The Pete Quiñones Show - A Realistic Discussion on Building Patronage Networks w/ Sean Wieland and Stormy Waters

Episode Date: March 19, 2026

119 MinutesPG-13Sean Wieland is a wealth mangement expert and Stormy Waters is a managing partner of a venture capital firm.Sean and Stormy join Pete to talk about the real world issues of building patronage networks in a world hostile to us.Sean's Twitter AccountStormy's Twitter AccountPete and Thomas777 'At the Movies'Support Pete on His WebsitePete's PatreonPete's Substack Pete's SubscribestarPete's GUMROADPete's VenmoPete's Buy Me a CoffeePete on FacebookPete on TwitterBecome a supporter of this podcast: https://www.spreaker.com/podcast/the-pete-quinones-show--6071361/support.

I can't actually believe it that Starlink has zero internet problems, and land-based internet is the one that's actually causing the issues. Let's see, I'm on Starlink right now. There is a storm moving in. Same. And let me check my speed right now. Because I already have cloud cover. We haven't had any sun all day today.

I've had like maybe two or three hours based out in like, you know, 15, 20 minutes, like increments of like intense sun and then just, you know, no rain. And now we have no rain and crazy like that really awesome lightning that goes through the clouds but never comes down. Yeah. So it's interesting. the summers have been very different than they normally are the past you know three or four years we've got like progressively weirder but like you live in the south floor right oh yeah all throughout the summer every single day in the afternoon it rains you know monsoon intense for a period of about you know 20 30 minutes and that's it stuff yep we haven't had rain all summer

Really? Yeah. Like maybe, I'm thinking like maybe eight days in three months. And when it does come, like, you know, you probably heard some of the stories out of like Fort Lauderdale, like the massive flooding and stuff. It just, it monsoons for like two days. So I don't know whether the jet stream has shifted or what, but it's very unusual. When I used to live in, when I used to live in howlough, And I lived about a half mile off the beach and there was like a week every year in July

Where it would just rain all week. I mean it would and it would just poor for seven days in a row And you know that's what I got used to. We have that that exists. It just we don't have a midday rain anymore. It's fucking weird Yeah, my I mean my starlink isn't as fast as it normally is, but it's way it's it's five times as fast as I need for live streaming. And I need more powerful live streaming than just recording like this. I should be fine. That amazes me a lot more than like most people,

because most people, like, never thought of satellite internet in that way until Sartland came around. But, like, being intact, like, I've watched three or four. of these just absolute failures. And the fact that Elon Musk was able to knock it out first shot into a usable product, right? Like, first off, like anything in hardware is a nightmare, right? This is, this is actually why, you know, Peter Thiel is always talking about why we don't, like, hey, we were promised flying cars and shit. Why don't we have them?

Instead, we have, you know, just software. funds and tons of software and people try and argue with me about like oh no tech has been advancing like crazy like how can you say that I get a lot of heat for it especially doing what I do

right because what I'm basically saying is my industry is bullshit and what will eventually come down to is I'll say okay well let's say if we got rid of your flat screens at home and your laptop

and maybe like the little whatever touch screen thing in your car and your cell phone. What exists in your life to convince you that you're not in 1970? And the answer is nothing. Well, I mean technologically, yeah,

the culture, the culture that would be the difference. Yeah, okay, yeah. But like in your house, like, how do, if I got rid of all your screens, like, are you in the 70s, the 60s. Everything exists online.

And it's because of risk. I fought against getting a smart TV for like the longest, longest, longest time. And I probably might not even have one now, but it came with the house. And it's just like my, my monitor is a 40 inch smart TV. But I mean, I have everything disconnected from it. I don't, it's not connected to the, to the internet and everything. So, yeah, it's just, all it is is just a monitor. I actually use, I have a 42-inch monitor.

Like, I think anybody with, like, the multiple screen set up is just causing themselves unnecessary stream. But, um, the only good thing for the multi-screen monitor is, like, for live streaming, if you're live streaming to different platforms, to be able to have each platform open so that you can like read comments in real time there's no what I do is you know I have to open them I have to switch tabs and things like that but you know when you're if you have multiple that that's the only reason I could think about it think that is I mean there's what that or maybe trading yeah oh yeah yeah definitely but the reason

I wonder like why Starlink made me think about that is because the reason why we have so much just innovation in software is because we watched the defense department take a big old step backwards and private capital was supposed to kind of fill in the gap right vc exploded at the same time as like six six star wars was winding down and star wars brought us things like the internet star wars brought us well right the satellite internet as well um all the cool hardware stuff that we have. And all VC got us was software.

Right? So like if you know, the internet went away, a majority of our technology wouldn't really exist because it would exist only on our machine. And maybe I guess it would exist on multiple machines if we all got together and had a land party. But from an investment standpoint,

right, software is much much easier to invest in because all right let's say like you get halfway you're two years into the project a year in the project and you find out like fuck we did this wrong we have to go back to like we have to go back a year and re-engineer i get to go back to where we were a year ago and then re-engineer from there into this new direction because of this problem that we found with software that's not going to cost me any additional money than i was going to already lay out Just, you know, that money is being spent backtracking a little bit and coding in a different, you know, a different tree than, you know, I was on already. But with hardware, like, let's say the company has got like 40 million sunk into it and you have to change the product, right?

Something doesn't work. There is a very good chance that you are going to burn another. $40 million to fix it. There is no quick fix. Because a coder is going to be sitting there in front of his computer screen, coding. Whether he's coding this other thing that he was supposed to be building that you have to change directions on. Or whether he's coding, you know, the new thing. It's the same guy earning the same salary in front of the same computer.

But with hardware, we're talking about like suppliers need to retool and show. engineering shops need to prototype, you know, what the new, you know, modification, like, it can cost, it can burn basically, you know, all of the money that you have up to that point is just wasted. And there's a very high likelihood of that. So from a VC standpoint, like, all right, I have a hardware play and I have a software play. Both of them could have huge returns. They could be, you know, I could have two unicorns. I got have a Starlink and I could have a Google. I am going to choose the Google every single time because of that risk. So, Stormy, this is something, this is a great way to get into this. So I've been thinking of it in terms of the resource curse or Dutch disease. I was very interested to discover that J.D. Vance has been looking at this as well,

that basically dollar in Germany. I have. Oh, sorry, go ahead. I said a lot of guys in my industry have. Okay, yeah, because, Because that seems to be the issue. And this is very similar to, so the problem I've raised is, especially with publicly traded securities, is basically that asset bubbles crowd out CAPEX, which is what you're describing. Because everybody just wants that quick shot in the arm of getting their, you know, stock line go up.

they're not willing to take the long-term, you know, low time preference, slow growth to do real R and get real growth. And basically, we've run out of quick fixes, which is also a Marks-Binnett's point in Dow of Capital. You can see this in pharmaceuticals more than anywhere else. Yeah, blockbuster drugs ended in like the 80s. Yep, exactly. All the easy, all the low-handed fruit is already picked. I was explaining this to Dark Enlightenment the other day. One of the smart skies, I think, I've talked to in a very long time.

And we were talking about, like, he was like, I had like kind of like a roadmap, or not like a roadmap, but like some bullet points that if Trump were to be able to do, we could dodge a lot of what's coming our way. Because I 100% agree with you as far as liquidity crisis, except for I see. them compartmentalized. I mean, we can hammer that out. No. Right. So from a regulatory standpoint, everyone thinks like, oh, you know, just changing corporate tax law is just, you know, oh, like, basically that is only going to lead to like GDP increase, because if we lower their taxes by 10%, that just means they're going to make 10% more money,

and then the stock's going to go up 10% or whatever it is. Generally linear thinking, right? Not orthogonal. And the answer, to that is actually worth. It goes completely perpendicular, right? The reason why big corporations, publicly traded ones is a big difference. I'm sure as you know Sean. The reason they do what they do is largely because of tax policy, right? Tax policy or environmental regulation, right? And so let's say I have, like what the U.S. has, rather persecutory corporate tax structures. Right. For me, if I end the year with any money, that's money you get to tax.

Right. So if I spend that money in R&D, that takes a while, right? So like, you know, a roadmap style approach. Like we're going to hit several milestones of capital outlaying, right? And a good chunk of that R&D money is. going to be spent next fiscal year. Well, fuck, that means I get taxed on that money, and then I'll have less money to spend on R&D.

But if I don't spend money in R&D, like Moderna is not doing now in paying the stock price, honestly, that company should go to zero. It has been a very painful short for me. The last two years have sucked. But that company's eventually going to go to zero. But they reduced their R&D budget, and the stock got hammered immediately.

And the reason for that is you can relatively assume like, fuck, well, if you're not spending money in your company, you know, and trying to invent new shit, then I can pretty much assume that your numbers now are going to be your numbers in the future. And if your numbers suck now, well, then, you know, it's going to suck in the future, but just suck more. Right. So I'm going to get the fuck out of that stock and go buy somebody that is that. So what they do instead is they do stock buybacks. I was just about to say, yeah. Stock buybacks are a short-term bribe. to for investors like please don't leave please please please don't leave i know we can't come up with

new shit but that's because we really can't end the fiscal year with any money on our balance sheet or the irs comes and fucks us in the ass so we're kind of you're putting CEOs you're forcing CEOs to do very short-term thinking and i think CEOs get a lot of shit because they're systems thinkers you don't get to be a CEO all right your brain isn't built for it unless you are one. And these are the type of guys that generally have the dynamism to where they would like to build shit if you would let them. And because the regulatory regime, you're forcing these guys to think one quarter at a time. So you don't think it's the principal agent problem? I've been looking at it more that, you know, or kind of like selectric theory, that they have to

defend the position from the board. It's a binary. It's a spectrum. Okay. There's guys like, let's say, Jamie Diamond, right? Jamie Diamond is the CEO and chairman because he owns that many shares. He worked, he literally took all the dollars that he's ever made on Wall Street and sunk them into J.P. Morgan, J. Stock. That company is as much a part of his...

See, Sean, you probably have run into this a little bit. I don't know if you're dealing with family offices or whatever. But rich people don't talk about money. Yeah, I've got a whole deep dive on Thorstein-Vebblin and kind of the issue with the leisure class. And this is also, I think, why they're, because they're more focused on status than money, it often means that they're not, they're not focused on creating

resources. There's kind of this pervasive myth that we're in like a post-scarcity society. And so, and because reputation or fame is a zero-sum game, whereas wealth is a grow-of-the-pie game, you know, once they've hit that that satiation level of money or resources, now they want to get cutthroat in the zero-sum game of reputation and social status. Well, like, so like there you have all, like, Jamie Diamond already has all social status in the world. He's out of the money in the world. But his identity, and this Elon Musk is very similar. And I want to draw a distinction between CEOs that are board employees and CEOs that are CEOs because

they are also the chairman. You see a very distinct difference in how these type of men act. So like an Elon Musk, he's CEO of Tesla because he owns that many shares. Right. His skin is very much in the game. And his identity. Right. Elon, if Tesla goes to shit, if Tesla goes to zero, that means Elon Musk has gone to zero. Right. I mean, he's founder or co-founder, right? So he has that identity of, you know, this is his baby as opposed to co-wing as a manager where it's a temporary gig, you know, like a nomenclature where I'm going to abuse the office that I have because I know I'm only going to be here for 10 years and then I'm out and getting my golden parachute. So they don't really care about the long term of that business. It's just, you know, a vehicle for them. So you could summarize this between internal and external CEO promotion. right so like if you've worked your ass off to get like your whole life and now you're in the C suite or like just next to C suite if I promote you to CEO then you have a tremendous amount of skin in the game because not everybody's going to be able to do what Jamie Diamond did or Elon Moss did Elon Musk bought Tesla and was very young it was like a series D right so that means it had you know five funding rounds plus you know including the seed and was just starting to get a product out the door right I think that I think they're they maybe shipped, you know, 50, 60 cars the time he bought it. And he transformed it.

But the reason he probably did so was because that was really all his money at the time that he bought it. He didn't have any other choice but to make that work. And if CEOs were promoted internally, right, from guys that worked their way up to it, I think it would solve some of that. Because the parachute CEO is the CEO you're describing, right? this is a professional CEO. That guy's a faggot. Yep.

Yeah, well, I mean, that's the whole managerial revolution thing, is that, you know, they take over institutions, but just temporarily. Yeah, 100%. They're very short-term players. But if you think about, like, who are the real, who are the CEOs you think of? So who are, like, because back in the before, CEO is a modern term. a relic of the manager revolution, I guess you said. Before that, they were tycoons.

Right. You know, Elon Musk has probably got about as much money as, you know, Andrew Carnegie. And there's some other guys like Soros that he's got a fuck ton of money, but they act completely differently. Right. So I find that these owner CEOs are the great man types, are the top. are the tycoon types and the professional CEOs like i personally i do not believe that somebody should be allowed to be a CEO unless they own enough stock right if you own enough stock for your chairman of the board right you get to be CEO you don't get to pick somebody else that you can

hire and fire because then you're just going to be disinterested you're only going to show up when there's a fucking problem but anyways we're getting top track to well so i think this is why you know, Elon took Twitter, or now X, private through a leverage buyout. I mean, I think that's the life raptor or the, you know, the escape for a lot of these publicly traded companies is before they go illiquid, it's going to take that kind of, you know, that kind of mentality or that kind of person to have that, like, private stake in the game where it's, you know, it's equivalent to their identity, as you're saying, basically. Yeah, and I see we're going into a place where I think corporate debt is going to. So I think publicly traded companies will continue, unfortunately. I would prefer they all die just after I've gotten liquidity first. After I've sold my being in public shares of things, I hope they die.

Because I think they're a disaster. And every one of these tycoons has thought the exact same thing. like i don't know p i can't remember if you did you did you do something on um henry ford i've never done any a deep dive on henry for um you know obvious reasons of uh wanting wanting to do that carefully yeah it was maybe it was the 20th century guys and i didn't know this they definitely did henry ford yeah yeah i didn't know this i knew about it for j p morgan and I knew about it for both Rockefeller and Carnegie, but I didn't know Ford was the same thing, right?

So Ford put in his will and literally came back to the company at 90-something years old when he found out that, you know, people in his absence were trying to take the company public. Like he would have burned every single factory to the ground. And he said so on numerous occasions, right before that company was taken public and that's why they only got to do it after he died because it allows you know this is why I think the difference between private and public capital is such a big distinction and why you see private equity on one side of the dividing line and public capital on the other side except in the term of like CEOs that are also chairman

So like David Solomon, J.P. Morgan, right, those are the only guys really from Wall Street that are really pushing back against what's trying to be implemented. The rest of them are all from the private equity side because their capital is being deployed for decades at a time. Right. If I'm investing a bunch of money inside the United States, then I need to say, well, fuck, I guess this place can't go to shit. now can it because my money is stuck here. My money is stuck in these companies and I can't just go sell it like, you know, any, any one of these, you know, finance, any one of these hedge fund types, right? Those, you know, buy a stock sell it the next day, right?

If it's a quant fund, right, or a high frequency fund, they'll sell and buy the same stock, thousands of times in a minute. Like they have zero attachment to that company. To them, it's literally just an abstract number. And they have no long-term commitment to the company and the place that the company operates. The company may have like attachment to the town of where it derives its labor force from. But the guy who, you know, by a perversion of our society gets to vote on what that company does, he doesn't give a fuck about it. So that's also something I've been thinking about in terms of, you know, the focus on market cap as opposed to cash flow.

A gentleman I talked to once gave a great example of, you know, Mr. Darcy in, what's the famous novel? But wealth used to be measured in terms of how much like, yeah, as a landed gentleman, it generated in a year. You know, there was no market for, you know, real estate in the, you know, 17th century or whatever it was. You know, these depths of market is a new phenomenon to make that be the measure. of the value of a company. And I think that's going to be one of the, and to your point, that's the benefit of an illiquid asset

where you have to have a 10-year or longer time horizon is now you actually have to be focused on profits as opposed to just, you know, how can we juice up the earnings per share, not by increasing earnings, but by reducing the number of outstanding shares. So running through what you think a patronage network would look like. Okay.

Okay. So because CAPEX is risky and it's long term, how this has historically been done, Imperial Japan is actually very interesting in this regard. Germany, you know, for the last century, has been interesting this way as well. Probably about Frederick List economies. Yeah, you need banking support where they're willing to make those kinds of long-term loans that they're going to stick it out. That that's really the key that we don't have. So patronage for our guys, you know, we've got that talent. You know, we've got a huge glut of weaponized autists who, if somebody could just figure out how to get them income in order to afford a home, get married, start families. You know, they would put in the eight-hour work weeks.

But that's not what's rewarded when just trying to, you know, IPO or gin up. the outstanding share price is focused basically in short-term gains through marketing, as opposed to that R&D, which is risky. And to your point, it's opportunity cost, right? Richard Werner is very good on this as well. Anytime you create an additional line of credit or create more money in the economy, it's going to go to one to three places. It's going to go into an asset bubble.

It's going to go into CAPEX or it's going to go into consumption. When it goes into consumption, that's a very obvious problem. you get the inflation like we've been seeing the past few years. The prices, everything goes up because there's just more money chasing basically the same number of goods. Going into CAPEX is ideal, especially because then the increased efficiency from that improved capital structure is going to offset that inflation with deflation and balance out, which is what real growth in an economy would be. But that entails entrepreneurial risk. You have a longer on time horizon.

There's just a lot more unknowns with that. So what tends to get favored is investing in an asset bubble. It's the, you know, you're dealing with bigger companies. You can write bigger checks. The results are basically instantaneous and they're basically guaranteed, whether you're investing in stock or real estate. The same thing as inflation in consumption goods, except because it's in an asset bubble. Well, you see that hit right away.

And you don't have to be any kind of like creative or confidence to do that. You know, it's all just, you know, spreadsheets. and, you know, fictional goods. Yeah, you're literally right. There's not a single hedge fund manager in the history of the industry that has beaten in the S&P 500 for more than 15 years. Well, and even the Fed came out with the paper recently that basically all stock market growth has been because of the great moderation.

Basically, it's just because the government is issuing a bunch of treasuries, getting the, you know, the, was it 13 banks or whatever, that are obligated through open market operations to buy them, and then that credit goes immediately into S&P 500, especially now that index funds are more than 50% of the market. You basically, you know, a portion of it. It's because you're on the index.

Yeah, a portion of it does. Right. Those treasuries go out there to be levered up. Right. So this is my theory on COVID. Let me know what you think. What happened in August of 2019? Yeah.

It's an overnight repo rate spike, which is very interesting that that came out right afterwards. Yes, exactly. So if you had a repo, and I've been kind of bad in this around with friends. So this is the first time anybody's heard it publicly. So I think that Tom Luongo is right about his zero-dollar thesis. So much so I dug very deeply into its origins, which he describes. how it exists now. Right?

And I went and dug up how it came to be. Because I've had conversations. Like, up the side. Pete sat in on one of a conference, series of conference calls I host. Right. Well, we take turns hosting.

Right. And one of those, actually, one of the two women, that we're on the call. She was a former Fed governor and she was on the LIBOR committee. This woman is probably in her 70s. And you know, this woman should know more about global capital markets than anyone in the world. And I asked her one day and I said, X, Y, Z. It's true that nine out of every $10 is, it's true that it's, it's a printed by offshore banks.

Yeah, the correspondence. Yes, yes it is. And I was like, okay. And all those offshore dollars, they're indexed to LIBOR, right? And she goes, yeah, of course, of course they are. What else would they be indexed on?

And I was like, okay. So the Fed doesn't control the dollar. And she's like, no, no, of course not. Like, what do you mean? Like, that's not the case. I'm like, okay, well, if nine-tenths of the dollars are printed offshore by overseas banks, and those dollar-denominated debts are indexed to a interest rate that is set by 20 banks in London,

not a one of them being a U.S. bank, then that means the Fed only has control over 10% of that. So if I own 90% of your company, right, I own 90% of the shares and I can vote those shares, then that makes that my company, not your company. And this woman was fucking speechless. Right? She literally is like, I have to come back to you. I have to think about that. And I'm thinking myself, I'm like, bitch, you do the, like, daze your child.

Right? You were in charge of a fucking portion of the goddamn global economy and this never occurred to you. And it bothered me and it bothered me and it bothered me and it bothered me. And I just run into this again and again and again. One of a similar type conversation with a famous economist. And this guy couldn't understand. He's like, I couldn't even. This is the, this is an economist like Goldman Sachs contracts, right?

Often. right this guy goes on like speaking towards investment banks stop what they're doing and everybody gets out of class for an afternoon to go listen to this fucking asshole speak and i asked him like well what happens if there is a sovereign debt default in a g7 country and he looked and he looked and he's wearing the face and said i don't i don't even know where that would fit into my my worldview like i wouldn't even know how to model that like i don't even i don't even know where to start with that i'm like really really like you're a fucking global economist and you can't you know at least hypothesize right like fucking just spitball what a sovereign debt default would be like in one of these like who are you people and i've just run into it again and again and again and again and the only conclusion that i can come to is that all of the people that set up this infrastructure right the plumbing like if i bought your house right right and

And you built it yourself. And, you know, you moved to some foreign country, some faraway country, and I can't get a hold of you. And I have a plumbing leak. I'm going to have to fucking tear that house down to the studs because I don't know where the pipes are. Yeah. Yeah.

The movie Cube of, you know, there is no master plan. It's a headless blunder operating under the illusion of a master plan. You know, I think they inherited. this thing. They don't know how it works and they're just trying to keep it going and keep it from exploding. Well, yeah, because they don't know. And that means they don't know how to stop it from exploding. Right. So like if everybody that set up the current, you know, we'll call it the euro dollar system, everyone that put that into place, all of the boomers that are in charge of shit that won't retire, right? What these guys came into whatever firm that they're at, right, in the 80s.

the mid-80s. That's like when they, you know, just got on the trading floor or whatever. That means everybody, all the men that set up the Brettonwood system were not only retired, but we're dead by the time any of the people currently in charge got anywhere near the steering wheel. So none of these fucking people, I would say more knowledge of how the global financial system actually works exists in our spheres, then does the institutions, then does the institutions, then does the elites. So Tom Longgo is effectively correct, right? This Eurodollar system, this nine-tenths of all these offshore dollars,

they're going to blow up, right? They are hypothesated dollars. And I don't know how familiar you are with his thesis, but I use J.P. Morgan private banking, and I got a letter in December of 2020. or was it in 2023 or 22 I just remember it was December

it was right before years and it said you cannot deposit any LIBOR denominated securities like you're not allowed right A we won't allow you

right and then I got another letter like a week later that said if you have any LIBOR denominated securities you must sell them by January and I don't get like there's not a type of

you know bank that tells you you have to must do anything, right? They're generally very nice and cordial and, you know, beat around the bush for a while. But they were, it was very clear. It was like a, you know, five or six sentence letter. It was like, you have to do this. You can't have any LIBOR denominated securities or instruments in your account at all.

So to come back to the patronage question, though. Okay, so a historic example of a blowup would be. What is like if all those dollars in our, all those trade, all those people buying stock overseas aren't allowed to play. Right. So I'm saying like there's a very good chance in the future that we may exist in a vacuum. I guess was the point I was trying to get at without something like a crazy person. Right.

The US dollars being put to work in U.S. markets. So a historic example of, you know, right after the Great Depression once it hit Germany, is that the middle class who owned stocks in Germany got wiped out. And that was the big part for, you know, the, uh, revolutionary movements that occurred soon after to stabilize things. But the people actually had physical control of the factories and farms did very well. They did better, in fact, in the midst of that. So as far as patronage, I guess the question why you use kind of Germany and Japan as

historic examples is, you know, getting people to invest directly in the things that are real CAP-X that create real tangible value, that they know their savings is safe in an industry that actually makes things. You know, if you if you work at Mitsubishi and your savings account is with Mitsubishi bank and you know, Mitsubishi is making, you know, generators and fighter planes and, you know, cars and air conditioners and whatnot, you know, they have the economic capacity of selling things that are valuable to other people and getting wealth for that, that there's some security there, right, as opposed to these accounting fictions that we're talking about, which is, yeah, when they blow up, you have an IOU for what?

I mean, I think ETFs are a whole other version of that as well. Nobody's really looking at the divergence risk or slippage between, you know, ETFs and what they claim to represent. So for our guys, though, who actually are focused on real productivity in creating that parallel infrastructure, I guess, you know, to get one or two steps ahead of this, right, that you're not much holding the bag, finding out that it's a cat and not a pig in the poke. All right. Well, so the majority of the boomer's capital is tied up in public markets. Right. So we're talking about a complete destruction of capital markets in your hypothesis. We're talking about the destruction of boomer capital, which we...

I'm betting what's going to happen is similar to Maiden Lane with the mortgage-backed securities is that they'll, you know, sovereign is he who decides the state of exception. So they'll say, well, it's okay for Fed to own special purpose vehicles. It's an economic emergency. We're not really going to prosecute ourselves. And basically, they'll create a special purpose vehicle to take these index funds onto the Fed balance sheet. And then they'll do gated redemption so that boomers still get their retirement income. It'll be uncomfortable. They'll lose their liquidity, but they'll maintain the notional value of those securities. And then they're just going to use financial repression, which is a fancy way of saying inflation, instead of the stocks dropping and notional value to

what they're actually worth, they're going to use inflation to debase the currency until it reaches that artificially high watermark. And then the boomers will be dead by the time that happens and their retirement income won't be a political question anymore. What time are you thinking?

So I'm not saying it's going to happen soon. It may not even happen in my lifetime. I'm in my 40s now. So let's say between 10 to 30 years. Okay. Well, so boomers, population is a very interesting thing. So that Jewish guy in what you can call it, Peter Ston,

you this a little bit at dinner, right? So chaos theory is terribly named. It's actually like nonlinear systems dynamics. And it was discovered when they tried to model two things that on the surface seemed like very simple systems. One was the weather. It's like eight or nine different, you know, inputs like barometric pressure winds me, whatever.

The other one was population, right? It was a deer population. And they found that even though the whole system operated on five variables, right, because that means there should be a total of 25 possible outcomes, right? Every thousand or so iterations, it would give them some insane number. And they couldn't make this go away. So the boomers are that. Right.

So like the story that you're told is that like, okay, after World War II, everybody came home and fucked a lot. Like, okay, well, how come South America has a baby boomer generation? How come India's got a fucking baby boomer generation? Did they come home from World War II and fuck a lot? No. That's not what happened. So the boomer generation is a global phenomenon. And COVID, so basically the,

you know, our population decreasing 5x would actually be a return to the mean, right? It is the boomer generation that is the anomaly. It's the boomer generation. It's the outwater. So right now we're already down 30% on our boomer count, and we lose roughly 10 to 13% every year. All right. So that means in three years, right? We're already past, we're inching up on 50%.

right and then after that point they're no longer the the dominant economic factor right and this is why everyone's this is why they are freaking out this is why nothing they do works right this is why the market doesn't work this is why none of the debt works right this leverage bubble that they've made yeah my green famously is the analogy of uh you know if you're breaking don't work in a car, but you're driving up a hill, you don't really notice it. But then once you cross the peak and are driving downhill and your brakes don't work, then you're in for a big problem. And yeah, getting these securities as a way of sucking inflation out of the system,

well, now that they're selling to redeem that in order to generate their retirement income, it's all getting pipe back in. So, yeah, the demographic crisis mixed with, you know, with that Band-Aid solution, No, I think the demographic crisis isn't a crisis at all. I think it's a blessing. Right? I think it's the best thing that'll ever happen to the country. So check this out.

You have a pyramid, right? So our whole society is a pyramid scheme, right? Where you have a whole bunch of people at the top or on the bottom, working their ass off, right? And that money filters up and it gets taken out a little bit of time to support the people at the top, the old peoples. Right. And what we have right now, right?

So you can add up the baby, you can add up the zoomers and the millennials together. And there's five times as many boomers as those. Right. So actually, I think you could probably throw in the Gen Xers too, but I'm not going to any. Right. So just the Gen Xers and the millennials put those together. There's five times as many baby boomers. So what we have is the pyramid scheme has flipped upside down.

Small amount of people at the bottom working and a large amount of people on the top. taking all the resources. What happens when they're gone, right? So the baby boomers also own all the houses. They own all the small businesses. They want all the medium sized businesses, right? All of the infrastructure that you're talking about, right? Let's just use it in turn, let's just, we'll just call infrastructure and, you know,

small and mid-sized businesses as, we'll just use houses. This is easy for everybody to understand. How do you sell if the baby boomers on all the houses, right? And there's five times as many of them as there are of us. How do you sell five houses to one person? You don't. Right. And also, you know, the issue is they're not selling.

Or as of now, the people at that bottom of the inverted pyramid do not have the capital to buy them out, right? Exactly. But the problem is going to sort itself out because you can't sell five houses to one person. Well, there'll be some massive evidence when they die. Or they'll give it all the way. way to charities and foundations for political purposes. They'll give it to Haitians because they hate their white kids that much. Maybe. But whether they give it away to Haitians or not, a large portion of them are not going to. There's no way that you have that type of disparity

without a correction in price. So I think the housing affordability problem is going to sort itself out. And in the way that that is going to be sorted out, we are guys, if they are ready and prepared, are going to face a once in a hundred year buying opportunity. Right. And I mean like, okay, you can't afford a house person that is listening to this. All right. Well, in the future that I'm talking about, you're probably not going to be able to get a fucking mortgage either. so that sucks. But could you buy a house if it was 90% off? I bet you could.

Especially when even if it's 90% off, there's still four of them that aren't going to get bought. So obviously it's going to get a little bit worse than 90% off. But just hypothetically, could you afford a house at 90% off? I bet you could. Or what about a small business? What about a machine shop? Right.

What about in small engineering company with five or six? six CNC machines. Because at the same time, this is happening. We have this other thing happening, which is the Strategic Defense Initiative for onshore and production. And big mega corporations, like the ones that currently dominate everything,

what is called dominate production, they're like cruise ships or battle ships, or the biggest, whatever the biggest fucking ship you can think of is. They take a really long time to turn around. So this is just a hypothetical or a hunch, but I think the demographic reality is going to set in right as we're going into peak onshoreing. And there's no way that you onshore without shortages. There's no way, which is going to create an artificial demand.

scenario. Right now, anything you want to buy is made by fucking Globo Faggot Corp and it's made in China and shipped to you and you can go to your Walmart and get it. But if GloboCorp has to move all of its production over here, that takes time, right? Like they can't even build a fucking semi-conductor facility in Arizona, right? This is just going to take a lot. So that means that there is going to be a demand opportunity that, one, exist any other time in history, I don't think. Well, not in history, that's a ridiculous statement, but let's just say in the next 80 years, whatever, that someone is going to have to fill the gap, right? So right now, small and medium-sized businesses can't compete because you're competing

against literally the entire third world, making things for peanuts and whatever, right? But if we're onshore and manufacturing again, there is going to be at least three or four year, maybe even longer, period until their manufacturing facilities are constructed in the places that they're on shoring too. So who is going to step in and fill the gap? Shortages mean price increases. Yes, that sucks. But what that also means is opportunity that was previously taken away. So small and medium sized businesses, the engineering shops, they have to make fancy stuff that's ITAR compliant.

So if you have 10 CNC machines, the only way you could even make any money at all is if you're doing aerospace or defense because the regulatory compliance structure called ITAR so burdensome that it can only be done by U.S. companies and can only be done by these small engineering shops because at a large scale, the regulatory burden becomes too much. So like Lockheed Martin isn't actually a defense contractor. right it doesn't build shit it just buys a whole bunch of pieces from tiny companies mid-sized companies mom and pop-sized companies and assembles them and then sells it to the government for much more right but if i can make a bunch more money right making something much simpler right like i don't know think of what's a you know a small metal object like a kitchen appliances right if my CNC machines could make way more because global cork fucked up and their you know their blender factory is not here yet right there is now a market opportunity where one previously did not exist for me to stop making bullshit i tar compliant stuff and crank the fuck out a bunch of lenders so typically though you know that is still requires bank capital in a medium term in order to do, you know,

expansion or or retool or whatever it is to do that. It's not a fire sale. Right. So even that too, like because you mentioned the boomer selling their businesses, but they're not going to sell working businesses. I think that's going to be very rough transition. It'll be an asset sale and then, you know, whoever does buy it is going to have to figure out how to apply it for future. But so, you know, in terms of answering this patronage question of how do you have that capital network you know and maybe you have

some insight on this from working in vc in order to you know sponsor something like that right that you're identifying talent people who could make that happen to do that retooling of that CNC equipment and you're going to invest in them and have that 10-year time horizon because it's not going to be you know the managerial states banking system right this is going to be private money that has to do this. Yes, I see an explosion of private lending in the future. And also, it doesn't have to just be private lending. And honestly, I don't think that may,

I don't think that's actually the way that it should be done. Right. So I think this, do you know how VC structure came about? Yeah, so yeah, feel free to explain from the beginning because, yeah, I think the smartest people in finance and economics are usually of that financial historian mindset. So yeah, beginning at the beginning is usually best. Yeah, it's, it's from, in a nutshell, it came from whaling because whaling was so risky, all right? You had the general partner and the limited partner, right? The general partner

is going to put up, let's say 10% of the money, right? So in our fund, we do a bit more than 10% but 10% is pretty standard. So 10% of the money in the total pot of, we'll this call the fund a big pot, which it effectively is. 10% of the money in the pot is mine. And I am very skilled at picking whaling locations or startups, whichever one. And you would like to capture some of, you know,

my location picking startup picking prowess. So you're going to take a passive seat, which means I will invest your money as I see fit. But I will split the returns with you. I will only take 10% or 20% of the money I make you. So, you know, it's a pretty good deal. and 90% of that pot is going to be filled with outside investors. And they just get to sit at home in Nantucket or whatever fishing place.

While I actually go out and I find the whales and find startups, I think that exact same structure would be very, very good. It lends itself to joint venture very easily. right because if I have the capital you know who's not going to be retooling those machines me you know who's not going to be trying to take those products to market me and who's not going to be working 12 hour days seven days a week me so I want a passive ride joint venture is probably the best way to do it because it binds my interest.

If I lend you money, my interest is only in the interest being paid, whether it's you or I boot you out and somebody else wants to assume your loan or whatever. I only care about the interest, but if it's a joint venture, I care about the actual underlying business and your ability to manage it.

It's that skin-in-the-game type. thing. So I think whichever way you're going to do, you would want. Right. So do we have that for our guys, though? Like, where is the, the base fund that is putting that money into? Show me the base companies. I've had this conversation with a dozen people.

Pete, I think I've ranted to you about this for a little bit, but it's probably the thing. You mean about how people just, you mean about how people just, you mean about people just say you got to be building you got to be building and then but they don't tell you what to build that and the um dissident publishers yeah everybody we need more dissonant publishers we do yeah we we don't that took me that actually took me by surprise that somebody pointed out it's like you know oh really the the dissent right is just a bunch of artists and i'm like oh i never really thought of it that way um and it was also pretty disappointed to think of it that way because I think there are a lot of engineers, builders,

like people who make concrete things who can't get a living that would give them a home, a wife, and kids. And there's not to be a way to make that a discount rate where they would happily work their asses off to make things that are actually valuable if they knew they had some kind of underwritten guarantee of decent quality of life in that sense.

Artists deserve to be poor. Sure, right, yeah. But there have to be our guys who are engineers who would make things if somebody believed in them to make that kind of long-term bet. Yeah, so the answer to why there is no based VC fund is because no one has been able to show, I don't care whether it's based or not based. I'm an investor, right?

You know what doesn't pay bills? moral platitudes. Right. Right. Like you being more based than the fucking, I don't know, training with a unicorn company,

I'll go be based by myself with my unicorn bucks. Thank you very much. Like, it's my money. Prove to me that you have got a company that will deliver me outsized returns

to justify the insane risk What our guys don't understand is that if you want money for things, you want guys to invest in your thing, well, you're in a competition. You just don't know it. I have literally thousands of things that I can do with my money. I can make 5% on my money guaranteed by the government. I could do that. and I can take zero risk, right? I can take some risk and invest in a stock that's publicly traded.

And if I don't like it or if it starts to look sketchy, I can bail out whenever the fuck I want to. But what you're asking me to do is to tie myself to the hip to you, basically be Siamese twins with my money, right? to where if you turn out to be a fucking idiot that doesn't know what they're doing, I am stuck with you. My money is going to ride all the way down to zero, right, where if you were a stock,

I could just sell you. The second I got the first whiff or retardation, I'd be out the door. Right? So you know who doesn't have this, like, qualm, though, is if you own a bank and you're creating a credit. basically out of thin air. You can afford to, you know, take losses.

That's like that's different. You asked me where the base we see is come from. If we're talking about venture lending, you know, if I'm unsure of your ability to run a machine shop, I could give it to you in venture debt at 12% interest. And if you do not succeed, I will sell your building and I will sell all your machines and hopefully that will pay the difference. So like investing in a company is asking me to take a ride with you and lending you money is significantly less risk and infinitely more protections. But the rate of return is generally capped at something like 12%. I'm not making any multiples. There's going to be zero X's in my return.

So I think and this is why. different businesses lend themselves to different style of capital formation. So, I don't want to put this. I think there's a question of, you know, to bring it back to, you know, that, you know, is being based enough. There's a question of political will, right? Like China as a communist government said, we are just going to dominate manufacturing. And as a, you know, a political dictat dumped a ton of money to make that happen.

And it worked, right? And now people complain about overproduction, which I don't think is a real thing. But they, you know, they completely dominate manufacturing, a lot of, you know, electronics manufacturing and so on. There's no reason we can't do that also. I think it's just a question of having the will to make it happen. You know, again, Imperial Japan did the same thing. They lent to people and said, you know, we've got faith in you. Yes, you have no track record, but because we share, a common culture and we want the same goals, we think you're not just going to screw this up or take advantage. You know, it's not going to be, you know, PPP money for fake inner city businesses.

Yeah, but they have the state, though, right? So like, let's say you suck at your business, right? I can be like, oh, shit, now I have a huge deficit and I need to make that up. So everyone, guess what? We're doing an income tax raise. Sorry. Right. Or it gets spread out for inflation.

It's inflation that's never recovered through because the capital structure did not become more efficient. It just just used. But if you're going to ask a private person, who is going to cover, like, there's no incentive mechanism for me to take that bet, right? If it comes down to like state mandated investing in the 20,000 right wing dissident book publisher, I'm going to bury my money in the backyard and pretend to be poor until you go away. So I guess I'm thinking of in terms of that for, you know, a people, a culture who values actual productivity, you know, make those high trust relationships at a discount before people who are actually competent become so rare and such a necessity that they're going to set their own price.

I think there is an opportunity to buy them cheap now because people don't realize what time it is. See, I've been urged, and let me know what you think about this. I've been urging every person. So I basically my little spiel about, you know, whether it's a, economic stuff or whatever usually it ends in like an inundation of dms or whatever and they ask me like i am in x y z situation what do i do if i have x y z amount of capital what do i do if i have you know no capital what do i've gotten like a wide range of these and it's the younger guys obviously that tell me like hey i don't have any capital right like like how

Because lending now is basically asset-based. I mean, that's the vicious cycle of, you know, lending is based on what you have assets as collateral in order to get future loans. And unless you're a boomer that owns a house and a large stock portfolio, you don't have the collateral to get that loan. But under, you know, the New Deal, for example, you know, they did redlining, redlining and say, oh, you're the kind of person that lives in this neighborhood and you're probably responsible and you're probably going to pay back this 30-year mortgage that they invented out of nowhere. the idea of a 30-year mortgage was crazy to bankers until that got pushed through. And turns out actually most of them did pay their mortgage. And it worked. So I've gotten, and you said you caught that show I did with the Jason from the two-bit podcast.

Yes. And how it ended, I believe, if memory serves, is how I got to work. where I am through childless boomers, which there are a lot of, that are successful. And also through boomers who've been insanely very successful, whose kids don't give a fuck what that does. They don't give a shit. They don't hear his stories, right? They just care about their credit card bill being paid.

And I basically was the guy that would listen to those stories. I wanted to hear all the stories. And we give the boomers a lot of shit. We really do. And a lot of it is deserved and a lot of it isn't, right? Because they don't, everything in their totology, you know, as basically their paradigm, everything that they've, because your paradigm is also your, it's not just like what you believe. it's the information you build your reality with. Yeah, it's like your sense making of the world.

The options that you think are available to you. So when they're unhappy, right, like let's say the boomers without, you know, whose kids don't give a shit, or that they've done everything in their life, right? They've achieved tremendous amounts of financial success. They don't know the options that we know about, you know, spiritual success. They don't know these other things are available to them that we know. So I don't blame them as much as everybody else does. So with these guys that I'm talking about, like I was that guy.

I was the surrogate kid that cared. So is what you did replicable? That's the question I had to Jason too. My first question is, well, where do you meet these boomers? You know, I would love to have those kinds of conversations with them as well. Finding them and getting them to be willing to have that conversation is a whole other thing. This is what I was trying to get it before when I was talking about the machine shops. I'm talking about capital formation.

I see the solution not as like private lending necessarily. I see it as apprenticeships. I see apprenticeships solving a lot of what we are talking about because I bet you every, like if you live in, you know, let's say, I don't know, you know, rural Appalachia, right? I can't, you know, there's not a lot of multi-millionaire boomers around you. There's probably two or three. And they own businesses that operate in those communities, right? And I've had, a good friend of mine was in, and this is going to ruffle on

of feathers because I know like, oh, we can't teach your guys to be plumbers or whatever. Like, I had a... And I've seen a lot of boomers where they're not interested in teaching or a place. They're like, oh, I don't get paid for that. That's not my job. You know, they're part of that paradigm you talk about is that they lack a sense of legacy. You know, and often they think, well, I'm just going to do this until I'm gone. And then I don't care what happens in my plumbing business afterwards because I'll be in the ground.

That, you know, they have no sense of like, well, why should I take on extra work and extra responsibility? I'm already in a mindless routine that I could just keep doing what I'm doing until. Here's something to them. And what I'll say is this. All of the guys that should be working for them, right, they can not give a shit about legacy. That's fine. But that's not the problem that they're facing. So my friend, his mother died, and he had to go to New York and basically handle her estate.

And her refrigerator was broken. And it was an old refrigerator that he wanted to keep. right and there was one refrigerator repair person for like all of like you know uh northern new york and it took him two months to get this guy to show up and the guy was a single boomer right he'd been in business for 30 years and he is trying to find employees that he will happily pay $90 an hour or $80 an hour because he charges $150 an hour. And he can't

find a single fucking person to come work for him. Because we were just as a synopt as they were. Every single person that we see in our age group, yes, Kat, I will let you in.

You're not the boss. They all went and got college degrees. Even college degrees, they can't even fucking use don't matter and a job like that is beneath them in some capacity. Yeah, they don't want to get dirty and sweaty. And most of the product sports at some fucking faggot

place when they, if they were willing to get even slightly dirty, which is another thing that our guys do, right? Leftists don't like getting their hands dirty, right? Leftists think they're intellectuals and that, you know, manual labors beneath them. You know, it's not beneath, like, we do things. that shit for free. Yeah.

And here's the type of people that do that shit. Yeah, I work in finance and that's like my leisure activity is. Exactly. Exactly. So we are those guys and we will damn sure do it for almost $100 an hour. So the- Are those openings there though? Maybe this just means there's a market to be the matchmaker between these two because

I mean, that's great to hear that there are the ones who want to hire the apprentices and bring people in, that's exactly what I'd be looking for. Like another example is PLC programmer for industrial machines, and it tends to be those old boomers who have all the wisdom and, you know, 40 years of experience, but there's no openings to get a 20-year-old who does want to get dirty and wants to make that $90 an hour to start working in that field. There's no, like until they pass away, that opening doesn't exist.

And because I think there's a lot of our guys who do want those kinds of jobs and they can't find them. Like there's like three engineering shops that I know. I've been taking extra capital and socking it away in CNC machines. Nice. Yeah. I don't plan on putting them to use myself. I'm not opening up a machine shop. Right.

I have friends that own machine shops and I'm going to use the cheaply acquired CNC machines. I got at a discount. Because, you know, businesses in Chicago are going bust. And I'm going to use those machine shops because they're already, they're, they cannot meet the demand that they have. And it's a huge problem. Their biggest problem is CAD engineers, right? There's not enough young guys that know CAD and are willing to learn, you know, at a slightly discounted rate for a year. all of the, you know, changing the

machine, changing the dyes and bits or whatever and doing, you know, the less exciting, you know, C&C job for a year while they learn the actual CNC job and no CAD. So if this is such a massive market

dislocation, where is the VC for, you know, the right wing trades university? You know, maybe they can't afford to do that. So, you know, what's that coding college where it's like they get subsidized on the classes and then part of their salary for the first three years that they're working gets clawed back in order to pay for the

education that made that job possible. Again, it seems like there's an economic opportunity or business opportunity to close that gap to, you know, to make those ends meet where currently now they're not, right? Well, so if the answer is, if the question is where is the VC to come in and, you know, fund a university. He won't, right? Because that's not going to make him money. But, like, a, what you're kind of circling around is, let's say, a staffing agency. Okay, sure.

All right. And if somebody put a very compelling staffing agency, right, and was able to draw comps, right this is the other thing right it's comps right so when everyone's like well where are the vcs how come no one's funding like i've had people try and get like oh this person i got a great you know uh youtube channel or do you want to help me fund my song i'm a great musician right like that's not going to make me like show me a business model right show me a business plan right nobody's putting the work in to think or to learn what somebody like me is expecting to see and your competition looks like right you know all the non-based normie pitchdacks and I get and the very viable

businesses that exist underneath them you need to be like that but better and my money is going to go right so we're all about meritocracy until it's like oh how come nobody's investing in our space. Now we want communism. Well, where's the VC just come in and give me my money? Like, no, motherfucker. Give me a business. And I will invest in it if it is a business that looks like I can generate a reasonable rate of return. And over what time frame, though, because I think, you know, the problem I've seen with a lot of VC and even some of the VC firms that, or private equity firms that are trying to be based is because of that opportunity cost that you mentioned. They have a very short time horizon. They want to make the quick flip. You know,

they want to buy the business, juice it up, and then sell it three years later for, you know, 10x. They're not looking to say, okay, I'm going to invest in this business for the next 20 years because they're going to have amazing cash flow and we're going to get a percentage of, you know, those profits that whole time, like a buy and hold strategy. You know, it's a market cap. That's growth, that's growth private equity. They buy businesses and flip them, lever them up and flip them. So long-term private equity is a different animal. So like Carlisle Group is, they're buying businesses that are already large caps.

So say like 100 million plus. In fact, like much larger, usually several billion dollars that have been in business for a very long time. And they see, you know, distributions as their. primary methodology. Yeah. Of generating returns. And VC is the person that takes the risk in the beginning. So my exit horizon, right, from the time I invest is best case scenario seven years, best

case. If I'm investing in a startup, unless you get, unless you're super, super successful, and within a, within a couple years, grow so fast. that you're already like causing the major companies fucking you know heartburn and sleepless nights so they have to buy you out of anxiety of what you could become then maybe five years but best case scenario on average I'm looking at a seven year investment I am stuck with that right so you and I are Siamese twins my money and your business idea for seven years So what's your expected exit in this scenario? Is it something other than buyout or IPO? Usually purchased by a larger company because I'm investing in early stage companies. So an early stage company is going to basically try and become a thorn in the side of the major companies by doing their business in a different way, much better.

to the point where my business model is superior to your business model. And if you allow me to continue, I will kill you. So you can either buy me now or be killed by me later. What do you want to do? And every big business is going to say, well, oh, here's your giant cartoon check. Right. But that's also how they get Nerf, right?

is, you know, if meta or... So you're asking me to solve both... You just have to fix the world. And you make a company problems. What Google does with your tech that they buy is whatever they want to do because they own it. I can't fix Google, but I can get them to buy early stage companies

if I cause them enough headache and enough, you know, few response. So how do we get our own Google, I guess, is we're going with this, right? It's the parallel infrastructure thing of, you know, if what is really going to count, especially, you know, when this is pretty... This is the problem with parallel infrastructure conversations. They're always parallel infrastructure and not superior infrastructure.

People go where the superior infrastructure is, right? Just like capital, right? My investor dollar is going to go in the best investment opportunity. my, you know, human capital. So that's contingent on the managerial state's bank then. You know, that's like why, you know, Ricardian comparative advantage and global homo doesn't work out in real life is because it's the banks that are, you know, putting the Fed put in that system. And to go out, you know, to fight the Fed usually ends in disaster.

No, like with big companies, right? Google's about to die, I would say, within five years. Not many people don't see it coming, but a few of us are. I'm not going to be the Fed that did it. It's going to be its bigness. When something becomes big, big and bureaucratized to a point, it cannot rapidly defend itself. very similar to like a nation state.

The more bureaucratic layers, and that's for this way, if all of a sudden, let's say like 50% of the Mexicans in Mexico weren't actually Mexicans at all and were actually Chinese people pretending to be Mexicans like in costumes that they took off when they were at home in their house. And then all of a sudden one day they took off their costumes and charged across the border with AKs. we'd be fucked. And we'd be fucked because our bureaucratic structure is so large and burdensome, it is incapable of rapidly pivoting, directing its resources, and defending itself. A corporation is no different. Google can't defend itself from competitors because it has to do everything by committee. and there's 90 different layers of bullshit.

So basically, somebody inside Google may have a brilliant idea on how to defend Google from this upstart attacker. But that guy's idea is just that guy's idea. He has to get past his manager. And that manager has to see the same opportunity that he does unlikely. And then that guy has to go to his regional director or whatever asshole titles they have. or like change agent or whatever faggity bullshit that they put on their LinkedIn.

It has to go through a whole lot of LinkedIn faggity titles. And it probably won't. And even if it does, the best case, it is so watered down. It is nigh on ineffectual. So science is... How much they're really at risk if they could just do stock buybacks, though? I mean, I think that's the big problem with this, the bigness and the manager of revolution in general is the need for profit motive basically goes out the window because you've got

you know the banking system stock aren't going to help you if this other company is growing faster than you investor dollars are going to go there you can only buy back so much stock without fucking revenue right if company like let's say TikTok if i wanted to make a long-term play in tech let's say like by long term i mean three years right If I were to go back, or let's just say I'm going forward, three years. TikTok's growth is parabolic. And Google's growth has been relatively flat and stayed the same, maybe up and down three or four percent for the last decade. There is no more market share.

Like, I don't care. I'm not going to make any money on the company that's already big already. How do you make your money? You make your money on the ride up, right? You make your money on a little company becoming a big company, right? But a big company, like a mega company, has gotten nowhere else to go, right? There's not another billion customers that exist for Google to acquire. Well, so it's infinity customers to acquire.

So that's growth. And capital is going to go over there. Their share price is driven not by revenue and growth in that sense. but because they're, you know, on the S&P 500 index and the higher the share price, the more that the index funds, the Black Rocks and the vanguard's, have to buy them. You know, bigness becomes its own feedback loop. That's the whole problem with indexing in general is that, you know, all that decision-making about being profitable in future revenue and buying at a discount

is evaporated. And it's just, you know, oh, the, share price goes up need more of it Polaroid man You're talking to me about Polaroid Polaroid Polaroid was the biggest company in the world that didn't see the digital camera coming

It literally was like one of the big It was one of the top three biggest companies ever At the time Right it was the biggest of big And it thought the digital camera was stupid And now Polaroid is A tiny little sliver in some

holding company amongst there's thousands of other brands that nobody gives a shit about. Or a good example of it in more modern time and a more distorted time would be. Blackberry or Erickson. These are these were I think I don't think people remember how big these companies were literally just five years ago, eight years ago. these were behemoths and they didn't defend themselves. They could have done all the stock buybacks they wanted and they could. They did. And they could have went down to, you know, Joe Zan in accounting and told her to write up X amount of bond issuances and take it across the street to the broker and go raise me $20 billion.

dollars. But eventually you get bumped down to junk bonds. You go from AA or AAA to double A. Still no revenue. Now we're going to go from AA to single A. Revenue get better.

No. But our debt services sure got a lot worse. But again, but the company the ones who are buying those shares are predominantly running indices. and on top of that they're doing it levered because it's through the futures market. So are we talking about the company or are we talking about the share buyer that runs the indecacy?

So let's say, you know, Brockton is running some, you know, S&P 500. What is it with the S&P 500? It's, you know, big tech is like the seven firms on that. And, you know, if it wasn't for them, it'd be negative and it's highly concentrated in those seven. you know, the fact that indexing is what is determining... Would you say that invidia is in everyone's index? Yeah, and that's, I think, why they're so big now. It's not because of the AI or GPU sales.

I think it's, you know, just being on the index gives them a boost, that now they have to get bought because that's the definition of what the index is. So, Nvidia should be around here for, like, let's say, three years from now. I think now that indexing is more than half of the market, I think you're going to see indexing having a bigger influence over share price than fundamentals. Because you're kind of telling me gravity doesn't exist. So is it absolute or big influence or absolute influence enough to be? I think because of, so Mike Green explains this better than maybe I am right now, but indexing is running the market. it's not the fundamentals of revenue and, you know, future profitability the way that people

traditionally think of stocks as value. It's on all, it's an algorithmic trade. It's on autopilot. Even what drives that algorithm? What algorithm is it? Is it a momentum trade algorithm? Yeah, right. So, right.

So basically it's a momentum trade, right? You know, when, when given money buy, when, when, you know, CFO of NVIDIA walks in on his wife fucking some Haitian that she found in the garden and

he shoots her and then shoots himself and then on the news the next day it'll be NVIDIA CFO kills himself you want to know what those momentum algos are going to do? They're not going to care about the Haitian

they're going to assume that something something catastrophic has happened in Nvidia, right? And they're going to dump Nvidia. So momentum trading is just momentum, right? It follows other momentum. So if the hedge funds who are paying attention all start dumping, then the momentum algorithms are chasing the hedge funds momentum.

All right. Hedge funds start buying. Then the momentum algorithms are chasing that momentum. Right. The market is impossible to manipulate in totality because it is hundreds of trillions of individual transactions that have interrelationships to every other thing that they're not even transacting with. So like buy my a stock of X, that market, that information is now going to affect some fucking bond in China, right? Because it's a fractal relationship. It is self-similar at all scales. So a good example of it is like the Treasury, you know how the Treasury was batting around this $80 oil price cap and everyone's like, no, that's not going to work. That's terrible.

But yet, for some reason, every time, oil looks like it's about to break $80, either some crazy news that ends up getting found out to be incorrect three or four days later after the fact. But at that point, it's like our jobs report. The revision doesn't matter. or some mysterious sell incomes and hammers the market. So this $80 price cap that was the most retarded thing ever and was roundly shouted down by the entire financial market, but the Biden administration was really intent on. They literally fucking shell-ditcher around the world,

brought it to, you know, COP 26 or whatever the fucking retarded one. Anyways, that seemed to miraculously happen. We have effect had an $80 oil price cap in the last two years. but the level and effort of market intervention has both increased in magnitude and increased in frequency. So if I'm trying to suppress something down and the force of my interventions each time require more and more and more force, at the same time as I have to do it more and more and more and more often, what that's showing you above the surface, What's happening below the surface is a non-linear system happening. So a feedback loop.

So even all the momentum, even all the Treasury intervention, eventually you can only do it so much because the cost of each intervention becomes exponential rapidly. and the frequency in which you have to intervene is going to increase exponentially. And eventually, all that effort and all that time and force that you've been putting down all explodes at once. By the way, that's what's going to happen in energy. But anyways, besides the point. So the power that you are attributing to ETFs and, these index funds exists but is not omnipotent.

And it's, you know, indexes are more than 50% of the market. And then because indexes are also the benchmark used by active fund managers, you have a lot of closet indexers as well because they have professional risk or career risk that, you know, they need to be close, at least to the index or they're going to get fired. So these things are going down rapidly, do you think that everyone at BlackRock has been like stare at it and like, oh shit? well, we better not do anything. We better not go find some other access to put this in.

Well, if it's an index, by definition, they can't, right? Now, if it's active, that is supposed to be part of their mandate, but that's being crowded out by the rise of indexing. And because it is a feedback loop, you know, so, yeah, until you hit that top of the hill and you realize your brakes don't work, it keeps working until it doesn't. I think that is more the, that, you know, rubber band effect of, you know, asset prices rise because asset prices rise.

And that's just going to keep churning up and up and up until that meets the demographic crisis of Fumers needing to sell. And market makers aren't going to be able to make money on making a market in them because there's nobody on the other side of that trade. You know, the millennials and Gen Z are not going to be able to buy them out. we'll have to disagree and we'll have to agree to disagree okay all right so let's move we want to um want to get back to um back on point with what what we got together to talk about um we've been gone for a while so if uh you wanted to wrap it up as far as basically here here's what i'm hearing is we want to have patronage networks people who have money want to make money.

Yet there are people who are like, there may be some people out there who are like, well, if you really believe in the, if you really believe in the cause and you believe in the person, maybe that should be secondary and maybe loyalty should be, loyalty to your people should be, it seems like to me,

listening to the conversation, that's where the stressor is happening. That's how this conversation got, too, we're going to have to agree to disagree. Yeah, like with, it's like with the green investing, right? They couldn't get anybody to buy into the green shit until they gave them enough of incentive mechanism to do it. Everybody, all those, all those faggots that are, you know, going to, going to Davos or whatever,

they all want to feel good about themselves, right? To where they will take a lower return, but there needs to be some return. right so you're not going to and you're not going to my relationship to my people does not supersede my relationship to my family it is an extension of it right so I will want to help you but what I see is people wanting at least from what I've been approached to like hey do you want to invest in this is like for me to do it for you right like I guess what would be very helpful is to describe what I'm like the type of founders I'm used to right like what it actually takes who you're up against yeah that's kind of takeaway I got from this as well is

maybe the first step is we got to teach people how to write pitch decks and just get like yeah here here's a based version of you know if you're going to make a value proposition this is how you're going to attract people. And then, you know, that we do give them access to the people who have money and that they get at least five minutes. No, so like, if it's not even get, let's put this way, if you've got the idea, man, money will find you. All right. This is what I mean. I was having this conversation with times.

All right. If you, you're going to have a couple of ECs that are floating around the space because they're here for the ideas. That's why that's why I'm here. right that's why mark and reason is here right that's why peter thiel is here because it's an intellectually interesting space right nowhere else has that so it's the ideas that brought us here right now it's up to like so we came and found you right like so like the you know the spurge on twitter that you know has been reading esoteric you know he's actually one of these pub he's actually one of these like eight customers that exist for the thousandth, uh, right-wind book publisher of, you know,

long forgotten texts, right? He's one of those guys. And he's been, you know, diligently putting out ideas. And I heard them and they excited me and I came. So now you have my attention, right? Pitch me something, right? And actually put the amount of work. work. So like you your autism and your beliefs, right, the ideological drivers, right, all the reasons why I should pay attention to you, right? Because of people, because of, you know, legacy and interests. That's what got me here. But I don't manage all my money. I have a fiduciary relationship. I am responsible. for the money of others. Right? So, but if I see a good investment, I'm going to take it.

So, yeah, so... The thousands, the thousands, guys in our sphere are so fucking in their own end zone. They want to do... I think we've got a lot of... I think we've got a lot of money. Okay.

And nobody with the business plan to say, here's what those CNC machines could make domestically. No. It's been talking to be with a fucking CNC machine idea, right? It's all, they don't understand what they are interested in, a very small group of people are interested in, right? And unless you're going to sell that very small group of people, things that cost millions of dollars,

which you can't because they don't have millions of dollars, you need to come up with an idea that everybody and not just niche weird so I agree with this too it's the Chick-fil-A model you know the people that they hire

and the people that they franchise for Chick-fil-A are generally based but they sell chicken sandwiches to everybody and they make money from that whereas you know I just feel it's beneath them like oh fucking Normie

the losers. My ideas are too esoteric and cool for that. Well, whereas the other, yeah, I'm going to throw Glenn Beck under the bus here, you know, running ads for Patriot Gold and dehydrated food buckets made in China is taking money from our guys and giving it to our enemies. It's backwards. You know, the way this has to work is, to your point, that you have to sell to everybody, but then the ones who you bring into the fold where you pay them salary, hire them, you promote them, you let them be owners is our guys. Pete, how did you like zero to one?

I liked it because it changed the way I thought. The idea, how monopoly is described in that and the benefit of monopoly, and I know that there's a lot of guys out there. I mean, there are billionaires that I listen to their podcast and stuff. They disagree with the idea of monopoly. They think that monopoly causes people to be stagnant, causes innovation to be stagnant. But that's not the way I saw it. I understood exactly what they were. I understood the points that he was making in that. So yeah, I mean, I liked it because it caused me to think, it caused me to think differently. And it basically broke some of the old stale libertarian kind of thought that was in my head. Yeah. It's, It's the blue ocean idea, right?

That I don't see. The one difference I would say in the type of companies and stuff that I have to look at. And the type of ideas that I get pitched on Twitter or stuff like that, they're all like the based version of this thing that already exists. Right? And I can't stand it. I want somebody to show me something that I've, never fucking seen before, never thought of before, right? And you know you, how do you know

when you've encountered a good idea that's a company or like a good idea that's like a pitch deck? I want to get angry when I read your deck. I want to be so fucking angry I can't see straight because I want to read your deck and I want to think why the fuck didn't I think of that. God damn it. This may be. make so much sense. It's like, how did I not? Like, the best ideas are the ones that any but, like, when you see them and somebody else has them, they get you angry because you're like, this was sitting right in front, like this was in front of people the whole time. Like, why, of course, this makes a total sense. And when an investor sees that, it triggers, like, I'm going to,

I'm cutting a check. Because that means that. means I know that whoever else sees this company is going to get it immediately. It's going to get why it's important and it's going to get why, like, right-wingers describe businesses like fucking leftists meme. I don't want a fucking big, like I want to look at it and I want to get it because that means if I can look at it and I can get it, that means anybody, right-wing, not right-wing, everybody that looks at it is going to get it. And they're going to look at the way they were doing it before and go,

why the fuck was I doing this before? Like, this is so much easier. Right. And when that happens, all of the things like blue ocean stuff, all that's baked in, right, I know nobody else is doing it this way because I have, you know, a violent reaction when I saw this deck because, you know, it was right there in front of my face. and how has no one done this before? Like, how are you the asshole that thought this up?

Like, how come I'm not that guy? That's what we want to see. Like, I've seen enough bookstores. I've seen enough publishers. I've seen enough magazines. I've seen enough shit that's for our own guys. You have any thoughts on Palmer Lucky and Andrel going after the military market, kind of doing the Elon Musk thing, except it's,

you know, rockets to kill enemies as opposed to rockets to Mars. The amount of drama, like, that happened, because right before that, right, right before that, there was a massive, like, George Floyd level, I don't want to call it a riot, I guess you can call it a protest, whatever, at Google, it shut down the campus for like a week. because Google employees, fucking Chinese communists that work there, and black people that shouldn't work there, found out that the... A division of Google was working on something called Dragonfly for the Pentagon.

And this is a company that at the time was working on three different things for the Pentagon. the Chinese military, by the way. But the fact that we were working on, Google was working on something for the U.S. military, I mean, like if you had said what Peter Thiel, Palmer Lucky,

and really, because it's not just Peter Thiel, was all Founders Fund. And it was Founders Fund first. And Mark Andrewsson shortly after, I think within a day or two. Like, I can't describe to you how much of a social taboo that was.

Right? after this thing happened, right? Like, oh, we're going to shut down Google because we're going to protest you working for the fucking Defense Department. Like, nigger, you're in America. And we're going to, like, basically a whole fucking sit-in at Google because you don't like the idea of, like, Google doing something for the Defense Department, but we'll do stuff for the Chinese military.

And Peter Thiel stepped up and goes, like, no, Founders Fund will invest in defense. We're only going to invest in defense and space. That's it. And it was a brilliant strategy because at that point in time, all of tech was doing the fucking right-wing publisher bullshit. Right? Like, I'm going to be the Uber of X. Like, basically, it had gotten so easy to do a software-based startup.

Right? Like, oh, I'll just grab my hosting infrastructure from AWS. That'll take 10 seconds. oh, I'll just grab this mapping engine from, it's just a bunch of APIs stacked together like Legos. The whole pass thing, yeah. Yes, so basically the barrier to entry, the amount of skills that it was required to start a fucking app

got dropped so low that every fucking retard had an app. So they were diving down narrower and narrower and smaller and smaller niches. Right, like this is the app that's kind of like Uber, but it's only for Indians that only eat Chinese food. Like, okay, well, what about all Indians? No, that's this other guy's app. Okay, right? Like, it had become nonsensical

because it was so easy to do startups. Just add AI to the end of the company's name. That'll get your next round. The hardware stuff, the stuff that the Pentagon actually wanted to do, nobody was doing. And Peter Thiel's like, but the Defense Department,

and pays a shipload. And that whole system's fucking broken. And he had a rock star success with Palantir. And he's like, I guess I'm imagining what his thought process was. Be like, if I, like, because Peter Thiel is like the Jamie Diamond of the West Coast. Right. Like whatever Peter Thiel says he's doing, everybody else is just going to do because they can't afford to bet that Peter Thiel is wrong. So you just do.

it. Right? Peter, let's put this way. Like everyone reminds me, you know, the thing I see all the time is that nobody wants to do their due diligence. That's how these scams like FTX happen is, oh, well, so and so invested in them. So they must have done their due diligence. So we don't have time to think, let's just ride on their coattails.

And then it's turtles all the way down until they realize that like nobody's actually done the research. Maybe for crypto shit, but also FTX, there's a, there's a back story to FTX that's a lot more covered in spooks, what's that? Then that was the real reason that had exploded. Because maybe it got caught washing a bunch of fentanyl money for China. So they definitely didn't do that. That must not have come up in the due diligence.

But it wasn't because they weren't smart, that they were. But they were also criminals for a foreign nation. so hey and that's why I think it's very funny that the other criminals for a foreign nation Silicon Valley Bank also got assassinated by Peter Thiel but yeah

what Palmer Lucky is doing something anybody could have done right like wait we're just going to make drones but for the military okay well how come no one's doing that well I don't know

No. Because who else was? Like Lockheed and a predator drone that costs like 20 million, but the drones were seen on the battlefield costs like $10. So who's making those for the Pentagon? Well, nobody. We don't have it. Right?

Like, everybody should have thought of that. Right? Like the drones we see on the battlefield cost $10. And we'll fly right in your face and kill themselves. The drones, not the operators. But we don't have drones to do that. Where are our Kamikaze drones? We don't have any.

Well, and that I think, you know, because software was so cheap to make and people got habituated to that, that again, the idea of investing real Kaffex in making real physical hardware things was intimidating. People did not want to take the opportunity costs to take on that much entrepreneurial risk did not seem worthwhile. until somebody did the math and said, well, yeah, but the Pentagon pays crazy money. So the risk is justified. But when you're used to a low risk entrepreneurial environment, it's very easy to get stuck in that valley.

Yeah, kind of. It's kind of like that. Also, the Pentagon provided a very safe place to incubate these technologies. Right. That, I think, was the differentiator. Like, because Palmer Lucky isn't just throwing a bunch of shit on the wall. You know, and maybe the Defense Department wants this. Maybe they want this.

Maybe they want this. What he's doing is collaborating. Right. So what we've basically got all the way back to is Star Wars. This is how we got the end of it. Like, remember Pete, you never talking about? Like, the government, the military has the ability to look 30 years down the road when it invests. right and it has the ability to take much greater risks with their capital and make really long-term investments that may or may not pan out so it looks like VC is doing it but it's not it's collaborating this is kind of right where you know uh where we began though is that kind of incubation we're either willing to take that kind of risk over 30

year time horizon historically has been proven to pan out. I mean, maybe it's just that the right needs to have its own state, and that's what will satisfy that level of risk-taking. But that's what I was trying to get at with the patronage thing, is that clearly that model does work, but it tends to be state actors who make it work, and especially for military purposes. You know, Mizabu was making air conditioners,

and they were also making zeros. Well, that's a point that I've been making for a while now, too, is the whole Samuel Conkin agorous thing about building a parallel society. It's like, well, how do you do that with heavy industry? And I guess the way I look at it is in 1991, when a lot of these guys could have been working for the government, they decided to do it on their own, but use the government's money to do it. Use money that they took from the government in order to build their parallel society.

And that's what they've done now. And that's really the only way you're going to do it. You're not going to get away with, you know, the biggest problem with agorism was always heavy industry. Well, how are you going to have parallel heavy industry when you have regulation, yada yada, well, they found their way around it. Right. work with the government until it's a time to try to destroy the government so that you can take

their place. Which is where I brought banking into it, right? Only a bank really, you know, spends money that they don't have, which is why they don't feel the risk, the way that if you had to earn your money in order to invest it, you'd be much more cautious with it. Well, so the way that the good to Pete's question, to Pete Sigmund, the way that the government is doing it now is the government before you had like bell labs and shit and now you have incubators which are basically the little baby bell labs right so the same thing is happening right it's

just happening in a more distributed sense because well so if we're going to talk if you're going to talk about a state right i said i said this to you i think the other day about a mutual friend that was thinking about getting a job in infrastructure, like a manufacturing plant or something. And I was very excited about it. And I told him, like, I think you should do this because, right, you have a shot at being management at the same time as, so like right now, like, let's just say,

I don't know, XYZ production company isn't very exciting. Okay, why isn't it very exciting? It's exciting. It's not exciting because 90% of production of XYZ happens in China and we're just a small guy. Well, what happens if all that production in China stops? Then you're not a small guy anymore and you're going to be a very big guy. And now you're very close to the top of a very big thing. The more guys that we can get working at power companies, see, I don't believe in the competency crisis.

I don't. I think it's bullshit and it's cope. And before everybody, like, pillories me, if Fortune 500 companies have only been making 2% of their hires, less than 2% of their hires, right? I get, you know, more than 1% I guess. Straight white guys. the most talented highest propensity like the highest number of geniuses

sorry Jews that's not you know that you're not the IQ stuff is bunk so we're like the straight white guy is the smartest guy we have the highest number of geniuses so you're telling me that all of the major publicly traded

companies won't hire straight white guys like, you know, the genius demographic. Okay. Well, what about private companies? Well, private companies, they don't get to just issue bombs. They can't just, you know, borrow money from themselves and sell it to the market. They can't raise money instantaneously, right?

Private companies have to go to big funds like, you know, Larry Fink's Faggot Shop or any of these other, you know, fidelity or whatever, right? Right. And because they can't sell their own bonds to the market, these institutions like Fidelity, like BlackRock, they have much more leverage because a publicly traded company, like, oh, BlackRock don't want to give any money. BlackRock's got 5% of my shares and is being a cunt on my board. Okay, well, how much is 5% of our shares worth, Susan? Okay. All right. well write that number down and go take that to accounting and have them spit up that many bonds to equal that amount and let me know when you're done and tomorrow first thing i'm going to take that bond money and buy all larry things shares and i don't want in my company anymore right that's a possibility but a private company doesn't get to do that because he can't just go tell susan

to go spit some bonds out to the market and raise money to get Larry Fink the fuck off his cap table. This is where Michael Milken creating the junk bond market is it's much worse. If we think that 2% of white guys being hired

in public companies is bad. It is probably worse in large private companies and there are five times as many of them as there are publicly traded companies. So I would wager

that the amount of high value human capital that has been deliberately sidelined is way more than anyone's factoring because the only other stat is that fucking Fortune 500 company one all those companies are publicly traded but like Pete like let's just say like two or three of the mutual friends that we talk about all right I bet you I could take any one of those kids

right mid-20s and I don't care whether you're a fucking engineer or a nuclear power plant, right? Or you make, you know, X, Y, Z, you know, I don't know, I'm trying to think the most high, you know, risk type infrastructure things. So let's keep using nuclear power plants. Let's just say you're the guy that builds the reactor, right? There is not a fucking job in that nuclear power plant, right? or the manufacturing of the pieces that went into that plant,

that I couldn't teach one of our mutual friends in a year, right? Like, hey, go sit underneath this guy, whatever his job is, learn that. Every single one of those guys can learn whatever that fucking job is in a year. So I don't see a competency crisis. I see a misallocation of human capital crisis. Right. But they're not dead. They exist.

So yeah, I mean, this is what I've been saying, too, is that somebody has to act as matchmaker between this glut of weaponized autists who don't know what to do with themselves and can't make any money, and then the capital that wants to invest in those kinds of people, but can't find them. I think that capital exists. They just need to be allowed to hire them again. we're running up on close to been going for about two hours so um uh i mean we can pick this up at a later date and i'm sure we'll have a lot to talk about so um yeah you guys happy with a happy the conversation we've had so far no we didn't fix everything there's still more to do but it's a good start. Yeah, bastards. Both of you.

All right. I'll make sure to promote your Twitter account, Sean, like I did last time. And do you even want me to point people to your Twitter account, Stormy? Yeah, sure. Absolutely.

All right. We'll do that. Because you've been having some banger threads lately. I mean, some ones that you know someone's putting out a good thread when people either love it or hate it. And yeah, I think you've seen a lot of that lately. So I'm going to sign off. Thank you. We'll pick this up at a later date.

Yep. All right. Take care. No substack to show or anything else. All right, y'all. Take care of a good night. Good night.