The Pomp Podcast - #1143 Dave Collum | 2022 Was A Disaster Year

Episode Date: January 5, 2023

Dave Collum is a professor of chemistry at Cornell University. In this conversation, we talk Dave's year in review of 2022. The discussion includes Federal Reserve, macro economy, geopolitics, the war in Russia & Ukraine, US military, and the impact of FTX collapse. 

what's up everyone this is anthony pompliano most of you know me as pomp you're listening to the pomp podcast simply the best podcast out there now let's kick this thing off dave column is a professor of chemistry at cornell university in this conversation we talk about dave's year in review these are monstrous documents that he puts together and this one is almost 100 pages in this conversation dave and i talk about the Federal Reserve, the macroeconomy, geopolitics, the war in Russia and Ukraine, what the hell is going on with the U.S. military and intelligence community, and how he sees the FTX situation unfolding. I really enjoyed this conversation with Dave, and I hope you guys enjoyed it as well.

Once you get done listening, jump on Twitter and let us know what you agreed with, what you disagreed with, what you liked and what you didn't like. I always appreciate the feedback, and I find it super helpful. All right, here's my conversation with Cornell's Dave Collum. Insurance is entering a new era. Policyholders expect a fast and flexible experience from the insurers they trust.

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purposes only. All right, guys. Bang, bang. I am here. Dave Collum is back. You're in review. I thought a great place for us to start would be on the finance side. Over the last three years, we have seen absolute insanity across financial markets, activity from the Federal Reserve. We've seen bull markets. We've seen bear markets. Asset price go up. Asset price go down. How do you start to just unpack what's happened in finance and the economy since the beginning of 2020, all the way to the end of 2022? Well, I go back to 1981. I work from a different baseline. So the Fed, in my opinion, let the markets leave orbit in 1994-ish. That's when the markets kind took off and never looked back. And you can see it based on any valuation metric that they

barely touched fair value for the rest of the time. And so there was this accumulation of fuel in the system that had not been burned off and corrections corrected nothing. And I talk about corrections being a combination of price and attitude correction and attitudes never got change. So we have 40 years of recency bias where you simply never get punished for being in the markets. That's the rule. You're simply never punished for being in the markets. You get to 2020. So 2019, you get that repo madness period where actually we're just talking about Grant Williams before we went on. One night, Saturday night, Grant called me. For two hours, we just talked about the repo bad is trying to figure out what it was it's where the the repo right

was spiking up to 10 right and uh and and there was the at the end of the two hours we concluded we had no idea what what was going on and it was fun chat but um and so then the fed sort of swooped in to deal with that and i'm not sure they knew what was going on i think it might have been um the behavior of an emergent system where where it just started spazzing it just they they didn't know what was happening so they just they just threw all sorts of kerosene on the thing or whatever you fan whatever some some some metaphor um and then so what happens is they were they were following um guidelines from a white paper from black rock that had been written in earlier in 2019 oh what a coincidence right and black rocks basically said in this white paper um

the next crisis you're not going to be able to handle and and and what you're going to have to do is you're going to have to shove money directly into the consumer not just into the system and it was called go direct a guy named john titus had been talking about this and um and so when repo madness came you can actually see the the the retail money supply they have ways of dissecting it i don't know how to explain this it's way above my pay grade but you can kind of see the money go direct, not just into the system in total, meaning it didn't just head off to the Federal Reserve as a reserve. It didn't go into some dormant, sleepy place. And then, you know, within a couple of months, COVID shows up. Now, I blame the Fed for the COVID lockdown. And you say, well, how do you

do that? And I said, well, if the Fed hadn't said, we will provide everything you need to shut the whole goddamn global economy down, then we'll do it. Now, if the Fed had said, no, we can't because we'll have an inflation problem, then there would have been a lockdown. It's that simple. And if they said, we're not going to backstop you, you're on your own, then Fauci and these guys would have been able to lock the economy down. And so then that triggered, you know, there's been inflation all along that they've been lying about. This year, I'm going to have trouble because I just wrote 200 pages on this shit and so i'm going to keep referring back to it i apologize but i wrote one of my favorite inflation stories about a blender that that broke that was 50 years old

and then you replace with a new one it's a piece of shit and why inflation doesn't pick up this changing quality at all this bad downside changing quality hedonics to this downside and um and then i had just finished writing it and my fucking blender broke this is unbelievable timing my blender broke and um and so uh so in any case uh they triggered serious undeniable into the dna level inflation and and when inflation gets in the dna it's it's no longer just to dial it up dial it down inflation it's not like the fed can say okay we'll just cut back a little on the money supply or we'll cut back a little on the flow It is now deeply embedded in the consumer psyche and employer psyche.

So now they can't get people to work for lower wages and things cost a fortune. I published a tweet, which my brother keeps track of food. He's very well off, but he keeps track of everything. He's an accountant. And his food bill was up 41% year over year. And so when you have inflation of that kind, Jimmy Iorio said in response to that, he said, yeah, as restaurant, the food bill's up 24%, 25% year over year. And so the inflation had gotten real and gotten serious. And so now the Fed had to act. And it's not clear that the Fed really

has the tools to solve this inflation problem, because it's a very strange one. It's different, as always. Before we get into the inflation kind of getting under control, explain a little bit more your comment about the Fed playing a hand in the government mandated lockdowns, because basically what you're arguing is if the Fed was not willing to intervene in the market and provide the amounts of liquidity, if politicians also weren't willing to provide the fiscal support and basically bail out the consumer and also certain industries, then the science organism, if you will, or the science argument may not have led to the government mandated lockdowns. Instead, there would have been more balance in that debate.

Yes. Well, first of all, let me tell you that the science behind the lockdowns was zero. The people making the decision about the lockdowns were guys who were not scientists. Tony Fauci is a moron on a scientific scale. He doesn't know anything. And that comes straight from Scott Atlas, who spent months in the room with him. And he said he didn't have a shred of scientific thinking and his logic. And I was on a Zoom call with Scott and I was pounding him with these little yes, no questions for about 20, 30 minutes. And he said, Fauci never once used a scientific argument. When he asked Birx about the lockdown and about masking in particular, he said, what's the best evidence that masking does any good? And I'll foreshadow this statement

there's profoundly good scientific evidence that masks do nothing. There were 30 or 40 mass studies prior to COVID during flu epidemics and stuff. And not a single one found a statistically significant improvement in the pandemic or the epidemic or whatever from masking up. The masks don't work. And the masks themselves don't work. And even if they do at some level, it's like throwing stones in a brook. At the end of the day, the same amount of water is going to end up down downstream even if you perturb the flow it's it's still going to end up downstream and so uh so the masking was farcical and and it was known to be farcical i read a book in 2005 called the great influenza and the guy in that book said that they'd studied masking and it was it did nothing

it does absolutely nothing on top of that the masks that were being used the bandanas and the rags and you name it the cloth masks they are farcically bad that's like putting a screen door in a submarine. It just, it made no sense. So the masking was all a ruse. The question is why? So when Burks was asked the question, why, what's the best study? So this is Atlas asking her, what's the best study to give you that you're using to justify masking? And she said the beauty salon study. Now the beauty salon study was a beauty salon where two girls masked in the beauty salon and two didn't and the two who didn't got sick that seems that's the beauty that's the beauty salon study so so burks is a moron she's a twit fauci is not stupid but he's been a bureaucrat

for 35 years running all sorts of bioweapons lab stuff and and and he is not in any way a scientist he's a uh he's a crook he's a mass murderer he's all sorts of things but he's not a scientist So the whole thing was based on no science. The entire response was based on no science. Now, what happens is the Fed provides the financial backdrop, the monetary backdrop, to allow Fauci and Birx to pull this off anyways. and when they do that is this going into a room and they're like hey if we do the mandates we need you guys to step in okay yes we're going to step in okay go issue the mandate to lock it down i don't know how they covered it i don't know how they did it most of it was most of the discussion was done in meetings with trump fauci burke's atlas and a bunch of others and um and and Fauci and Birx were running the operation.

And Trump's biggest mistake – Trump sort of knew Fauci was leading him off a cliff, but he had delegated, and he stuck with his delegation. That was Trump's big mistake. That was Trump's big mistake. Now, is this something Twitter – we now are coming to find out the story that at least is being presented today – is that Jack Dorsey was the CEO. He had delegated a lot. there was other people who were doing all this kind of stuff when jack found out he did his best to kind of correct the the course of the ship uh was relatively unsuccessful in doing that and he ends up leaving is that a similar type example of what you think was happening with the white house

during all of this where trump had delegated they started to go off course and at some point did he try to step back in and get him back on course or do you think he was just along for the ride And Trump was too, you know, Trump's Trump's idiosyncratic personality traits were not helpful for this thing. I mean, there's things that he's good at and things he's not good at in a deeply scientific based argument was not going to be it. And so Trump really sort of delegated and said, it's up to you guys. And he should have stepped in. And he didn't. I don't know why. I tried to pin Atlas down a number of times on what they were up to. And Atlas was very careful not to talk about motivation, whether it's a philosophical point,

I don't know. I even had the passing thought that if he's positioning for a cabinet level position in some future administration, he's got to watch what he says. And so, um but but he he uh he really just he's burks would come in and give pie charts and bar charts and stuff in meetings that she was dragging off the internet same internet you and i use and he said she had no idea what it meant she had no idea about the scientific basis of it she had no idea even the quality of the source of it and these were the two clowns and so he says he's and when i said i asked him if it was what their intention was and he says you've got to understand you you cannot imagine the level of incompetence in that room he said it was just so profound

and and and and at one point um i said is it possible that it wasn't out of malevolence and that they they really did what they thought was right and he said well given how stupid they are anything's possible and when asked someone asked about reading burke's book he said i didn't read it i don't read fiction and uh and she wrote a tell-all book that made her look like a complete asshole she thought if she really got honest that someone would say oh great a refreshingly honest take and then fessed up to fucking everything up i mean it was just it was just uh i i didn't read the book i read excerpts of other people who read the book but it was just a disaster and then she

got a facelift i'm positive she got a facelift so i said well at least you look better now with your eyes pinned back in your head, you know? I don't know. So those two clowns got us into a lot of trouble. Once we get into that situation with the government-dated lockdowns, the Fed and politicians- And by the way, the Dorsey part,

I'm not sure about the Dorsey part. Okay. I've always said that I think Jack is an honorable guy, but Jack was also on one of the top, he himself was on one of the top committees that handled the biggest decisions about censoring. And I, as far as I know, he didn't stop it. Now, it could have been he could not control it.

I'm a little behind on the Twitter files because I've been physically writing and trying to get my life back and stuff like that. But but it's it's now pretty clear that the FBI invaded social media and Google and and various online things in a way that's, I think, profoundly unconstitutional. I think it's just so the other day, Jonathan Turley wrote an op ed that said it's time to have another church investigation. The FBI is completely off the rails. And he just went through a litany of of things that the FBI has done wrong that are, you know, 1950s bizarre. So the FBI is looking very, very bad here. Do you know who Vivek Ramaswamy is? They paid a number of these companies, a number of media companies, millions of dollars to tell the story about things like the laptop. That's what's coming out of the Twitter files.

Yeah. Do you know who Vivek Ramaswamy is? Yeah. He recently gave a speech, and he basically said, listen, First Amendment and private companies and kind of that entire debate with the social media companies makes sense and is a debate worth having. But the second that the government starts to go through the back door and kind of allow the companies or pressure the companies into doing their bidding for what they couldn't do through the front door because of the First Amendment, then all of a sudden that now brings the First Amendment debate to these businesses. And so whether it is the government itself not allowing free speech or if the government is basically pressuring organizations to not allow free speech, is there a difference? I thought it was just a fascinating thing because what you start to get into is like how do the courts look at that? How are the courts going to handle companies that are essentially acting as an extended hand for certain organizations? Or does the court say, no, actually, that's not what they're doing, and they can tell the organizations to kick rocks, and they don't have to follow their instruction?

It's a very complex topic. Well, except there's a kind of a faux libertarianism view that says they're private companies, they can do what they want, to which I say, OK, so can I exclude blacks from my diner? And society long ago said no. And so that's not clear. I can't remember the number, 20-30 or something, 2-30, that basically says you're either a platform or you're a media outlet. and in one case you are responsible for your content and you can be sued if your content's wrong and then the other you can't be responsible but you also can't exclude people if you're going to open the doors to everyone you can't say oh but not you black guys right so so i think that

ship has long since sailed and i think that the the social media companies have long since overstayed overplayed the hand that well we're private companies we can exclude anyone we want and uh and i think whether they like it or not twitter's the public square it's where people speak um and and uh if they really want to accept liability for what we say i'm i'll power to them because i want to see them get sued into oblivion if that's the case and they don't want that so either you let us all talk and and i'm willing to give them a little attitude about you know you know, sort of inciting violence and yelling fire in a theater and that sort of thing. I think I had a little attitude to edit, but, you know, less is more.

I'd rather be in the wild west of free speech than have some douchebag with a ponytail in Silicon Valley editing my stuff. How do you think this changes with Elon gaining ownership of the business? Fascinating question. The question is, does Elon really believe everything he's doing? And he's certainly playing it well, right? He really looks like the White Knight. But if you read something like the Great Reset, one of the theories on the Great Reset is all these douchebags like Klaus Schwab are meant to look evil, and then some White Knight

will show up and clear them all out, and we'll go, hallelujah, and it'll be fucking Adolf Hitler, right? And so the question is, is Elon really sincere? Is this coming from the heart or is this? Elon is one of the great minds and the great grifters of the modern era. He's both. And so which are we seeing? We're either seeing a phenomenal grifter, a phenomenal sort of intellect who's had enough.

I don't know. Now, you got to remind yourself that every single industry has ever been involved in is deep state connected. Every single one. So he's, he's got, he's, he's deep state from head to toe. So the question then is, is, is a guy who's, who's that sort of tied to the, you know, whether it's rockets or, or, or battery technology or whatever, um, is that guy all of a sudden going to defy the deep state?

It could be a farce, could, could be a ruse. I don't know. I'm hoping he's doing it. I mean, I'm really praying he's doing it because we desperately need him to do it. We need more people to do it. We need him to be a role model. Explain a little bit more the idea that Elon Musk is both a great mind and a great grift. Well, he's a phenomenal hoser, right?

I mean, he's phenomenal at marketing. He's kind of got a Steve Jobs-like marketing eye. And he's certainly anyone who can build companies to shoot rockets to the moon and drive, build brand new electric cars and stuff. What is it, PayPal where he started, I think? And this is a guy whose mind is unconstrained compared to most people's. There's very few people in the world who can think that big and put it into action. And he's not stuck in a dotted line at all. And so I think he is a genius.

And I think he's funnier now. I mean, there's no question. And I like to associate humor with genius. And so I think he's a great mind and he's also a hoser. He's been able to fund Tesla through the years by all sorts of cool stuff, like trading Bitcoin, right? Trading Dogecoin and things like that. He recognized the wild west of the various cryptos

and realized that he could put money in and then pump it and then sell it and no laws were being broken, right? And so he's been able to cook his books pretty good. Do you think that's what he's doing? Do you think he's been doing that? Do you think he's been- Well, I think he's cooking them

maybe not in the illegal sense, but if you're a car company and you're funding yourself by pump and dumps on crypto, it's odd. I don't know if it's illegal, but it's odd. You know, it's like a micro-sailor, right?

Sailor just flat out openly just trades crypto, right? But Elon did it to sort of raise money. when you see uh kind of the asset bubble that was created from 2020 into 2021 and as you said might have even started in the 80s and 90s with some corrections along the way what is kind of your view now in hindsight with a little bit more clarity and understanding that obviously prices have come down we have some tech stocks down 90 95 percent bitcoin's down 75 percent we've seen the indexes come down 20 30 percent uh how do you look at that asset bubble and what do you think

it'll be written as in the history books? Will it be the greatest asset bubble of all time? Yes. Yes, because it's been the longest duration. So most asset bubbles are real, you know, sharp rise and fall, right? So they look like the Washington Monument. This thing has built over years. I really do think the market's left fair value. I look at 25 metrics evaluation. And you can say, well, this metric shows this. I go, look, I've got 25 that all kind of line up. And they all show that around 1994, the markets just took off. And a valuation metric is the price of the market relative to something that the market

ought to track. And so no one likes Buffett's because it's priced to GDP. You go, well, the GDP is screwed up because, well, it's screwed up because for two things. One is it's inflation corrected, but the inflation number sucks. So you can make the argument that it's over, that the market's even more overvalued using that. But then others point out, well, the GDP of U.S. companies, the S&P 500, are now much more global. And so price to GDP is not a good metric anymore. And I go, but that's a regressible situation, too.

That's a regressible. That can be regressed to the mean. If we deglobalize, that's all going away. and so uh so that could be just a trend line that's not a forever trend line but on top of all that um i've got 24 more that they all generally agree so at the end of 2021 i did every several years i do this i did a full analysis of market valuation i went through the 25 metrics and looked at where they broke away from fair value every one of them busts away at in 1994-ish. That turns out to be two things. One is that's when we had to bail out the bond market.

And the second thing that Mike Green came in on, and I can't disagree with him. I was on a Twitter spaces or something, Green jumped in. And I think he thought I had it wrong. But I think he was actually saying, in addition, he might not have been saying it, but I infer in addition, that's when uh index investing really kicked in and so uh and so propelled by mindless money and and a generous fed and the fed just decided they just liked what they were doing they just got a kick out of it they had a they had a they started they started in 1981 with interest rates so high they had so much runway to work with to bring down interest rates methodically it's almost linear right if you look at interest rates it's almost like they said okay we can get 30 or

40 years of dropping rates if we do this right it's almost like someone saw that and and so so they just kept tapping the rates on and tapping them down and when you tap the rates down you tap the equity prices up because every nitwit thinks if you have a bubble if you compare your uh equity index to something else that's also getting overvalued that that's a good idea so if you want to say you know the the fed model which says that stocks are fair valued because interest rates are low well that's fine but it's it's like saying that you know buying a toyota camry for a hundred thousand dollars is fine because because because a honda accord also costs a hundred thousand it's just it's a bad metric and and interest rates won't stay low forever it feels like forever

right 40 years of dropping rates feels like forever but it's not forever and now they're going up and the equity market is now ignoring that. So interest rates have done what? The 10 years almost, it's doubled at least, right? More. And equities didn't cut in half. A few select companies did, but they've just, the equity market has taken off the froth. It goes back less than two years. Do you really think two years of growing froth is all there is to this bear market? And I think not i think i think that's a farcically minor amount of correction i think we're going to go by the way my friend at that founder's dinner who shall remain nameless in a public podcast said um said he thought the last two bull markets are going to be given back and when i

tried to pin him down he wouldn't he wouldn't say what his definition of a bull market was My definition is 2009 to 2022 is one, and 2003 to 2009, seven is another. I'll give them that. You give back those two, now we're back in the triple-digit S&P. You think that's going to happen? No. I don't think in nominal dollars it'll happen. I think the S&P should be sitting in the teens somewhere right now.

there's a lot of people who that would scare the shit out of them i hope so and do you should and why do you think that even though the fed has been aggressively hiking interest rates and creating tighter financial conditions over the last 12 months and we have seen you know 20 30 corrections in the indexes and some of the other assets coming down what's the s&p right now it's like down what 12 or something something yeah and nothing so do you think that the fed and those tighter financial conditions just don't have the same impact? Or what gets us a deeper drawdown than what we've already seen? It's recency bias. There's a stickiness to the system. So if you convince people that every dip should be bought, then for a long time, every dip will be bought.

And then over time, these dip buyers will start getting hurt. They'll start going, You know, I bought the dip, and for a while I was doing okay, but the lower highs, lower lows model is how they grind you to dust. If you, and my favorite one, you know, there's bear markets that you can look at as models. The Nikkei topped in 89, and it took, I don't know, 15, 18 years to plumb the bottom. I mean, that's non-inflation corrected. It took that long. and so anyone who tried to invest in the Nikkei from 89 on forget about if you you had your money in it already let's say you were a young punk you got a job in Tokyo at 22 years old and it was

1989 you couldn't make any money period when George George Noble one day said to me oh yeah you could short it I go no you couldn't you know that's true you can't short a market that takes 18 years to go down. Do you feel like that is what is possible here? Do you think we could be in a... I think it's probable. You think that it is probable that the U.S. indexes could be in a bear market for a very long time, whether that's five plus years or 18 years? Generational, generational. Yeah, I think we're looking at a generational bear market. Unpack this a little bit more because I think this is something that people are not hearing from many people okay so i made a chart using ron grease's chart and chem draw to add

the arrows if you look at what happens now we might have talked about this before but people have short memory so it's not a problem if you if you look at what happens from the top oh six top 1929 top uh 1967 top whatever you you look at what happens from that point on what everyone focuses on first of all if you don't inflation correct you're just an idiot you got inflation correct you can include dividends but if you're going to include dividends you also have to include fees and taxes it's amazing how close those come to zeroing out because dividends in the heyday of dividends were four percent well during the heyday of dividends fees were about two percent i mean they were not cheap and and taxes were so you made a few

percent or two, maybe, off the non-capital gain. So if you inflation correct the S&P from the turn of the century, and you draw a straight line from the 1906 top, and you ask the question, how long does it take to recover? It's like 20 years, right? So that's generational. But here's the thing people don't know, is that if you ask the question, when did it not only get back to that value but when did it reach that value for the last time not the first time and so usually you finally break through the 20 year old value and then you and by the way Europe is that right now Europe has been treading water for 20 years Germany big big economy it's been treading water for 20 years so anyway so you go from 1906 about 20 years later I think it recovers and uh and then

And then it goes up for a while, and then it comes back down, and it's amazing. It came right back down to that same value as 1906, 75 years later. From 1929, it went from the 1929 top, and it returned inflation adjusted to the same value in 1981. won. If you are at a top, you can't win from there. There's no way to win unless you're unbelievably dexterous. There might be good value, but Hussman would say, look, you got a stock that's got a PE of 10. You're going to make 10% in theory if it's gap. I mean, if it's really good gap and these guys really do crank the printing presses and are making you money. But the price of those shares can cut the PE to five.

When the PE is seven, half the stocks are below seven. So if we regress to a single-digit PE, right? If you look at the gains off 1981, inflation adjusted, it's about 6%. Half of those are PE expansion. Half of those are PE expansion. as you look going forward and we go through a generational bear market so let's say that your probable uh outcome occurs how do you invest in that what do you do you just sit down you just sit out it's it's my analogy is in stage four cancer and you say to your doc what do i do and

he says, get your affairs in order. The problem is if you're not in good shape at the end of the greatest run in the history of finance, if you're not in great shape, like so many pension funds are not in great shape, you're never going to do it. If you can't take 1981 to 2022 and get yourself in good shape, you owned it. You really screwed the pooch. You want to know what event was like the big red flag to me. There's a lot of like smaller red flags along the way, even if you go back to before the pandemic when we had the inverted yield curves

and CEOs leaving at all-time high rates and all that type of stuff. But the one that I remember, I can't remember if I sent an email or I sent it to a friend of mine. I said, hey, did you see CalPERS is taking on leverage? Yes. Oh my God.

I said- Everyone, but everyone's taking on leverage. CalPERS is taking on leverage. What a disaster. Well, they had to. Kentucky. Kentucky is funded 22 percent in their state pension plan. Indiana, Illinois, these these states are insolvent. You say, well, then there's going to be a big bailout. And you go, yes, but now we have inflation. And so those big bailouts put a brick wall right in front of the inflation puts a brick wall in front of the bailout. So now the Fed has to face some reality. Now the Fed has got to either support asset markets and currency destruction, or they have to support the currency and the integrity of the Fed. Which are they going to choose? So I want to unpack this specific point around – you said earlier that inflation is now in the DNA.

We – I think that November 2021, so from November 2020 until November 2021, the inflation rate was like 6.8% for the trailing year. CPI. Yeah, CPI. Before that, it was like 1.2%, 1.4%. So if you go from 2019 to 2020, you get like less than 1.5%. You go from 2020 to 2021, you get 6.8%. And now we have just over 7% from 21 to 2022. We are compounding.

The compound annual growth rate of inflation is now over 6.5%. And what we are starting to see is that it's showing up, obviously, in prices. We know wages aren't keeping pace. And so I don't think anyone is confused, or at least anyone with half a brain, does not believe that prices are going to come back down. You're not going to see McDonald's and Chipotle drop their prices. Their grocery store is not going to go and put a 20%, 30% drawdown in prices across the store or anything like that. Yeah, inflation is infinitely sticky.

Yes. So now that we are here, normally – Unless we have a catastrophe. Okay. If we get a real deflation, then that – bad deflations are feared by central bankers, and there's a variety of reasons. One of which is, if you have a deflation and everything, then first and foremost, you can point straight at the central bank and say, it's your fault. You did it. So central bankers do not want that hanging around their neck.

Second of all, let's say asset prices go down for 20 years. Where are the capital gains tax is going to come from? It's not a taxable gain. It's a taxable, it's a tax break. So it just screws up that pattern too. And so central bankers hate deflation. Deflation is an incredibly rational thing. In a real world of a not so flexible money supply,

which is what you hodlers are trying to achieve, when you put out a loan and you charge someone, you charge them 5% interest. You got to ask the question, where does that 5% come from? right so i got an argument david and alfada the vice president of st louis fed he's kind of on the spectrum but he to his credit he would engage with the masses including me and um he said that volker volker fought inflation early but his policies became inflationary i go fuck i've never heard that what what are you talking about and he said he made the case and i'm not sure i

didn't fill in the gaps or he made it explicitly but basically if you're shoving 15 into everyone's money market account you're shoving 15 more money into the system more spending power into the system and that is inflationary so while rates are high you have this massive influx of money now here's a plot that i only know of one person who's created it and and it seems so obvious to do although now they don't report m2 anymore but if you want to correct for inflation instead of using cpi which they've completely screwed up from head to toe right completely the boskin commission turned it into a fourth trimester abortion um the you would plot the asset markets corrected for m2 money supply that would be a pretty rational way and a pretty numerical way to correct for inflation

And M2, you know, I'm not an economist, but, you know, it's the cash in the bank and some pretty low-level money supply thinking. It's not derivatives. It's not all that weird stuff. But if you correct for M2 money supply, from 1920 to the present, the S&P hasn't moved. Is it possible, I ask, is it possible that the capital gains in the S&P 500 for 100 years have been zero correcting for that metric of inflation. So I've talked about this too much. People actually have gotten mad

that if you go back to 1971 and when we went off the gold standard and you basically denominate the indexes in gold or other types of assets rather than the US dollar, many of them are flat or down. Some of them actually have lost money. And so when you go further back,

called 100 years or so, it is interesting, because you could basically look at there was a gain on the first 30 years. And then you basically took a loss in the last 70. And you basically end up flat, you know, give or take and kind of round numbers, if you will. And so if you're flat for 100 years, and actually the change in value is the debasement of the currency, then it starts to bring up a lot more analysis in terms of wages. How have those changed? You start to look at is the consumer, is the investor, is the business better off today than they were 20, 50, 100 years ago? And I think there's a very strong case that that may not be true. Well, so here's an interesting case that I'll make for you, though. There's a question that gets asked. And apparently, when

when the poll goes out, you get about the same percentage answer every time. And that is, would you rather live in 1925 on a $50,000 salary or in 2022 on a $50,000 salary? Now, think about it. There's layers to that onion. You obviously are a rich man in 1925, but think of all the things you don't have and the one that causes 86 percent of the people to choose the modern fifty thousand dollars is health care i think that they realize they go holy shit i could die of an ear infection i think otherwise it might be a great time to live but don't forget you got no tv you got no none of the things you really like do and so being rich you know you get You know, troll around, get chicks, hot chicks, you know, but your wife's hot, so you don't need any more of that.

And so it's an interesting question. So there is something that the hedonic adjusters have right, and that is that there has been an improvement in quality of life in some way, in various intangible ways. Well, I think the, well, yes, there are absolutely objective improvements in life from a technology standpoint, healthcare. Jeremy, we can go down the line. There's a bunch of stuff, right? And I think the techno-optimists believe that is going to continue forever. If you read The Rise and Fall of American Growth, which I think you've recommended multiple times to folks, there's kind of this 50-ish period of time, maybe 70 years, whatever it was, where there was an explosion of connectivity. Wasn't that a great book?

Amazing. It was an amazing book. It's probably one of my favorite books that I recommend. I got another one for you now. You know it because I emphasized it. The True Believer. The True Believer. The True Believer, my introductory section,

I emphasize The True Believer. If you read one book this year, Eric Hopper, 1953, The True Believer, he will explain the world to you in a little tiny, half the normal book size book. It's just an amazing book. It so got into my DNA. It explains mass movements and why they form and what gives them oxygen.

And I spent a lot of, I spent a lot of time writing about it and I hated doing it because if you go to read it, just say, well, Colin already told me the plot, but it was so important to me that I couldn't say, go to Amazon, trust me. And so I, so in my, my pin tweet, if you guys are tweeters out there, which most of you are as my guests, go to my, go to my pin tweet and read the introduction to my, to my year Review, and it emphasizes it's got an Eric Hoffer theme. And I think it's, some things I write are okay. Some things I think are great. That's one of the great ones. When you look at the analysis that you described in terms of going back $50,000 in 1925, or whatever it is, or $50,000 today,

there's a strong argument that actually people are sicker today. They're more out of shape. They are dumber because they say, wait a minute, watch your step there, buddy. And they sit in a doom scroll on social media, like all these things, right? It's this fascinating question because you can't just look at all of the positive improvements because there's also been some of that technology. Some of those improvements have led to degradations in the quality of life. We're living longer. We're living longer.

And so there is no, I think, easy analysis, but also it scares the shit out of people. to go backwards. I think there's like a psychological, whether it's a bias or fear or whatever it is, where the idea of going back when you don't have TV, when you don't have a smartphone in your pocket, when you don't have, you know, healthcare, as you described, you can't imagine how people live that way. My childhood was great. So my childhood, you know, so odd. My mother was a profound alcoholic. I mean, really sort of in you're you're facing the mashed potatoes at dinner alcoholic right and uh and i still had a great childhood somehow my dad raised us to to deal with her as though you would deal with having a

retarded sibling or something right and and we just we would go out in the woods and we'd build forts and we'd go we we we'd steal you know from local building contractors their their cement tub and we'd drag it to the lake and use it as a boat. And we just had a great time. And we didn't have all the bullshit. And we had three TV channels. Up in the Adirondacks, I have a cabin, as you recall, because that's when the dogs were giving me shit

on our last podcast. Charlie's a legend. Charlie's a legend. He is a legend. And so I read comments. And people say, oh, never read the comments. I read comments because there is content in there. and it's like watching a game film and say oh my god oh i can't believe i threw the ball into that

guy's hands right um but um but there were people who are saying i should stage it better and i go i'm in the fucking adirondacks you idiots they thought i was ted kaczynski or something the other amazing thing really amazing about the last podcast which i thought by the way went really well and in you may have noticed in this year in review i gave your podcast top billing i did out of about 50 um um what i noticed is i made some joke about inflation i said people don't have 400 to rub together and now you know that to replace a microwave which is about what a microwave costs now right and you wouldn't believe the number of commenters oh he lost for you and he said a microwave costs 400 i go really that's what it takes to lose you what do you got adhd

See, hey, there's a squirrel. Go chase it, you fuck. You know, it's just, you know, I'm amazed at what comment section shows how many sociopaths there are in the world. Because all you have to do is read the comments and go, you really just said that? It's just, okay, so a microwave oven doesn't cost $400. Maybe I was being facetious. Maybe I was. Maybe I'm a clueless idiot.

But, my God, you say I stopped listening when he said a microwave costs $400? You got it. Really? You can't mess with the microwave people, the microwave, the microwave, the microwave industrial complex. All right. I want to move on because we've got a whole bunch of stuff we got to get through. Next thing that I want to talk about, you did talk about this last time, but it was more of a passing thought. And I want to read you a specific three or four sentences from from the letter summarizing 2022. You said my training as a parent tells me those demons are scheming. so indeed i am a conspiracy theorist if you are not one ignorance is bliss hang on to those lovely

thoughts and what you're talking about here is people in positions of power and influence and last time when we talked you mentioned someone in an offhand comment uh conspiring is what people do when they come together and they conspire to do something and so you're now going from offhand comments to explicitly calling out much more i think your expectation and the way you analyze these situations so i thought it'd be fascinating when you read something in the news how far on the i believe verse i start at this is total bullshit do you start like where on that scale are you when you read something in the news well it depends on the author for starters okay because if I'm reading Matt Taibbi, I assume, or Glenn Greenwald, I assume they're trying to get it

right. And I will read anyone who's trying to get it right. I've been denouncing the use of conspiracy theorists as a pejorative for many years now. In fact, the one you just read was very mild. I used to attack those. If you call me a conspiracy, if I'm in a conversation, anyone says, well, you know, I'm not a conspiracy theorist, but I will stop them dead in their tracks right there on the spot and say, why did you just say that? And I make them defend using that phrase. I said, you're about to tell me something about someone conspiring to do something bad, and yet you're saying you're not a conspiracy theorist. We should be conspiracy theorists. We should assume that the politicians are up to no good.

We should assume that the press has been bought and paid for at this point because all evidence points to it. Once the press is bought and paid for, they're lying to you. the last podcast i did was as recently as yesterday and if you can wade through all the goddamn f-bombs that i dropped there was content in there somewhere but um but it was with chris irons right and and and i i was out f-bombing chris like there was no tomorrow i think he's gone uh i think he's gone hollywood or something he was very tame um but but but if you're in the press and you're lying to me, you're my enemy. You're supposed to be trying to get to the truth. That's what the press is supposed to be. The constitution kind of gave you special privileges

so that you would help us. And if you, I don't care if you're lying in favor of the right or against the right or in favor of the left or against the left. If you're lying to me, you are my enemy. I want Edward R. Murrow back. And he was probably lying too, but I didn't know it. And so if you're sitting there telling stories like the laptop is fake and you know you're lying, you're a liar, right? You're a despicable human being. I have nothing but bad things to say about you now. Do you think they thought they were lying? Yeah, I think they did.

You remember when the laptop story broke? How long did it take you to figure out it was real? As soon as Twitter started blocking all the links. It didn't take that long because, you know, OK, so so someone gets you a copy of the laptop. How do you check it? Well, you go the email and you say, oh, gee whiz, he sent an email to this guy in the state. Let's ask the guy if he got an email on that date. If he did, you've got the laptop. It's that simple. So you knew the laptop was real and the blocking was very fast. when they kicked the new york post off twitter right the oldest newspaper in america that kicked

off twitter blocked that story you knew the laptop was real there was two moments where i knew stories that maybe people uh weren't as excited about were likely to have more uh weight to them more accuracy than uh uh than initially thought and both times it was because someone got kicked off twitter when zero hedge dropped the um uh wuhan uh virology institute information and they literally had like here's the doctors and and uh uh i think they put a phone number and email that was publicly available on the website and that's what you know the doxing rule uh was somehow and then and then the the foia release of fauci's emails where fauci sends an email that posts the zero hedge lincoln says we got to get on this yes and so uh that one i was like oh somebody should just go do

some more research and then i actually i don't know if you remember this um very shortly after there uh there was a i'll call it an open source document i can't remember if it was a google doc or something got put together as a pdf um and the writers of it were uh anonymous no one knew who put it together but it was very well researched it was obvious that these are intelligent sophisticated people who understood science and geopolitics and all this stuff and they'd put together this document and i still today believe that they likely did it anonymously uh as a response to having seen what happened to zero hedge so that was one and then two was when uh when the links got blocked on the new york post story again not because i had some insight or

thought that uh it's 100 true but just it is the classic like somebody tells you don't look here and every human goes well what's there why don't you want me to look there i just knew the new york post wasn't going with a fake laptop story i just do it's like when the snowden papers come out did you question them not a bit not a bit you knew you knew that that's such a blockbuster that anyone who went forward with that if they were wrong would be destroyed and so um and so So the FBI has become basically the praetorian guard. If the Republicans get in power, they will be the Republicans' praetorian guard, maybe. When Elon went to buy Twitter and the left shit their pants, it was very, very clear that they were about to lose a tremendous tool that they were using against the right.

now there is this sort of you know one party view of the world that says this party is is they're all the same party there's no difference and i there's some truth in that but the evils of the world i see right now are coming from the left and i've looked for them on the right i've made that assertion to people and said give me examples um you know i look at i look at january 6th and and what i see in january 6th was an optically bad moment i see uh i see the fbi infiltrating uh infiltrating the crowd causing trouble i happen to run across in the ukraine story this year i happen to run across a picture of a ukrainian nationalist which we should get to before this thing's over

with q anon shaman at january 6th i'm going what are those two doing together january 6th what's that all about explain explain this more because people who haven't read this yet uh the the imagery is uh and again i am uh deferring to you that uh obviously the other person is uh who wherever you found the image uh is who they are saying it is there's no way for me to well it's a it's a picture so it's either photoshopped correct but but but there's a lot of pictures of this guy with q anon shop there's a picture of the guy with q anon shaman and then there's all sorts a picture showing he's a Ukrainian nationalist, which is a sanitized version of saying he's a Ukrainian Nazi. Now, you will be told by mainstream media this year that Ukrainian Nazis are a

conspiracy theory. All you have to do is go on Twitter. Here's your homework assignment. Go on Twitter and search Azov Battalion, A-Z-O-V, Azov Battalion, and start reading tweets. It's nothing but awfulness it's just going back years if you want set a time frame you know civil rights groups and and and and world organizations watching out for the well-being of humanity have been denouncing the azov battalion the whole time what is that but that it's a military it's a it's it's a military group in ukraine that are a bunch of nazis they trace their roots back to world war ii where they were fighting with germany against ukraine and against the soviets and they were genocidal they were they were anti-semitic they were everything you'd expect out of a nazi those guys made it

through to the present now they've had highs and lows but in 2014 they really got their feet on the ground after the Maidan protests and the CIA-sponsored coup of, don't make me pronounce his name, I can spell it, I can't write it, I can't say it. So we toppled the Ukrainian government, put in our guy, and I'll admit that the previous guy was Putin's guy, but it's not Putin's back doorstep. So, you know, Putin should have his guy there. And so in any event, so the Ukrainian Nazis really started getting legs. Now, these guys celebrate Stepan Banderas' birthday. Stepan Banderas was Goebbels' buddy during the war. He was a diehard Nazi. And these Ukrainian Nazis celebrate his birthday. And I provide links to video footage, and they're scary as hell.

The best analogy I have is they're not big in numbers, maybe, but they're like a Mexican drug cartel they what they lack in numbers they make up in ruthlessness so those were the guys who were trapped in the azov azov style steel mill remember that where they were they were in there and they were supposedly protecting civilians bullshit they weren't they were using civilians as shields and and and putin flushed them out of there and i think they probably died a grisly death because putin's move into ukraine we're probably jumping the gun on you here who is moving to ukraine was to clear the the azov guys out of there that was why he invaded ukraine it was to clear out the nazi movement in ukraine which was picking up speed thanks to nato arms

and training do you feel like so hold on i got a couple questions uh first that is the stated reason or one of the stated reasons from russia and putin uh one do you believe that that's actually why they did it. And two, do you think that the Russian people believe him when he says that? I think they do. I did a poll on Twitter. And I said, which leader most cares about their own country? The choices I gave were Biden, Trudeau, Johnson, and Putin. 71% Putin. They can't even convince guys in the US that Putin doesn't care about Russia. Putin is popular in Russia. You look at the last 15 years of Russian history, it's been pretty tame, actually. And when I get into, do you want to go into Ukraine now? We can go into it. I'm into it already. Part of it's because

it's the core of my write-up this year. It's the one where I said, okay, I'm bringing my A game for this write-up. But Chrystia Freeland, let's go to the truckers. Remember, it was the most peaceful protests in the history of protests. These guys were clean in the streets. They were playing hockey on the ice. They were doing everything you'd want to see in a protest. People were taking donuts and bagels to feed them. And they were protesting that they didn't want to get vaccinated. And then Trudeau and Chrystia Freeland stepped on them like Nazis. Now I'll say like Nazis. So they stepped on them like authoritarians and they shut off their bank accounts. They threatened to kill their dogs. They disabled their trucks. They shut down funding campaigns.

They did everything. And the reason was because they could have just said, okay, you guys don't have to vaccinate. We got the message. We don't care. That's fine. It was time to stop the vaccination anyways. But they couldn't give the deplorables the victory. They could not in any way let truckers win because they could win in every country in the world. So they had to squash them like bugs. Now, who's Chrystia Freeland? Well, Chrystia Freeland is Ukrainian.

She used to work in Ukraine. Her grandfather was a Ukrainian Nazi. She is in the World Economic Forum. She has the resume of a bad person. She is on the short list to be the secretary of NATO. So when you see them step in with the trucker specifically, one of the pieces that I think shocked people was not that they pushed back, stepped on the protest. I think now people understand like, hey, this idea of protesting governments, they're not cool with it. They may say they're cool with it, but for the most part, unless they agree with what you're protesting about,

They're going to do things to deter this, to stop this, whatever. But I think it was the way they did it, the cutting off of the bank accounts and just the treatment of citizens in a way that you would treat quite literally terrorists, right? People who you thought had some sort of ill will. And I think if you walked around the streets, people would say, no, no, no, we are in this case Canadian. and we believe in Canada and we believe in the freedoms of Canada and we believe in X, Y, Z components that make up that country.

So it was very, again, kind of shocking when they started to use tools that previously had been reserved for what most people I think would have said were appropriate measures in stopping terrorist financing or those types of activities. I would say it was more appropriate

for someone in the Soviet Union to step on that. To me, it was just so off, over the top. Yeah, over the top is a good way to describe it. And Justin Trudeau made very brash statements about them being neo-Nazis and about them being pedophiles. He made all sorts of accusations about the truckers. And he talked about taking away their personal freedoms. He said it. I quote him.

And so Justin Trudeau is a sack of crap. and he should be voted out but elections don't work anymore so there's that um so so so so then you get so then you get um then you get the uh the ftx collapse well which connects before we get to ftx let's talk about uh russia and ukraine because okay let's that's that's that's where my heart is right now in february uh sorry for wiggling my brother says i wiggle a lot that's fine my brother says i wiggle you're good sorry it's all good yeah okay in february of 2021 we saw putin go ahead and uh and move into ukraine uh invade the country i think there's a lot of people who thought it was all talk it was all you know bark no bite he wasn't going to do it

he did it which i think includes the cia and our intelligence they thought it was all bark and no bite okay and once he did it it felt like there was a pretty big shift there was a lot of uh change in the coverage in the United States and globally. There was, I think, a lot of people in the United States. One of your comments in your write-up was these geopolitical events happen to teach geography to Americans. People are like, hey, where's Ukraine? And they started to unpack some of this. And then, frankly, there's a lot of people who just said, I don't know anybody in Ukraine. I don't know anything about this. Why is the United States being involved. And you got kind of a very wide dispersion of responses. What's your read on the

situation? Well, I would like to think there was a lot of the latter, but I don't think there was. Yeah, I don't think there was a popular response. Yeah, I don't think that was a popular response or one that was the majority by any means. So here's the backstory. I went back and looked at all the times I wrote about Putin over the years. It turns out my first time I ever wrote about Putin was in 14, which happened to be on the heels of the overthrow of the Ukrainian government, CIA sponsored. And I was just trying to understand what was going on at a very shallow level. And I don't know anything. So I had this huge disadvantage of, I literally was one of the guys who couldn't pick Ukraine on a map. I mean, you show me a picture of a map, I wouldn't have

been able to assign Ukraine. So I actually put up a picture of a map and I admitted that. And I admitted in my write-up that i started from scratch i had to first find ukraine on a map and i showed a map i said was uh was a top secret pentagon map and and and some guy said oh he doesn't have that he if he got he's a he he must be a psyop blah blah blah and it's a fucking risk board you morons i picked a risk board from the game risk and and and what's funny is there's no Russia in the game risk. They're all provinces. I said, oh my God, they've already taken Russia off the map. So I had to start from scratch. I didn't know there's a civil war going on in Ukraine for years. So the Western Ukrainian with a core group of Nazis have been slaughtering

ethnic Russians in the East for years, slaughtering them. So this is not a simple story. Zelensky is a complete hoser. Zelensky is phenomenal at what he's doing, but he's every bit as dirty and slimy as any other leader in that region of the world, where he banned the Catholic church, he shut down his opposing party, shut down all the minor parties, he did all sorts of bad shit. And everyone would think, oh, Nobel Peace Prize? I'd take him to the Hague for the shit he does. But but so when I when I when I get into it with people, when I get really frustrated, I would drop to moral equivalency and I would say, OK, OK, before you you wave your fucking yellow and blue flag one more time. Let me let me ask you this question. How many countries. Over the last 20 years and how many people have been killed, how many countries have been attacked and how many people have been killed by Russia and by the United States? and it's not even close it's two decimal points apart we have done 292 292 military interventions

and since the mid-90s 292 which of those countries attacked us this year we we bombed Syria three days in a row and the official story was that it was to send a message to Tehran and I said in the write up. I said, that's odd. I didn't remember Tehran. I didn't remember that Tehran was in Syria. This is confusing to me. We bombed Syria to send Iran a message. What kind of war crime is that? So I quoted Madeleine Albright admitting that there were 500,000 children killed in Iraq, 500,000 children, and she said it was worth it. So please tell me how twisted she is. please tell me where was the video footage of those bloated carcasses where was the video footage of those dead children so so when you want to get all teary-eyed and all oh you know

give zaleski the nobel peace prize explain where you were when the saudis were bombing yemen and killing tens of thousands with our weapons that we provided explain why so that why why why our more recent liberal president, which I don't include, Biden, Obama, bombed seven Muslim countries. Which of those countries attacked us? Seven Muslims. Which attacked us? The hint, none attacked us. So who are the bad guys? Statistically speaking, we are the bad guys. Flat out, we are the bad guys. I want to be the good guys. And I provided quotes from the former attorney general of the United States, Ramsey Clark, saying that the United States, that quote was the United States is something like the most warlike. No, Jimmy Carter said we're the most

warlike country in history. I think it's Ramsey Clark said that the greatest crime has been U.S. foreign policy. Then you can go to guys like Chris Hedges and find all sorts of hateful things. And so the bottom line is that while you're all sanctimonious, you, the people, about Ukraine, you wave your flag and you show great hostility to guys like me who try to look at it through Putin's eyes. Try reading something, just anything, just read something so that you're not a complete fool. I call them the sanctimony industrial complex. They'll find a cause to get all bent out of shape over. But when I get bent out of shape over something, I go read about it and I find out what I'm bent out of shape over. And sometimes I'm wrong. So the bottom line is for years, back in the 2014

write-up, I quoted John Mearsheimer. I had forgotten that. John Mearsheimer is a University of Chicago policy wonk who I've been in communication with since I rediscovered him. And he has been telling us that NATO has been heading us for World War III for 10 years now. He has been warning everyone that will listen that NATO is taking us to World War III in their actions. Ukraine is on Russia's borders. Putin has been saying you can't have Ukraine. You can't bring Ukraine into NATO. It is an existential risk for Russia.

It's not going to happen. And people say, well, you know, who's he to say that? I go, well, we told fucking Cuba to take a hike. We would tell, yeah, how long would it take? How long would it take if Russia put missiles in Mexico for us to turn Mexico into a sheet of glass? About five seconds. We would scorch Mexico if there were Russian troops and or weapons of any kind. So why is it that Putin doesn't have the right to say, look, for us, Ukraine's it.

so Putin brings in first the war started out in this very odd way Putin had been warning you can't do this you can't do this they had communications right up through 2021 and the west we didn't just say look we disagree because we said go fuck yourself we said we don't care you know why we wanted Ukraine in a war with Russia we wanted that so to us the ukrainians are the same as the irish infantry were to long to long shanks in braveheart you didn't care if they died we don't care if the ukrainians died we're giving the ukrainians weapons to go get slaughtered and if you if you find the guys who are telling the story so here are the names you want to watch out for uh colonel douglas mcgregor he was uh in a position to be a

cabinet level military advisor in the white house he was in a he was going to be the ambassador to germany senate uh vetoed it uh colonel colonel um i think it's stephen black he he was in the virginia senate for for for years he was military using the the marines for 31 years you got guys like more offbeat guys like oliver stone you got um who's actually very good um you got guys like on Greenwald. There's dozens of people who've been trying to tell the story, but the media doesn't want to hear it. The media doesn't want to hear it because they're paid to tell the other story. And so NATO is the cause of this war. NATO pushed Russia. They had to move. Now, what was the proximate trigger? That's a fascinating thing. Was it the proximate trigger that NATO was pushing

ukraine in that nato is pushing ukraine to join nato they say well why is that so damn important well what makes it so damn important is that if if ukraine's in nato by treaty if russia steps on ukrainian soil everything kicks into gear everything goes straight to now we got to fight russia and so so it's bad enough to be arming the ukrainians with nato quality crap but to have Ukraine in NATO is like all the treaties that existed prior to World War I. They trigger events. And Putin said, you can't do it. And we should have said, OK, we get it. Now, when the Berlin Wall fell, the Soviet Union fell apart. Germany was being reunited, which had more than just the Russians nervous because big Germany has done a few bad things in its day. We promised, written

record, we promised the Russians that if they kept the Warsaw Pact from being reassembled, we would not push east, eastward in NATO. That NATO would stay out of that zone if Russia stayed out of that zone. And then we almost immediately put plans into moving eastward with NATO. And it started, it finally started in 97 officially with Clinton. And George Kennan, who's considered one of the greatest cold warriors of history, said it was the biggest US policy mistake ever when Clinton pushed NATO eastward. And so we pushed NATO eastward, and we flipped off Russia. We said, you don't matter. And a sovereign state does not want to hear that. It's fine to disagree with them, but they don't want to hear that you don't matter.

And then at one point, Biden says, where does the rhetoric get really bad? This is where it it's completely psychotic. First and foremost, when Putin or a Russian speaks, it's a single voice. It's Putin's voice, to be frank. So when Lavrov says something, it's Putin. It's all been clear. Putin, Russia, Lavrov, all these Russian guys all speak from a single playbook. When NATO speaks, it's a bunch of whack jobs. It could mean anything from as high up as a high-ranking person in the White House who's higher ranking than Biden, who's losing his marbles. But when Biden says the regime has to go, when John Bolton writes an op-ed that says we have to assassinate Putin, we have to set up an assassination of Putin, how are you going to

explain to me that's not existential risk? So Biden says the regime has to go, and some Some newspaper said, oh, that's the most aggressive stance towards Russia since Ronald Reagan. I go, no, that's bullshit. Reagan never said the regime had to go. You say a regime has to go. You're saying, go ahead, light the place up now. We're going to take you out. So it's gobbling time.

It's a green gobbling strategy. You want a nuclear war, you tell Putin that's his only option. You'll get a nuclear war. Now, we hear about how Putin was pushing nuclear war. No, he wasn't. at all he wasn't our press was pushing the idea that he was pushing nuclear war and we had senators saying we should arm poland with nuclear weapons we had senators saying we should attack preemptively because nato speaks in a bunch of voices of a bunch of loose cannons with

our weapons are loose cannons with double digit iqs and so the nato message is crazy you got kamala harris doing her dr seuss imitation over in poland um and so um and so uh you know uh mearsheimer sent me a debate he did against sikorsky used to be the secretary of defense of russia of poland and mearsheimer really didn't like the debate. He thought he and McFaul, who's a pathological liar to Russia. When you're a diplomat to a country, you're really not supposed to lie. According to Mearsheimer, who studies this stuff, he says, when our leaders talk to us, they lie their ass off. When they sit down and they break bread and they talk to each other, they don't lie. They call a spade a spade. And McFaul

was so proud of the fact that he was lying his ass off to the Russians all the time. And so McFaul and Sikorsky debated Steve Walt and John Mearsheimer. And I found Sikorsky repugnant. So then, months later, there's Sikorsky saying, we've got to arm Poland with nuclear weapons to go after Russia. How is this not existential risk for Russia? They want to pull weapons within seven minutes striking distance of Moscow. How is that not a threat to Russia? So we've been, I'm positive NATO could have stopped this war at many, many points along the way. What do you think they should have done? Stop the war. Yeah, but how would they, if you were running NATO, and now

obviously with hindsight benefit, where do you think those points are that they could have stopped it? any point just literally putin was saying i want in writing that you guys are not going to move you're not going to take ukraine into nato he he's been saying it the whole way you can't have ukraine he wasn't saying he had to have ukraine he was saying you can't have ukraine he was happy to have ukraine just be there He had serious tactical issues with having the ability to deal with Ukraine rationally. So he had pipeline issues, and he has the Soviet – the naval fleet and stuff. He had to have Ukraine accessible to Russia.

The invasion force wasn't an occupying force. It wasn't big enough. The invasion force went into Ukraine to take out the Nazis, which were the problem. Do you think – and again, now we're into speculation land, so it's impossible to know. The whole way I've happened. What could happen? But do you think that if NATO had put in writing, we will not bring Ukraine into NATO, that would have been the end of it? Or do you think that he still would have gone in for this Asimov or Azov battalion? No, that would have been the end of it.

You think? I think – I absolutely believe that. Okay. We'll never know. Okay, so this was going to be – my question is – So what was the trigger? This is back to the trigger. I don't think the trigger was the NATO.

Okay, what was it? So why, after all these years, did Putin finally move? And what happened was I got two emails from guys who I don't know. It's one of these things like I'm now friends with a Canadian military intel guy who sent me an email and reached out and tried to tell me something absurd about the COVID virus. and he was in the military games in wuhan in october of 2019 and he said all the athletes got sick and wuhan was a ghost town and those two put together says maybe that's when the virus got released now i didn't know who this guy was he was trying to get my attention i was you know humoring him turns out he's canadian military intel he's got boots on the ground in ukraine

giving him information and he's confounded at what the hell's going on there so this is a complicated story so um i think putin was asking for an absolute openly stated willingness to back away from ukraine and the u.s and nato don't didn't want to do that and still don't want to do that because they viewed it as like showing weakness or no black black again these are just opinions, but Black thinks it's just a resource grab. NATO, which is the U.S., wants the resources of Ukraine and Russia. Now, I read an article that went way back, and I quoted it, that said NATO's biggest concern, or the U.S.'s biggest concern, is an alliance between Germany and russia and the reason was is because with german technology and russia's resources

they would dominate the globe so you say why did we blow up the pipeline well we did not want germany signing a deal with russia you said that you said that as if that was a fact i'm positive Why would Russia blow up their own pipeline? I'm not alone, by the way. Guys like Jeff Sachs of, you know, Columbia, there's a ton of guys. And then the former defense minister of Poland, when the pipeline got blown up, put out a tweet with a picture of the blown up pipeline and said, thank you, USA. He thanked the United States for blowing up the pipeline. And then he deleted the tweet.

Of course, the screen grabs were hot and heavy. but so so the fact that john brennan said that the russians are the lead candidate for blowing up their own pipeline it was like caitlin johnstone who's very off off broadway said well we should to win this war we just have to wait till russia just blows up all of its own infrastructure so now we blow up the pipeline it might have been a proxy it might have been the polls it might have been the brits who knows but u.s naval activities above the pipeline the month before, are suspicious. But the Russians didn't blow up the bridge. They didn't blow up the Kirch Bridge. They didn't blow up the goddamn pipeline. So use the pipeline as kind of an example. What

does the US and NATO gain from that? And what is the perceived loss to Russia? And is it literally just keep Russia and Germany from becoming closer by doing that? Russia was rumored to be on the saying, look, we're going to deal with Germany. There's very few countries in the world who've actually signed off on this anti-Russia thing. Russia has been dealing with most of the countries in the world the whole way. Well, India, I think, basically said, look, we need the fertilizer. We need the oil. We need a bunch of this stuff. And we don't have anything against Putin. China as well. And so it's really US and the people we can bully, and it's a small number. It's not Italy.

There's a big Macron that's not exactly on board. When I went down a rabbit hole on this, I don't know, maybe six-ish months ago, and I think I even wrote a quick piece on it. One of the things that just blew me out of the water was that – I think it was Germany. Maybe it was some of the other countries that normally would have been dealing directly with Russia. Now we're taking the stance we will not buy Russian oil. And so they were buying Chinese oil, which was really just Russian oil that had a Chinese flag on it and was marked up 2X. And so when you unpack all the virtue signaling and the posturing and the marketing messages, just strip all that away. is russia one of the only countries in the world and by you know uh kind of association i guess

ukraine that whole region because of the oil because of the natural gas because of uh their impact on fertilizer and wheat and all this stuff they just have to be an interface for global trade with many many countries around the world regardless of what they do yeah well so they They supply the world with only 40% of the wheat. They're the swing supplier along with Saudi Arabia and I guess the U.S. if you want. You want to throw in the fracking, but I think the fracking story is starting to peter out. And so one of our big swing suppliers we're now operationally at war with. The other swing supplier has been acting very ornery to us and been talking a lot with Putin.

And so I think that it's possible that the Arab world is about to align with the with Asia rather than with the United States. So I don't know if that was happening in the wars because of that or if we boned it in the wars causing that. I'm not sure. China is opaque. This call I got right before your Zoom call. Some guy called me from China and was trying to tell me stuff about China, but I couldn't understand him. And and so the fact that I can understand nothing about China is what scares me, because I've attempted to figure out what China's up to and what their role is. There's this implicit, you know, China's got various alliances with with with Russia. But it's such a vague sort of implicit thing. It's not it's they're not in plain sight. And so I don't know what China's role is, but you can bet that they're in it deeper than we're seeing.

How does Russia and Ukraine end? One of two ways. Either we have a huge conflagration. That's a big word. What does that word mean? World War. Okay. Which may or may not involve nukes. um actually meersheimer says that he thinks a nuke going off is the only way to really stop this thing he thinks if a nuke goes off somewhere we will then go right to the negotiating table and

say okay enough is enough he says but when he was asked how do we get out of this one in a recent podcast he said we can't we're screwed okay that was his answer let's unpack that hold on hold on so then let's unpack that real quick because i think that when you say a nuke going off that does not sound like a u.s nuke going off that sounds i don't know russian nuke there's nukes all over the world you think if one goes off or at least the thought process would be if one goes off regardless of the country of origin everyone runs to the negotiating table that's meersheimer's sort of base argument i don't think he's saying it will work i think he's saying is that could work because basically that's the prisoner's dilemma that means that everyone it

is absolutely the prisoner's dilemma that's i've used that analogy talking to people um the other thing is that um is that um if you listen to mcgregor douglas mcgregor you listen you listen these guys mcgregor and black mcgregor seems to be the best source scott ritter who who is a controversial character. They say, you know, if you turn on the news, you hear that Ukraine's kicking ass. And that's why we have to give more weapons, because we're so close, we're on the two yard line, and we just have to push them over the end zone and solve this problem, right? McGregor and a few others are saying that Ukraine's getting slaughtered, that the media is completely and utterly wrong.

And here was an interesting scenario. So when this war first started picking up speed, and it was a very strange thing. The first thing that happened is we heard the war was coming. And even in the press room of the White House, there were reporters saying, what's your evidence? The guy said, well, I just told you.

Jake Sullivan said, well, I just told you. He says, that's not evidence. What's your evidence? And the press wasn't buying it. And then there was back and forth. Like the Brits said something's going to happen. The Chinese said nothing's going to happen. One of the ministers of something or other in Ukraine said, we're not seeing evidence they're going to attack.

And so it was this chaos. And at one point, some Russian put out said, could you send us the dates that we're supposed to attack so we can plan our vacations? Right. It was chaos. And I think there was, I think at one point Zelensky said the U.S. was stirring up trouble, was stirring up stress and tension unnecessarily. So I think in the early days, the only one who had a taste for war in Ukraine was the U.S.

And I think everyone else was trying to wiggle out of it. And the U.S. just wasn't going to let it happen. then come the war starts and the footage was very telling and i kept saying to my wife this doesn't look like a war and she said what are you talking about and you know you'd show bombed out buildings and stuff i go but you can't see the war that's a bombed out building i don't know what that is so what i did in my year in review i i actually sort of insulted myself i say well mr smarty pants or there's no or what what what about all these horrors and i showed eight photos of just wiped out buildings and then i said yeah those are horror stories but uh but they are in order

a b c d e f g whatever um uh ukraine 2016 ukraine 2022 uh uh i think one of them was uh baltimore one of them was detroit one of them was uh one of them was somewhere in the middle east and i said see how easy it was to convince you that there's a horror story And I said, they were just showing us pictures of shit that you couldn't say, that's evidence there's a war. And in fact, some of the footage of Mariupol, the destruction looked like it had long since passed and it was decaying buildings and stuff. And the explosions were, you know, M-80 to dynamite-sized explosions in the middle of a street hitting nothing. And then you'd see a car on fire. You'd see some mother squealing about how awful it is.

but the really big explosions were too far away to know what blew up and so there was just i was looking for the show me the smoking gun of this war and i couldn't find it now what i'll tell you is is i think the blowing up of the pipeline in the kirch bridge caused putin to change and i think he's inflicting horrific pain on ukraine now so the war did start but there was even images of you know guys with russian tanks talking to civilians Now, there was a great news week by a guy named William Arkin, who I discovered relatively late, in which he wrote about the evidence that Putin was not inflicting civilian casualties and was not trying to destroy the infrastructure because he believed that he would have to rebuild it. And so he was attempting. And so at the very beginning of the war, Ritter says, here's what Putin's going to do before it started, really.

He said, Putin's going to suck the Ukrainian military to defend the cities, and then he's going to do an end run and get to the military targets he cares about, and he's going to avoid urban warfare at all costs. He got slaughtered due to bad decisions made in the Chechen War, and the casualties caused him so much political problems. And so he was avoiding casualties at all costs. And there were all these stories coming out, and then it turns out they wouldn't hold up. like the Buka massacre, and you find out that there's bodies lining the street,

all those dastardly Russians, and you find out those pictures didn't start showing up until three days after Ukraine had control of Buka. And so you got the Azov guys who are a bunch of these ruthless Nazis who are willing to kill anybody. I mean, they really are like Colombian drug lords. They're happy to litter the side of the street with it. There was an explosion in a train station, got a lot of press. 50 people died.

Oh, that's dastardly Russians. And I showed a picture on Twitter of the missile, and it was intact. And I said, here's a picture of the missile. Let's discuss this. I just left it at that. And it turns out that I had misread the situation. It's a two-stage missile. When I first discovered right away, within a minute and a half, the military guys jump

in and they say it's a two-stage missile that's the first stage that gets jettisoned that's not the explosive part i go okay i stand corrected and then um and then some guy says but those missiles haven't been used by russia for at least five years the only guys use those are ukrainians and i said okay that's getting interesting and then someone says those are unguided missiles so if you find the first stage you find the second stage you can actually calculate where it was launched from, and it turns out traced right back to Ukrainian-controlled territory. Ukrainians were bombing Ukrainians, which they have been doing for a decade now. There are an estimated 15,000 dead ethnic Russians in the Donbass region because they got slaughtered by the Western Ukrainians.

This has been going on without anyone in the West giving a goddamn. Where was your yellow and blue Ukrainian flag while that was happening? I didn't know about it. And they were using weapons for provided by CIA, NATO, you name it. And so we have been fostering a civil war in Ukraine for 10 years. One of the things that happened in the last 24 hours, and I saw this, and I was like, oh, and I'm going to talk to Dave. I can't wait to hear his response. There's this guy, Max Blumenthal, I believe is how I pronounce it. Yeah, Max Blumenthal. He's one of the several dozen that I cite as willing to talk about the other side. Okay, so he tweeted about 24 hours ago, and he said, after months in Ukraine training soldiers, retired Colonel Andrew Milburn of the Mozart Group mercenary firm gets sauced on camera and spills the beans.

Ukraine is a corrupt, fucked-up society run by fucked-up people. And he just quotes there. And then he says, Ukrainian soldiers, quote, kill dudes who surrendered, quote, and then commit, quote, atrocities. It's been going on for years. Blumenthal goes on to describe the Mozart group as among the largest PMCs in Ukraine. New York Times profile of Milburn painted him as driven by the same pro-Ukrainian spirit that has put yellow and blue flags flying across the Western world. yeah yeah whatever so that is a retired colonel andrew milburn from the mozart group talking about how ukrainian soldiers were killing people who surrendered and again i don't know this again this is me reading what blumenthal is tweeting and then there's a clip where he was on the team

house podcast uh and he's openly saying it so unless that is not colonel andrew milburn or somehow the video is doctored it appears that is what he's saying but then 12 hours ago blumenthal tweeted and said dan rice a u.s army veteran advising zelinski tells cnn that ukraine urgently needs cluster munitions to quote increase the base lethality end quote and he complains about eu states that signed anti-cluster bomb treaty and promises ukraine's army will clean up unexploded munitions and zelinski and then he goes on he says zelinski's u.s advisor and lobbyist was granted an uncritical platform by CNN's Aaron Burnett to appeal for Washington to authorize illegal cluster munitions to Ukraine to, quote, win the war, end quote. My takeaway from these

two collections of tweets is that there is more to the story. It is not black and white one way or black and white the other way. And what it always comes back to, and I've talked about this a bunch on the podcast with various different guests, is war is a nasty, nasty, complex, horrible situation where there are no winners. And I think what we're seeing- In fact, if you look at some of the losers, you say, how's Japan doing after World War II? How did Germany do after World War II? The losers end up being the winners in some twisted way. Well, and what I think we're starting to see, and again, time has a very interesting way of doing this, is that more details are coming out that are just highlighting it's not black and white. And so for the average person who does not have a lot of time on their hands, does not care enough to go investigate, and doesn't have, quote unquote, a dog in the fight, what ends up occurring is they now are starting to say to themselves, well, what the hell is going on?

Because it doesn't seem like the story initially is the full story. It may be part of the story, but it's not the full story. I think that's really what you were highlighting in the piece that you wrote is just like there's a lot of shit going on here that isn't being covered, and maybe we should be asking why. Well, then there's all these things that show up. Like, for example, we find out that there's 36 – actually, I've seen both the number 36 and 46 bioweapons labs in Ukraine, U.S. bioweapons labs in Ukraine. Why do we have 46 bioweapons labs in Ukraine? And so you say, oh, that's just conspiracy theory. Those are just old Russian labs that, you know, were decommissioned. I go, well, I read about those in the book Demon in the Freezer many years ago. And they were terrifying because they were these rickety old buildings and they were rusty padlocks. and there were a bunch of heroin addicts who were looking to sell germ warfare materials

on the black market to get some cash. And so when the Soviet Union fell apart, one of our biggest concerns was go in there and button those things down fast. Well, it turns out that we did button them down fast. They're not leftover. And in 2005, there's some non-Lugar thing that okayed us setting up the bioweapons labs in Ukraine. And so I said, oh, do I really know they're there?

Well, then Victoria, fuck the EU, Newland, admitted they were there and that they were struggling to get control of the materials to get them back to the U.S. And I go, what kind of materials? They were, well, things like modified coronaviruses to kill people. Let's start there. And so there's just bad shit in this story. This story stinks to high heaven. And what bothers me, what bothers me is the people, the Eric Hoffer group, the fanatics, he calls them, who just sign off on this and get suckered into it. I could be dead wrong.

Go prove me wrong. I pray I'm wrong. I want to be the good guys. But right now, I am convinced we're the bad guys. And if you go back through history and you say, show me where in history there were really good guys, it's very hard to do. It's humans are brutal humans. Humans are bad people. I mean, there's nothing worse than a human. We cannibalize each other. We kill each other. We and if somehow the CIA is no longer doing shit like this. I'm reading a book right now called Poisoner in Chief. What a horror story. What a horror story. if if somehow the cia is no longer bad guys tell me what year they became good guys because i'd love to know the year that someone said okay let's stop being bad because the shit

they were doing in the 50s and the 60s was horrific dr mengele level horrific and so the question is what makes you think the u.s are good guys i see no evidence we are we are good domestically so far i would say that's slipping very quickly the fact that there's still guys who have not stood trial and are in solitary confinement after january 6 is evidence that we have real authoritarian blood coursing through our veins that's a horror story is the u.s the best country in the world to live in or do you think that there's other yes yes so it's like even with the the black eyes and the bad stuff and all the things you're highlighting they're not hurting for the most part they're not hurting their own people

they're trying not to again if you read what the if you read the the real anthony fauci you read you know poisoner in chief we are hurting some of our own people um pretty gruesomely but um but for the most part we have a great existence so i don't want to tear down the system because our system is the best system i mean there's probably countries like you know who knows maybe living in sweden's much better you know but but but but considering all the burden all the baggage we carry we're still okay but we're at great risk of not being okay it's i've read a number of books going back all the way tony blankley's book before he died the west last chance i think it was there's a lot of guys jonah goldberg there's a lot of guys who think that we're on the precipice

And that the American experiment, which has been a brilliant experiment, is at risk of being thrown away because we've forgotten what got us here. Now, there's a great story of Chesterton's fence. Did I use that one last time? Brett Weinstein drew it to my attention in his book. Guy's about to tear down a fence. And his friend says, well, do you know why they put the fence up in the first place? The guy said, no. He said, well, you better answer that question before you tear it down. And it's a great sort of metaphor. It's a great maxim where it is before you before you get rid of some longstanding tradition like Catholicism.

I'm an atheist, sort of. Make sure you understand what it was and wasn't doing for society. And I don't even know what to call myself now because I'm not religious, but I think we're attempting to push religion to the back burner. And I think religion has been a glue that I personally had grotesquely underestimated its importance. And there's called the Lindy effect, I think it's called. I think maybe Nassim Taleb pushes this. I don't know. The longer something is in existence, the longer it'll last. That's right.

And Weinstein's take on this. I had a long chat with Eric Weinstein the other day. It's quite enlightening. Talk about brains the size of cantaloupes. The longer something's been around, the more likely is that it's serving an important purpose, whether it's a physical thing like your appendix or whether it's, which they're now figuring out what it does. It's not just hanging off the end of your intestines doing nothing. To something social like Catholicism or religion or whatever. um don't underestimate the importance of its existence because it's been around for thousands

of years people who are anti-government i go you know we've been choosing government over non-government for 5 000 years what makes you think the choice of non-government is the best choice so to be a libertarian is one thing to be an maximalist libertarian is stupid I had a professor in college who, I forget what exactly the class was, but it's philosophy or sociology, something like that. And he made the argument one day in class, pissed a lot of people off, a lot of people off, which kudos to him for even being willing to have the conversation. But he basically made the argument that you can argue that everything about religion is wrong, inaccurate, and it's basically fiction and still argue that it's important for people to believe because it holds together that social fabric. And it's actually the thing that keeps people psychologically in the game, and they believe that it is better. They believe that there is something more positive in the world.

They believe that there is something, you know, when they die, like, and he kind of walked through the whole argument. And again, whether you wherever you fall, I made that argument in print, I made that argument in print, I, I opened the discussion of pro religion, I think I was inspired by Charles Murray, actually, okay, who's also a polarizing figure. I said, look, I'm a pro-choice atheist, and I refer to myself as a pagan with a noisy sword. But I'm now going to write in defense of religion. And I wrote about four or five pages defending the gluing effect that religion has had and that I am benefiting from the Judeo-Christian ethic that I personally am not actively involved in, but I am benefiting from it. It's sort of like hammering Silicon Valley for being a bunch of douchebags, but forgetting that, by the way, your fucking phone came from there. Well, you're tweeting it on your iPhone, as you say, these idiots. Zoom didn't come from Peoria, Illinois, right? The last thing I want to talk about is FTX.

You have a whole section in your end-of-year roundup, and your main point is just the FTX story is not a crypto story. It's a geopolitical story. unpack a little bit uh in terms of why is this on your radar and and why do you think it's so much bigger than maybe people are giving credit for well so as soon as the story broke which i you know me i i know the only thing i know about crypto is what i learned from doing podcasts with you and marty bet and and and various devout hodlers who've been attempting to who knock on my door with the bible underneath their arm trying to convert me um by the way you mentioned earlier index uh the index uh rise in the 90s right and one of the things uh people have yet to connect

but i think is important is uh passive indexing is very similar to uh hodling it is uh right the continued accusation of an asset that you believe will be worth more in the future than it is today and so my my my detraction of crypto of bitcoin forget crypto there's what 20 000 cryptos 19,990 something of them will have to die you know that i know that right you're not going to have 20,000 cryptos running around this is like all the banknotes in the united states from all the different banks across the country back in the mid-19th century they all died um that's not to say that bitcoin dies or it's also not to say that you know which one will survive but i do i During the FTX collapse, I did learn something about the difference between how Bitcoin works.

And I don't need to understand it. I do probably to become a hodler. You guys call them hodlers. I think hodler makes more sense, but that's just me. um um the reason that i doubt the hodlers is because i do believe to the depth of my soul that you guys either are going to be absorbed like the tea party wing of the republican party becoming republicans again or or you're going to have to do a battle of the bastards and you're going to have to survive i i believe that at some point you'll be absorbed by the banks or you will

be and and therefore it'll become pretty generic and it won't be what people right now are enjoying or they're going to destroy you and i believe they have mechanisms to destroy you despite despite the total autonomy that you can achieve by holding your own keys and things like that because i think they can make it so unpleasant for anyone who tries to use crypto that if they decide that crypto is not in their interest. Now, if they decide it's in their interest, then it's a different path. I'm not sure it's a win still.

Which path do you think is likely? I'm torn. I don't know. I can tell you're torn. Every time I've talked to you, you're one of the only people I know who I think you're standing at the fork in the road and you can clearly identify the two paths.

I'm like Tom Hanks in the movie Castaway standing in the fork of the road at the end of the movie. You won't pick. No, and I'm waiting for an event. I had lunch with Larry Lepard, who's a big Bitcoin enthusiast, and I really respect Larry. Hi, Larry.

And I could be converted, but I don't know. People say, what price would convert you? And the answer is, it's not about a price. there's not some crypto has no inherent value that that i can price it in even gold has such a thing so gold you know the favorite thing gold is that it's always been able to buy a fancy suit the problem with that statement is that what's a fancy suit in ancient rome it's a rag with a it's a toga right so that doesn't help me what gold also has bought since the dawn of time is a month's worth of manual labor, and that hasn't changed at all. And that's the better

metric. So gold does have a valuation metric that you can stick to. But that's not to say it won't pick one up, because it becomes the currency of the sane and the currency of the realm and the currency of whatever. So I don't think it has to be tangible to be the go-to currency. It has changed over the years too by the way at first it was going to be used to buy pizza and you go not really it's it's really more of an asset so there's been a drift in the story i am waiting for some moment where it just clicks in my skull that says it's real they're going to win time to buy it and and i'm just i'm waiting it's going to be it's like porn i know when i see it you know every night maybe but yeah and um and so so that's my view on crypto um the ftx story as

soon as it broke obviously i paid some attention because it was exciting and you had that 24 7 um that 24 7 twitter spaces where kim.com was fighting with some other hodlers they were trying to keep track of what was going on um in the ftx collapse which was great and then all of a sudden out of the blue they have as a guest hunter biden i go whoa what the hell is that all about right so i had spotted the connection the connection of of um the ftx token was it ftt or something i think it's called um and ukraine very quickly and i recognized the geopolitical component of the ftx collapse very quickly so within a day i think and and so i put out a tweet it was a hail mary tweet that said before this story is over

there's going to be there's going to be hodlers washing up on beaches around the world and that turned out to be true so there have been some prominent hodlers who have found themselves literally dead on beaches around the world and and one of them was said that he was about to be framed and the masada was going to get him and then boom he ends up dead and so there have been some, and I don't know how many, because I don't know how to keep track of them and stuff, but there was enough to say, oh, that was a good tweet. So it appears to me as though FTX was never meant to be a legitimate operation. It wasn't like they started it and they had a good heart and they knew what they were doing. And then they got behind some eight ball, right? And that can

happen, right? I think some of the stable coins, they started out that way, but you can spot a problem with the stable coins. As soon as they started giving away stable coins to open account, I go, well, now you're underfunded. You just gave away the reserve of your stable coin. And then I heard that they were holding crypto as assets for the stable coin. I go, OK, this is just nuts. So I think the stable coins, I think there's going to be a bunch of problems going forward even. But they've been sort of have started to get dealt with. I've not been able to understand what that will mean to bitcoin hodlers i don't know and i asked marty and i asked guys like you and i get kind of a guarded optimism but i'm not sure it's not just a self-preservation optimism

but it seems to me if the stable coins really get the crap kicked out of them if tether goes i i think there's going to be a period of chaos and that might be the battle of the bastards that might be the moment where i go okay that that's kind of a bottom and they're surviving and they didn't need heather and they didn't right but um so um quickly i picked up the connection of ftx to ukraine which is really what got me paying close attention and then i started finding videos of guys who were you know off off broadway describing the thing these are not the stories coming out of glenn greenwald stuff these are guys standing in front of their camera describing what was happening and i started to pick up the you know gabe bankman freed and laura bankman

I started to pick up the different players. I go, holy shit, this is crooked as shit. And to make a long story short, it looks to me like FTX was never intended to be anything but a crime syndicate. And that it was intended to launder money. And the losses we hear quoted, $10 billion, is that close? That was the total number of assets, I believe, on the platform. I don't know if they've come to a conclusion as to how much is lost. But let's say up to $10 billion, I guess, is the way to describe it.

Okay. Okay. So I think the best model is that it was used as a platform to launder money. And so what we know the losses, what we don't know is the flow rate through the FTX system. And so, for example, the great model is that Biden gives Ukraine money. Ukraine somehow, with the aid of FTX, was laundering money back to the DNC and to various PACs that had funny, friendly, fuzzy names about fighting pandemics and fighting all sorts of things. But it was just basically shoving money back into the DNC, which then caused Biden to give more money to Ukraine again. So it really appeared to be a round trip of taxpayer money somehow using FTX to get

to ukraine ukraine's national bank was involved and then it was ending back in the dnc and and pretty recently uh the press secretary what's her name do you know her name i can never remember it pierre something karen pierre something kjp i think is the initials right yeah um she was asked are you going to give the money back to help make people whole who got who lost their life savings and she pled the fifth i'm going oh so you are a skanky whore i got it Um, and so no, they're not going to give the money back. And so life savings ended up in the DNC. So if you, I'm on a jury and you take an AK 47, you go into the DNC's office to wipe

them out. I'm hanging the jury. I'm hanging it. I'm not convicting that bastard. They're going to have to do a new trial because I'm not letting them. I don't care. If the DNC stole my life savings, I'd be looking to get even. i don't know how i would dedicate my ample brain to find a way to make the dnc pay for that

and so i think that now one of my favorite parts of the write-up i did is i so so then the bizarre part is you got sam bankman fraud um out in the on the streets and in the digital world doing interviews and doing and and as a guest on that on that that twitter spaces spilling his guts i'm going who are your lawyers who's telling you to do this and and and he was doing this this this i'm just i'm just a kid who didn't get it and i didn't really understand what was happening and i didn't know where co-mingling funds and blah blah blah so boy genius turns turns out to be you know so I referred to it as a uh as an episode of leave it to beaver where the bees got himself into trouble again and in the end I said look

you know without Lassie Timmy would have a life expectancy of about a week who's watching out for you and uh I think um I think he could be now called I've referred to him as as as Sam Bankman epstein i think he can have a life expectancy of a gnat pretty soon um and i think there's i think it's a much much bigger scandal that they're trying to put away i think it's kind of an epstein level scandal they're trying to put away and i don't have the details but it just smells smells the holy hell of of this and uh and the fact that the republicans are not Feeding up the Democrats on this tells me that it's crooked. I know that, for example, Mitch McConnell, you want to cause me to switch parties, Mitch will do it.

Mitch McConnell, who is truly the most despicable of Republicans, in my opinion, and it's not a short list of despicable Republicans, completely refused to fund anything in Arizona while Kerry likes in a brawl with what's-her-face Hobbs. what's her, Katie Hobbs. Now, speaking of, you know, rotting empire, you know, Katie Hobbs was in this close race with Carrie Lake. And who was in charge of overseeing the election? Katie Hobbs. She oversaw her own election. She was the head of the election commission to oversee her own election. And she refused to step down. The ballots were rigged to jam the machines. They were an inch too wide. And the whole story is just crazy. But meanwhile, Mitch McConnell's refusing to fund Carrie Lake. Meanwhile, FTX is funding Katie Hobbs. And Mitch McConnell's

getting money from FTX. So this is a dirty world. And what I can tell you is if I were to say, you know this election wasn't riddled with smoking guns i i could easily imagine the whole thing was fucked up but it wasn't like the 2020 election where it was so garish that you got the whole thing is just stinks of a rotten corpse um but all the guys who attached themselves to maga lost what what you know maybe it's tactically bad or maybe it was way of saying if you touch the MAGA story, we're going to destroy you. Both parties. Neither party wants MAGA. Republicans don't want them either, just like they didn't want the Tea Partiers. So I think that's the FTX story. I think FTX is a money laundering scheme that's

much darker, more sinister than just some idiots from MIT who are having orgies. I said, By the way, it sounds awfully Pizzagate-ish to me, which I'm actually a believer in. So that's my FTX story. What's wrong with this story? Tell me what the counterargument is. I don't know if there is anything wrong or counterargument or even if we have all the details to put together a counterargument. I'm in this weird place, right, where I've talked to some of the people who are involved in this. uh you know on the podcast or or uh conferences over the years did i see you on cnbc or fox or

something where did i see you at oh i went on cnbc for a three-minute segment that turned into a 20 minute horn locking with uh our boy scott wapner yeah oh wapner yeah yeah i saw that that looked unpleasant to me we we had uh well look it's uh actually i haven't talked about this yet so 20 minutes on national television with someone who is not there to be your friend uh in the interview because that's his job right i don't think he was doing anything outside of you know he's trying to ask tough questions or whatever people forget like that's not fun how do you think i'd respond under those conditions would i just lose my shit and rip them a new one with everything i got or what so in case you can't do that i you really had to

keep your shit together which you did yeah yeah yeah and you know uh i think scott would say this as well as i i just probably have more command of uh the technologies in the market and like i'm in the business, right? Like that is what I do on a day-to-day basis. This is one of many things that he has to pay attention to. And so, uh, from that standpoint, you know, I probably have an advantage, but also I'm on his turf and, uh, I don't know what the questions are. So a little balancing there. Um, I always say that it's not about how you act on the, uh, uh, the current situation. It's always, can you get your point across and, uh, be invited back, right? The, Yeah, I don't know if you're going to get invited back.

I don't think you're going to get invited back. Maybe if there's another turn in the crypto plot, you might. Yeah, yeah. Well, in 2018, look, I used to go on all the time. And Kevin O'Leary, who now is somehow one of the players in the whole FTX thing and has been out there kind of talking through various parts of it, there's this classic video. He literally says to me, how much of your money is in this?

And I tell him, and he goes, I forbid this. And he's yelling and screaming at me, and he's got the finger point, the whole thing. And you've got to remember, some of it's entertainment, right? Obviously, that's why people watch. And I always cite, if you remember, Bill Ackman and Carl Icahn calling in to CNBC Live together, yelling and screaming at each other. And Carl saying, Billy came to see me, and I told Billy he was an idiot. Icahn won that, as I recall, right? icon kicked his ass and then snuck out the back door with his money yeah well and you the part i

love about it is as they're doing that uh live you know uh entertaining debate between billionaires on national television you hear the traitors in the background and each time one of them scores kind of verbal points you hear them kind of yell cheers yeah yeah i remember that it was great right it was great it was like when great telly did the tea party rant right yeah there's a couple of these throughout the years where i think you can point to and say look this is obviously has an entertaining uh component to it outside of what is you know somewhat of a dry topic for for most americans uh and people around the world now when it comes to the ftx stuff what what is um a part of where maybe i'm perplexed is is very obvious that there was public coverage of one side of

the political spectrum receiving donations from uh ftx sam however you want to kind of characterize the players and organization but then it's come out that actually there was money that was being donated to both parties that's right at least uh at least a half a dozen to a dozen republicans got money yeah and so you get that and then i saw um there was a story that was written i think uh beto in texas he'd received like a million bucks or something and then like the day before the election he gave it back but it was before uh the blow up and just like there's a lot of these details and stuff that you're just kind of like i now want more information before i come to hey here is my like official uh opinion on it because it just feels like every day we get more information

and you're just like what is going on right i found myself more than any story over the last two years asking myself what is going on here uh with this very much so very much and but it really looks dirty as shit well what i don't know is how much of it is because i'm in this industry you know uh our media business had a uh one of the advertisers was ftx us regulated us-based exchange right the whole nine yards uh there's been fallout from this other companies that i was an investor in or uh advertised uh they have been affected and so some of it is definitely just like if you're in an industry and something like this happens naturally you're going to hear a lot about it you're going to, it's going to constantly come up in conversation. But then I talked to friends

that are completely outside of kind of the Bitcoin or crypto industry. And even they're talking about it. Like, okay, right. This is not just a crypto thing. This is definitely kind of escaped that into a much bigger story. Well, so here's the question I have for you. Is it going to be used to influence the crypto world by the authorities and i don't know what influence means yeah so what's fascinating about this um and again perplexing at the same time right it's fascinating and perplexing is that this was not one of the exchanges that was at least publicly stating we don't want to be regulated it wasn't an anarchist you know saying take down the u.s government it wasn't somebody who was um openly trying to uh avoid going and talking to regulators

or politicians or whatever it was quite the opposite and so um was it intentional maybe was it uh ignorance and stupidity maybe was it a combination of all the above probably right you know whatever the ignorance and stupidity by the way this this is this is i'm reminded of january six on this i i think for example the fbi has informants the informants i think believe that because they're tied to the fbi they're safe they don't realize that they can be written out of the plot any day and so for example if you are a rabble if you are an fbi sponsored rabble rouser at january 6th that in no way guaranteed you wouldn't be arrested and thrown in jail for five years and so um the absurd part of the story to me is is that um that not only did um sbf

not understand how shark infested these waters were but he his parents apparently didn't either and so his parents who really do look like they must have somehow been involved because for one thing they bought real estate off ftx money and stuff like that um they let their son walk into a snake pit and so if my model is at all remotely correct and that is the whole thing has been to process money which i can't see evidence against that um then then his parents let him play in a very dangerous place and and by the way his girlfriend looks about 12 years old he's got to be a pedophile um

it's a joke um thank you for clarifying that yeah youtube's algorithm appreciates it yeah right if i don't pick that subtlety up um all right i got so i got one last question for you on uh on ftx and then we'll wrap up which is what do you think happens what what is the the end result when we're recording this um sam uh was arrested in the bahamas he's now been extradited back to the united states uh he was released on a uh bond um and uh is i think living at his parents house at the moment there are two other uh players um i think gary uh wong is uh name one and then caroline uh they have both pleaded guilty and are cooperating with investigators um how does this play out and you know two three jail time just what do you what do you think

happens i guess to them maybe even to uh uh the larger bankruptcy case like how do you well it depends on how deeply they understood the game they were playing and so um a number paths could be followed. If they're knowledgeable and highly dangerous, they could go the Epstein route. If they were suckers, if they were the patsies and they were enjoying their little fun, they could end up in prison as long as they can't sink any important people. um and and i could imagine a scenario that by the time it's done after the whole fures died down that nothing really consequential happened let me put it this way if he's a legitimate hodler of any kind if he doesn't have a bunch of money socked away in the blockchain he's out of

discord right so he is not broke there's there's no way that he had billions and didn't put some shit basically into a swiss bank account equivalent on the blockchain is that right i have no clue but it would be put it this way he if he didn't he sure wondered why now of course the um do you know so that would be downright stupid do you know the story of uh dan bilzerian you know who that is dan i know alex bilzerian dan's the um the actor uh yeah well actor i think he was in a movie yes um he also is uh very popular so alex is his nephew i think or or cousin okay i know alex he's a physicist he's a sort of a silicon valley type physicist so i i um will get the details wrong so i won't even try but uh long story short is

that dan's father was a corporate raider back in like the 80s uh i believe 70s 80s whenever it was and um at some point uh front door got kicked in by uh federal prosecutors law enforcement etc i believe he did uh jail time and um then his son pops up there's a bunch of money and uh lives a very lavish lifestyle son was a professional player right uh or at least was playing poker and uh and talks about that's where which is a money laundering mechanism right there yeah so again i i don't know but i think that uh your point about um just very you know this story has repeated over and over and i've talked to a number of people who've been around for a long time and they're like look there's you know four or five details in every one of these stories that

all seem to kind of overlap uh and that's not to say that these people know each other or anything like that it's just like these usually unravel in a very specific way um and it seems like so far this one is is following that trend well so i gotta figure that sam is in trouble i just i he's he got too visible and and whether they say look you're gonna have to do 10 years in club fed and your life will not be so bad there'll be you know you can weight lift and you can swim and things like that but um it could be that um if i'm wrong about how deeply embedded ftx in the political system was then then he'll just get hammered you know but but i i don't think i'm wrong on that because i think there's way too much evidence pointing to the fact that he was

money was going to powerful they were even funding the lincoln project they were funding uh they funded the they funded the um the um the the clinical study that showed ivermectin doesn't work i mean they were up to their ass and everything bad and so so i really think that I don't know if Sam knew the game he was in. I don't feel sorry for him. He had to have known he was breaking laws and doing bad things. But I think when you're hanging out with the cool kids,

you somehow think that you're also one of the cool kids. Here's a question I like to ask people rhetorically. We know how much child trafficking is a problem, right? When was the last time someone got arrested for receiving a child? Right? These kids can't come cheap. They're not selling these kids in trailer parks. Where are these kids going? When was the last time someone got convicted of receiving a child? I can't name them. I think Denny Hastert got himself in a little bit of trouble,

but that could have also been who did he piss off. But that was years ago. So if child trafficking is rampant like we hear and sometimes you see some story where they save you know 30 kids on the back of a u-haul right if they hadn't intercepted that u-haul there'd be 30 wretched deserving to die people receiving those kids where are they you ever wondered about that no and you said that was a rhetorical question so i'll leave it at that but uh i think that well let me put it this way i don't own any of them so you know i'm saying i think that uh asking questions is a good thing i think that more people should ask questions maybe not uh not just buy so back to the just to finish the ukraine story i could have a lot

of stuff wrong but if if you think i do dig into it right just do your own that is one thing i will full credit for which is anyone who's watching this or listening to this uh if you disagree with something dave said go on twitter email him the whole thing he will he will read it he will engage uh and if you show him that he's wrong he'll change his mind which uh which i appreciate as well um you know very few people will actually go and message you or uh or do the research but uh but i think that you would encourage them to do that i i would i'd love to think i'm wrong about the dark stuff but the the problem is that every time i go down a rabbit hole i find i don't find rabbits i find stuff and so you know i want someone to tell me what the great reset is

it's real klaus schwab is real they make absurdly bizarre statements about what the world should be they are heavily funded they are globalists they say things that no one would believe they'd say because you know this is one of the most recent catchphrases was there's no reason why life has to be fulfilling what what person says that right this was on their website so what is their purpose are these a bunch of eugenicists are they going to try to bring the population down under a billion? Is that their goal? Because there's no other model. There's no other model. It's either global domination or, you know, global destruction. You know, maybe it's destruction of the United States hegemon, right?

But it's not simple. And I've called out so many people who say, please explain to me what the great reset is because they they garishly speak about it and i've read a lot of books on totalitarianism i've read a lot of books on propaganda and one of the two common things i use is one is fear okay covet the second is demoralization and that's where i put the garishness part so if they can garishly say we're coming through the front door and you're not going to be able to deal with it, and we're going to squash the truckers, and we don't care how bad we look. That's demoralizing. And we know the vaccine's crap. We know the vaccine is somewhere between doing nothing and killing lots of people. And then the question is, why are they still

pushing it it's it's it's almost like a like when we diss the russians we don't care what you think we're gonna do it that i you can you're welcome by the way you have my authorization to delete statements i won't give you i won't give you guff to keep this thing on youtube i i i i won't hold it against you if i if i watch the game game films and say oh he took that part out i'm okay with it Because that's the world we live in. And it's a sick world. But it's also a world that every other country and every other period in history has experienced.

And somehow in the United States for various periods, we felt that we were the good guys. And I think we have a great existence here. But I don't think we're the good guys. i don't think we're the worst guys we've got a lot a lot to shoulder i mean united states is the policeman of the world which i've now been convinced that i at least understand why we are the policeman of the world i used to have this monroe doctrine view but if the u.s ever stopped projecting military power globalization would cease that day be gone that day because the thing that allows ships to travel 12 000 miles to deliver goods

and services is that there's people going yeah if we in any way cause that to stop united states military is going to come and kill us and that's what is a lot of globalization to get to where it is today it's the projection of u.s force we're the only truly blue water navy in the world and uh and so i understand it but i think we're abusing it i think we're abusing that power it's we should walk soft and carry a big stick we somehow stomp around and smack people with it it's different now where can we send people if they want to reach out to you well they can always find my email if they can't they're too stupid

But if the barrier is knowing that I'm a Cornell professor in the chemistry department, if that's not enough to get my email, then I don't want to talk to you. Otherwise, people send me emails. People call me. I talk to people. I get cold calls. That's okay. My actual contact point with the world is Twitter, at David B. Column.

i have you get a bunch of these um mirroring accounts that look like you that aren't you you get those tons yeah what are they bots but what are this what's the purpose uh from what i've seen friends have sent me screenshots they try to scam them i got them on telegram on instagram on twitter or whatever and they're basically strike up a conversation uh as if they're i've got this crypto for you actually one of my friends followed up on one and they said they were trying to sell them some X coin, a shit coin, right? Yeah. Or the classic, send me one, I'll send you two. Yeah, I know. My son, someone tried to scam him. I said, okay,

here's what's coming next. Just so you know, called it to a T. The guy sent him a check for too much money. He said, look, just cash and send me a check back for the difference. I said, no, no, no, no, no, no, no, no, no. Don't do that. That's a scam. My wife got hit by a scammer. Let me tell you ever so quick story. I get a call from my wife saying, you know, someone hacked our computer our router and they're emptying my our bank account says i'm talking you got to get home right away and i go no get off the phone what do you she's having a phone with

a guy from apple i go no you're not and i couldn't get her to hang up on the guy so first i reach out to the banks i make sure there's no activity there and so i said uh somehow put a flag on the account so i went to all the accounts put a flag and then i get i call the neighbor because while I'm doing this, I said, get Candace off the phone, run next door, get her off the phone. She's being scammed. I get home. She's still on the phone. She's been a guy that she thinks is from Apple. And I, I, I said, Candace, I said, give me the phone. I said, and I talked to the guy and I said, here's the deal. If you're legitimate, you'll understand why I have to ask my wife a couple of questions. And I went and asked her, I said, did they send you a number to

she said yes she's and then they they they said they helped her they helped her lock down her llb and charge card i go oh that's a problem um and uh and and then she says no but and i looked at the screen they had control of her screen i said but they only have control of your screen and the guy was talking her through and says okay we're gonna lock this down we're gonna do this the guy's telling he sounds real nice i said okay um you're a scam artist but i'm gonna give you one shot at convincing me you're not and he says well i'm just trying to help your wife with a real serious problem here and i go that's not a good answer i said you're a scam artist he says well you're insulting me and i go now i know you're a scam artist because a real it guy would

completely and utterly sympathize with me and so we're done so i hung up and then about 30 minutes later, they called my wife back thinking I might, might've gone back to work. Wow. And I said, look, um, dude, don't call us back. And if, if I, and I know this may sound like a hollow threat, but, um, but if you do, I'm going to come and find you. I said, I said, I have high ranking tech friends. I will find you. So don't call us back. And, uh, my wife was so violated by it. and and uh they scammed cornell they they sent they sent an email look like it came from hr and it said log in and do something simple something trivial and you try to log in and you didn't get in so most people said oh cornell website fucked up they took your login attempt

went to the hr window changed direct deposits of people's paychecks to banks in malaysia or something. And so, you didn't find out you've been scammed until your paycheck didn't show up. A lot of people don't notice their paycheck doesn't show up for quite a while because they're not balancing their books or something. So, that's when Cornell went to the double level login. They said, okay, time to get serious. They ended up reimbursing about six faculty for having lost a paycheck. So, it's getting to be tougher. I know you're more techie than me. So, I just, it's getting to be a tough world to negotiate everyone's trying to scam everyone's lying their lips are moving they're lying you reduce 50 of the attempts just don't answer the phone and don't respond to

text messages i tell my wife said you never ever call back a number or reach back to a number they give you but then todd harrison you know todd harrison he's from former morgan stanley did a he did a i got an email from and said i'd like you to take a look at this and I'm going oh this is bullshit and so I went into my email address book and I independently sent Todd an email and said I just got something that they want me you said you want me to look at because he could have and and his response was yeah something I bet you'd be interested in and I clicked on it and it didn't do anything because I was on a Mac and it was a few years back I go over to Twitter and there's Todd and he says I'm not emailing anybody

and what had happened is someone got a hold of his email box sent out all these messages and then every incoming message to his email box got sent to trash and deleted so they had complete control wow and uh and i'm going this is this is a tough world this is going to be tough to negotiate the older i get the dumber i get and uh they're going to dupe me and i you know they empty my 401k or something my retirement account i'm not going to be happy sam bagman freed dave i always enjoy talking to you if anyone has not read your year in review i highly suggest they go print it out sit down get a little hot chocolate maybe sit there for 16 hours and read the whole thing this one's smaller i've got a third part i haven't

written, but I'm not sure I'm going to write it. It's on COVID. I'm not sure people want to hear about COVID. I, I, uh, I found it fantastic. So thank you so much for taking the time to write these every single year. And thank you for, uh, for always coming on and, uh, and talking through things. I, uh, I always enjoy it and I think people do as well. So thank you. Well, our last one did really well in click count and, uh, and I thought it went really well. So I'm hoping this one stands up to that standard. And I always enjoy the chat, even if you forgot to record it. i've had that happen i've had people forget to record of course i've never done that but you know dave colin ladies and gentlemen thank you so much thank you