TRASHFUTURE - She’s Turned The Bonds Against Me feat. Alexandra Scaggs

Episode Date: April 15, 2025

Alex Scaggs of The Hedge (https://theehedge.substack.com) joins us to talk about the economic chaos unleashed on the world by… Fed Chair Paul Volcker between 1979 and 1982. This episode tries to make sense of the ongoing American trade war with much of the rest of the world - going into the history of the American grand treat bargain, how the character of manufacturing has changed, and the psychiatry of why the guy from Cantor Fitzgerald wants you to stop sending emails and start hitting the girder with the big hammer. Get more TF episodes each week by subscribing to our Patreon here! *MILO ALERT* Check out Milo’s tour dates here: https://miloedwards.co.uk/live-shows *TF LIVE ALERT* We’ll be performing at the Big Fat Festival hosted by Big Belly Comedy on Saturday, 21st June! You can get tickets for that here! Trashfuture are: Riley (@raaleh), Milo (@Milo_Edwards), Hussein (@HKesvani), Nate (@inthesedeserts), and November (@postoctobrist)  

That's the good thing about our production cycle is this should be out by tomorrow, which means as November said earlier before we started recording, things will only have changed like by 90 to 98%. Not the usual 160% that we've expected day to day in the last several weeks, which is good for us. 360%. Yeah, I think we've really come full circle at this point on the global trade regime. I'm really enjoying the decades of weeks where decades happen. I think it would be really cool if the current administration, if enough guys just call Trump and are just like, hey, I'm Tim Apple and I need you to exempt my great company from the tariffs. You don't want to exempt, you don't want to hurt a great American company.

It's like, well, no. And if enough people call him, then he can just completely from first principles and backwards reinvent the Seattle round of World Trade Organization negotiations. What do we think about that? Well, the thing is that lasts until the next person talks to him because as we know, Donald Trump. Yeah, Donald Trump like always like inhabits the worldview of the most recent person to talk to him, and so he talks to Scott Besson or Peter Navarro and he's back and the tariffs are back, so

I think that's one reason why it's been so back and forth. Yeah. It rocks. I really can't wait for the companies to start realizing that they can compete with each other by being like, no, listen, this industry is what you really need to tear us. And so it'll just be like a constantly rotating group of CEOs, terrifying and un-tariffing their competition. Well, I mean, the thing is, this is the most, one of the more easily buyable administrations, like more direct, like you could buy Obama, right? Like he knew that when he left office,

he was going to get his like zero interest rate funded like a hundred million dollar Netflix deal or whatever. Fine. But you can buy these guys before you can buy these guys while they're in office. Well, that's that's efficiency. Yeah, yeah. I was reading I was reading a piece earlier where he was like, you know, Warner Brothers was talking was talking to the administration and they were like, you know, if you want more direct access to the administration, Amazon gave Milani a $40 million for her show. Why don't you guys let Don Jr. do a hunting and fishing show on Warner Brothers owned networks? That would be cool. We could see him get chased by the Venetian like wildlife reserve cops.

Yeah, Venice's revenge. So, you know, this is, it's just going to be, as you say, Alex, it's going to be people just trying to see if they can purchase a tariff that will harm their greatest competition but not themselves, which, as far as I'm aware, correct me if I'm wrong, you work for the Financial Times, not me. Investors love that, right? They love to do business in that environment. I think that they really feel alive. It's invigorating American business. No, I mean, it's insane because even... Just as a regular, extra regular person being like, okay, when do I buy my computer? So I just went freelance, permalance. I'm like now FT contributor and also doing a sub stack, which was hilariously timed. And I was like, okay, I need a laptop.

So I hear about the tariffs and I'm like, shit, I have to go buy a laptop. And now I'm like, oh, I guess nevermind. So like I can, I mean, you know, supply chains have contracts, right? They have financing, they have preset, you know, six-month, one-year, 90-day, whatever terms that they're doing business with. And like right now, it's funny that like, on one hand, the White House is, you know, going after law firms for like not being nice enough or like representing the wrong people. And on the other hand, they're giving just this incredible opportunity for lawyers to renegotiate every supply chain contract in the world because that's what they have to do now.

Yeah. This is the art of the deal. He's causing deals to occur. Yeah. He's a deal maximizer. Yeah. Yeah. It doesn't mean the deal has to be good.

It doesn't mean everyone has to be doing deals. Yeah. Constant deals every day. Isn't that what GDP measures? Yeah. It doesn't mean the deals have to be good. It doesn't mean everyone has to be doing deals. Constantly. Constant deals every day. Isn't that what GDP measures? Doesn't the D stand for deals? Yeah. Look, it is Alex Heggs with us today, former guest of the show, always happy to have you back. And we are going to be trying to untie exactly what's going on with the economy, which appears to be doing great.

I'm actually looking forward to a pretty short episode because there's not much to discuss here. I don't think it's pretty good. Yeah. State of the economy. Pretty good. Yeah. Pretty good. Everyone's having fun with it and exploring the space. Howard, Howard Lutnick is Cantor Fitzgerald's finally getting a go where we're only Goldman Sachs used to tread before.

Look, would an unhealthy economy be sending Katy Perry to space? I would say no, I would say that actually we're doing fine. And I, yeah, I, can I, I know we're not going to talk about the space thing, but I think it's so funny that all the headlines, all the headlines like Katy Perry and a bunch of other girl bosses are going to like space. And I'm just like, imagine if you're like Jeff Bezos' girlfriend or whatever, and you're being like overshadowed by Katy Perry. That must suck so much.

Makes it even funnier that Elon Musk still hasn't been to space. Katy Perry has been to space before he has. Like, I sort of like, if we're going to do this kind of like billionaire dick measuring, I support getting really hostile with it, you know? Send Grimes up there. It's like, we're doing the Elon Musk's family and exes who hate him space tour. Well no, my general prediction, I wrote this like, so Elon is definitely going to try send some people to space like soon, right? But he's going to be the one that fucking kills them.

And all the people who are going to go to space are like catered to like whoever else is dick riding him still. They're going to die. They're going to die. And they're not even going to get into space because the thing is going to blow up like just as just as just as like they're about to get it. My favorite like Elon crash out still to date is him beefing with astronauts because there was this unspoken thing because I guess they don't let you be an astronaut if you're

the kind of person who holds I have been to space and you haven't over someone to win an argument. But it was just there and neither of them could really acknowledge it. But it was like obviously this kind of like you could detect it through the Brownian motion that like you know is seething that like he has not been to space and these people have. Which is cool. I appreciate that. If Elon's just being like, everybody, if you haven't seen posts from Doge Designer recently, he didn't die when I tried to send him to space, he just lives up there now, he's the

first guy on Mars, he's gonna wait for the rest of us. Going to have an anti an anti woke space station. Yeah, finally. But look, I want to talk about this thing. Right. So I initially thought that there was no plan and I thought that was kind of crazy, but fine. And then I, you know, idiot me, of course, I didn't check with the Oracle of Oracle of Spacks, Bill Ackman, a friend of the show as well, former, hopefully future guest. Yeah. Who said, you know what?

He said former guest. I'm just thinking back in my head really quickly which episodes we did. It's like, no, it's, well, there's your problem that does the six hour episodes. Yeah, that look, Bill Ackman, he straightened everything out, right? He's like, look, it may look as though

the United States has done a bunch of random flails at sort of the broad network of global supply chains upon which it depends and alienated all of its allies. However, Bill Ackman has said, imagine if within the next 89 days, the US, Europe and Japan agree to go zero on tariffs or remove all trade barriers, then all get together and raise all tariffs on China to 145%. And then the US, Europe and Japan as a united front negotiate with China to remove tariffs and trade barriers, then put in strong structural protections for IP. Alex, I don't think we actually need to do this episode because that sounds pretty sensible. Of course. What's his, what's his, what's his, um, a free like username? What are the

tags on that? Or do I not want to know? I mean, listen, I'm imagining it. He's got me there. I am imagining it. It seems like it'd be pretty, you know, pretty effective. I wonder what he thought about Brexit. Well, I mean, the thing is if you just... Master plan. Yeah, if you imagine a situation in which it wasn't a terrible idea,

then, you know, well, nothing happens, but you can imagine it. It is theatre. It is a theatre class. It is about, like, you know, enjoying yourself and, like, feeling the space, right? Like, you can do whatever you can imagine now. Yeah. Well, with that in mind, Alex, can you just take us through, at time of recording, this is crucial, let me say, at time of recording, which is Monday evening, what is the current situation? Okay. Jesus.

Imagine if you're not an economics commentator. Imagine if you are someone who is trying to make a purchase or do some business. I don't know much about the economy, or at least I didn't know much about the economy or at least I didn't know much about the economy before I started doing this podcast and one of the things that you said Riley that really elucidated to me is that it's not really about the number itself it's about predictability and it's about stability

and I've been you know really really kind of like thriving on that lesson. Yeah you can tell the administration is really into predictability, nothing crazy. No, it's insane. So like, I mean, I'm sure you guys talked about, you know, liberation day or liquidation day on past episodes. And the, I mean, just in general,

like the original slate of tariffs that they put out were kind of incomprehensible and basically based on the idea that no one should have a trade deficit and that if they do have a trade, if we, the U.S. does have a trade deficit, then that means that our trading partner is cheating somehow, which is amazing and completely baffling because as you guys know, Americans don't really like anything more than we like buying stuff. That's like our entire, that's like America's entire thing. And so, you know, they were basically saying like, well, like, we buy too much stuff and people buy our bonds for that and that's wrong. And so it's been back and forth a lot since then.

The week after that was also insane because there were like various headlines getting floated about them putting all of the tariffs on pause for 90 days and then they were like we've never heard about that, you know, no one knows what you're talking about. And then two days later they were like oh by the way we're putting a 90-day pause on all tariffs except for China, which goes up to 145% now. And then over the weekend, the psychological warfare against economics bloggers continued and they were like, oh, we're actually doing exemptions on consumer electronics from China, but like not the other stuff. So like not the stuff that goes into consumer electronics, at least as a last

check. I'm like, you know, who knows what they've put out in the past two hours. But it was very funny that they were like, you're gonna sit in the factory, you're gonna use the tiny screwdrivers on the iPhones. And then they were like, actually no, we're not gonna import the part or we're not going to give the parts a break. We're going to give the iPhones a break from the massive tariffs that we were proposing. And then let Nick saying, okay, only for a month. And then a factory could be stood up in a month.

Yeah. I mean, here's the problem. Like, you know, I was going to make some joke about starting a factory, but but other other fun funnier people have made that joke already. And also, how do you sleep? I just, when you're trying to actually cover this, God, I think I was on a hike when they announced the 90 day pause. I was like, I had been online for two days straight and I was like, I need to touch grass. So

I hiked up a mountain to actually the ruins of a casino, which has no... Yeah, has no greater significance. And then I got back down and I was like, oh, okay, never... It's all off. Never mind. And again, you talk about businesses and predictability and can you imagine actually trying to run a real business? Well could you also you know um this is also a little bit silly but could you imagine if that happened with you while you were hiking up a mountain to an abandoned casino spare a thought for all of the asset managers at the PGA tour who have all had their phones taken from them for a week and then just missed all of the... How many people do you think got blown the fuck out while they were just watching the golf?

I'm never not sparing a thought for golfing asset managers, let me tell you. The two guys in a Bloomberg model is ruined forever because you need at least three analysts to just watch the news. To just watch Walter Bloomberg's feed, not the actual news. He predicted the 90 day pause before it went on and then off again, then became a sort of 30 day pause for some things and then was sort of semi walked back, but we're still doing the fentanyl tariffs. And we're still doing also the 10 semi walked back but we're still doing the fentanyl tariffs and we're still doing also the 10% tariffs but we're not doing all the other ones so long as no one retaliates but now Vietnam has signed 45 separate agreements with China

and is that considered retaliation? No one knows. MW It's really good because it's just sheer muscle confusion. This is great and the White House obviously leaks like a sieve, but because it's comprised entirely of warring camps of guys who all hate each other and all have different ideas about the tariffs it leaks like several different sieves, all filled with a different liquid, the implications of which are you lose all of your money. Yeah, it's like how and to whom, I guess. I like that the different news items are like

increasing the second hand value of all of the stuff that I panic bought after the tariffs. I was like, I need a sewing machine. What am I gonna do? And then Vietnam tariffs are gone. And I was like, shit, now I have to learn how to sew? But now we're back on. I'm so excited.

It's like the energy of it being so over and us being so back is actually rotating quickly enough that it's a source of free power. Yeah, it's a kind of quantum superposition of back and over. Yeah. I mean, there's just so, so, so many angles here to discuss. I mean, I think the first one I want to get to is talking about some of the people, right? I mean, we've talked about Howard Lutnick and his SoundCloud rapper son on the show a few times. We talked about Cantor Fitzgerald a lot back when we used to be talking about Tether,

because they were like the main bankers of Tether, which is awesome. And you can draw some comparisons between like who are the finance gurus who are setting up the Trump two tariffs versus the finance gurus who were committed to keeping them from happening the last time like Steve Mnuchin and Gary Cohn. Because like Steve, Gary Cohn and Steve Mnuchin, hilariously are just like lifelong coastal registered Democrats, Goldman Sachs alumni, who Trump just happened to know as rich guys with hot wives from like the New York City charity dinner circuit. And he's essentially replaced those guys with Stratton Oakmont, more or less. Yeah, I was trying to describe Howard Leibniz to someone and I was like, okay, like, I guess,

you know, if Gary Cohn ran a bucket shop and then I was like, oh, but it's Cantor. So like, maybe that's how much of an exaggeration is that? I don't know. But yeah, I read somewhere that it was really amazing that Gary Cohn used to just like grab papers off of Trump's desk and like run out of the office. He couldn't sign them. I heard this. Yeah. Yeah. Yeah. And I love that that's the best strategy for policy guidance in the White House.

Yeah, it's like it's just like all they would do is just be like, Vietnam said that they respect you very much. And, you know, they're, they're actually said they eliminated all their non-tariff barriers to trade. And then he would just be like, perfect. And then he would just move on. Yeah. Or like that, or Trump getting winded on the South wall and trying to chase down the declaration of war with Iran. Yeah. Those guys were essentially throughout the first term or Gary Cohn was around for the first half of the first term, basically trying to either sort of corral the Mr. Magoo like

Trump away from sort of stepping directly into the grain thresher or pushing everybody else into the grain thresher. But these, I mean, I think if you want to understand, you know, the transfer of one of these elements of the transformation of the American right, it's that all of these guys, the people that Howard Lutnick, the person who Howard Lutnick in position, excuse me, that Howard Lutnick's in now, or the person, the positions that were like taken by guys like, by Gary Cohn or Steve Mnuchin or Larry Summers before that, you know, that started as, you know, a white shoe Wall Street law firms, then places like Goldman, and it's become now a glorified boiler room operation. We can include Tesla in this, right?

That's taken over. And it's not to say again that the previous guys were good. It's more like as the politics of the right became more about the naked expression of power, then putting that power effectively through existing institutions and relationships and putting a genteel face on it to make it function smoothly. That's what those guys previously were doing. It became less and less and less necessary. You were just able to get the modern day bucket shop guy to come in and just make up policy on the fly on TV. Because fundamentally, it's always been about just the exercise of raw power. It's just how much

more raw is it able to get? I mean, that's how I see the sort of transformation of the personnel involved in actually doing this stuff. Yeah. And the frustrating thing is that on one hand, it's like, yeah, okay, this is kind of always who these kinds of guys were. But at the same time, it's like how much more pain does that then like emanate throughout, you know, to like real people, you know? So it's it's tough because on one hand, it's like extremely funny that this is all happening like this. But then on the other hand, you know, like you have CEOs saying like, OK, well, we're in a recession. And like, what does that mean?

That means layoffs, you know, like it sucks that like just extra regular people are losing health care are like getting their lives all fucked up by all of this. You know, that kind of clown show that's going on. And it doesn't look like it's going to stop anytime soon. Yeah, I mean, absolutely. You know, I think it's that there's going to be a huge decrease in the standard of living of average Americans. That's what happened in 2008, right? The recessions leave scars in standards of living when they happen. They don't just get fixed and go back to normal, unless there's like huge amounts of like investment, unless there's a new deal,

basically, that's what it takes. Right? And, you know, in this case, they're saying, no, we're going to cause a recession because we think that is some sort of purgative. I mean, they keep talking about it like it's a fucking juice cleanse. We're going to cause a recession because I saw too many guys with beards at a coffee shop and none of them were like hitting a big eye beam with a hammer. Yeah. And also because I'm bored. Also, like that's not that far from the truth. Like they're causing a recession because they

keep seeing that like TikTok video of the Australian, like, um, of those Australian girls, like doing that. They just keep getting furious about it and they have to tank the economy because of that. And you don't need to go any further into explanation as to why that might be. Yeah. It's a jobs are when you hit a girder with a hammer, not when you touch the computer and we're going to bring it all back to that. But what I wanted to bring this to as well is like, so many things I think that one of the reasons that this is hard to make sense of is that I think about it increasingly as a conversation the right

has been having with its own disastrous history allowed again and again to just learn by doing, right? Carrying out repeated disastrous experiments that crush living standards again and again and again. And where I'm sort of thinking about my history here, I'd be keen to know your thoughts on this as well, Alex, is like Paul Volcker engineered a recession on purpose in response to a period of high inflation. Tell me where you've heard that joke before. In the late 1970s, basically killed off American domestic manufacturing. It's long before NAFTA, right?

After this, the dollar was up. The United States became primarily an exporter of extremely high margin goods, and more importantly, services. And that's around when steel production, for example, peaked. And then that's when the jobs started to go away. And transition to a primarily computer-touching-based economy. Yeah, honestly.

And in response to that, around the same time, the new economic settlement arose. And Alex, you alluded to this earlier where it's like everybody around the world engages in difficult, low margin manufacturing jobs for Americans and then Americans and then they store their money in US treasuries, basically. That was the arrangement that Paul Volcker kind of came up with. It was a disaster for the American sort of middle and working class. It was a pretty big disaster for more or less everyone, for a lot of people around the world who were in sort of stuck in low margin manufacturing jobs. But that was the

system that came out of it. And now these guys are having a conversation with that incredibly cruel and extractive system saying, that's too nice. That created Australian girls who did a little dance around it with a TikTok. We have to think of something crueller. It's crazy. And it's like they're ripping us off because we buy their stuff for cheap because labor standards are so low like it really is like pretty gross when you really think about it you know and I mean yeah like I think Rob Armstrong one of my one of my colleagues at the FT had a nice piece late late last year that was like you know who are Americans right now like we

buy stuff you know I know you guys like have your the like treats economy right like people want their treats delivered not just from the coffee shop but also stuff. You know, I know you guys like have your treats economy, right? Yeah. People want their treats delivered, not just from the coffee shop, but also from China. You know? And so like this entire sort of like, you know, American consumer identity has somehow become like too generous to the rest of the world in this, in this conversation. Like it just, it doesn't make any sense and also it's funny because like I mean the the comedy here is that it does mean that we ultimately end up shooting ourselves in the foot because they're saying like oh

like what are you gonna do sell our treasuries and it's like that's why they own the treasuries we're the global trade currency because Americans buy so much shit you know it just it makes no sense. And so basically we brexited from the entire world all at once and pissed off everyone. And now we're saying like, oh, well, like we really have the upper hand and we're going to stop, you know, the Bangladeshis from making so many shirts in their factories. Like it just it's it's trying to be cruel, but then walking off of a cliff in the process is... I guess it's kind of fitting for our history.

In recent episodes as well, look, we've been talking about extreme wealth and unchecked power as being almost like entailing the cognitive equivalent of being just repeatedly kicked in the head by a horse. Right. I think the only way to understand this moment in time, right, where the again, the extremely cruel and extractive economic setup of the world is an American company town, right, where you get paid in script that the that America issues, which is just which is dollars and T bill and you store it in script that America issues, which is just, which is dollars and T-bill, and you store it in T-bills, what you store at the company bank and everything like this, where that was considered to be too nice,

despite that it has to be understood in two ways. I keep vacillating back and forth, honestly. I don't know how to think about it myself, whether I understand it as a genuine bit of lead poisoned imperial madness, right? Or whether it is the product of elite cycling, whether it is these guys, a new, a very, very new generation of elites has won a kind of intra elite competition over political institutions in the US and is using the chaos that they're creating to entrench themselves in a much crueler,

much much more rigid and vastly even more, if it can be imagined, unequal system than what we had before. I wonder if it's both, but I go back and forth between these two explanations. Yeah, it could be both. I mean, there have been some really interesting comparisons between the post-Soviet Union Russia, like after the fall, where it's like, okay, everything's going to get shittier. But you do have that sort of upper crust of wealthy people who can just like do a smash and grab on their way out and become, you know, generationally insanely, sort of offensively wealthy on the way. And I think that like the sort of results of that intra elite battle that you're talking about is looking like at least within the US that it's gonna turn into that kind of thing.

Because again, like it is sort of like smashing everything up, but then also like, you know, seeing how much you can make on the way out because you know, you know, at this point nobody's gonna have the institutional power to take it from you. It's something that aligns pretty well with a lot of like, the near reactionary stuff that, you know, still floats around occasionally when people aren't, you know, stuck on effective altruism or whatever of just

sort of quietly being like, well of course, you know, once everybody's sort of like much poorer and working hammering the big I-beam, then naturally things will shake out in a way that returns to feudalism and I get to be the king. Yeah. Yeah, that's really funny too, to see like the way that market headlines are getting sent around and even just like within that context, because I've, you know, I think like a lot of times people can get really hung up on that because like, oh, who had the info first because like they want to be the guys that got the info first.

But the funny thing, particularly about the early week, I guess a week ago now, Walter Bloomberg tweet from Walter, owner of Bloomberg. I'm just kidding. Uh, is that he actually wasn't the first one that had it. It I have like from decent You know decent sources and a decent number that it actually was circling Circulating around bank desks first So it was like kind of like the institutional traders like spreading rumors and then he picked up on it

And then things went a little haywire So I do kind of wonder like what that means, again, people who are trading the markets actively at this time. I mean, I don't know, the president fucking had a shit coin. Days before inauguration. Like... I forgot that that happened. As with so much of this stuff.

Yeah. If you're trying to make sense of the economy right now at a macro level, which I've been trying to do, well, I mean, I've been trying to do with this podcast for several years now. It is so hard to keep all of it in your head at once because everything is just changing so quickly. And I mean, speaking of the change, I want to go back to something you mentioned earlier, right, which is to try to focus really on living standards for actual people. And to talk about how some of the changes up in the financial economy filter down into changes for actual people.

There are two ways that it happens. One of which, as you mentioned, is recession. The other of which is that the grand bargain of being a hyper alienated, global north computer toucher or someone who's like, even not even a computer toucher, just a hyper-alienated, global north computer toucher, or someone who's like, not even a computer toucher, just a hyper-alienated global north capitalist subject is your living conditions, broadly speaking, can be expected to go up in terms of... Improve in terms of ever cheaper consumer goods. And so can I ask just firstly, is it good when the University of Michigan Consumer Sentiment Index is down three points and inflation expectations are up 6%? Is that good for the American project in maintaining

consent, I guess, for part of that grand bargain? Scientifically, no. It's a very complicated niche topic. No, it's fucking terrible. People are expecting inflation to be really high, which again leads to all kinds of crazy behavior like say you're me buying a sewing machine. And also the fact that, so there's that, right? Consumer expectations suck and are getting worse.

But also the bond sell-off that we saw last week also really matters for this because one of the benefits again of being a whatever, the hyper-alienated global northerner who taps at the keyboard is that borrowing costs aren't supposed to get that high. Like treasury yields, bond market sell-off pushes up treasury yields,

which is the basis of a mortgage rate. So you're like, okay, well there's a recession, but at least I can buy a house. Like at what rates? Because like mortgage rates are down a bit. And like, yes, okay. Like if, you know, if there's a terrible crushing recession and home prices fall a lot, then like, yes, you know, it'll be more affordable, but financing is not getting more affordable. And that's the, that's the really unusual thing about what happened last week is that Treasury markets sold off, yields went up. Usually, if you're trying to tank the stock market and cause a recession, you do it so the Fed cuts. You do it so people aren't paying as high interest rates to borrow money. Because another thing that I think gets lost is that, you know, Americans like to buy cheap

stuff with cheap credit. Yeah, because that's the deal. Right? That is that was my tree. Yes. Well, because the political settlement, if you're going to like, it's back to we're thinking about the post Second World War, political settlement is always we did the New Deal one time and we're going to spend 80 years seeing how much of it we can take away before it falls apart. This is also what happened in Britain, of

course, in a kind of a different way, but similar enough. However, your living standards will go up, but only in as much as consumer goods become cheaper. But that was like literally America, like the global soft power campaign against the Soviet Union was to show Europeans dishwashers, right? And then you just say, and then, but then that whole idea is based on, OK, there has to be a market for infinity, constantly improving dishwashers. And that's going to go up faster than people get paid. So we're going to need to make sure that there's constant cheap credit available, Paul Volcker. And, you know, to say, and we're never going to deal with the consequences of making sure that everybody buys a new dishwasher every year on credit. It's not to say this to be hyperbolic or to be ad busters. It's just remembering the 60s

and 70s. And as you say as well, Alex, the goods get cheaper, but the rent doesn't go down. The housing prices don't go down. The healthcare doesn't get better. But the only thing that you can really promise is that the treats will always flow. But eventually that runs up against hard physical limits anyway. And ultimately you cannot live in an increasingly large television. And what we're seeing now is the chaotic withdrawal of this deal and nothing being put in in its place. We're seeing it withdraw, as you say, in the financing of this lifestyle. You're seeing it withdraw in the actual physical requirements, the treats themselves.

You're seeing it withdraw in people having the stable, pleasant jobs that they've all become used to. I mean, the whole, the most fascinating part of the manufacturer and this is also by the way, another chapter in the America is becoming Britain saga is that 80% of Americans think life would be better if more people worked in factory jobs. Only 25% of Americans think their lives would be made better by working in a factory job. It's very fun. I like to imagine my enemies hitting the big I-beam. Yeah. So it's like the easy, relatively safe, comfortable, pleasant. I don't think pleasant in terms of like it's rewarding, but like it's not physically demanding, really.

Those kinds of jobs, right? Those are going to be going away. The finance that you get to get used to get the treats in is going away. The treats themselves are going away so the finance doesn't really matter. But the finance that you use to get the house is being pushed out of out of reach. I mean, this is like you don't realize that you stand on top of a global network of super profits, essentially, until the third worldest guys from Cantor Fitzgerald tear it all down because it's marginally too nice for you. Oh God, yeah.

And like, it's hard to exactly chicken or the egg. Like, is it the cheaper treats that mean that the financing costs are low or what? But it's definitely a big part of it. So they're saying, okay, fewer treats. And then that means that the stuff that's here, you can't buy anyway because interest rates are out the roof and because you've lost your job because there's a recession. All of these things happening together. To me, that looks like a chaotic unraveling. That's not just

one thing causing another. That's not just, okay, this is worse than 2008. This is much, much worse than 2008. This is the chaotic unraveling of a... This is pure speculation. I mean, again, I ask you to please tell me if I'm wrong, but a huge number of banks hold US Treasury bills as cash and the required ratios they have to have of assets of cash to loans is set on the basis that all of their Treasury holdings are cash. And if there is a political risk premium on US treasuries, are they less cash? Yeah, I mean, definitely globally. For banks, for US banks, I think that the regulatory regime is so strong. And I mean, there are many countries around the world who have basically sort of financed,

or partly financed their own deficits by saying like, oh, actually, you banks, you guys have to hold this stuff. But beyond that, I mean, I would say that last week, at least, and I have to check it's funny because like last week, everyone finally capitulated and because at first everyone's saying like, oh, it's just a hedge fund on wind. This isn't anything fundamental about America or the dollar. And then like slowly see people start capitulating and like I don't know I was covering treasuries during the 2020 explosion like things were really weird arbitrages blew out like price relationships were really like that wasn't happening last week and so I was like oh shit

this is the bond vigilante even though they're not real. The woke bond traders they killed Liz Truss and now they're back for the tariffs. More evidence that the US and England are just becoming the same place. I mean, you score an own goal that big, like Liz Truss budget style big. And the funny thing is that you can say, oh, it's a conspiracy, but it's not.

It's just like a fundamental, these are the incentives that are set up for a bond investor. And you thought that as long as you were withholding, you meaning the government, you thought as long as you were withholding nice things from the populace that the bond traders would be on your side, but then you've managed to push it far enough the other direction that they're like, oh no, this is like all of the Soviet Union type stuff. You know what? Like I think I like the euro more now. I think I think the yen makes, you know, makes more sense to own. And so like, I don't think that America is like, you know, I don't, I mean, famous last words, but like, I don't think we're like Argentina, but I do think that like Europe is looking better right now relatively.

And Europe has been a fiscal shit show for however long. That's not a good sign. I want to pick up on what you said about that everyone seemed to believe that what truly and this is a wonderful look into the psychology of these people. And it's not just these people though, because this is also the psychology of Larry Summers. It's the psychology of the Eurocrats who pushed austerity on Greece, which is that... It's especially the psychology of people like Liz Truss and her elk, which is that the demands of the invisible god of the bond market, of the global capital flows

are that we are cruel to people. And with the Liz Truss budget, with the Trump tariffs as well, in both cases, it's like the bond market said, we actually don't want you to be as cruel. How cruel you were being, that used to be amazing. We loved how cruel you were. You were now marginally too cruel. Yeah. I mean, at this point, you get the sense that some of these guys want to go back to like

hurling lifeless bodies down step pyramids in terms of like, necessary blood sacrifice for the thing to work, right? Yeah. Yeah, and it just sort of betrays like a kind of fundamental misunderstanding of like, the things that make the bond market just like, mechanically, you know? They were like, oh well, like, as long as people suffer, like the bond market will be fine. But then like you're making them suffer in the way that the bond that actively hurts the sort of foundation that the bond market strength sits on. So like,

why? We talk about contradictions a lot, right? And I think the contradiction that we have seen looking at Anglo American politics, the that we have seen looking at Anglo-American politics, the contradiction we have seen over and over and over again is that tension among right revolutionaries of having a dogmatic belief that to please the market, they must attack institutions, that they must sort of inflict

further and further wanton cruelty. And that the only problem is that the previous guys didn't go far enough and that we just need someone who's willing to push the button. With Liz Trust, we just needed someone who was finally willing to push the economy good button. With Donald Trump and Howard Lutnick, it's like, hey, these guys are finally willing to push the everybody gets to live in an AI generated ad from the Coca Cola ad from the 1960s button. And no one else was willing to do it because they were either institutionally captured, or they weren't

brave enough or whatever. And you have beginning to, in order to follow the logic that the market did give you, in order to follow their logic to ultimately destroy the thing that sustains the market. We talk about things containing the seeds of their own destruction, I mean, the whole essence of Trumpism, trustism or whatever, it is worship of the market in the same way that Mark David Chapman would have like worshiped John Lennon. Seeing the market coming out of it's apartment building.

Kind of. This market's been ignoring me and my letters for too long. And you know, I mean, we mean, we go back to like these, these truly seismic changes are happening. Like, while the United States state, the thing that made all of these networks work right for their owners, not for people that they're sort of being done to, right. That, that also is in a very real sense that regulatory state that also is gone.

Right. It's what you go back to. okay, well, this is chaos, right? This is a disorderly unwinding of a very large system. I think you're like covering all of the things that you like got it. So it's like, you sort of like, I mean, it's enormous and it's stupid. So it's sort of like, okay, what now? And the answer is like, I guess we'll find out when the recession hits.

So it's something to look forward to, you know? Yeah. And I mean, what I find sort of, so, you know, so, so, so, so many of the psychological elements are things I find quite strange about it. Right. Which is we talk about this, this elite cycling, right? This new set of elites that sort of won decisively the inter elite conflict, right? Because you can see like the elite capitulation to Trump 2.0 is that it has happened so quickly, whether that is, that's in entertainment, whether that's in media, that's people just lining up to bribe him, right? Because they've,

it gives the consensus is okay, well, we're all fine, actually, with more people being made uncomfortable. Because that deal that we talked about, that deal of like, you gave well, cheaper goods in exchange for, you know, political compliance, basically, that's no longer really working. We kind of don't need it because there's not a Soviet Union anymore. People aren't bought into it anyway. So this is the opportunity to actually sell lower living standards because of there's this fantasy. And I was thinking of this comparison earlier, right? The fantasy of selling the lower lower living standards, it's almost based on a kind of updated version of what the German Nazis offered till as their

story, right? Which is there's going to be a Volkisch spirit. We're going to return from the drab factories to the bucolic existence of like the Bavarian yeoman herder, right? It's weird for Trump to say that. I think I do need to hear Trump say yeoman herder. Yeoman herder, he's going to be a yeoman herder, we're going to dress in the later housing. American Nazis are dreaming about a return to the drab factories from the even more soul-deadening email job or like fentanyl town.

Everyone's got lower ambitions these days. No one wants to work anymore outside of the mines. I don't know if you heard, he legit said, he was like, these guys, they just want to mine coal. You could give them a penthouse on Fifth Avenue and they just would want to go back to the mine. So I'm like, buddy, I don't know if that's true. That was a conversation with Gary Cohn. Yeah. Where he was saying to Gary, cause he was saying to Gary Cohn, well,

they, they like mining cause they're not mining right now and they're unhappy, which means we have to bring back mining. And then Gary Cohn was like, but you don't want to mine. And he says, no, I'm up here. I'm in the office. They're in the mines. That's how it's supposed to be. I mean, I think that there's this, they're trying to make sense of the, you know, the American conservative mind is I think in some ways a fool's errand because they'll just

believe whatever they have to believe in order to exert the maximum amount of power and inflict the maximum amount of pain. It's flexible, right? But the sort of the contours of how Donald Trump thinks other people think are fascinating. He's like, no, those guys are born miners. I'm a born tycoon. And it's a bit like, you know, it's a bit like busy town

where everyone has to be in their right place in the busy town. And the problem with the like whole neoliberal revolution was that everyone got out of place in busy town. The factory workers aren't working in the factories anymore. The people who should be the housewives are doing like a mini skirt dance in Australia. And I'm the only one who's where I'm supposed to be. I have to reorder everybody.

I mean, I just want I want to know who they think is gonna like, I don't know, do like hiring at the factory. They're like, clearly that's gonna be a different boss and no girls allowed. They're gonna like, like do hiring for them for the man jobs in like a tree house where no women are allowed to go. Well, I mean, talking about talking about like hiring for the jobs and the complexity there as well, right? I think the other, the other thing that these guys have done is they have told themselves an insanely wrong story about China for like 30 years now, maybe about 30, maybe 15 or 20, right? Which is that they're like, okay, China is primarily a place that's characterized by low labor costs. That's where the cheap treats come from. But that's like

basically not true anymore, or not nearly as much as it was. Where it's like the reason that the treats can come from there is that there are incredibly high concentrations of skilled capital infrastructure. Like in order to supply the world with disposable umbrellas, an entire city will emerge in China dedicated to the entire manufacturing process of disposable umbrellas. The people, the skill, the physical capital, like nowhere else would. The people, the skill, the physical capital. Nowhere else would the machine for weaving the canopy, the machine that maintains that machine, the machine for making the handles in different shapes,

the opening mechanism, the infrastructure required to send them in and out. In nowhere else, and then all of the administrators who make that, who are actually coordinating that level of complex production, that doesn't exist anywhere else at all. Nowhere.

You certainly can't make that in the States. You certainly can't make it if you've decided that like the idea that all of the possible coordinating and regulating functions of the state are gay and you want to get rid of them. Right. And so it's, um, it's so it goes back to like to the fantasy of the knot that the Nazis had of going back to like being the Bavarian Jomen. That was also an incredibly impossible, evil, ahistorical. But just that one, I think that one comparison, that one insight about how global manufacturing has to work if it's going to be serviced this many fucking people. If you're going to be like, I feel like a disposable umbrella, I will lose it.

That's fine. I'll buy another one tomorrow. It's going to cost $3. Right. How complicated that is versus how the tools that these guys have to set that up. It is as farcical if not more. Yeah. And they don't even have cheap money to do it with anymore. I think this is it though. This is like the reason why it's so confusing to like figure out like the sort of macro picture. Like it's not the sort of case of like, oh, we're trying to make sense of it because we know that none of it makes sense. But it's like even by their own terms, it's like completely incoherent. And it is sort of interesting to like read the people and see how they triangulate between like trying to still be on the Trump

project, but being like, fuck, fuck, fuck, fuck, fuck, this isn't going to work and they know it's not going to work. And like the kind of concessions that have been made are sort of reflective of that. I'm interested to sort of see how much further they go. But like, this is just kind of, it's sort of motivated by, you know, like the best way to describe it, I think, is it's like a guy who's so angry, he's forgotten who he's angry at. And it's just like, you're kind of then just, you're like the cartoon character that just like is swinging your arms around and hoping you hit someone or something that

you don't like. But like, because you're so slow, like everyone can see what you're doing and then you're just like watching you. Yeah. Right? Then you just happen to be a massive guy and so they have to make space for you to do your thing but yeah, it's sort of all... This is what happens when you're completely motivated by hatred and spite and a sense of self victimization that's completely unearned but you're so big that no one can really be like, hey, maybe chill chill out. Stop doing things. Maybe like, yeah, maybe stop hitting yourself by like,

could like rotating your arms around as a boxing technique. I don't know. It's it's literally just a giant guy hitting himself in the face because he can't he can't see a world in which he is not the ultimately good, you know, protagonist of history. I'd also written down a little bit earlier in the episode, but like, like this just sounds like a divorced guy who's just like so kind of stewing in his, stewing in so much hatred that he thinks that everything's against him. And like, you know, it's this sort of classic kind of trajectory of a divorced guy who like

is so like, he kind of becomes convinced that initially it's sort of like, oh, you know, my horrible wife of Venice sort of develops to the horrible family courts and the horrible like, you know, all the horrible media and everything. And eventually again, it's like you go back to like, you were so angry at like everything, you're not actually sure who you're angry at anymore. Right. And like that's as a strategy, I just don't think that's particularly useful or helpful. Yeah. Yeah. It's funny talking about this. And from the US, it's a little bit grimmer too, because everyone here is armed. So you're going to have a lot of really angry divorced guys with weapons. So it sounds like when this doesn't work and inevitably it's like the fault of like

every minority group, that'll be an interesting thing to see. I want to kind of go back to something I kind of think of as one of the bits of a skeleton key for understanding this, which is back to Volcker, right? Which is we got rid of the manufacturing, we've changed our economy to require fewer people because we're producing so many higher margin goods. And the challenge that has been facing developed economies in the global north ever since that change became pretty universal, what do we do with all of the surplus people who are not engaged in these high margin manufacturing or services activities? And I mean, this is why I say

also like this ultimately like, yeah, this the right might have swung might have swung the the blow here, you know, as Hussein you were saying. But like this is an outcome that's been brought about by liberals as much as anyone else, by always standing in the way of answering the question of what do we do with all of the surplus people with anything but probably you should die quietly, right? Because people don't want to die quietly. And any rebellion against that system from the right as well is one that becomes easy to sell. And I mean, that's because like what will become of a country? A question sort of raised by Volcker, it was what will become

of a country that basically lays off most of its workforce? And that also gets answered by the same kind of brutal right winger who sees the interim settlement of you know, US rules, the world's a company town, elites enjoy super profits and clicking buttons. It's too nice for some people. Back to the factories, but this time highly automated, but without the unionization as well. Right. But so many of the lurches to the right have been because the only acceptable answer to give to... And this is why I always talk, whenever we talk about the economy like this, I can never stop thinking as well about culture, psychology, and society, and even like the relationships between political forces,

is that the answer to that question is one that only the right has been allowed to provide. Because ultimately, all of this for someone like Obama or for people like the sort of second referendum campaigners, all of these people who actively stood in the way of answering that question, what do we do about the surplus people in our global North import driven high margin economy, anyone else trying to answer that question was sabotaged. Anyone else trying to answer that question different way was sabotaged. And so it's guys like that who have made this as inevitable and who have created all of that anger by never allowing an alternative to please die quietly.

Yeah. And if you've basically started from the point of delegitimizing any public spending, any public investment, then what is the alternative? There is none. And I do feel like the Obama liberals were like, well, we can't have too much public stuff. There's really not else. I don't know. I'm getting off track here.

But I do, I do think you're, you're totally right. And I do think that a lot of, a lot of these issues are here because there is just sort of a delegitimization of anything other than I go, I clock in a private sector, somebody gives me a paycheck and I help them make widgets or I help them, you know, send emails to manage the guys that make widgets. You know, like I do think that the sort of lack of imagination and lack of appetite again for any other kind of economic structure really has sort of helped accelerate or bring about, you know, this this kind of crisis.

I've seen I think I've seen either you or Joe Weisenthal refer to it as like one weird trickonomics or direct economics, folk economics, because the answer is always the same, right? Which is all of those problems which are bound up in like our economy, our economy's official position for a huge portion of the people in it is that they should just die quietly, is we can fix all those problems without having to look at our ideological third rails. These things you talk about like generational increases in public investment and so on and so on. We can fix all these problems without having to look at our own ideological third rails. All it takes is doing what needs to be done. You can hear the sort of leading

capital in that phrase. And in both the UK and the US, it was saying, the problem is coming from out there. We have to blow up all of our bridges to out there. And then it will just be us in here. And then that problem will somehow go away because there will be fewer immigrants or because we will have the good times back from when there was just a lot of growth, from when there was a lot of excess demand to soak up the infinite laundry machines that we were making. And again, it's the one weird trick because no one else was allowed to look at the other weird trick, which is invest in people having meaningful, good, healthy, happy lives. That

was beyond the pale. Yeah. Yeah. Because then, again, like, yeah, I don't know. It's really interesting because some of this I have to wonder, like, there is a real strain of like, let's discipline the labor force in here. It just happens to be like, OK, like the women who take videos in Australia, that part of the labor force. Getting so mad at five women in Australia that you just machine gun off your own arm.

Exactly. It's so. It's cool that it just turns out to be misogyny once you dig at all. Yeah. And then just misogyny and racism. And then the rest of it is so like. I want a Chinese version of the Australian TikTok. I feel like that would be. Do you remember that week everyone was on Red Note? That's what they were looking for.

Yeah. Well, interestingly, 80% of that Australian TikTok is actually assembled in China. They just ship it into Australia, like screw on the branding elements, and they just slap Made in Australia on it. But like, I want to think of the long run causes. I want to just start thinking of the long run effects, right? Which

is the United States will reshore coffee production somehow. And if that doesn't work, then these things will become unaffordable luxuries. The United States also then enters a period where the main economic relationship driving these kind of whole neoliberal project around the planet, which is China producer of last resort, America consumer of last resort is gone. I have no idea what comes after that. I don't know if any of you do. Oh, I don't know. I mean, something entertaining probably. Maybe, I mean, I don't know, maybe the circular economy will become a thing. Maybe that'll be like the main sort of economic driver. We just borrow each other's stuff.

The circular economy in terms of what like the new Magnificent 7 isn't like Netflix, Metta, Microsoft anymore. It's the new Magnificent 7 is like potable water, a generator you can fix easily. A Toyota Land Cruiser, a gun. Oh, God. A world of a world of YouTube influencers that are like, here's how to fix your generator. I was thinking about this the other day. I was just like, I wonder if MrBeast will pivot to yeah, like survival, like being sort of like a prepper or a survivalist.

He's going to pivot to becoming like a sort of modern day Duke. That's true. It might be like, yeah, the low level of the sort of like the influencers who right now just sort of do like clean food recipes will sort of be like, here's like the best thing you can do with like your ration packs or whatever. I don't know. Man, herbal life is going to make a killing. Yet again, Bill Ackman just fucked by the never goes his way. Down, bad. Yeah, but like that if that relationship goes away, who knows where those supply chains will reorient

towards? At the moment, the Bill Ackman plan of the world forms the united anti-China front seems to be a bit on the rocks as the EU is rapidly deepening its relationship with China, already discussing bringing down tariffs on the actually good Chinese electric cars. You wonder, as you sort of alluded to, might the euro become the global safe haven currency? Right? God knows. Yeah, they're getting closer. Yeah, they issue a euro bond. It's everyone's game. Yeah, no, it is really interesting. I mean, I do think that the way that people have been talking has been like, well, you know, the US, the

US was exceptional, US exceptionalism was a thing, you know, for years and years and years. I don't know if they're talking like post-Bretton Woods exceptionalism or just like past 20 years exceptionalism. But like, regardless, it's not looking so exceptional anymore. And I think people are thinking about COVID thinking about, you know, okay, what is this? You know, what will I have trouble getting? And I think that's a really natural next line of thought. But I do kind of I do wonder I'm like, is this

like a $30,000 iPhone? Or is this like, I don't know, there's just like a bad reception. And then the iPhones just like aren't sent here. It's... It's either a $30,000 iPhone or a $0 iPhone because there aren't iPhones to buy. Yeah. And this is the other question. And again, I don't think... I don't know what the number is here. I don't know how you go about calculating it. But the average quality of life of a normal... Of just like a normal American person, how much of that is based on American exceptionalism? What percentage of the quality of life that you might have is based on American exceptionalism? It's tough to say, but definitely some. Yeah. And I can also see a world where everyone

talks to the US and is like, oh, dear leader Trump, you've done such a great job. And then things just get shittier for the United States. And then this sort of like, you know, Chinese, you know, trade relationships grow stronger. And then the same problems that they're trying to address here only become worse. So like, you know, maybe not $30,000 iPhones, but maybe like, I don't know, 1200 or 1600 dollar iPhones when they used to be $800. You know, nobody can still afford a house because like things haven't fallen apart. But mortgage rates are high. That guy who's like, oh, maybe you'd be able to afford a house

if you didn't buy an iPhone would have a point. Right. Yeah, it's like, it's like the wages are down. Prices are up, credit's expensive, and political rights are being massively abridged at every turn. Someone is... There's an attempt to reshore semiconductor production. God knows how that goes. But if it doesn't, the entire supply chain shuts down, which is a catastrophe because at the moment, everything is computer.

The reason that they're going to sell that new dishwasher every year, right, because they keep having to make new dishwashers every year is it keeps having to grow. And you keep having to buy a new dishwasher every year for some reason. They're now doing that by putting a computer in it and everything else. So if you don't have semiconductors, that shuts down. So there are things you can't reshore, like coffee production. There are things you can't reshore like rare earth minerals, many of which come from China. You can get them from elsewhere, but a lot of them come from China now. And they're saying, we will just embargo you if you do any more chicanery. So there's stuff you can't reshore. There's stuff that you can't reshore easily. There's stuff that you can reshore

easily. That's like low margin industrial jobs like textile manufacturing. Stuff that was just... That was outsourced because Americans were just like, well, I don't want to do that. Right. It's okay. Well, you used to be a budget administrator for a university. The university is now just Trump University or Bovine University or whatever. It's Barry Weiss's university that now you have to go to. You've been fired because your job's been taken by an AI. So you can now retrain stitching textiles. And pair all of that, which is product worker productivity down, pay down, prices up, dollar down, bond yields and therefore credit more expensive. I don't see how any of that is not a complete catastrophe for the social cohesion of the global hegemon.

Should be fine. No, it'll be fine. Oh, okay. I think you're a panikin. I think you're worrying too much. Yeah. Oh, you saw me check on that souffle and then you were like, oh, you're a panikin. The classic panikin pose of kneeling down to check on the souffle with perfect mobility.

Yeah. Well, I called you a panikin because I was talking like an old timey prospect or as in as is my want. Right. And I said, oh, you're a panicking. Yeah, that's going to be one of the last jobs. Old timey prospect. Yeah, absolutely. Maybe there'll be a gold rush. Yeah. Maybe we'll just find new gold and that'll just fix all of it.

Have fun. All of you working sewing the thousand dollar pairs of Jordans. I personally will be down the mine. Yeah. I can't wait for our new extremely shittier, or even just moderately shittier for years and years and years continuing. Yeah. And I guess my last question on this, just to tie it together, is a lot of this has just been like irrevocably broken, right?

Because this is the thing I keep thinking about foreign policy or the economics of this is if you had some kind of like backlash to the backlash and some huge swing leftward and I don't know like AOC or Tim Walls or whoever else gets elected president with like a kind of like bath party majority and goes okay well America's back to what extent can that even possibly be true? Who would trust in the US in markets or Nato or anything else if in four or eight years time it can all just go back to this again? Yeah, and that's the thing. That's why, you know, the sort of COVID... It's funny, just talking to you guys, I'm like, you know, the from this perspective, the almost the COVID style, like sharp sudden disruption starts

making a little bit less sense. Because I don't think that other countries are going to be like, actually, just fuck you, we're gonna embargo you entirely. I think that they're like, oh, well, maybe, you know, we get an AOC walls thing, and they're gonna be like, okay, well, here you go. We gave you what you want, but then everything gets worse because they're not actually gonna be doing that. And then of course, when you do again, get an AOC or walls or somebody in,

I do think that, at least when you're talking about global trade, when you're talking about like US exceptionalism or whatever, like that's not coming back. Like, it's, because again, a guy can just fucking decide, actually, I'm gonna I'm gonna make this happen. And anyone who disagrees with me is going to El Salvador. You know, like, I mean, I don't know. Yeah, so so I do. I don't know about the like, immediate disruption, everything falls. But like who? I mean, who knows? But I do. I do have trouble seeing anything other than things get shittier.

We make maybe make more things here, but those things are shittier and more expensive. And the jobs are shittier and people are less happy. And then they just take it out on, you know, women and minorities and people are less happy and then they just take it out on, you know, women and minorities and people who are more vulnerable, which is a nightmare. So good times, guys. I mean, even then, that depends on that whole, that situation, right, of AOC, Tim Walz, you know, ride some backlash to the backlash and so on and so on in theory. That depends on them being allowed to take office.

Yes, exactly. Right. And again, if you're just zooming it all the way back, right? Well, we said at the very beginning is that I always sort of struggle a little bit with talking about this because trying to talk about it from, understand it from the perspective of the people who are doing it can sound like an endorsement. I don't think that these people are are or were ever like good or that their economic system was particularly at all good for anybody. But to understand how a business leader and economic planner basically, right? Someone who holds capital is just the economic planner of like our time. For them to make a decision to deploy capital is things need to be predictable and those things just no longer are.

And the idea, the only reason that they ever were as predictable as they were was because stuff like this hadn't happened. And now that it has happened, it can't unhappen. The bell cannot unring. Yeah, the only way you can restore stability is some kind of change of system that makes it impossible for something like this to plausibly happen again, which, I dunno, the wind whispers the name of climate Stalin, I dunno what to tell you. Yeah. Yeah.

Balkan America. Like, at this point, it could be fucking anything. All that is completely certain is that whatever came before is done. Yeah. I hate when the old is dying, and I hate even more when the new is yet to be born, you know? Yeah. Like, the period of time before something is born is a real slump.

I'll tell you that much. We are in the maternity ward waiting for the new to be born, and we're exhausted. Let me tell you... And I am taking advantage of the fact that my wife does not listen to me. Sure. Don't tell her if anyone knows, don't say anything. It was I'm getting into a lot of trouble. I mean, you know, but I will say I look forward to the future when when the kids

are idolizing the coffee shop era of America, when coffee beans are a thousand dollars. Grandma, what was Starbucks like? And you go, yeah, it was wonderful. Imagine describing, oh, there was a Starbucks on every corner. Like, wow! Well, yeah, well, like, well, this is the thing, like America, America, like my, my first introduction to the United States when I, when I went for the first time was that America runs on Dunkin because there was, because it said it on the Dunkin Donuts at the airport. But what happens if America doesn't work on, run

on Dunkin anymore? God. What does it run on? Like what does it run on except for resentment and lost dreams? Yeah. Well, you know what? Maybe you could fortify one of the Starbuckses and then, you know, you can use that as a... Dunkin dialectic. Oh my God. I feel like this one, just one more prediction, which is that like sometime in the future, they'll be, you know, like how you have those sort of like weird American diners in London, but like don't quite capture like the American. I see where you're going. But it'll be like, but it'll be like Starbucks, but it'll be like in China. This is what an American Starbucks used to be like, but actually it's a British version of the Starbucks. Yeah, the only place I'm going to be, I'm going to be 90 years old and drinking in the like living history Starbucks reenactment.

You're just going to be, you're going to be 90 years old and sort of just walking slowly around Guangdong. Yeah. Just being like, oh boy. The barista will dead name you, but like that's part of the, that's part of the authentic element. All right. All right.

We've been going long. So I just want to say, Alex, thank you so much for returning to the show for a sort of more discursive talking around the idea episode, which is I think the only way to discuss what's going on right now. Because it could change tomorrow. It could be different now. We'll see what's happened when we log off.

We've been recording for about an hour and 20 or so minutes. Let's see what's terrifying now. Yeah, every everything now, every time I look at my phone, feels like coming out of a cinema after a long movie. Yeah, every it's like, oh, oh, they're gutting the federal deposit insurance program just at a time when there might be a huge recession. Cool. OK, all right. All right. We got to go.

Alex, once again, thank you very much. Where can people find your Substack? It's the hedge.substack.com with two E's because the hedge was taken. Yeah, by the pesky gardeners. But you know, I know. And also this is the free episode. There will be a bonus episode that is five American dollars per month to get. God knows what that will be worth at some point in the future.

Just warning you now, we may change that two pounds. It won't be five pounds. Why not one is my question. It will be, at the time of recording, let me just check, eight, no seven renminbi. Anyway, anyway, look, we've gone long. Thank you very much to Alex. Thank you very much to listeners. Thank you very much to listeners.

And we'll see you on the bonus episode in a couple of days. Bye, everyone. Bye. Bye.