The Pomp Podcast - #1396 Polina & Anthony Pompliano | Trump Owns Crypto & Kamala Harris Economic Plan

Episode Date: August 20, 2024

Polina Pompliano, Author of ‘Hidden Genius’ and Founder of The Profile, and Anthony Pompliano, CEO of Professional Capital Management, discuss the new economic plan from Kamala Harris, price gouging, housing, tax credits, Trump’s current crypto portfolio, Mark Spitzngal’s recession comments, and takeaways from Peter Thiel on Joe Rogan.  ======================= Xapo Bank, the world’s first fully licensed Bitcoin-enabled bank, offers military-grade security with an unmatched blend of physical and digital security, as well as pioneering regulatory oversight, so your funds are always protected. Beyond secure storage, they enable you to grow and use your Bitcoin. Earn daily interest in Bitcoin, spend with zero FX fees using a global card, and make instant payments via the Lightning Network for unrivalled access and convenience. Visit https://www.xapobank.com/pomp to join. ======================= Wondering where to go for financial advice? Domain Money makes financial planning simple. No hidden fees and no sales pitches - you get a personalized roadmap to your goals, from dream vacations to retirement. Flat-fee advisors create a plan tailored to you, with zero pressure to invest. Don’t be like most people who’ve never had a real conversation about their financial plan. Book a free strategy session today at https://www.domainmoney.com/pomp While I'm not a Domain Money client and they are paying me, I've seen first hand the value of their service through the free plan they did for one of my brothers. Yes, I might have an interest in promoting Domain Money, so just like any major financial decision, it's important you understand what the service is and if it's right for you so make sure to see important disclaimer at https://www.domainmoney.com/t/legal ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's up, guys? Bang, bang. I've got a special episode for you today. Today, we have Polina Pompliano, my wife, but also someone that I spend an immense amount of time talking to

about current events. In this conversation, we go over four different things that have happened in the last week, and I pontificate on what I agree with, what I don't agree with, and we hear what Polina thinks as well. Those topics are Kamala Harris's new economic plan, including housing, child tax credits, and what she's going to do for price gouging. We also talk about the fact that President Trump, he has over a million dollars of crypto, how he got it and what that means. We then go on to discuss Peter Thiel and Joe Rogan, what we took away from their conversation and what was so interesting about the way both of them think. And then lastly, we talk about Mark Spitznagel, one of my favorite investors who is now predicting a recession is imminent.

I don't necessarily agree with him, but I'll explain why and I'll break down what Mark's strategy has been in the investment world and why he has driven world-class results for so long. I hope you enjoyed this episode. I would love feedback. Let us know if you like these episodes. Should we do more of them? Maybe we should do it once a week, or maybe we should do it once a month. Leave us comments on YouTube or just tweet at us, whatever your feedback is, good, bad, or indifferent. If we get good feedback, we'll keep doing them. If we don't hear from you, then we'll stop. But here is my conversation with Polina Pompliano. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast

are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Today's episode is brought to you by Zappo Bank. Let this sink in for a moment. Over half a trillion dollars in Bitcoin has been lost or stolen. Whether that is misplaced hardware wallets or an exchange that went bust, the risks are very real.

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That's X-A-P-O-B-A-N-K.com forward slash Pomp. Go check out Zappo Bank today. Today's episode is brought to you by Domain Money. I get asked all the time, Pomp, where should I go for financial advice? Now, as you all know, I can't personally give financial advice, but I now know people who can.

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Trust Domain Money to help you build a clear roadmap for your future. It's hands down the smartest move you can make for your money. Book a free strategy session with Domain Money at domainmoney.com slash pomp. Again, domainmoney.com slash pomp. And yes, I might have an interest in promoting domain. So just like any major financial decision, it's important you understand what the service is and if it's right for you. So make sure to see the important disclaimer at dmnmy.co slash x. How about that? Go check it out today. Go to domainmoney.com slash pomp. All right. So Polito, why don't you start with what's the first topic you want to go over from the last week. All right. So let's talk about Kamala Harris's economic plan. I think that

there's a bunch of things that she has in there. I think the most famous one has been the price gouging on groceries. Do you want to explain that? So price gouging, in theory, having a ban on price gouging makes a lot of sense, right? You don't want businesses to say, hey, there's some sort of crisis and I'm going to take advantage of people. Now, the interesting thing about price gouging is most people look at the outcome and think they can determine whether something is price gouging or not. But I actually think of it a different way. Price gouging is determined based on the intent of what somebody is doing. So let me give you an example. If there's a hurricane and all of a sudden grocery stores say, well, everyone needs to come buy water and they make

water go from $3 to $100, they obviously are price gouging. They are trying to take advantage of the situation. But if you look at Uber as an example that says there's a bunch of people in this one location that are trying to get a ride, but we have no drivers in that area, Uber will raise the price as an economic incentive to get the drivers to drive over there because they can make more money so that they can create driver liquidity. The intent is not to screw over the rider. The intent is to use economic incentive to get drivers to come over because it's a marketplace, right? It's a platform. So in that case, it's not really price gouging in a nefarious or a malicious way, what they are trying to do is use economic incentives. In both scenarios,

there is some sort of quote unquote crisis. And in both scenarios, the outcome is the prices go up, but the intent is very different. So I think that's kind of like a key component that people forget is everyone looks at outcome, not at the intent. Now, the other thing is 34 different states have outlawed price gouging. It's pretty well understood, like you shouldn't do it, right? you can't do this. So 34 of the 50 states. Now, what is hilarious to me, though, is this administration is going after the grocery stores. And I don't know what the grocery stores did to this current administration, but there are many politicians currently in power, both at the national level and in some of the governing bodies that have come out and said the grocery stores are

evil. They are price gouging, et cetera. Prices are up 100%, but they're up because the inputs to the grocery store business are up. If the cost of food for the grocery store to acquire it goes up, they have to raise their prices to the consumer so that they can continue to make money. Now, what a lot of people will point to is they'll point to the aggregate profit number. They'll say X grocery store chain is making $24 billion. That is evil. That is immoral. How could they possibly make $24 billion? But then when you go and you look at it, the aggregate number is a lie. It will trick you into thinking, oh my God, they're making all this money. What you have to look at is look at the margin number and the margin number in the grocery

store business is notorious for being razor thin one to 4%. I looked the other day and a number of different grocery chains are still at 2% or less margin. So that means that you are operating with in many cases hundreds of billions of dollars of revenue with a two percent error margin if you're off by two percent you lose money and so the government believing that they can come in and that they are going to run the grocery stores better wait so so explain exactly what harris wants to do with the prices so there's a couple different things that that uh she has at least alluded to and then there are things that she's explicitly said one of the things that she explicitly said is that she is going to create a national ban on price gouging you might as well

take that idea and throw it out the window because it doesn't do anything price gouging is already illegal right if a grocery store engages in price gouging and somebody brings them to court they will get fined they will get in trouble etc so creating a national ban on price gouging sounds awesome but in practice has zero change do you think this is one of the things where remember when everybody was like every government was like we're gonna put bitcoin on the whatever on the what is it called balance sheet and it's like you're not but it you could and it sounds good it's not gonna do anything i think that they actually will pass a national ban on price gouging it's just it doesn't change anything that's what i mean it's not marketing for the

hundred percent and what you're doing is you're appealing to the average person who they're sitting there and they're saying to themselves, food is expensive. Food continues to get more expensive. And what we essentially have is we have people, I would argue, are using the complexity of economics to predatorily try to create a narrative that it's the big, bad, evil grocery store. Instead, what actually is going on is that there is inflation. Inflation is still at 3% in the United States. It's 50% higher than the inflation target. Food has been one of the categories that has seen the most inflation because things like eggs, et cetera, continue to skyrocket in price. Now, what isn't a popular narrative is for a government to come out and say,

well, we know we printed a lot of money. We know we spent a lot. We know we created this inflation. Milton Friedman, a famous economist, has this great line. He says, inflation in the United states is created in washington dc and nowhere else and so all of that money printing all that spending that's out of control the national debt skyrocketing that's what creates the inflation but no politician is going to go and stand in front of a lectern and say to a crowd of people are bad we're going to stop spending instead they're going to point to the grocery store and say you big bad evil grocery stores yeah you need an enemy but do you think so i mean i read a lot about this stuff. And a lot of people are like, oh, there's going to be bread lines. Is

that too extreme or is that something that. So now you're taking it a step further where actually I disagree with a lot of the kind of public narrative, which is at one point people thought that this administration and kind of the Harris's kind of campaign was going to come out and explicitly talk about price caps. Yeah. Price gouging is in a crisis scenario. I jack up the price price cap means that i go to the grocery store and i say bread cannot be more than two dollars and 75 cents and that would be radical for them to do it would be communism wait just before you say that yesterday i called my dad to ask him about this very thing to get his perspective who grew up in bulgaria under communism and i was like what do you think about all this

and his only sentence was this smells like communism so the idea of a price cap in theory sounds great. We are going to use legislation. We're going to use the threat of law to tell someone you cannot raise the price past a certain point. But the problem is, let's take bread. If you said, hey, bread cannot be more than $2.75 a loaf. Well, if the grocery store has to pay more than $2.75 to acquire the bread to put in their store, they stop acquiring the bread. They're not going to sell things at a loss. So what ends up happening is, in theory, you are capping prices. but in practice what you actually do is you create food scarcity and so all of a sudden you start to see less food on the grocery shelves people then say wait a second why does it feel like the

grocery store is more bare more bare more bare and then all of a sudden people start to panic because like there's only so much food available and so that's where you get the bread lines in places like russia venezuela bulgaria etc now one thing that i will say which is saying the part that you're not allowed to say out loud i'll bite the bullet for everyone the real price gouging that goes on in the American economy that you're not allowed to talk about is government services. And so if you think about government services, there is a crisis of confidence and there's a crisis of self-reliance. People say, I cannot deliver certain services for myself. I need somebody else to do it. There's a crisis. That crisis is fulfilled by the government with

various services, but they deliver a subpar service and it costs you 50% of your income. They devalue your currency and they bankrupt your nation. And so if you think about true price gouging, that is probably one of the greatest examples, but it's this taboo subject because when you get a government service, it usually doesn't come with a price tag. You don't see the government jacking up the price. It's in all these hidden ways that they're increasing costs, But that is actually the real price gouging that goes on in society. And so it's one of these things where, you know, politicians who come out with the anti-gay legislation and then they're caught in the airport bathroom. Right. And people are like, huh, there were signs. Same thing here is the government is yelling and screaming at the private organization saying you're price gouging, you're price gouging. Well, literally, that's what they're doing from a public sector standpoint. Yeah. And so it's this paradox of don't just look at what they're saying. Look at what they're doing and begin to realize that Harris's administration did not suggest at least explicitly price caps. Right. What people are worried about is by saying you're going to go after price gouging. It's a slippery step is the price cap. So I'm not as worried about price caps as of yet because of what they said. But I do think that people are right to say, hey, listen, she is the most left leaning politician. She her track record is ranked last in terms of kind of a liberal scale. And it is not hard to see, you know, a hop, skip and a jump to price caps, which obviously have a massive problem.

But you would think that they know what that price fixing has done in history. I would doubt that that's one of the things they would do. Politicians are not incentivized to think in more than eight year term, you know, kind of timelines. And so when you've been the president is different than being a Congress in Congress or in the Senate, the Congress and Senate, you can keep getting reelected. You can serve for 20, 30, 40, 50 years. President, you can only be it for eight years.

But then you have legacy. and some people care about the legacy but i would argue that um time is actually more important for somebody's legacy than the actions they took in office right if you go and you look at most presidents they have actually a very good legacy even presidents that were unpopular at the time uh because there's this element of like the president is such a nostalgic thing that they were the leader of the free world um that even somebody like george bush there's an entire generation of people that are growing up and like george bush paints really nice george w bush yeah george w bush yeah he the nice watercolor paint nice he's friends with michelle obama and so the

more time that elapses the more that you actually can improve uh kind of what people think about your presidential uh governance yeah and so it's this very weird dynamic but i think on the price gouging um there's a lot of talk and not as much action is there anything in her plan that you liked. Yes. Which may be unpopular with a lot of folks because right now people on the right like to attack her. People on the left like to, you know, completely defend her blindly. I think that there's a lot of nuance in these economic plans. And I challenge people that when somebody puts forward an economic plan, you should make a list, draw a line on a piece of paper on the left side, put everything you agree with on the right side, put everything you disagree with. If you don't

have something on both sides of that line, you're the problem, right? You're an extremist because you can't think critically enough to actually figure out what do I like, what do I not like. In Harris's plan, she also goes after home affordability. Now, contextually, home affordability is some of the worst environment that we've had in 40 or 50 years. Right now. Right now. Incredibly bad. Part of that is we are not building as much home supply, right? And so if you don't have as much supply, but you have a lot of demand, obviously prices have to go up. If prices go up, it becomes less affordable. You have inflation.

So you had the cost of goods going up at one point during the pandemic, lumber was skyrocketing to the point where people were saying, I cannot build any more homes because I do not know how much it's going to cost me because lumber just tripled in price. And so there was a lot of folks who were saying, I just got to put my pencil down. I can't figure out how to price gouging. Well, so again, easy to yell and scream. So look at the home builders, right? um but then also there's this element of uh regulation where we live in a society i mean

san francisco is notorious for this san francisco is trying to appease an aesthetic where they will not let people build above a certain height and therefore if you're on a peninsula so you can't go out and then you limit by regulation going up naturally you have artificially capped the supply of housing which therefore means if more people want to live there but you won't build more housing, of course, prices go through the roof and it becomes unaffordable. And so she comes out with a couple of different kind of components. One of them is a $25,000 subsidy for first-time homebuyers, which in theory sounds awesome. Hey, you want to buy a house for the first time. We want you to buy a house, right? At the American dream, own your own home, et cetera.

We're going to give you $25,000 to go do that. This is a horrible idea because what ends up happening is it's a lot like the student loan crisis, right? What happened with student loans? people want to go to college, American dream, go get educated, go to college. I don't know how to afford it. Don't worry. The US government's going to lend you the money. And so people, what do they do? They borrow. And you pretty much, it was very hard to get denied student loans. And so you'd borrow the money, you'd show up and you would pay. And the colleges realized if we increase prices, the line that is already out the door of admissions is not going to get shorter. And so they kept increasing prices, increasing prices, increasing prices. Well, the government

just kept lending money to pay for the increased prices. And so what we ended up with is sky-high tuition. We ended up with an entire generation that have $1.5 trillion or more in student debt. And the US government, which now has a crisis on their hands to the point where they are having to, I personally think illegally,

but they are actually relieving the student debt that they're absolving the student debt. And so this horrible situation all started because the US government said, we're going to blindly lend money to people, whether they can pay it back or not. They're going to use that money to go and buy a good or a service from a university. And those people can indiscriminately continue to increase prices because they know the people who are in line at the admissions office have unlimited money to pay. Horrible situation. If that is a debt

situation, what Harris is talking about with homes is she wants to give a subsidy. So it's not a loan. It's almost like a grant. Yeah. But now every single home buyer that gets this grant has $25,000 more in their pocket. But wouldn't that artificially inflate home prices? Of course. Creating a different problem? We've sold homes. If I have a house and I know you got $25,000 extra and you're burning a hole in your pocket, immediately I'm starting at $25,000 higher. So how is that helping? Maybe even $50,000 higher, right? Because actually that $25,000 can be the down payment, which means that you can actually get more debt, which means I can increase it more than $25,000. And so the median home price in America in 2016 was $288,000.

Wow. Today it is $434,000. It's a 50% increase in the median home price. Interestingly, at the same time, the median home price in Bitcoin in 2016 was $664,000 Bitcoin. Today it is $6,000 Bitcoin. So in dollar terms, the median home price has increased 50%, but the median home price in Bitcoin terms has dropped 99%. And so the home is the same home. It's the denominator. It's the currency in which you are using. And so this is an inflationary pressure, which this subsidy will drive home prices higher, which I think is a horrible situation. Now, there's another part of her plan, which she wants to issue a tax credit to home builders. Now, again, it sounds awesome she is calling for more supply to be built which is a noble thing we should celebrate

the idea that a politician wants more houses to come online if we build more houses prices should at least stabilize if not come down because demand is what demand is supply increases then prices should be positively impacted and affordability should get better great idea execution wise giving a tax credit to home builders does not solve the problem there's no home builder in America that's like, ah, having a hard time making money. I just, you know, not going to build more houses until I can make more money. The economic incentive is not the thing that is stopping people from building homes. What usually is the problem is state and local regulation. So again, in California, in San Francisco, as an example, they're not allowed to build the houses. It

doesn't matter how much money they can make. They're not allowed to build it. They have to go in front of the local government and say, I would like a permit to build a six-story building here? And they say no. So it's more the regulation is the blocker. It's not necessarily. If you want to make homes affordable in America, you need to deregulate at the state and local level building homes. The problem is that everyone's got an opinion as to where what type of housing should go. So, for example, do if you're OK with single family homes down the street, are you OK with multifamily homes are you okay with affordable housing are you okay if all of a sudden a developer comes in and buys land next to your suburban home and says you know what i'm actually

going to build shotgun homes i'm going to build these really kind of small two-bedroom skinny ugly homes now says well we actually don't want that so what you're fighting is not uh everyone being aligned on getting home affordability down you're fighting a lot of things around aesthetics around economic and zoning planning, et cetera. And so that's the real solution is if you want more homes in America, you have to deregulate at the state and local level, the building of those homes,

and then you can affect that price positively. One of the issues is that the national government, the president has no say on the state and local level, right? In the sense of this home kind of regulation. So the president can't come out and say, every local jurisdiction, you now have to deregulate. what you have to do is you have to push down via influence how to do that but guess what happens some of the most dangerous people in america sit on local city councils because they're usually

people who don't have a lot of experience but they have a lot of time they got an incredible amount of time and it's the worst type of person in that they are incredibly power hungry in a local geography god it's not about being able to be voted in and voted out and have the scrutiny of the national media usually what happens is it's like a kind of like an old boys network or it's kind of like a local you know celebrity and those people are the ones who get on the city council and once they're there they can wreck havoc you know one of the jokes is that everyone worries about who the president is but actually you should pay more attention to who your hoa president is oh yeah because they have a much bigger opportunity to kind of screw with your

life. And so same thing with city council is in many places around the country, who sits on your city council is actually more important than who the president is. And so being able to go to these people and have them deregulate, very, very low likelihood, which means that home affordability, unfortunately, is probably not going to change in America. Great. Okay, I urge everybody to go read this plan. I thought it was interesting. There were some things about like, newborn and child tax credits i think that her point is i want to help families and lift the financial burden off a little bit but it could also be if a lot of people are considering having kids and they're not doing so because of the financial burden then maybe that could incentivize i

i like the idea of the tax credit of the for the children for the children yeah i agree because one of the things that um i find really interesting is um there's always this worry that uh people in poverty you'll hear you'll hear kind of child tax credits and people in poverty those things uh get talked about a lot if you're in poverty you don't pay taxes right so the tax credit actually is not an incentive for those people oh interesting because you live in poverty you 47 percent right Mitt Romney famously came out and said, 47% of Americans don't pay taxes. So some portion of those live in poverty, unfortunately. And so the child tax credit only affects people who are paying taxes.

You're getting the credit, right? Right. And so what you're actually doing is you are creating this economic incentive, which the government is basically abstaining from taking some of your money. And if you want more children, because more children in America means more economic production in the future, then giving incentives to parents is a great way to do it. What is beautiful about a tax credit is you're not printing more money to do it. Yeah, but it doesn't really help the people you want to help.

Well, you could argue that, and I think a lot of people do argue, what you want to do is you want to help people who are productive in society and are generating enough income that are also paying taxes because those are the people who likely are going to be able to afford having children. They can have multiple children. They also are likely to create more productive children for society. So you kind of like follow this whole path. Now, I don't know. I disagree here. Well, if you take the extreme of the opposite argument, which is if somebody is living in poverty and they have eight, nine, 10 kids or even three or four kids, it is actually exasperating the situation. I know. So that's why those are the people that should be helped, because they will keep having kids. You can't by not giving them a tax credit. You're not going to stop them from. But the tax credit doesn't actually help them. Even if you whatever. I'm just saying they're going to continue having kids. Therefore, that's why I think the tax credit is not aimed at them. The tax credit is actually aimed at the group of people who are having children who are paying taxes and putting more money in their in their pocket. now what is really interesting about this from a political standpoint is this is an amazing way

to you know indirectly buy votes because what you're essentially telling someone is i'm going to directly put money in your pocket if i am president yeah and so there's a lot of people who say well this candidate says they're gonna give me two thousand dollars this person says they're gonna be six thousand dollars well i like the six thousand more than i like the two thousand and so i do think that this is a a great program i think that you're going to see more and more people uh kind of figure out ways to do it the execution is important but i do like uh incentivizing you know creation of more children and also raising them with more money in your pocket so that they can actually live you know kind of a safe uh good life the creation of more children

yeah okay um so trump has more than one million dollars in cryptocurrency his disclosure included details about a cryptocurrency wallet and a virtual ethereum key holding that he valued it between 1 million and 5 million dollars um so what i find interesting here is that trump's public position on bitcoin and cryptocurrency has changed over the years we've both seen it we watched him at um the bitcoin conference my favorite part was he was giving stats about like bitcoin ownership And then clearly he hadn't written the speech and or read it before. And he was surprised by the stats speech. He was like, oh, is that right?

Like you just said it. So what what do you think about this? One of the things that's important about Trump's crypto ownership that people may not understand that this a nuance is he has created a number of NFT collections on Ethereum. And as far as he was campaigning, right, he has created a number of different ones. That's how a lot of the crypto people went to Mar-a-Lago and originally met him. was because he held like a community event for his NFT holders, which, you know, is hilarious. Is that a fundraising way?

He definitely is using this for campaign funds. That's why he's been launching the NFTs, et cetera. Similar to how he sells the hats, right? But in the smart contract, Trump takes 2% transaction fee of every time that those NFTs trade hands. And so what is actually happening here is I'm sure that he probably did buy some Bitcoin or crypto or something at some point. But I don't think that it was like a material amount.

What is actually driving this one to five million dollars is that the transaction fees from his NFT collections are being deposited into this wallet and they've been growing over time. So the more that people are transacting in whatever Trump NFT or collection that he's created, the more that that two percent fee is being deposited to him. And so over time, his crypto ownership is actually going to keep growing. But it doesn't mean that Trump is like going into his own personal pocket, taking money and going and buying Ethereum or anything else.

And I actually don't even know if he knows how much crypto he has or cares, right? The guy is, you know, debatably worth billions of dollars. And so half a million dollars, a million dollars, like probably doesn't really register for him. But it doesn't matter. And everyone wants to keep talking about like, does Trump actually believe what he's saying

about Bitcoin and crypto? It doesn't matter. We already got most of the value. The 80-20 rule applies. we've gotten 80 of the value that we're going to get out of donald trump coming out and saying i'm pro bitcoin he shifted the national conversation that now the leading presidential candidate is pro bitcoin has kamala said that she uh has not i think explicitly herself come out and said uh anything about crypto she just released this big economic plan there was not a single

mention of crypto in there um and uh the current administration has been very hostile towards uh kind of the crypto industry there was talk that they wanted a reset they were reaching out to a bunch of crypto companies saying hey listen why don't we reset our relationships here why don't we kind of um you know uh kind of take a more positive uh note um but i think crypto folks have rightfully pointed out well like you guys are in power right now what do you mean a reset like just stop being hostile change the way that you guys are doing this you guys openly are suing multiple companies in the industry but now of course openly being debanked so like if you want to reset kind of like don't talk act but isn't that biden's camp i mean technically so that is

one of the challenges that i think uh harris has is uh the things that are going well in the current administration she's going to want to take credit for us and say hey you know me me and joe we were right there together yeah but the things that are not going well she's going to have to try to distance herself and it's this kind of like tight uh rope act where uh how do you take credit for the positives and say that you guys were right there together but then also deny ownership or responsibility for the things that didn't go well yeah right now i've said you know before that um trump also was in office he was very uh at least verbally hostile towards bitcoin he has changed and so it can happen a politician can change their position um but i just think that uh the

existing administration has kind of like shot all their bullets in terms of words and now people in the crypto community from what i hear and kind of what i see people saying online uh they're very much in the camp show me don't tell me um and so they got you know 70 days or so there's probably not that much they can do in 70 days uh but there's definitely things they could do to kind to show hey look we are pro uh crypto i just don't think the democratic party really thinks that it's that important for the election oh it's pretty important guys they control the memes um okay mark spitznagel warns that a recession is coming we know good old mark we don't know him but you know the goat he um he's the the black swan guy he's predicted a number of bad scary tragic

economic events. He told Fortune, it's not different this time. And anybody who says it is really isn't paying attention. The only difference is the magnitude of this bubble that's popping is bigger than we've ever seen. So this is a narrative that we've heard. It was largely dismissed. But now that Mark is saying it, is it true? This is going to pain me for what I'm about to say. You're going to disagree with Mark. Let me give some context. I'm a very big Mark a Spitznagel fan. He wrote one of my favorite books called The Dow of Capital. It's actually right there behind Polina on the shelf. And he also wrote a second book called Safe Haven, which is all about investing during bad times. Mark has got a very interesting career.

He met Nassim Taleb in a college course. They created a fund initially, and then Mark kind of spun out and went and did it on his own. The current fund is called Universa. And the entire idea is they lose money every single day buying out of the money options, essentially betting on a market crash. And so they lose money, lose money, lose money, lose money, lose money. And then when the market crash happens, they make thousands of percent. I think in February and March of 2020, they made something like 4,400%. There was a really good Forbes profile on him around that time. Yeah. And so he's kind of this, his pitch to institutional investors is, hey, look, I don't want a big allocation from you. Give me, you know, 1% of your assets and

think of me as insurance. When the market crash happens, I'm going to have this massive payout and that's going to lead to, you know, kind of protection for your portfolio. Now, I give that context and let me say again, I'm a very big Mark Spitznagel fan, but it's not necessarily that I disagree with him. I just think it's impossible to predict when the next recession is coming or the big market crash. And so to me, it is a fool's game to do that. But if I was a fund manager who is financially incentivized for crashes to happen,

I would go start talking quite a bit about, hey, a crash might be coming because if the narrative takes hold, people will change their actions. If they change their actions, the market comes down, he makes money. So the incentive is for him to always believe that a market crash is right around the corner.

Yes, but you don't spend every single minute of every single day thinking and analyzing this stuff. And he does. He doesn't either. He doesn't? No, he runs a goat cheese farm in, I think, Minnesota or Wisconsin. He's notorious for part of this strategy is you kind of set it and forget it. So you're not making active decisions every day.

You take an approach, you say, I don't know when the market crash is coming. I'm just going to buy the insurance every day or every week. And so when it comes, I'm positioned for it. And I'm willing to lose a little bit of money every single day in the meantime. and so uh i joke a little bit but he literally does uh he has like a world-renowned uh goat cheese farm he does he does um and uh i from what i understand he spends quite a bit of time doing that so uh maybe we have an equal amount of understanding and time spent he's doing goat cheese i'm doing other things we both look at the market you know once a day and uh yeah we'll see

what happens so i guess a recession isn't imminent in your opinion it's not so much is it imminent or is it not? I actually think that a recession is much less of a risk in today's environment because of two things. One, if you look over the last hundred years or so, we actually used to have tons of recessions in terms of frequency and severity. They were very, very bad. But if you look over the last 20 or 30 years, we get them much less frequently and they are much more muted than they used to be. Is that because the government's like, cash money? Well, the central banks have now gotten to the point

where they've said to themselves, we have a playbook, right? So if you go back to March of 2020, there was a market crash. Yeah. Stocks went down, you know, 20%. Crypto went down 50% in a day. But the government said, no fear.

I have a playbook for this. And they reached in their pockets. They suppressed interest rates to zero with two emergency rate cuts and they printed trillions of dollars. And we were back to all time highs by the end of the year. Yeah, that was crazy. And so they have now an instrument to respond to this.

Now, if we were having this conversation with the current economic conditions and interest rates were at zero still, that would be a very scary situation because they don't have any room to cut interest rates. But the Fed, although I think they've been very behind the curve over the last couple of years, one positive that they did, again, if you take a piece of paper, put a line down, what are the things you agree with the Fed? He loves a pro and con list. What are the things that you don't agree with?

Well, it just makes you critically think about how, like, organizations are not good or bad. You got to be able to do both. One of the things I do agree that they did is they raised interest rates and they did it very quickly, which caused a lot of kind of financial pain. But now they have a cushion so that if we do get some sort of market downturn, they can cut rates. They could even cut rates to three, four percent, still not be at zero percent interest rates. And that should stimulate the economy and help us kind of blunt any sort of downturn. And so, again, is a recession coming? Is it not? Are we already in a recession? There's people who argue that, you know, kind of doesn't matter. Instead, the next recession is not likely to be nearly as painful as recessions 50 years ago, because we have playbooks and instruments now in place that will allow the central banks to handle them in a way that we couldn't do 50 years ago. And I think that that should give people a lot more kind of confidence. Just keep buying assets. Don't sit in dollars and have a long time horizon and all is going to be good in the world. The quote unquote big crash ain't going to wipe you out in the way that people keep kind of saying. Yeah, it kind of feels like the government is that, you know, parent that wants you to go out on your own, but then is like a financial backstop. Like they're not going to let something bad happen to you. Well, think about if you were investing your money, and you thought that there was a very real possibility that you could lose 100% of your money buying the S&P 500. That would have

significant negative impact on financial markets in general. And so the fact that you, who I don't want to speak for you, but I would say that you're an intelligent person who doesn't spend all day thinking about financial markets, but you know the basics. You can have confidence to go and put a portion of your capital in the stock market. And you're like, look, maybe it goes up, maybe it goes down, maybe it goes down 20%. But I don't ever worry about the S&P 500 going to zero. I don't ever worry about some massive financial crash that as long as I make good sound financial decisions in my personal life, I should be able to kind of weather any sort of short-term volatility. That is good for America, right? That gives people confidence domestically to invest in

the market, but also internationally for people to invest in the American business and kind of financial instruments, etc. And it incentivizes companies to want to go public. And, of course, you you don't want to live, you know, I'm a pretty free market believer. And I think that a lot of times you don't want the government to intervene in a lot of these situations, I could make the argument, I would make the argument that a lot of the volatility in financial markets is because of government intervention, right? If it was a more free market, we would actually have kind of a better, stronger, healthier market. Now, one of the things, again, make that line down the sheet of paper. One of the things I do agree that the central bank has the ability to

is to stimulate the economy. Now, this is not like, oh, we went off the gold standard and, oh, if we just went back to the gold standard, everything would be solved, right? There's a great book written by Edward Chancellor called The Price of Time. And I read it because Stanley Druckenmiller said that it was one of the most important books he had read in the last couple of years. Stanley Druckenmiller is a pretty smart guy. He does a lot of reading. If he says it's an important book, I went and bought it immediately and I read it. And what you find there in that book is Edward Chancellor basically writes this kind of very engaging history of interest rates, which does not sound very sexy. But what he's talking about is the cost of capital and how

it's been set for thousands of years by governments and kind of different governance bodies, and the impact that it has on uh kind of economies and what you find is that is not a gold standard not gold standard thing that is a cost of capital decision uh and that may be one of the single most important things that happens to stimulate the economy and so you want to have somebody setting the cost of capital because they can respond to these negative situations if it's just a fully free market you know you get depressions you get all kinds of you know very very extreme swings which uh i don't think is fun for people to live through yeah which is the nature of bitcoin so it's more of a free market for sure all right what's the last topic you got

last topic is the peter teal joe rogan podcast let me just set the stage for people it was a nice friday i woke up heard the birds did my work and then i was ready on a friday night after such a tough day to kick back my legs and sit down on the couch. And I got hit with, you're not going to believe this, but Peter Thiel was on Joe Rogan. Let's go was the exact language. So I said, oh, great. Like any supportive partner. I said, great. And then Anthony took that to mean perfect date night activity. So I was like, okay, fine. So we sat down on the couch, we put it up on the TV. and what happened. Anthony quickly regretted

watching it with me because I would pause it every 30 seconds and ask clarifying questions. You're a real one for wanting on a Friday night to watch Joe Rogan and Peter Thiel

wanting to talk to each other. Oh, you wanted to. I wasn't holding you there against your will. You voluntarily said on the couch. I think my suggestion was Love is Blind UK,

but I chose more education. You did. Yeah, it is very hard to watch with you. So at some point, I decided that maybe i was better watching it by yourself you were falling asleep and i don't know if that was on perfect because i kept asking i understand but you pause every 10 seconds to the point where

you forget did you not learn from my questions debatable you learn from my questions all right so uh i mean this is king shit right here what is there's two kings coming together coming together yeah one wants to talk about pyramids and chimpanzees and aliens the other and wants to pontificate about the philosophy of Voltaire and 18th century kind of politics. Do you know one of my comments when we were watching? I was like, thank God that Joe Rogan has kind of like the mental horsepower

of less of a Ferrari and more of a Honda because he asked the questions that I want to ask. He was like, so what is social security? I'm like, thank you. Well, he's a very curious guy. I know, I know. Um, and, uh, you know, one thing about Joe Rogan is that guy has range. Yeah.

If you look at, uh, the podcast list of Joe Rogan's guests, he could talk to a musician or celebrity. He could then go talk to an M and a, uh, MMA star. He then could go talk to a Peter Thiel and then he could literally talk to somebody who is an expert on alien civilizations. But that's what I think. I think if he was extremely intelligent, like a Peter Thiel, it would be very hard for him to interview in the way he does

because he does ask the questions that people are wondering. Do not confuse the simplicity for stupidity. No, no, no, I know that. But I'm just saying, I like that he has a self-awareness and social skills.

Yeah, he's a very good interviewer as well. What I appreciated about the conversation is both of them treat conspiracy theories as intellectual journeys to find truth. I don't think I got to that part. So at one point,

They were talking about let's use the Bill Gates part of the conversation. Peter suggested that maybe Bill Gates is overzealous participation in the covid response had more to do with the fact that Melinda Gates was currently had already told him that she wanted a divorce. And he was using COVID and the deployment of his financial resources as a way to say to Melinda, you can't take 50% of the money. What are you, anti-science? The money is going to the foundation. You can't take 50% of the money because I'm using it to do good in the world. And so the more in Peter's view, the more that Bill Gates put himself out there in a weird way, boxed Melinda Gates in with her left leaning friends, that if she took a lion's share of the money, taking the people's money, she's taking the money that could save lives. And so instead, she only got about one-tenth of Bill Gates's money in the divorce. And so both Joe Rogan and Peter Thiel, I think, come to the conclusion, regardless of the truth of that, it's a very interesting theory, and it is objectively true that in a divorce, to only give up one-tenth of your funds when you have the wealth that he has and no prenup, there was something that happened there. where bill gates was able to navigate that situation but why is that very low odds why is that even a theory that he has like what well why was he so involved because because his whole thing is vaccines that's his like whole platform of the foundation but the point being that maybe all of the uh foundation work was because actually since the early 2010s they have been talking about

getting a potential divorce and there is now one of the things they talk about is bill gates actually asked jeffrey epstein for marriage advice no way and he said hey look this isn't working out and supposedly jeffrey epstein had suggested to bill gates well why don't you just get a divorce back in like 2010 2011 and gates was like that's not really an option and so that was the insinuation that maybe there was uh a way to put the funds into a non-profit i don't like this one let's talk about the pyramids so what i did appreciate about the conversation is um joe rogan is obsessed with the pyramids and he's got he's talked to all these experts there's a bunch of different theories it is objectively true that it is a

modern marvel how they built these things they supposedly didn't have electricity they didn't have motors they didn't have all of these things that we would use today they took stones from 500 miles away and moved them somehow and were able to build these things that have stood the test of hundreds if not thousands of years yeah nobody knows how they did it that's crazy it's insane there's even evidence that certain pyramids point perfectly north south east and west with the corners. Okay. And so the engineering feat that was accomplished is incredible. And during the episode, Rogan suggests to Peter, well, maybe there was technology that was lost. Maybe they had technology. Okay. That technology allowed them to build this thing. We don't know about

the technology because somewhere along the way, like the plans got lost. Okay. And so that's why we don't understand it. And Rogan was very interested in how they got built. Yeah. But I thought that it was fascinating. It really shows, I think, Peter's kind of perspective. He said, well, I'm not, I'll just take your word for it. It's difficult to build. He goes, I don't know, but let's just say that's true. I'm much more interested in why they were built instead of how they were built. And so you have two people who are, you know, obviously very intellectually curious, talking about a topic, and they have two very different things that they're interested in. One was interested in how did they build this? Physically, how did they do

And the other is saying, why did they spend thousands of people's time and all this money to build these things in the desert? Yeah. Both of those questions are valid, but either one of them was more interested in kind of the thing that they were interested, not the other person's topic, which I found very interesting. And then maybe the last thing is, you know, most people I know think in black and white terms. Things are true or not true. One of the things that I appreciate about Peter Thiel is he has a way to think in paradoxes. And so one of the things that he said, which is just stuck in my head, is we went to space and we went to the moon, allegedly, in kind of the 60s. And right around this time, Woodstock happened. OK. And so one of the things he said is, you know, there's this paradox. We stopped going to outer space because citizens started going to inner space. Everyone started getting high, which meant that we didn't need to go to outer space anymore. Now, again, that's kind of an interesting thing. And whether it's true or not, you know, almost doesn't matter. But it's an interesting framework to think through. another thing he talked about was the internet made location irrelevant because now anyone

with an internet connection should be able to log in and be able to experience all these services and products etc but the paradox is that all of the internet companies that matter are in san francisco so the internet democratized access for users but it's centralized location for the producers of the goods and services yeah and so that paradox the ability to understand that the world is not black and white that there is kind of these constant back and forths i think is a really powerful way to think in uh as you kind of go through your life i thought it was interesting that part where he talked about detroit and how that used to be kind of the silicon valley of america when all the cars were being built and how the the center of like power was there and

then it all kind of crumbled? Well, it's, I think, kind of twofold, right? If you have an industry that was really, really important, but that industry is in physical goods. And so if you can get a low cost producer to produce somewhere else, and they can get it to you, right, in terms of producing overseas cars, and then bringing them here, naturally, that is going to eat away at the profits that are generated in a place like Detroit. And then second is there's a lot of mismanagement. And so, you know, I think the lesson from Detroit is don't think it can't happen to our current powers or centers of power. And it would be crazy to think that New York City is not New York City in a decade or 20 years. San Francisco, similar thing. But if you really

think about, we've seen maybe the weakening, we've seen net outflows of people in capital. And so maybe it isn't, again, kind of the extreme of ultra success to ultra failure. uh and it's more of like a slow you know evolution but uh i definitely think that um the current power cities are not nearly as strong as they were 10 15 years ago yeah although i gotta say like especially when i was a reporter at fortune every day i would get a pitch from some city government that was like nashville is the next silica you know and it's like it's it's almost never i I wouldn't think about it as trying to pick the replacement city as much as the easier trend to identify is the degradation of the existing cities.

So it's easier to predict the downfall or the degradation of San Francisco or New York than it is to look at all of the cities in the United States and say, this is the one that's going to be the next power city. Yeah. And I guess Miami was that for a while, but I don't know. I think that Miami did exactly what Miami should have done, which is they were able to gain market share. And now it's definitely talked about as a major player. Everyone wants to judge success on are you number one or not? But actually success in my mind is like if you were to list, stack rank

all the cities, let's say for the tech industry, Miami went from maybe not even on the list to now they're probably top five top seven and so that leap is a major win for miami um and sure they're not number one yeah you know uh over san francisco but that kind of like loses the the point of this major leap that occurred uh and maybe over time it continues to go up the charts like we don't know that story yet um but being number one i don't think is the you know only kind of mark of success. Um, it's just continuing to kind of improve, continuing to attract capital and people is pretty important. Cool. That's all I have. All right. Thank you for doing this. Did you have fun? So much fun. All right. If you guys like this and you guys want us to do more of

these, maybe one a week, leave a comment, tweet at us, let us know. And we'll, uh, we'll gauge feedback. If there's a lot of good positive feedback, we'll do more of them. If I don't hear from anyone, I ain't doing another one. Please comment guys. So, uh, appreciate you guys tuning in and, uh, maybe we'll see you next week.