The Pete Quiñones Show - Episode 1410: Don't Ignore Economics w/ Thomas777 and Ron Dodson

Episode Date: August 18, 2026

62 MinutesPG-13Ron Dodson is Principal Owner & Portfolio Manager of a Texas hedge fund. Thomas777 is a revisionist historian and fiction writer.Ron, Thomas and Pete talk about the economic realities that are all around us.Ron at the American ReformerShips in the GulfHouse-Centric AI and the Return of the AristoiRon's SubstackRon on TwitterThomas' SubstackRadio Free Chicago - T777 and J BurdenThomas777 MerchandiseThomas' Book "Steelstorm Pt. 1"Thomas' Book "Steelstorm Pt. 2"Thomas on TwitterThomas' CashApp - $7homas777Pete and Thomas777 'At the Movies'Support Pete on His WebsitePete's PatreonPete's SubstackPete'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.

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If not, here's a show. I want to welcome everyone back to the Piquino show. Got two old friends here. Ron Dodson, how are you doing? I'm doing well. Thank you. Glad to be here. Thomas, how are you doing?

today. I'm doing well. Thanks for hosting me. No problem at all. All right. So this all started from Thomas replying and doing a nice little post somewhere. I think it was it was on substack, I'm pretty sure, or telegram. And Ron read it and thought that Thomas made some points that most people don't make. So I'm going to just let Ron run with his initial thoughts on what Thomas had written. Well, without just reading it, I came across, somebody reposted this on X and the clarity of it just really struck me because we don't talk much about what money is in its basic sense much in the political discourse. And Thomas really hit the failures of Marxism with regards to money and marginal utility in a way that I thought was very salient and would help. You know, the average guy out there doesn't need, you know, they hand over their, they tap their phone, they get whatever they're buying and they really don't think about it. But this hits at what money is, what role does it play, and how can the state either subvert

that role or manipulate that role either for or against its own citizens? And so really the key thing Thomas talked about was Marxism's desire to abolish money. and I think that's part and parcel of its desire to abolish what man is, in a sense. I immediately thought of the Tenth Commandment, you know, about coveting. But if you look at, if you read that commandment either in the, in Exodus or in Deuteronomy, it's really about man's right to own things and transact in those things. And so, anyway, that's what struck me.

And I just wanted, I reached out to Pete and said, hey, I'd love to have a discussion about this because I think it'd be informative for folks, what money is. You know, I spend a lot of time and talk a lot in private with my clients and everything about the evils of modern monetary theory, about the distortions of financial repression. But I thought all of this kind of all fits,

fits together and and Thomas has done more reading than a hundred of me as far as the historical applications of this. So that was the that was why I wanted to get on and talk about it. Yeah, thanks for the compliment. I, to be clear, I don't have a deep understanding of monetary theory. I think I understand political economy fairly well. And, My objection to the monitorists and people like Milton Friedman, I'm not a Vonnesean by any means or anything, but there's no reliance on modeling that I think is misguided. But I think Joseph Schumpeter is the greatest modern political economist, and his stuff remains kind of inaccessible with the exception of capitalism and democracy, which is very much written for a layman. but business cycles it's an incredibly intimidating endeavor to take on even the abridged version is two volumes it's it's very difficult you've got to have a rudimentary understanding of statistics

i'm really terrible in math so i mean being bad at math doesn't somehow preclude your understanding if i can grasp the relevant statistical methodology you know anybody can i mean that quite literally it's not falsely humility. But I want to I want to Marxism and that this term gets banned. Go ahead. Oh, I was just going to say finish your point, but but I wanted to ask you about the the lack of modeling with Freeman because I think that's I think that's very interesting. So let's not let's not forget or let's let's not forget to come back to that. Okay. Um, I people like these days and it's particularly out of step with the zeitgeist, you know, that these people on the right invoke Marxism to refer to everything from, you know, typical regime liberalism to, you know,

government waste to, you know, the typical kind of spoil system that that characterizes, you know, special interest lobbying. I guarantee none of these people have ever read Das Kapital, and they don't have any understanding of what Marxism is or was. Marxism doesn't exist anymore. Nobody believes in Marxist Leninism. There's not some, despite what Donald Trump seemed to think, there's not guys in Iran or guys sitting around Venezuela

who believe in some 1920s style model of national production, and there's not some think tank of guys who are insisting the plan to kind economy is, you know, yields greater productivity and efficiency. Nobody thinks that way. But, you know, Marx remains important because the entire 20th century was in dialogue with Marxism. And I've always objected to the, even the, even the terminology of Marxist economics. Marx didn't believe in political economy because he said that it presumes categories that don't exist. Because within Marxian ontology, productive forces simply determine everything from sociological configurations, the human societies, to people's patterns of living, to what they consume.

And this is very arbitrary and based upon accidents of innovation and things they're in. So there's lots of independent science of economics. You know, and that's one of the reasons why the planned economy fails because these things can't just be, you can't just anticipate innovation and isolation. You know, any more than you can just arbitrarily abolish the price mechanism and then say, I'm going to assign value to come out of the X because that's the way people should think. you know and of course this is about outside the scope but people have difficulty grasping the medieval mind for all kinds of reasons but you know if you want to understand

you're going to transition to modernity and to be clear that's a very imperfect model is this this paradigm of ancient medieval modern but just for the sake of you know coherency and invoking familiar language yeah yeah um one of the reasons why the guild system endured it wasn't just being i mean yeah part of it was because it protected profits and it held labor to certain standards and things like that but

the understanding whether you're talking about woodworking or metallurgy or principles of sound construction and in in architecture the idea was that there's a mysterious source for the knowledge of these processes and through a process of revelation for example, you learn how to temper steal. Nobody sat down one day and decided to calculate, you know, gee, I think if I temper iron long enough, there'll be some sort of stronger modality of this element, and then I can make a weapon out of it or a tool.

These things develop by revelation again. So the understanding was that if you're, you know, a guildsman, who, for example, was trained as a blacksmith, you're partaking a knowledge that was really, revealed presumably by Providence to men. Okay. Why is that relevant? Well, okay, I mean, even in,

even if you're an art secularist, you know, there was an understanding that human populations in aggregate, there's something about that sort of aggregate decision making its scale that leads to productive activity that in turn serves the common good and axiomatically leads to innovation. And there's something that,

that's intrinsically spontaneous about this. So in analyzing it, we've got to try and identify patterns of innovation and cyclical, you know, cyclical rise and fall, not just a productivity, but of profits and innovation and things like that. And if you're a shumpeter acolyte like I am, innovation is the driving quantity of all economic activity. You know, that might sound reductionist to some, but I'll stand by that. and the reasoning is it's not just some sort of colloquial witticism.

There is volumes and volumes and volumes of data that is shown better coded in order to substantiate this claim. Okay. So we can't really talk about, we can't really talk about Marxian economics because Marx was presenting a sociological claim and an anthropological claim about the human condition. avoid economic activity and structuring is paramount and dispositive but does not derive from

any sort of a mysterious or ill understood at present source. That's one of the reasons why Marx's Leninism was so dangerous because in Marx's defense or maybe that's not the right way to characterize it

to clarify what Merck's predicted in terms of the advance of socialism was that historical conditions would facilitate this. Leninism introduces the revolutionary imperative, where you can quite literally, by way of a cadre who's committed to political warfare and violence at whatever scale required can build socialism out of whatever mentioned material and productive process knowledge is extant, so long as there's the will to pursue this revolutionary imperative. Now, what that means, though, is that you've got to condition people psychologically

in order to accept this new paradigm of value as well as labor. And the only way you can do that is by eradicating all competing, concepts of alternative schema relating to labor economics and if people prove uneducable you've got to annihilate them because they're the

they're the vessels that bear the counter-revolutionary idea so in my opinion and I've written on this extensively Marxist Leninism is intrinsically homicidal at massive scale okay that's just part of the that's just that's part of its revolutionary praxis you know and that's why instances

like what happened in democratic camp at chia that's not this bizarre outlier and sell of sar for example paul pot was the his non-begir he was actually a very learned man and he was actually a fairly orthodox marxist leninist he understood the subject matter very completely you know Now, it's not to say you can reduce these kinds of disasters and this kind of massive, organized systematic annihilation therapy of human beings. You can't reduce that to the machinations of one man, obviously, but it's not accidental that that truly punctuated example of homicide at mega scale happened in Cambodia because you had a cadre who very much understood the revolutionary imperative. and it involves killing huge numbers of people. So that's been outside the scope. But, you know, again, I'm not, I'm not a, I'm not a guy who understands monetary theory pretty well.

And, you know, I'm at base of political theorist and revisionist as a story. And, you know, I'm not, I'm an economist. Well, I'll say that I think the, I think, I think you have a pretty darn good. understanding just from what you just said because I don't think I think the separation of the two is is somewhat false it's it's it's similar to the separation of politics and philosophy or politics and theology politics and economy are are at the very least handmaidens but that destruction that you speak of that the Marxist wanted to, well, I'll back up real quick because it's something I didn't want to go over. I think, yes, Marxism isn't existent today, but you do see certain

things like I still hear, I still hear bits of labor value, you know, labor theory of value being bandied about not they're not going to call it that but that's the assumption behind what they're saying that that what brings value to something is not the is not the demand for the product but it's the labor put it you know put into it talk about that still exists yeah and i think americans are uniquely susceptible to that yes yeah what is it politically politically and part of that What makes us susceptible to that? A couple of things, I think, because you've got,

it kind of arrives from both quarters of mainstream discourse. You know, because Locke, if you read Second Treaty as a government by John Locke, which remains, I have no idea if they still teach that in high school or community college

intro to you know politics or whatever but you know for a long time they did yeah and that's that's very much part of Locke's ethical schema not just his ontology but also I realize speaking of Milton

Friedman you know I realize some years back an issue that's not talked about other than by a handful of labor economists the abolitional labor is a huge deal and that's going to profoundly disrupt things it's already starting.

And when, for example, you know, within 50 years, you're going to have unmanned over-the-road commerce. People claim like, oh, no, that'll never happen. It's already happening. It's already happening. So when there's no more truck drivers because, or when there's, you know, yeah, when there's no more truck drivers or when there's one guy managing like 80 drone trucks, you're going to take out a huge swath of workers.

most of them are men who are breadwinners for families. You know, so, and Pete, so anybody who realistically understands this, understands that so long as the regime as structured and indoors, there's going to need to be some sort of guaranteed basic income. And Americans go berserk when you say that, because they're like, that's welfare. It's like, so what? Should we force people to dig holes all day for no reasons that we can,

because otherwise it's immoral to give them money? You know, like this is totally warped idea of you don't deserve, quote unquote, deserve money if you're not putting X amount of, you know, often pointless labor into the activity of earning it. It fundamentally misunderstands what money is. Like money is not, it's not some sticker like you get in grade school to say you did a good job. It's literally just a bearer paper and a fungible means in exchange and it's worth what it's worth. It's not good or bad. And people can't extricate a moral filament from that. Okay.

And part of that, too, is just the hangover from sort of Gilded Age and New Era nonsense, like Horatio Alger, you know, that there's some, like you can, you can judge somebody. It's just kind of like secularized and warped version of reformed theology. and I can say that because I am reformed. You know, whereby it's if you're making money, it's because you're a good person, and then if you're having a bad time in the labor market, you're a bad person. It's bullshit like that, I think.

But yeah, it's people, I mean, that probably sounds like I'm just postulating my own prejudices. It's probably a bastardization of, you know, what Paul was speaking about in, I can't remember of his first, second Thessalonians. There was a group who dropped out of the politia of Thessaloniki at the time and just were sitting around on a mountain expecting for other people to basically provide their means but they weren't doing anything. And Paul in response to that says, well, if you're not going to,

if you're not willing to work, then you don't get to eat. Not off everybody else. And but but so there's a there's a twisting of that I think that that ends up becoming, you know, this Protestant work ethic that pull you, you know, pull yourself up by the bootstraps and there's no collective regard for the body politic as a whole. I think that's part and parcel of where this comes from, especially on the, as the reform side of things lens leans leans heavily on Paul. that's probably where some of it comes from. Yeah, I agree with you. And it, but it's problematic too because like, I mean, like we talked about, there's,

there's a poverty of serious political economy in this country, I think. You know, and that's why it probably sounds like I'm singling out Milton Friedman as some sort of, as I said a dummy to burn an effigy or something, but you know, I, Freeman was kind of a middling theorist, I think. And the fact that he's held out as this incredible genius says a lot. You know, and again, I mean, I, if this is obvious to me, it should be obvious to people a lot smarter than I am

who are far more knowledgeable about the subject matter. You know, so, and plus two, I mean, one of the reasons, one of the things Shumpeter, I mean, business cycles is pure economics. But if you read most of his other work products, you know, we talked about how the problem with socialism is that in a parliamentary system, I mean, he was speaking to the European situation, but it applies to America too. The Golden Goose is always.

slain because parliamentary politics or electoral politics in the American situation, it's always a matter of auctioning off the productive capacity of the country, you know, as a kind of rent-seeking behavior to score votes, you know, or to create permanent structures that guarantee an incumbency and perpetuity. And eventually, it's just not, eventually, you know, it just becomes cost prohibitive for anybody to there's nothing to hedge your risk and I mean even doing business at all it becomes cost prohibitive

you know like why and it's not you know I know people are going to say that sounds like something you know Ann Rand point or something but it's a real phenomenon and like dummies like Ann Rand filched it from

people who actually know what they were talking about you know so there's arguably this is a sociological and historical problem I mean, arguably in high trust societies, you know, like Germany or Japan were, you can mitigate some of that. Because there's not only a cooperation between labor and capital when those tensions emerge in savage earnest, as was the case during, you know, the late industrial age. But also there's an understanding of, and people also, what they value, they value recognition for the nation or the, or the, or their, race or the ethnos as a whole, there's not this desperate need for personal validation that

has a corrupting effect, both on people's sense of entitlement, as well as on the ambitions of the political class. I mean, it's complicated. I mean, that could fill 10 volumes. But, you know, I, that's something that is going to become increasingly problematic in America. And an interesting point, Brendan Sims, this seems off the topic, but I'm bringing it back, giving us a moment.

But the guy named Brendan Sims, he's written this great series of books on Edolf Hitler. You know, very, not quite revisionism, but very, very, balanced.

And the second volume, it deals a lot with once Hitler, becomes Reichs consular and sort of his own musings on the world situation and despite the canard like oh hitler thought that he and the germans were the master race he didn't think that at all in fact he said europe's in dire trouble because our best mentioned material went to america so ameria's going to dominate the world because all the best smartest brightest physically robust people up and left and then they carved out this incredible continent-sized superpower out of the savage wilderness and fought race wars against these incredible warriors who, you know, were utterly

terrifying. You know, when Europe, you know, he's like, we're basically a bunch of sick people and, you know, spiritually and physically and intellectually, you know, and we just wages suicidal war. You know, so the only way for it is to essentially breed a class of people who were as elite as this bargaining sort of like American superpower class, okay? And you don't need to accept, you know, national socialist ideas on eugenics or whatever to understand. Well, your productive capacity really comes down to your mentioned material. You know, it doesn't come down to what you have on the ground. Like the UK or Japan, Japan's a volcanic island and the UK is basically a rock in the North Atlantic with nothing on it.

You know, it comes down to your population and their capabilities. and once you slay that and you decide, well, we're basically going to import the global south and create this ultimately like 500 million strong

population of permanent of permanent regime clients. You're you're not going to produce wealth. You're not. That's right. You've got a population of, you've got a population of, you got a population as slave consumers, you know, and that's an oversimplification,

but that's a big aspect of what's going on. And that human factor, the anthropological factor to, if you want to consider it in those terms, that's something that's left out of the equation, you know what I mean? There's sociobiologists who talk about this in a way that touches the concerns, political economy. I'm not going to be wrong. I'm not some guy, I'm not some genetic determinist or some like race realist who thinks everything reduces to IQ metrics or heritable behavior traits but you know mentioned material and discussing potentialities they're in is obviously a very real thing and aside the political aspects of creating a permanently divided society or or or catastrophically miscegenated society you're you're not going to be able to duplicate

prosperity, you know, when that's what you're working with? Well, I think one of the greatest failures, first of all, Schumpeter, and I had to check my notes, if I remember this correctly, but he agreed with some of the other, you know, an Austrian guy, and the Austrian, part of the Austrian ideal was that economics is not a math discipline. It is, it's applied sociology and political theory. And that's right to me where a lot of this goes off the rails because in order to make it a hard science, a mathematical discipline, you have to assume the fungibility of humanity as a whole and of its individuals. And that is, you know, I don't need to tell you two guys. That's just a completely false assumption.

But even within a high trust homogeneous culture, that's not true. Individuals are just that, individuals. And so it's a sociological study. It's not, you can't just reduce everything to, you know, rational actors acting exactly the same. So I find that interesting. I think with regards to Friedman, He got popular because he was willing, when Rawls was so dominant, he was willing to say incentives matter and inflation is a, is, I think he overstated the case, but is a is a monetary problem in the sense that if you have, if you have, it's a scarcity issue. If you're trying to reduce scarcity in order to increase velocity,

then if everything else stays the same prices are going to increase. And the early modern monetary guys were saying, well, if we increase velocity, we can raise GDP because it's based on the false assumption that if Thomas and I just trade stocks back and forth and back and forth all day long, chasing the bid ask, somehow an economic event that is each one of those trades is increasing this measure of domestic productivity, which is clearly not the case. So modern monetary theory is basically trading velocity for store of value.

So just real quick, for those who, if you've stayed this long, good job. But money is primarily two things. It offers a medium of exchange and a store of value. But you can, because we have a fiat currency, that the government decides what that supply of that medium of exchange and store of value is, you can fudge with it, so to speak. And so modern monetary theory came along and said, well, let's increase the rate that money changes hands in order to provide, because we're continually

running deficits that will provide an internal sponge to use up the excess capital. And I think it's completely flawed because it erodes that ideal erodes the store of value. It ignores the idea that it is my choice to make the marginal, my marginal utility might be to hold those dollars for tomorrow or for my kids or for my grandkids. And if you prioritize velocity over store of value, you erode that. And along with what's called financial repression, which is the idea that you set up I'll try to keep this simple, but you hold interest, you hold the market for interest below what it would be if set completely freely so that you can transfer a certain amount of that store of value from savers to the government. and a couple of Stanford guys in the early 70s.

I'm trying to remember their names, but it escapes me right now. But they described this, and that with that along with modern monetary theory, separate, modern monetary theory is separate from the monetarist school. The monetarist school was kind of a way to free Austrian economics from its political implications or its sociological implications. And I think that's wrong. That's where Friedman is kind of what you're talking about, Thomas, where it gets that wrong. But anyway, that kind of, hopefully that helps some of our listeners get some of these ground rule or these definitions of what we're talking about. You know, the U.S. can create dollars without limit. It just can, but it can't create

demand for those same dollars without limit. that fixation on velocity and most people don't understand this i think even most academics don't people you'll hear people colloquially talking about the great depression oh this was a case of out of control inflation at least the american experience it was not it was the opposite it was a deflationary spiral and it was a cash drought um it was sort of the inverts of what happened in vimar or in vimar and murray rothbard i cite murray rothbard a lot and I mean, my ops are always criticizing my sources and saying, I don't know what I'm talking about and these sources are bad. But it particularly seems to raise their hackles when I cite Murray Rothbard.

But I maintain, and Rothbard wasn't an economist. I, you know, he was a political theorist. But his book on the American Great Depression is probably the best book on the subject matter, in my opinion. And he emphasizes that point. And that's also where, you know, know, the, that's also where the, that's also what restructured the banking system or was the catalyst. Most banks couldn't even conduct business across state lines at the time of the 29 crash, which is crazy to think about. You know, but it was, it was quite literally against the law in most states for a foreign bank, you know, to even want it from a neighboring state, you know, to be lending money, you know, across that border.

So, but that's, unless you understand the Great Depression as a cash drought, you don't really understand what happened. And something like that's impossible today. That's why guys like Peter Schiff, I think in some ways they do good things with, like you do, helping late people understand money better, you know. But they're also, I don't think he's a peer of Onmesean, but like a lot of these Austin school guys, he's always predicting catastrophes that don't come to pass. And he's always talking about it. There's going to be some punctuated crash with the value that dollar bottoms out. It's not going to happen. It's going to be gradual.

And it's going to be a death by a thousand cuts. But I just, I didn't even interrupt you. There's like a couple second delay. So I accidentally interrupt, forgive me. But I want to raise that point, that Rothbard point. I think it's important. I think you're exactly right, Thomas, about Schiff. These are good.

The gold bugs, the Mesa School gold bugs are good people who, want to preserve that store of value function. The problem is they don't understand that, you know, I wrote down some stats. As of Q1 this year, the U.S. dollar was 57%. Think about this, of global foreign currency reserves. Transnational commerce, 76% dollar dollar dollar denominated. Think about that. That's so, so are, are we doing things that are eroding that 100%. Our obsession with sanctions is, I mean, I haven't talked to either one of you guys about this, so I don't know what your opinion is, but our obsession with sanctions, ultimately, it's born of that dollar strength, but it erodes that dollar.

strength with each use of it because you're driving people to go other places. But you're right. It's not going to come crashing down. We're not going to wake up tomorrow. I mean, like China. Oh, China sold all their U.S. debt. You know what that would do? Nothing.

I mean, not much. The U.S. holdings of our debt is 80-something percent. Yeah. Well, it's also, I don't even think something like the crash of 87, which was comparatively minor. I mean, it wasn't minor to the people who got wiped out. But I mean, that really was reducible. I mean, you can't reduce events like that to, you know, a single proximate cause. But information awareness up to the seconds precludes something like that from happening.

I mean, even in the late 80s, people were still communicating, like, people were still communicating data on. financial markets by telex i think and stuff i don't know if fax because i was like a little kid i was like you know a kid and an adolescent thing i i don't know if it was if fax machines were a thing yet but even so i mean you were getting you were getting hours old data on market events you know and um ticker tape was still a big deal and people so i mean you're okay yeah yeah but that but that's just one example like there was a there was a relatively banal cause for a lot of these market events you know, in the later 1980s and early 90s that the state of IT and telecom just precludes these days. And that's something that's not written enough about.

I mean, there's some, you'll find these like IT guys and give like TED talks and stuff, and they'll address this stuff in kind of a dumb down way. But, you know, I haven't read any stuff by political economists taking this stuff. on in like a dedicated capacity. They probably think it's too prosaic or something. Well, the, uh, think about it this way. Because we have mass democracy, we have incentivized. There are no incentives to, uh, interestingly, it was under Clinton that we had a, the last balanced budget. But part of that was because the, the Republican Congress was trying to cut him off at the ankles, but, but there's, there's little to no incentive to actually, uh,

keep this and keep this whole game and check. So we have to, we issue, uh, so much more current's, you know, uh, and it's not just about taxes. They could stop all income tax, uh, tomorrow. And it would, that's not the issue. It's the, it's, it's, it's, Do you issue more dollars than your productivity growth enables? And that sounds real mathy and confusing, but just think about it this way. We produce more dollars, we print more dollars than is actually being used. I'm going to make it very simple. So in order to keep that from making our prices go up by the exact

amount of that greater production, which is a huge amount. So let's say inflation being 40%, we rely on the fact that the rest of the world acts as a sponge to soak up those dollars. So it's in our best interest for the rest of the world to use to be denominated in dollars, to use dollars, all of that. So every time we sanction, so us sanctioning, Biden, when the Russians invaded Ukraine, Biden took the Russians off, you know, Swift, sanctioned them. It was, so people have, well, some people do, but most people don't realize the Russians with their oil and raw materials production that's always been traded in dollars are a huge source of that sponge that soaks up our excess currency. and us cutting that off and driving it to the RIMBi, the Chinese currency, was incredibly stupid. Doing the same thing with the, we started this whole deal.

It's also just real quick. Just real quick, we, I mean, first of all, I mean, it's just smacks of like, impotent rage that America sanctions half of this planet. But there's also this habit of the regime sanctioning countries that are not at all deeply interdependent with America. I mean, Russia is always dysfunctional. It's got an economic profile like that of the kingdom of Saudi Arabia. Okay, we're sanctioning you. Okay. I mean, what the hell do the Russians export other than oil, national gas and weapons? You know, yeah, go ahead.

No, I totally agree with you. And so the, the, if, if we didn't produce more dollars than we actually use or need, and I'm again, what being very simple about this, then little of this would matter. We could have a completely enclosed economy and that many might say would be more healthy. you know, the, the Japanese for the, you know, have, well, they're a separate issue because they have huge debt too, but their sovereign holdings of their debt is like 96%. So they kind of have a closed system. But the point is, if we're going to play this game, which we built on the back of Bretton Woods, then we have to incentivize the world using.

dollars. If we're going to finance the world, then the world needs to transact in that which we're financing. The problem, part of the problem is, and probably beyond the scope of this talk, is the euro dollar issue, which is that every European bank, every Middle Eastern bank, issues accounts to be settled in dollars. They basically create dollars out of thin air, and then when they have a crisis, they don't have the dollars to settle up. So the U.S. ends up going even further down this road because it has to, via swap lines, issue those dollars so that those banks can settle their accounts. And you say, well, why are we doing that?

Because we're very worried. The entire Federal Reserve system is set up so that the American banking system, I don't want to get in a complete talk of ethnicity and all that, but it's set up so that we won't have that deflationary spiral that Thomas mentioned a few minutes ago. So if let's say a massive European, let's say BNP out of Paris started to go under because it couldn't settle its euro dollar accounts, the Federal Reserve would literally print dollars in order to send to them in order to settle up.

increasing this supply of dollars because they wouldn't want B&P failing to come back and create a deflationary spiral here. You call that if you ever hear the word contagion, that's what they're talking about. And this system is just an auriboros. It continues and continues and continues. And the only way out of it is by fiscal discipline. And as long as we have mass-demand, I don't see a way out of that. That's the real problem we're creating for ourselves. And it is a death of death by a thousand cuts. Yeah. And I think ultimately that's what's really,

I mean, don't get me wrong. I speak on the Brendan Sims book, and I don't want to seem like I keep trying to pivot back to my research concentrations around most comfortable. But in my defense, Sims does spend a lot of the second book of this Hitler series on political economy and in broad strokes. And one of the problems Europe had in the era was, you know, America didn't just have superpower potential owned to its mobilization capability, but probably about half of the planet's natural resources as at the onset of hostilities were in America. now it's probably like a third 40%. It's still dwarfs basically every other country

or constellation of nation states and their ability to extract and industrialize or monetize those resources in question. But really the only thing, especially because America's forfeit any vestigial moral claim the world leadership. When true globalism at scale, I mean, we're already there, but when the conditions on the ground become kind of homogenized, you know, when Tokyo looks like Berlin, looks like New

York City, looks like Islamabad, looks like Beijing, there's really nothing remarkable about America. You know, not only is America not going to be going to be able to draw the talent at need to. needs to sustain the driving engine of productivity innovation. But there's really not going to be any reason people look to America other than as one place to doing business of many. You know, there's not going to be any real incentive to do business here instead of in Beijing or Berlin. Yeah, there's still going to be a global south. Places like Lagos or, you know, places like Manoa aren't going to be desirable.

locales for setting up you know or for direct investment other than you know unless you're talking about you know some company that mined diamonds or something but you know I that's going to converge a lot with the

devaluate with you know the the devaluation of the currency oh and you know fiscal hemorrhaging in my opinion because there is a matter of cultural cachet and prestige behind this you know and if um and plus two i mean i don't a lot of what's uh a lot of what's sustaining this too is that you know most countries uh the uh the interest rates

are i mean are completely artificially manipulated i think the chinese peg their currency eight to one on the dollar just permanently i might be wrong about that if somebody who's It was like a forreter and I'm wrong. Like correct me. It's something in that ballpark. You know, so this idea that these conditions that privilege the dollar are just spontaneously occurring. I mean, there's nothing to do with prestige or with a political situation or, you know, incentives they're in. I mean, that's, that's ridiculous too.

You know, this isn't occurring like the weather or something. It's very calculated and very curated. They, the Chinese officially ended. their peg, but interestingly, it has stayed pretty much exactly that, about eight to one. So, you know, did they end it? Did they not? I don't know. Right. The, I've got a question for you, because I think it's, again, a sociological, political question as much as it is a purely economic question. Is there a future or when will the people be ready for a non-state digital currency? Because clearly, even with Bitcoin and everything, people seem very hesitant to actually

transact in it. They will invest or trade, but not transact. Do you think that's a realistic off-ramp to some of this craziness or do you think it's the the sociology the people just aren't ready for it the problem is and look i'm all in faith i don't invest in crypto or anything if that's your thing i mean that's cool i'm not throwing shade it's not my thing but no yeah no i get it um but i the problem is not a currency it's a way of liberating yourself from the commercial banking structure which is great, but it's some sort of non-traditional bond. You know, when you're totally reliant upon the dollar to set value, like you're not, you're not talking about currency. Could there be a future where there is a, like some sort of non-state actor or some constellation of

banking structures that aren't tethered to any national government or traditionally political imperative are issuing bearer paper or it's equivalent digitally and that has the confidence to be used as in lieu of the dollar yeah i mean like cyberpunk writers are like write about that all the time you know um i don't think that's impossible i think it'd probably i i can't put a timeline on when that might emerge but the problem with the problem with bitcoin and stuff is that it's it's It's inextricably pegged due the dollar. You know, and if the, if, you know, and again, there's not going to be some 1920s collapse, but counterfactually, if the dollar utterly tanked tomorrow or like

better, better counterfactual, like it's like a Vimer situation. My Bitcoin is now worth shit. Right. There's not some independent value to my Bitcoin, other than the fact that, you know, the blockchain allows me to avoid, you know, avoid asset forviture and stuff like that. And, you know, actually preserves anonymity the way that, you know, offshore banking did in the past. But it's, it's going to get a lot more common as older folks who don't trust it at all passed away. And older folks, I got to think it's older folks. I'm turning into one.

But, you know, they've got a lot. They don't trust, they don't trust crypto at all. They think it's some kind of con or something. you know so and they they obviously hold a disproportionate percentage of of wealth so in 30 years you know when when millennials are you know like middle-aged and late middle-aged people it's it's going to become a lot more normal or normative I think yeah it and what's funny is it trades as a risk asset not a it doesn't trade in a counter trend which is what you would expect if the if the thesis is store value right it would be you know but that's not the case it's

clearly it trades with a high beta you know to get whatever about it Ron wanted Ron I wanted want to ask you a question yeah do you think that more countries will be going towards the Chinese model of having an onshore and an offshore currency I mean my thesis is that do you to hard power, the change in calculus of hard power projection, that balkanization is just the trend. And that will, and that so currencies, information, trade, all of that will slowly, which is devastating for, unless the, unless the demographic cliff is a, is a, is worst-case scenario as it seems to be for China and for Russia, for that matter, that could drive a future, hey, we need to be in this together.

But the great temptation in liberal democracies is you're facing a demographic cliff, just to import the solve for X and import, right? But China's demographic cliff makes ours look, makes ours look like nothing. There's even some who have speculated that their population is overstated by a pretty decent factor. But again, back to my thesis is that you're going to get some kind of push for national firewalls. I mean, who's, you know, and so on and so forth. And that's just a, that's a, that's a working out of the fact that, you know, it's not that people are anti-globalist that, that there's a move towards this

balkanization, even though I would love that. I think it's a realization that 11 carrier groups just doesn't mean what it used to mean. that it's way easier for smaller nations to act as middle powers or even greater in the defense of their near abroad. And so I know that's not exactly what you asked about, but I think that's where we're headed. I'd love for Thomas to comment on that, what his thoughts are as a check. Well, yeah, that's the, I mean, it's a totally different, it's a very related and it's an extremely linked but the um the um

the element factors are different yeah um America's uh the core of America's power projection capability hard power projection capability is obsolete and that's that's being demonstrated every day by you know Iran's defeat of uh of the

of Tel Aviv and Washington well the hooties too I mean the hooties are yeah yeah that's the damn thing you're a tough guy like I mean the The Persians have been a mess and hard to conquer. But the hooties who control this tiny bit of Yemen? Well, the Yemen, especially South Yemen, they've got a strong industry of resistance.

And bin Laden was part Yemeni. And he took pride in that. They were a warrior race. And one of the reasons why some of these Houthi armed groupings, they fly the old flag of South Yemen and South Yemen, which doesn't exist anymore, that was the only Marxist-Leninist client regime in theater that the Soviets had. You know, and the Russians remain close to them, which is interesting. But they're very, very tough people. They're kind of, they're kind of, the Comanchees of the Arab race in a way. I mean, I'm not just being funny. They're very,

very hard guys. But the, you know, the American, even when, even when, I mean, I, an aircraft carrier in in 2026 is just a giant missile magnet, but also, I mean, I think service warfare is obsolete anyway, service naval warfare for reasons, some which are complicated, some which are obvious. But I, the age of the manned, multi-role aircraft is over. you know, America never adjusted to the strategic landscape of the 21st century, you know, and that's, that obviously has implications because, yeah, America's ability to enforce, you know, economic imperatives by way of hard power is evaporated for all for medical purposes.

But that also cuts to the credibility issue, which relates to prestigious. issue, which in turn, you know, further diminished as the, you know, the incentivization to retain the dollar. You know, we should reconvene and discuss that and a follow-up to this. Like, I'm not, I'm not trying to be abrupt. It'd be a dick, but, like, I'm hungry and I want to go much. That sounds good. That sounds good. Ron, tell everybody where they can find your work. Oh, I'm on. I get, you know, I write for, I had a long piece come out in the American mind by Claremont on how we should abandon the post-war consensus, which is, you know, for them to publish something like that was, I thought was kind of cool because it's a little, you know, a little revision-y, so to speak. and then so you can find me there.

I have written in the past for American reformer on political theology. I don't, you know, they like punchier, smaller pieces, and my pieces are getting longer and longer. So we'll see if that, I love those guys. They're awesome. I support them, but I don't know if I'll still be published there. I write at my substack. which is the eyes of a pillies,

and then I'm on X all the time, mixing it up, and, you know, with you guys and everything. So I appreciate everybody. I tell you what, Pete, you've been so good to me. You and Thomas to a lesser extent in your comments have been a huge part of my increased audience, and I just really appreciate you guys being willing to dialogue with me and talk with me.

It's been, y'all both been a real blessing to me. Appreciate hearing that. Appreciate hearing that. Yeah, likewise. Thank you. You can find Thomas at real Thomas 777.7.7.com. We're recording this on Monday the 18th. And if I'm not mistaken, what are we about 72 hours away from the drop, Thomas?

Yeah, boy, howdy. That's what the, that's what the, yeah, the Kindle direct publishing software told me. and Carl and Andy confirmed that it's it's you know that that's accurate it generally drops right when they say it will so yeah I'm very excited and once again I recorded with a burden just before I hopped on here with you guys and I owe a burden and Pete as well as Carl Dahl and Andy Edwards a tremendous debt of gratitude what great guys every one of them yeah no they really made it possible to get published. I mean, I'm not a total fucking retard. I'm sure I would have eventually figured it out, but that would have been a lot more difficult than I get frustrated very easily.

I'm sure Pete can attest to. I'm pretty excited about reading Daryl's introduction. Oh, yeah, no, I got it. I, no, and I, yeah, thanks for raising Daryl. I can't overlook his contribution. I got great love for Daryl. He's an incredibly neat guy. The best.

The best. An incredibly decent guy and great friend. And I really appreciate him writing the intro and like shouting me out on Tucker. That was tremendous. He is a prince of the realm. All right. Find Thomas A Real Thomas 7777.com and at Thomas 777.com the T is a 7. Gentlemen, thank you very much.

Appreciate you.