're all sort of politically connected and part of this class that, you know, is connected in Washington and goes to Davos. And, you know, it's like part of the, of this click with the media that protects them it's just you know again it's part of that like fake

expert class and it's it's exactly the reason why go ahead him you know yeah i think this is the reason why they hate him is because it's just um it represents a whole different model it's really the entrepreneurial capitalism that this country started yes it's the american model of one guy having an idea you know we are living i don't know last time if ever i mean it's I live in such a geeky world, David, but I don't know the last time that you read Dwight Eisenhower's farewell speech from the Oval Office. But he nailed this time period right now. And he talked about those adventers that are working by themselves in their garage and coming up with ideas, those are gone. And they're going to be replaced by teams of people working on things through corporations.

and he warned us against it, and we didn't pay attention on very many things. And that speech, I mean, it warned us about the military industrial complex. And I mean, Eisenhower, he knew of which he spoke. I mean, he was the Supreme Allied commander in World War II, President of the United States. He knew he warned us that, yes, we needed a defense industry, but they would become a special interest. And we have so many of these industrial complexes, whether it's the media, the pharma industrial complex, the education industrial complex,

where they've started just becoming more of a special interest in their own right, as opposed to fulfilling the mission that they were created to do. They're serving money and the government, it seems more and more. And less the, it's, you know, the one thing about Musk is it is a pure intent. You know he wants to go to Mars. That's his end. It's not about becoming the richest man in the world. And there's a difference on that.

We're going to say, in the phone, all the world can be a guy of the finance. Not to have a gross world in art, to play to golf, nor be an pro of the crypto. Not even though, you have always done these affairs.

And the apply, Nogistititre TD, you add to renouing with your instinct of negotiation. with the support 24 hours per per year, no amount on minimum, nor fraymentuels. You're made for negotiate,

and the appellee negotiate-tit-tit-titre and fed for you help. Telecharge it right now. You know, you work hard for the money. My gosh, have I turned into Donna Summer?

You work hard for the money, girl. If you're like me, when you have to spend that money, you prefer to spend it on things that are of quality, especially if they're made here in America. That's not just pay, patriotism, it's a quality thing.

And traditionally, things that are made in America last longer, work better, and set the standard for the rest of the world. That's one of the reasons why I love partnering with companies like Grip 6. With Grip 6, you're getting the true American experience products you can count on. For instance, you buy their socks. You're supporting American ranchers who raise specialty bred sheep that will produce the modern wool. then you have the American manufacturers who wash and process that wool, and then the other people who are weaving it into socks that will keep your feet warm in the winter and cool in the summer. They're fantastic. The American business owners who have accepted the risk that comes along with only using American-made products and American labor. Check out Grip 6 today. I love them. I think you will, too. Put your hard-earned money in your trust in a company that does it right in America. grip6.com slash Beck. That's grip6.com slash back.

Let me quickly just cover a couple of things. I absolutely believe we blew up the Nord Stream pipeline. I don't know if we'll ever prove that. But I'm sorry, you know, the president who, you know, one of the signs of, you know, dementia is saying things that you shouldn't say. And he comes out and says, yeah, we can. get rid of that. We don't believe me. We'll, we'll end it. Okay. Do you think we're ever going to find out the truth on that? Yeah, actually, I do. I mean, I think eventually that's got to come out.

Now, eventually, do you mean it like we just found, we just found out that the CIA was working with Oswald and on his payroll on their payroll? Yeah. I mean, maybe you're right that we'll never know for, maybe we'll never have that confirmation, but, but look, I agree with you that Cy Hirsch's story is far more credible. Oh, yeah. Then the cover story they planted in the New York Times just recently,

which was laughable. No, no, they know the boat. They just don't know who was on it, but they know it was four men and one woman, but they have no idea. I mean, it was ridiculous.

It was ridiculous. They say like, okay, that we believe that a pro-Ukrainian group did this. Okay. well, well, which one? We don't know. But, well, did it include Zelensky? Absolutely not. So it's like, it's like a weird, weird level of certainty about certain things. And then like they don't know any, you know what I mean? It's like, look, you either know who these guys were or you don't. So how can you be so sure that it wasn't our specific allies? But by the way, I mean, this was a very sophisticated operation. It required a state actor to do. Yeah. And like, you. said they said what they're going to do so um i'm i'm with you on this one i mean it's the same kind of thing they're doing here they're they're decommissioning all of our coal fire plants and blocking

the way for us to go back uh that's pretty much what happened with the nord stream pipeline right just blocked your way to ever go back to that source um david uh last thing war with chock and or Russia, they look like they are becoming closer and closer allies and allies with Iran. And now Saudi Arabia abandoned us because of, for good reason. I would too if I were them. How likely do you think it is that we'd be headed towards war? And what does that mean? I mean, I've been warning about this since the,

Ukraine's situation started. This is a proxy war of choice that we've gotten into. Ukraine is not a member of NATO. It is not a treaty ally of the United States. We are not required to defend it. Moreover, and I think this is the deeper point, is we engage in a series of actions going back to 2008 that the Russians viewed us highly provocative.

And they warned us over and over again is categorically unacceptable for you to try to bring Ukraine into NATO. And yet we persisted in that mission. We have these crusaders at the State Department who just want to keep expanding NATO. And I don't know why they can't see that that is unacceptable to the Russians the same way that the Soviet Union trying to put nukes in Cuba was unacceptable to us in 1962. I mean, we have the Monroe Doctrine here that says that no distant great power can put, troops and weapons in the Western Hemisphere.

We consider that an intolerable security threat. And that is what we have been trying to do with Ukraine for a long time. This was very easily avoidable, in my view. And now we're at the point we are effectively a co-belligerent in this conflict. I mean, we're not just providing them with money and weapons. We're providing them with intelligence. We have commandos on the ground directing the flow of those weapons and of intelligence. we've had administration officials brag about painting the targets on Russian generals.

Crazy. So they could be killed. Bragging about providing the intel to sink the Moshe, which is the Russian flagship. Can you imagine if Brezhnev did that when we were in Vietnam? If Brezhnev went to Vietnam and said, our whole goal here is regime change. We're funding you. We're paying the targets for you. My gosh.

It's crazy. It's crazy. It's crazy. And, you know, like people sometimes compare, well, why isn't this like Afghanistan where, you know, we blood the super, like Reagan blood the Soviet Union? Yeah, that was a covert operation. Operation Cyclone. We didn't have American flags on the boxes of the stingers and the weapons we were giving them. It was a, it was a very co- and here it's very different because we're not just giving them weapons. We're providing the whole what's called the kill chain for them. You know, it's a, it's a tightly woven web of information services, the weapons by themselves aren't valuable, you know, like

the High Mars, for example, isn't valuable unless you also give them the targeting coordinates from our satellites in space. And so, you know, the Ukrainians are pushing the buttons and pulling the triggers and taking the bullets, but it's the Americans who are providing the targets and the intelligence and even taking credit for that counteroffensive last fall. There's a New York time story where they basically described the, it was called the critical moment behind the, it was the Carqueath counteroffensive, where the Ukrainians came to the American generals with their plans and the general said, no, this isn't good enough. Let us like fix it for you. I mean, it's, it's just crazy, you know. And then we, we, and then when I think the obvious

downstream effects of this happen, which is that it drives Russia into, China's arms, we react with this outrage and surprise. I know. It's like shock, like we didn't know what's going to happen. I know. It's like, are you kidding? Of course. I know.

Of course Russia and China become tighter and tallies because China, they see what's happening and they know that if Russia falls here, if that actually could happen, then the gun sites of U.S. neocons and U.S. hawks will be entirely trained on them. So it's in their national interest to help Russia. this was entirely predictable. And we think we're going to prevent them from pursuing their national interest by expressing condemnation and outrage. I mean, it's like it's like our spokespeople and diplomats are children here. I mean, again, it's the elites and everyone with common sense are looking at each other.

Look, I didn't vote for the guy. You did vote for the guy, but I'm with you. This is nuts. I mean, the elites that are running, the State Department, the Pentagon, the media, all of it, we all look at each other in day to day and go, you and I could fix this. It's not that hard. I know. I know. It's, it's, the State Department one is really crazy because their job is diplomacy.

Mm-hmm. You know, it's to lessen conflict. No, their objective is regime change. Right. I mean, they've been conducting these regime change operations, and you'd think... They did it in Ukraine when Biden was the vice president. Our state department went in there. Anyway.

And you know what happened three months later? They put Hunter Biden on the board of Burisma. I'm sure that was just a coincidence. I mean, how do you think that's going to, how do you think that's going to end? I mean, he's got, we now have the records that three Biden members and the, the, uh, Hallie, the daughter-in-law.

I mean, I don't know what, you know, what information she had that was so valuable in Hong Kong for an energy company, but,

uh, and Biden's still out there saying it's not true. Is anything ever going to happen to these guys? Probably, probably not. Um, I'm not saying there's not a lot to find. I'm just saying that I think the media,

one of their enormous powers is they get to decide who gets investigated. Yeah. Um, effectively. because they will, you know, make you a target and Jenup outrage if they don't like you. And if they like you, they'll sweep it under the rug. I mean, I don't understand how the Hunter Biden thing isn't a big story. I mean, he's put on the board of a Ukrainian energy company three months after Biden gives the attaboy,

gives the approval for basically our backing of a coup there. And it's not like he has energy experience. He's utterly unqualified. He's utterly unqualified for the post. It's just that's crazy to me. But once again, the media decides what we care about because they just won't cover it if they don't like it. David, always good to talk to you.

Thanks. I hope to talk to you again. Thank you. Absolutely. Thanks, Glenn. Great to see you. Just a reminder. I'd love you to rate.

and subscribe to the podcast and pass this on to a friend so it can be discovered by other people.