Unveiling a Financial World Order: Challenging the 'Own Nothing' Paradigm | Carol Roth

[00:00:01] This isn't your average business podcast, and he's not your average host. This is the James Altucher Show.

[00:00:19] Carol Roth, so great to finally meet in person and your book You Will Own Nothing, great book. I want

[00:00:26] to find out all about it. There's a very controversial views in it that are very interesting and

[00:00:33] I'm really looking forward to you answering all my questions.

[00:00:36] Yes, I'm excited to be here and I wanted to say again we talked a little bit about this

[00:00:40] before, but we are both part of the Big Hair Club. Everyone knows I'm an advocate for Big Hair.

[00:00:45] We call it Laysay Hair on Twitter, so you are now part of the Laysay Hair Club.

[00:00:50] Do I get a membership? Can I use that at the airport?

[00:00:54] Like an ID card?

[00:00:55] Yes, you get to go through TSA Pre-Check. They put you in front of the line for that.

[00:01:00] Excellent. Well, now your title You Will Own Nothing. It's a very interesting title because

[00:01:08] at first glance, I kind of want to own nothing actually. From a point of view of lifestyle,

[00:01:15] imagine if you don't own a home, a car, maybe you own a couple of t-shirts and a pair of pants

[00:01:21] and whatever. I used to live like this for a while for about a couple years. I just lived

[00:01:26] from Airbnb to Airbnb. I just had one bag. I threw out all of my 40 years of possessions

[00:01:33] and lived like this for a while. It wasn't such a bad lifestyle actually,

[00:01:36] but I know you're talking about it from a more global financial perspective that this could be

[00:01:43] a very bad thing. From a lifestyle point of view, I didn't have responsibility for anything. It was

[00:01:48] great. That's exactly the buy-in that they predictors of You Will Own Nothing want to get

[00:01:54] from people. If you go back to the World Economic Forum, which is littered with the global

[00:02:00] business and financial elite and political elites, the number one prediction in this video,

[00:02:05] the top eight predictions for 2030 is you'll own nothing and you'll be happy. They're actually

[00:02:12] trying to sell this lifestyle, this carefree wouldn't it be great to not own anything?

[00:02:18] You and I both know, James, that when you own things, that's how you create wealth. Wealth

[00:02:24] is derived from ownership. You own assets that have the ability to retain value or appreciate

[00:02:30] and value. I think this is a very important concept actually in personal finance. I don't think

[00:02:36] you can really generate wealth from just making a salary or it's very, very difficult. You have to,

[00:02:43] like you say, own stuff and get chunks of money that are taxed differently than income is.

[00:02:49] Even if you make, let's say, what's a good number that Americans make? 200,000 a year.

[00:02:53] Let's say you make 200,000 a year. 40% goes straight to taxes. In some places like New

[00:02:58] York City, it's over 60% goes to taxes. But let's just say 40%. So now you're left with 120,000.

[00:03:05] And that's your rent in New York City, right?

[00:03:07] Yeah. So if you live in a city that's paying you 200,000, then your rent is going to be like

[00:03:13] 6,000 maybe. So that's 70,000. So you're left with 4,000 a month in expenses.

[00:03:19] So you're not going to be eating out dinner or taking any vacations or anything like that.

[00:03:22] Like it's very hard to save money on income even if you make an enormous salary.

[00:03:27] It's very true. And I think going back to your lifestyle piece that you opened it,

[00:03:32] I think there's also the differentiation between stuff and assets. People think that you go out

[00:03:37] and you spend on a credit card and you get jeans. Maybe they make you look good, but that's not

[00:03:42] really an investment. That's not something that's going to have the opportunity to

[00:03:46] go to work for you to appreciate in price. But this idea of not having property rights,

[00:03:53] to not have private property, that has been the great enabler of wealth not only here in the

[00:04:01] United States but certainly around the world for like the past 70 plus years. And so it's a really

[00:04:08] important thing. And I think it's also a question of if it's voluntary or if it's by somebody else's

[00:04:15] mandate. And that's the difference. You have assets and you said, oh, well on the stuff side

[00:04:20] I just want to have something more carefree. But if that was forced upon you, that feels very different.

[00:04:26] Yeah. So forced upon me and you mentioned the World Economic Forum. What is the World Economic

[00:04:32] Forum? Like, and I'll be honest, I don't know much about it other than occasionally you see

[00:04:36] Larry Page, like Mark Zuckerberg, and then Angela Merkel, Bill Clinton shows up there,

[00:04:42] Bill Gates. What is this? Like, is this a real thing? Is this an organization? What is it?

[00:04:49] Yeah, it's a non-governmental organization that was founded by a gentleman with an engineering

[00:04:54] background named Klaus Schwab. It used to be the European Management Forum and this was back in 1971,

[00:05:01] I believe. And he has had these ideas around the concept that I have a big problem with called

[00:05:07] stakeholder capitalism, whatever that means. And the idea that businesses have these other

[00:05:13] stakeholders that are not involved with the business but somehow should have a say on what

[00:05:17] goes out with business. And so what happened in kind of the mid to late 70s is there were a lot of

[00:05:23] geopolitical issues. You know, you had the war between the Arabs and Israel. You had the oil

[00:05:31] embargo and all these things that were going on that brought geopolitics to kind of the forefront

[00:05:36] of what was happening around the globe. So they were able to start attracting more political

[00:05:42] people into this European Management Forum and they changed the name to the World Economic

[00:05:46] Forum. And I think originally it was kind of this, and for some people I think it still is,

[00:05:52] kind of this snotty boondoggle. They have these events in Davos, Switzerland where very

[00:05:58] wealthy and well-connected people go together and they hobnob. But somewhere along the way,

[00:06:05] through all the connections, and they're very well connected with a whole group of people

[00:06:10] from the United Nations to sort of individual entities, big financial players like BlackRock

[00:06:17] and whatnot that they started putting out all this quote-unquote thought leadership. And a lot of

[00:06:23] it if you really kind of get down to the core is really bananas at the best and kind of scary

[00:06:30] at the worst. So my take on it is that there are a lot of people involved who probably don't

[00:06:38] have any idea of these other things that are happening because there's so much information

[00:06:44] that's coming out of this entity. And I think their budget is something like $300 million

[00:06:49] a year, so it's a pretty substantial organization. So if they get that from membership fees,

[00:06:57] people like us pay for through our tax dollars go figure that's both under

[00:07:03] President Trump and Biden. We've paid millions upon millions of dollars to these organizations,

[00:07:09] but mostly it comes from their membership as well as people who are buying tickets on a one-off basis

[00:07:16] to this Davos event to supplement their income and be a part of it. And I have to say I've been

[00:07:22] a useful idiot for the World Economic Forum in the past because again if you don't dig into

[00:07:27] these things it just sounds like oh it's a bunch of business people and big ideas. I went

[00:07:32] to one of their events in New York probably 10 or 13 years ago and blogged about it and said oh this

[00:07:39] is you know they're talking about you know whatever a person's book had come out. And it seemed very

[00:07:43] innocuous, but there are these crazy ideas and then you get these people who work in businesses

[00:07:50] who don't really kind of understand that underlying craziness bring them back and then

[00:07:55] start shepherding them into sort of the political sphere as well as the business

[00:08:00] sphere and they really get entrenched. There's this crazy video from Harvard's Kennedy School

[00:08:06] where Klaus Schwab, the head of the World Economic Forum is talking about how he's looking at something

[00:08:12] called his Young Global Leaders Program and that he's looking at all these these politicians that

[00:08:18] were part of it and he literally says you know and then we penetrate the cabinets.

[00:08:23] And it's like okay you know when you start saying things like we penetrate the cabinets

[00:08:28] like at least one eyebrow should go up and like what exactly do you mean by that? But so many leaders

[00:08:35] you know whether it's Justin Trudeau and Christia Freeland up in Canada or former chancellor of Germany

[00:08:41] Angela Merkel, all these people have been in and around these programs getting you know at a minimum

[00:08:48] exposure to if not indoctrinated by these ideas. What are some of like the craziest ideas you've

[00:08:54] heard spoken about there? There are so many of them. You're just going through the eight predictions

[00:09:02] that they had in 2040 or for 2030 you know one of them is that the US is no longer going to be the

[00:09:09] world's leading superpower which sounds crazy on the surface but probably isn't that crazy in

[00:09:16] reality. We're going to eat less meat not as a staple but as a treat people who are vegetarian

[00:09:23] might go that's a great thing but for many of us it's goes yeah I don't know that that makes that

[00:09:27] much sense. But you know all kinds of things about fleets of autonomous vehicles, faves trying to get

[00:09:35] the sharing economy around cars and getting rid of car ownership. But that might occur right because

[00:09:41] that's like the dream of Tesla for instance which is that and you mentioned in the book

[00:09:48] 90% of the time your car is not being used so once there are autonomous like Tesla's dream

[00:09:54] then you could rent it out to people 100% of the day. Yeah and it's one of those things a lot of

[00:10:00] this stuff sounds really good in theory until you put it in the context of your freedoms

[00:10:05] and what that means and the level of control and we've been through a period of time

[00:10:10] over the past few years which really changes our perspective on this. You know if you had

[00:10:14] asked me or told me some of these things you know 10 years ago I probably would have been like

[00:10:18] eh you know big deal who cares. But I also in February of 2020 when COVID was just you know

[00:10:25] starting to go around China and some of Europe you know talked to my husband about it and said

[00:10:30] do you really think they could shut down the United States? And I'm like no there's no way they

[00:10:34] could do that. So things have really shifted in terms of what could actually happen versus you

[00:10:42] know what we might have thought would happen I think over the past couple of years.

[00:11:02] I was terrified when the shutdown I mean I was terrified of COVID like many people but I was

[00:11:06] terrified of the shutdown of the economy because things always start with good intentions like oh

[00:11:13] we'll shut it down for two weeks nobody will get sick COVID's over like because that's the

[00:11:18] incubation period was two weeks and so if everybody just stays inside and holds their breath

[00:11:22] for two weeks virus will be gone. But the idea that the government can shut down every almost

[00:11:29] every business in America and they did it for you know in many places for over a year maybe longer

[00:11:35] I mean they just ended the quote unquote emergency that's scary because what's the next good intention

[00:11:41] that's going to shut down every business? I mean people went broke families went broke

[00:11:45] businesses that have been around for generations went broke you know not everyone who owns a

[00:11:49] laundromat is a rich gazillionaire like these people their families went broke.

[00:11:54] I'm a huge small business advocate and one of the interesting things that I studied actually

[00:11:58] wrote a previous book about this was that they actually didn't shut down everyone and that's

[00:12:04] what allowed this to continue for so long is they shut down about a third of the economy

[00:12:09] and it was not based on data and science it was basically based on political clout and

[00:12:13] connections so you could get your dogs nails done and it's fur groomed at a big box store

[00:12:21] but two doors down you couldn't get your nails done and your hair groomed because it was a

[00:12:25] smaller footprint and so they were making these decisions willy nilly so many examples of them

[00:12:32] and that was really the scary part because the people who were wealthy and well connected

[00:12:36] I believe that they would have shut down Amazon they would have shut down the grocery stores

[00:12:40] they wouldn't have provided you know fed support for the market the big companies would have felt

[00:12:45] that pain and they would have said absolutely not like we're done with this and this whole thing

[00:12:51] would have been over within two weeks probably but the fact that they didn't do that and they let

[00:12:56] the big companies benefit they let wall street benefit and the wealthy and well connected

[00:13:00] benefit while the average American and main street struggled that allowed this to perpetuate

[00:13:07] and allowed the government to really pick winners and losers and that's kind of this

[00:13:11] common theme here that we're seeing the picking of winners and losers were they using of you

[00:13:16] know kind of this proxy for social credit as a mean to take away your rights and your property

[00:13:22] rights in that particular case you know we saw with COVID if you didn't get vaccinated you

[00:13:28] couldn't go into a restaurant you were maybe called names on social media in some cases they

[00:13:34] took away your job and as we talked about they actually closed down certain businesses so these

[00:13:39] are you know your opportunities to create wealth and in some cases the actual wealth creating

[00:13:44] mechanism that they were able to take away and that sets a really bad precedent for this concept

[00:13:52] of ownership as well as your personal freedoms shutting down people's rights to make a living

[00:13:58] and their property rights i.e. shutting their businesses down that's clearly against the constitution

[00:14:04] and in places where it was fought like Minnesota Wisconsin I think people on the side of the

[00:14:09] Constitution won like you were allowed to keep your businesses open in those states

[00:14:12] and why wasn't it fought more like particularly in a lot of places in the country that are

[00:14:18] considered smart this is probably the lingering question like that that you know $64,000

[00:14:26] or now $64 trillion with the with inflation question is why didn't we get people fighting

[00:14:33] tooth and nail and more pushback and I think that's the really scary part because if you think about

[00:14:39] other central planning initiatives including the ones that we talk about in this book the

[00:14:43] fact that you don't have people marching for this kind of stuff and particularly

[00:14:49] Main Street America who's gotten just screwed over you know one thing after another they're

[00:14:54] shutting down of their businesses you know the crazy inflation the you know big transfer of

[00:15:00] wealth with zero interest rate policy from Main Street to Wall Street you know we're not seeing

[00:15:05] any marches on Washington or the Fed or anybody anybody calling for anything in any meaningful

[00:15:10] way it's just like oh boy this is hard and I think that's why we really do need a movement

[00:15:16] sort of this battle plan to fight back because otherwise the people who are making these

[00:15:23] decisions and they are the powerful and well connected particularly as we're seeing changes

[00:15:28] in the global landscape they're just going to do more things to make sure the people who are already

[00:15:32] wealthy and well connected come out on top and that really is what at the end of the day leaves

[00:15:37] you with nothing but in the one thing that's always been great let's say about the U.S. and

[00:15:43] let's say the U.S. version of capitalism is that there's no real caste system like maybe

[00:15:48] that seems like there is like you know legacies get accepted to colleges more easily and stuff like

[00:15:55] that but in general anybody can come up with an idea it's cheaper than ever to start a business

[00:16:01] so and to move up in this kind of quasi financial caste system like it's not like a real caste

[00:16:08] system there is social and financial mobility and do you think that's going to start to come

[00:16:13] to an end yes this is you know why this is so important and we have to fight because that is

[00:16:19] based on the system of property rights if you go back to you know England and even before that

[00:16:25] before they kind of institute of the protection of property rights how did assets pass down

[00:16:30] right they came from you know somebody who's wealthy well connected to pass down to their

[00:16:34] heirs and it was this very vertical type of you know creation of wealth and then everybody

[00:16:41] else didn't participate once we had property rights and what you were doing was was protected

[00:16:46] as well with technological innovation then you had this horizontal transmission of wealth where you

[00:16:52] and I could trade our services I could invest in something and and we could each benefit from

[00:16:59] our own investments and really build up that opportunity to create wealth and it is probably

[00:17:05] the part that scares me the most because the U.S. is really the only place in the world

[00:17:11] that has this you know fantastic American dream and opportunity and promise and it's why people

[00:17:16] across you know the globe come here to try to seek out that opportunity when we've had shifts

[00:17:22] in financial orders before whether it was the the Dutch to the British or the British to the U.S.

[00:17:27] in terms of who was at the pole position and the global financial economy the group that

[00:17:32] was waiting was a you know sort of a better option or at least a place where you could have

[00:17:38] that opportunity if you think about if we're no longer the center of the global financial

[00:17:43] universe and we're not standing for that then who is you know the leading contenders are these

[00:17:49] bastions of tyranny and you know kind of dictatorial rule and so I think it's really important

[00:17:56] that we preserve this concept of the American dream for everyone here in the U.S. and around

[00:18:02] the globe as well and so what's the path because I think like you say the alternatives are not so good

[00:18:10] I think that's actually at the end of the day going to win be the theory that wins out which is that

[00:18:16] we can't switch because you know that we meaning the globe because the alternative is no good

[00:18:22] and at the end of the day everybody realizes that but but like what do you think is the

[00:18:26] path towards problems from here yeah so I mean there are the people who are talking about this all

[00:18:33] the time there's probably a half a dozen different potential outcomes and obviously this could all be

[00:18:40] upset by a major geopolitical events you one thing I noted in my research was that you know

[00:18:46] anytime we've had a switch of the global financial order it has been preceded by war certainly

[00:18:52] not all war has preceded a new global financial order but that has been sort of the event to be

[00:18:58] that catalyst for change so that's something that could upset it but one of the things that's

[00:19:03] happening now around the globe is that you're seeing these different blocks form you know we have

[00:19:07] sort of the the g7 allies and then there are the BRICS countries the brazil russia

[00:19:13] india china south africa and now they're you know trying to bring in other people in there

[00:19:19] and they're trying to move away from the dollar because frankly you know with our responsibility

[00:19:26] as the holder of the world reserve currency the fed has this dilemma it's called triphan's dilemma i'm

[00:19:31] sure you're familiar with where you have to make decisions do you do what's right for the domestic

[00:19:36] economy or do you hold the dollar stable for the global economy what does it mean to be the

[00:19:41] global reserve currency so it means that most of what happens in the world is done in dollars

[00:19:46] so if you think about something like oil historically for the past you know it's kind of

[00:19:51] since the 70s ever many years that's been 50 some odd years basically everybody prices in dollars and

[00:19:59] things like oil energy and food are all priced in dollars so when countries trade they don't

[00:20:06] trade in their own currencies they actually trade in dollars and end up having to to settle

[00:20:11] from there and the challenge with that is that if you don't hold the dollar stable and all of a

[00:20:17] sudden it requires more dollars to buy oil and to buy food well that becomes an issue for these

[00:20:23] other currencies and these other countries it becomes a national security and an economic

[00:20:29] issue for them because now it's you know they're they're basically spending more to be able to

[00:20:34] get you know the basic things that they need in terms of commodities so normally in previous periods

[00:20:42] the Fed would do what it had to do and we saw this with under Fed chair Volcker back in the 80s

[00:20:47] where he took the interest rates up really high in order to bring that stability back to the

[00:20:53] dollar bring down the price of oil bring down the price of commodities priced in dollars

[00:20:58] so that you know from a global standpoint that dollar was stable and now our Fed has amazingly

[00:21:04] done neither they haven't held it held it stable here in the US they haven't done it on an international

[00:21:10] basis and these countries are fed up as I said it's a security issue for them so you're seeing

[00:21:16] these other countries you know China is trying to get Saudi Arabia to sell them oil and let

[00:21:21] them buy it in their currency in their yuan and so you may end up seeing these different

[00:21:26] alliances across the globe you might see something like what was originally proposed

[00:21:33] at Bretton Woods before the dollar was named sort of the the global reserve currency where you have

[00:21:40] a basket of currencies or maybe you have some commodities in gold and other precious metals

[00:21:46] that end up backing a currency so there are a number of different scenarios and it doesn't

[00:21:52] mean that the dollar goes away or that the US goes away it just means that we don't have the strength

[00:21:58] we don't have the opportunity at the government level to to finance their debt and expansion

[00:22:04] cheaply that we don't maybe have as much access to other products and that our lives become

[00:22:09] more expensive so the period of prosperity that we've lived through here in the US

[00:22:15] and like we said that kind of flows out to the rest of the world because we're so important

[00:22:20] it could just mean a step backwards for everyone and I don't think that's something

[00:22:24] that anyone wants to see happen we want to at least maintain if not you know move forward as

[00:22:30] we live through this period of prosperity that has done that the idea that we're going to move

[00:22:34] potentially backwards and life is going to get worse and harder isn't really a great outcome

[00:22:40] in 2023 right and so the idea is like let's say everybody has to buy their oil in dollars

[00:22:48] every country has to buy oil in dollars which is called the petro dollar and it's been as you

[00:22:53] mentioned the policy for the world since the 70s pretty much and what that means for the dollar is

[00:22:59] that if you're if you're england or germany say you have to have a lot of dollars in your banks

[00:23:07] in order to buy oil for germany so that means you have where do you get those dollars well

[00:23:11] you have to give the u.s government money to get dollars by the treasuries right because at

[00:23:17] those at least you earn something on them so yeah you're sitting on these reserves so to speak

[00:23:21] and and so that means the demand for the dollar goes hot is high so that keeps that's sort of this

[00:23:28] natural way it costs low exactly and and it keeps our inflation low like like and so

[00:23:34] the argument might be that if everybody's buying oil in the yuan the chinese yuan for instance

[00:23:41] the world won't be around to stop our inflation from happening like our inflation

[00:23:46] can be much greater than it is now and that's that's one potential problem another potential problem

[00:23:51] is that countries won't have to be as diplomatic with us because they won't need our dollar they won't

[00:23:57] if germany has a lot of our treasuries they want the u.s to economically do well so the u.s

[00:24:02] doesn't default on the money we owe them and i'll point out one other thing that happened

[00:24:08] right that this kind of one of the reasons this is all sort of falling apart has been a

[00:24:12] long time but a really watershed moment is what happened when russia invaded ukraine

[00:24:17] that we went through all these financial sanctions so we kicked we kicked russia first out of the sort

[00:24:22] of global payment settlement system but then we did something that has never been done vis-a-vis a

[00:24:27] major economic nation before is we freeze we froze the access to their reserves so basically

[00:24:35] they had held a bunch of dollars and we went nope sorry you can't have that and so who was to let the

[00:24:42] u.s have the reserve currency he forced to do business in dollars just to allow the u.s to say no

[00:24:49] you can't access that i mean it was an absolute insane thing that wasn't didn't happen through

[00:24:55] congress it was you know biden and his administration kind of made this off-the-cup

[00:24:59] decision and by the way a couple other of our ally central banks the ecb and bank of its

[00:25:04] pan also did the same thing and that was really i think one of the key

[00:25:10] it kind of points in time that if you're somebody who maybe you have some things you want to do that

[00:25:15] aren't as friendly to what the u.s wants you to do now all of a sudden the person who's in charge

[00:25:20] of the game isn't going to let you play that's a huge huge issue yeah so so potentially

[00:25:27] people could look at the situation and this by the way is not any comment on

[00:25:31] the war with russia and ukraine because i was obviously it didn't stop the war from happening

[00:25:36] so it happened anyway but this weaponizing of the dollar countries can look at russia and say hey

[00:25:42] if it happened to them it could happen to us and so they might be more open to another reserve

[00:25:48] currency but my my push like a few months ago i was really nervous about this and that weekend

[00:25:54] this is like i don't know six months ago there were oil transactions done in the uan there was

[00:25:59] oil transactions done in the brazilian real but then i thought who the heck wants to hold

[00:26:06] the brazilian real as their major like like right now i still would say there like no one really

[00:26:13] china may be growing fast and whatever you know playing a bigger role on the global scale

[00:26:19] nobody wants to hold the yuan though ultimately i think yeah well let me tell you what they're

[00:26:23] doing so that i completely agree with you so that there have been all these people who have

[00:26:27] forecasted that china is going to be huge and it's going to be the yuan and i agree it's a communist

[00:26:31] country nobody wants to hold i mean if you don't trust the us with your dollars do you trust china

[00:26:36] with their yuan right no so here's what they've been doing they have been loading up on physical gold

[00:26:42] and they are now offering credible physical gold settlement so if you trade in yuan at any

[00:26:49] point in time it's not a backing it's not like a one for one but if you trade and you

[00:26:53] say yeah you know i want to hold this anymore you have that opportunity to then retrade that

[00:26:59] into physical gold and that's what they're using as this kind of de facto backing for their currency

[00:27:06] so let me ask you this though like so china then will say hey you can either have yuan or gold

[00:27:10] like what so so you trade in yuan right and so you're holding yuan but they say if you don't

[00:27:15] want to hang on to that we have this exchange well that will then exchange the yuan for gold

[00:27:20] so you still have to make the initial trade but the settlement is done then okay you can have the

[00:27:25] gold my pushback on that is that there's not enough gold in the world right and this is why nixon got

[00:27:32] us off gold is because the u.s was in such debt because of the vietnam war and and the great society

[00:27:37] programs back in the 60s that we just didn't have enough gold to pay our debts that we got off

[00:27:43] the gold standard the rest of the world followed it depends on the pricing of gold right so the

[00:27:48] pricing of physical gold in particular has been suppressed because of the kind of paper gold

[00:27:53] trade the reality is if you let gold go to you know what it probably would be or they do a repricing

[00:27:59] of it then that changes the system and i think that's one thing that people are projecting is

[00:28:06] again one of many possible outcomes is that you see that major repricing in something like gold

[00:28:12] or that it ends up being a basket of currencies or as we've been talking about you know that you

[00:28:18] write in the book you're something like a central bank digital currency that maybe has some sort of

[00:28:23] a backing of a basket of currencies and commodities and precious metals and whatnot behind it so

[00:28:30] i you know i think that the form that it takes is definitely very up in the air and we know

[00:28:36] that it's chaotic i mean after britain wood took 15 years to kind of transition from the pound

[00:28:42] sterling being the reserve currency to the us really you know kind of being at that center

[00:28:48] so that's a messy period that people have to to get through and you know we don't know what that

[00:28:54] looks like but anything that is going moving in that direction could cause a lot of chaos for

[00:29:00] people this is great thank you for responding to my different pushbacks my next pushback on

[00:29:05] this is that although probably our biggest export is the dollar our second biggest export is is all

[00:29:11] of our innovation like yeah there's china still can't really compete with us in genomics ai uh any

[00:29:20] kind of automation internet like all these technological innovations from the past 100 years

[00:29:26] it all comes from the us like no china's not even close nobody's close i guess the question

[00:29:32] then and it kind of goes back to the the the thesis the kind of the haves and have nots is

[00:29:37] if you look at the technology landscape today and the really the big tech companies there's a

[00:29:42] handful of tech companies that sort of control everything and if you think of their market

[00:29:47] caps i mean the market caps of the biggest tech companies are more than the gdp's of most of

[00:29:53] the countries in the world many of the the tech companies have more users than countries have

[00:29:58] people so there are a handful of people who are going to benefit the question is does that

[00:30:06] flow down to every american and i think that the what we're seeing with the this sort of

[00:30:12] transfer of wealth that's been happening and this idea of people not owning anything

[00:30:17] is this barbelling of the population where you have a small group of people who are going

[00:30:23] to do very well that's what they're trying to do but what does that mean for everybody else

[00:30:27] in the process and i think that's got to be the level of concern because we did have this this

[00:30:34] period of prosperity where people were doing well and able to live that american dream

[00:30:39] that's becoming harder and these signposts are really taking us in a way that looks

[00:30:45] potentially kind of bleak here and so again as i said it doesn't mean america is going away

[00:30:50] but if there is some resetting of the financial order who is going to be the one that benefits

[00:30:57] and you know if that's done in some sort of a debt jubilee or a marking up of gold or

[00:31:03] you know with different silos or god forbid a war that changes that around there are people who

[00:31:09] are going to come out on top as has happened every time this has happened historically you

[00:31:14] know this is not something that we haven't seen before we've seen these these kind of rises

[00:31:18] at falls of financial empires and you know there are people who do very well with it but

[00:31:24] that's sort of the point is that the people who see this coming who are the students of history who've

[00:31:29] like uh this rhymes a lot with what i saw before with britain with the dutch with roam back in the day

[00:31:36] i gotta make sure that i'm gonna do really well and then i'm putting myself in a position to

[00:31:41] succeed and you oh you should get really comfortable with non ownership it'll be really great for you

[00:31:47] and it's that separation which i think we have to be really cognizant of because it's not good

[00:31:53] for the average person and just from a stability standpoint we know throughout history that doesn't

[00:31:58] work out too well either so what's the path to main street america doesn't own anything i think it's

[00:32:20] really a change in the way that they approach their lifestyle i know people don't like to hear

[00:32:26] this and this is you know advice that you might hear during any time but i think it's even more

[00:32:30] important now is really kind of rejiggering and putting yourself on a personal austerity plan

[00:32:37] for your spending and taking whatever you can and making sure that you do have some level of hard

[00:32:43] assets and obviously it's going to be different for everybody you know whether that is a home

[00:32:49] whether that's precious metals you know i know folks like you like digital assets things like

[00:32:54] bit bitcoin cryptocurrency um and you know other other potential assets that you can actually

[00:33:02] have ownership and have that opportunity for appreciation stocks businesses and the like

[00:33:07] and you have to rejigger the way you think about things because you know we are a consumeristic

[00:33:12] nation but consuming is different than taking your money and investing in it and we were talking

[00:33:19] a little bit earlier off camera about just shifting lifestyles too you know if you're in a city

[00:33:25] where you can't afford that house and you're paying rent and you're making somebody else

[00:33:30] wealthy along the way maybe it's a shift and you're living in a different location where you do have

[00:33:36] that opportunity to participate in the american dream yeah that's so interesting because like for

[00:33:41] instance covid has changed lifestyle a lot like there's now work from home and remote work and

[00:33:48] don't you think that i mean i'm hoping that some of the bad things that happen are going to be

[00:33:54] outweighed by the good which is that the talent and innovation that would happen in places like

[00:33:59] new york san francisco la chicago is going to disperse now throughout the country and so people

[00:34:05] are going to move to dallas or denver or atlanta or salt lake city or whatever and that's what we're

[00:34:13] kind of seeing happening is that there's a net outflows from major cities and that inflows to

[00:34:17] this sort of second third like like cincinati right now is the fastest moving real estate market

[00:34:23] so it's like a third or fourth care city that is booming because of these outflows from the major

[00:34:29] cities and that seems like ultimately like a net good thing for the country that that that talent

[00:34:33] gets dispersed and money gets dispersed like that i mean i'm all for decentralization like

[00:34:39] one that's done again by your own agency in choice and not like you felt like you were forced

[00:34:43] into it because of a bad situation created by government mandate but i do think that that

[00:34:49] you potentially could be a silver lining that we see here when we do see that this type of dispersion

[00:34:54] but i think the other thing that's important to realize too and i think this is part of our

[00:34:59] whole discussion here is that not everybody in america is the same and people like you and me

[00:35:04] may have the opportunity to work from home and have a lot of flexibility but there are a lot

[00:35:10] of people who can't you know we have a 70 service based economy a very large part of that

[00:35:15] requires you to be performing services somewhere other than in your home and so you know i see

[00:35:22] friends and people that i talk to and you know kind of counsel about these issues and they're

[00:35:28] like what do you mean this work from home trend like i can't work from home i'm cutting hair i'm

[00:35:34] working you know as a janitor i'm working in a hotel like this is never going to be an option

[00:35:40] for me so you know it's it's easy for us you know one especially for the people who are in

[00:35:46] these kind of bubbles of hey we have this great flexibility my friend carol markowitz i think

[00:35:52] calls it the the pajama class or the laptop class something like that you know that that has lots

[00:35:58] of options which is great but there are so many people around the country that don't have those

[00:36:03] options and again the division of the haves and have nots that picking of winners and losers

[00:36:09] has really been a bad thing for our country and for you know just the outcomes for for the every

[00:36:15] american and so i think we need to be cognizant of that as well so how do we how do we you know

[00:36:23] avoid this because again it was so easy for the us to just shut down the entire economy

[00:36:30] and think there's going to be no consequences obviously we see the consequences with inflation

[00:36:35] with displaced workers with with everything it's going to take years to really understand

[00:36:40] the economic effects of covid like you know the effect on major cities having these outflows like

[00:36:45] the downside is that all commercial real estate in major cities is being flushed down the toilet

[00:36:50] right now like like in san francisco people who own like malls and major office buildings are

[00:36:56] literally just handing the keys back to the bank and saying hey we got to go you guys

[00:37:01] could run this building if you want like it's a mall don't feed everyone nice and that's never

[00:37:07] happened before i think i think of the consequences of that so if you're in a a reach or you're a

[00:37:14] real estate owner you file you got this write-off and you have some way that you can manage through

[00:37:19] it and you go and raise more capital and you buy some stuff back cheaper and you have these

[00:37:23] sort of vulture boom and bust cycles if you're the small business who is serving doughnuts

[00:37:30] next to the mall where everybody came to shop and to work and you were kind of the lifeblood

[00:37:35] and that was your only business then that's your entire life savings that's just blown up

[00:37:41] and it's so it's against this very different outcomes and when we saw 15 years of suppressed

[00:37:46] interest rate policy by the fed nine years which was you know zero interest rate or about

[00:37:51] zero interest rate and you saw sort of this this transfer this benefit to the asset holders

[00:37:57] at the expense of the the savers and the retirees and the people who are just getting by and then you

[00:38:03] saw that happen again during covid where you know that the people who had the big businesses did

[00:38:08] well and the small business or ploids is down this this becomes this recurring theme is that if

[00:38:13] you are connected you're going to have more opportunities and you'll have that duration

[00:38:19] and that sustainability and if you're a small person it just doesn't work out well for you

[00:38:25] and i think that's the pushback here against these central planners you know the idea that the fed came

[00:38:31] in interfered with interest rates put nine trillion dollars on its balance sheet over this 15-year

[00:38:37] period that wasn't to help the average american that was to help their buddies on wall street

[00:38:44] and to allow for the government to continue to finance at the very low interest rate

[00:38:49] and we've seen that the wealthy get wealthier and the average person not do as well and have fewer

[00:38:56] wealth creation opportunities and i'm all for merit based inequality like if you are michael

[00:39:02] jordan you're the best basketball player you're the best singer and you know you should get paid

[00:39:07] more but when it's driven by central planning policy i have a really big problem with that

[00:39:14] yeah so so a what do you think is going to actually happen in the next few years

[00:39:18] and be given that these things are probably going to happen

[00:39:22] someone listening to this what can they do to protect themselves yeah so as you know in financial

[00:39:26] services uh in the in the markets in particular it's the hardest thing to predict is duration right

[00:39:32] so you can see the trajectory of these things happen you could be a short seller you can

[00:39:36] know that a stock is going to eventually go down but if it goes way up before it comes down

[00:39:40] you're going to get crushed so that that's the hardest thing to do is you you know you see

[00:39:44] what's happening but getting the timing right is almost impossible in finance and i think that's

[00:39:49] the same thing here is we don't know if this happens in 12 months we don't know if it happens

[00:39:53] in 12 years we don't know if it happens at 50 years but i think that you do need to be prepared

[00:39:57] and ask yourself questions one of the things that we haven't talked about yet that was in

[00:40:02] the book for example um is that there's almost 85 trillion dollars in wealth that is set to be

[00:40:08] passed down voluntarily over the next 23 years and you know that can really help to level the

[00:40:14] playing field for the average american just to have especially if you're a millennial or gen z

[00:40:20] and you get some of the wealth that the boomers created passed down to you but we're seeing from

[00:40:24] you know various administrations and uh you know a lot of the the pundits talking about things

[00:40:31] like wealth taxes and inheritance taxes in my fear is that you use the carrot of the billionaire

[00:40:37] the ultra wealthy for people to go yeah we should totally tax you know unrealized capital gains or

[00:40:44] you know something like that not realizing that those are the people who have the sophisticated

[00:40:49] planning elements and that that's not what they're actually coming after they want they want the

[00:40:54] bulk of that 85 trillion dollars so you know as the average person for example you can look into

[00:41:01] estate planning you can look into trusts or maybe you can start doing some gifting up to

[00:41:06] those maximums each year i think it's 17 000 per year right now if that's something that you're

[00:41:11] concerned about because it's possible though not guaranteed you could be grandfathered in

[00:41:16] if they make rule changes but the first step james obviously is just empowering yourself

[00:41:21] with all the information because what you're going to do if they come out with the central

[00:41:25] bank digital currency is going to be very different than what you're doing to protect

[00:41:28] yourself from a potential wealth tax all right let me ask about that because again

[00:41:33] this is not like a for or against but it's just reality like every country in the world

[00:41:38] is going to eventually do some sort of central bank digital currency and there's a lot of feelings

[00:41:44] and and you talk about this in the book that that's going to give the government more

[00:41:49] transparency into how you personally spend money they're going to know everything basically

[00:41:53] and they're going to be able to do things about like if they decide oh you don't

[00:41:57] believe in a vaccine for the for the next covid oh we're going to shut down your

[00:42:03] your currency we're just not going to let you spend money and and there's a lot of fear about that

[00:42:08] of course that's just a theory of what could happen that nobody said that will happen i mean

[00:42:13] government could do that now they could shut down your bank account they know where you do

[00:42:16] your banking anyway because of where you pay your money to your taxes but what is going to

[00:42:21] happen with that like again every country is going to eventually do it so what's what's

[00:42:25] a way to benefit maybe or or to look at this central bank digital currency in a positive way

[00:42:30] so i it's one of the things i fear the most frankly and you know i see different ins and

[00:42:35] different ways that they could enact it you know whether it's promising ubi

[00:42:40] promising some sort of a bonus you know the same kind of thing that happened with the

[00:42:44] stimulus checks oh you want stimulus checks oh i don't realize that that's going to you

[00:42:48] know generate massive inflation for the rest of my life i'll give you 10 digital dollars

[00:42:54] james for every dollar that you get and then people think that they're going to be rich because

[00:42:58] they don't understand purchasing power versus you know the nominal headline value of the dollar or

[00:43:03] it could be something like hey you guys hate inflation um if we had a central bank digital

[00:43:08] currency we could better control inflation because you know what they can do if they want

[00:43:12] to destroy destroy demand they just turn off like access to spending right so i think that there's

[00:43:18] always these kind of oh these are these good ideas and ways that we can put this in place

[00:43:24] that end up having really bad consequences and we know as we've seen with you know every

[00:43:28] government program that's ever been put out that once they start with one level of scope it just

[00:43:33] sort of expands and expands so i think that the question for people is that if you know you

[00:43:39] have these dollars that you are earning and they're going to be in a form factor that somebody

[00:43:45] else has complete transparency and control over do you again want to take some of those dollars

[00:43:51] and put them into other things you know whether that's the investing side for the the hard assets

[00:43:57] or think mediums of exchange you know how are you if you know they don't want you to eat burgers

[00:44:02] because you know it's bad for the planet and you really want to eat a burger how are you

[00:44:06] going to barter how are you going to use you know precious metals or if you're somebody

[00:44:10] who's into digital currency is that you know an avenue for you what is it that you're going to do

[00:44:16] and i think part of it is just thinking through this ahead of time and having that plan you know if

[00:44:22] your house is on fire it's a really bad time to have an escape plan and think about getting

[00:44:27] insurance but if you've done that already then when that happens at least you can go okay this

[00:44:33] is a bad situation but like i've thought through what i'm going to do and i think this is an

[00:44:38] exercise in that is we don't know the timing there are several different ways that this can turn out

[00:44:43] but have you spent the time thinking through what you would do in each of these different situations

[00:44:49] and because it's coming at us from every different angle you have a lot of different

[00:44:53] situations you need to think through but fortunately many of them have you know similar

[00:44:57] similar ways that you can approach it just like just like dealing with inflation if you're

[00:45:03] thinking it through in advance okay you own assets the nominated in dollars so if the dollar

[00:45:10] you know if you need more dollars to buy a house hey no problem i own a house if you need more

[00:45:14] dollars to buy mcdonald stock no problem i own stocks or i own you know bonds or other assets

[00:45:22] than my own art i own other assets that go up in value potentially exactly have to decide what

[00:45:27] those assets are given given the situation and and i think diversification in general

[00:45:33] is a good philosophy here like diversify where you're getting your money from might mean multiple

[00:45:39] incomes if you own a business you know or a shareholder of a business you know there's more

[00:45:43] of these crowdfunding platforms where there's more you know small businesses you can invest in

[00:45:50] if you want to do that that's you know a skill in and of itself but that's another

[00:45:55] like there's more places to put money now than ever before so being educated about that i do agree is

[00:46:01] important yeah and i also think just you know kind of things that people like you and i who've had

[00:46:06] the exposure to it in financial services but other people haven't thought through are important to go

[00:46:11] through um asking for ownership as part of your compensation is huge there's so few people

[00:46:18] who really think about oh do i want your stock options or some sort of a grant or some ownership

[00:46:24] in the company that i work for and if you're going to be putting your heart and soul into

[00:46:28] building something that isn't yours having that ownership is a great thing and there are a lot

[00:46:33] of people who would be like no i'd rather have the cash but if you're really committed to it

[00:46:39] asking for that and it's available for private and public companies not every company does it

[00:46:44] but it's one of those things that i would be asking about and be more vocal how can i get

[00:46:48] some ownership of this company that i'm working for and that i want to help build and succeed

[00:46:54] what's the deal with our what's called unfunded liabilities like like social security like how

[00:47:00] much do we oh how much are we going to owe in social security over like the next 30 or 40 years as

[00:47:06] as the baby rumors and then gen X retired so okay so this doesn't include state pensions and it

[00:47:12] doesn't include the 32 trillion dollars in actual debt that we owe but the statistics that we

[00:47:18] have in the book cite just under 130 trillion dollars in unfunded liabilities which is one of the

[00:47:27] reasons why i'm so concerned about a them trying to inflate up the value of the dollar and print

[00:47:34] more dollars to deal with this and you potentially cause inflation and also coming after that 85

[00:47:39] trillion dollars that's turning over voluntarily because boy that would put a nice dent in those

[00:47:44] unfunded liabilities the the fiscal situation of the united states is not sustainable and this is not

[00:47:52] my opinion solely it's the opinion of the us treasury it's a opinion of the cbo like it's

[00:47:59] not on a sustainable path and they have said so in black and white so something's got to give

[00:48:05] and you know so far we haven't on any side of the aisle had you know anybody with with a

[00:48:11] backbone to say we really need to address this in a meaningful way which means probably taking away

[00:48:18] some services because the only other ways that you pay for things are raising taxes which at

[00:48:24] some point as we know ends up being a negative revenue generating proposition you know printing

[00:48:31] more money to you know in terms of monetizing the debt so you don't have a lot of choices

[00:48:37] here they all end up poorly for the average american and nobody really has the fortitude

[00:48:43] to be the one to deal with that i guess because like obviously politicians are elected by people

[00:48:49] and the primary voters of primaries are older people and so that's who benefits from social

[00:48:55] security medicare medicate all these things is is older citizens and i'm arguing against myself

[00:49:00] i'm four and a half or i'm four years exactly away from being able to collect my first social

[00:49:06] security check oddly which feels weird to say i've never said that i'll allow it for but maybe there

[00:49:10] could be some staggered way like clearly quality of lifespan is going up like people are working

[00:49:16] into their 70s or longer lifespan in general is going up so maybe you have some cutoff like

[00:49:22] whoever's gen z now or millennials now or whatever it's your retirement age is going

[00:49:28] to be not 59 and a half or 65 but you know 65 and a half and and 70 you know maybe there's a way to do

[00:49:36] that did you see what happened in france when they tried to do that they tried to move the retirement

[00:49:40] age from 62 to 64 and they burned down paris oh no so that's something to worry about so that i

[00:49:48] mean that and that's the challenge is that we don't have strong financial literacy in this

[00:49:53] country and so empowering people with this knowledge to understand the trade-offs and

[00:49:57] saying yes i know you don't want this but the alternative is worse or don't take the

[00:50:03] thousand dollar stimulus check because it's going to end up costing you seven to ten thousand dollars

[00:50:08] a year minimum for the rest of your life those kinds of things the average person has to get

[00:50:14] their head wrapped around for us to have any choice because the politicians don't want to

[00:50:19] risk that level of social unrest i mean what what's interesting is is that you say people

[00:50:25] don't have financial literacy and i guess i agree but the problem with that is is that the evidence

[00:50:33] is so clear like there was a 60 year experiment in central economic planning and it was called the

[00:50:39] soviet union and it did not work the people starved five-year plans you know china and

[00:50:46] so we would have these five-year plans oh this is what the this number of people is going to buy

[00:50:51] apples this number of people is going to buy tomatoes and we'll we'll tell the factories to make that

[00:50:58] and the people starved they couldn't make the food that people couldn't get it they just couldn't

[00:51:03] get it to the people one of the things tomasowl's basic economics they talk about in a lot of these

[00:51:07] places where people starved it wasn't because they didn't have enough food but they didn't have

[00:51:11] the transportation to get it to the people who needed it right so so capitalism the gears of

[00:51:17] capitalism and let's not even use the word capitalism the gears of innovation is free enterprise

[00:51:24] free enterprise figure that out like oh i need to get a car to get my apples that i grew right

[00:51:30] to you know i need a train car to get it to new york city so enough people can eat them and i know

[00:51:35] exactly how much people want because people have been yesterday people ordered this not five years

[00:51:39] ago but yesterday and so the gears of free enterprise figure this out which is why the

[00:51:44] u.s was able to flourish and the and the soviet union collapsed the failure the experiment failed

[00:51:51] and china is essentially you know kind of this dictatorial capitalism right now so a

[00:51:57] everybody knows history everybody saw that and then the second thing is when you have people

[00:52:02] politicians like well-known famous politicians come out and say oh we can solve we could tax

[00:52:08] unrealized capital gains which means your investment hasn't you invested in a stock say

[00:52:13] and it's gone up but you haven't sold the stock so it's unrealized let's make it personal to the

[00:52:19] people who are listening here you bought a house your parents bought a house in 1970 for a hundred

[00:52:24] thousand dollars today on zillo zillo says is worth two million dollars you now own tax on

[00:52:31] one point nine million dollars where are you getting that tax from yeah you have to sell

[00:52:36] the house and we'll so again basic financial literacy if everybody has to sell everything

[00:52:42] then it's worse than it's 10 times worse than the great depression nothing james this is the whole

[00:52:48] point here right is that these ideas that are being floated they sound nice in theory they're

[00:52:54] very like unicorn like right but the reality in the history shows that they don't work and we

[00:53:01] have a bunch of people because we have been prosperous who are in denial and don't sort

[00:53:07] of have that broad worldview i mean i would imagine you know if you were in like you we've been in the

[00:53:13] poll position you know at the center of the global financial universe here in the s for the last 80

[00:53:17] years if you were in britain while they were at the center they probably felt invincible too i mean

[00:53:23] the same with the dutch right like hey we're we're everything we're the we're the man it nothing's

[00:53:28] ever going to change because it's just hard to imagine how you can mess it up so completely

[00:53:34] but then you go look and our public jet debt to gdp is at 125 percent you look at the unfunded

[00:53:41] liabilities you look at sort of the the people that the central banks were moving away from the u.s

[00:53:47] dollar there are a lot of red signs on the horizon so you know again it's not necessarily going to

[00:53:53] happen tomorrow but you have to plan it and prepare you're not going to change the new

[00:53:59] financial world order from happening at some point in time but maybe we can delay it or

[00:54:02] at least help yourself get through it yeah i agree like i'm going to be both a cynic and an optimist

[00:54:08] here so a i think it's i'm cynical in that i think multi-billionaires it's to their incentive

[00:54:16] to have this new world order because it makes everyone just when they made their money everyone

[00:54:20] else now will be blocked for making money so they will roll and so i'm being cynical there and

[00:54:26] conspiratorial but the flip side is i would say gen x and baby boomers are more sophisticated

[00:54:34] financially than the generation before like each generation gets a little bit more sophisticated

[00:54:38] i think i hope and we're not going to vote for something that takes away everybody's property

[00:54:45] although we did it was you have young people who are going out and taking out multiple six

[00:54:52] figures in college debt to pay for five figure salaries so yeah i mean i'd like to think that

[00:55:00] they're savvy but the the architecture around them is feeding them lots of misinformation

[00:55:08] about things that don't add up mathematically and i think that's the that not to say that

[00:55:13] they're not savvy people but there are too many sort of free writers and people who are

[00:55:20] benefiting they're creating a system and then they're just being like yes you should totally

[00:55:24] take out two hundred thousand dollars in debt to make you know to go teach in a public school

[00:55:30] like it makes no sense whatsoever they're never going to be able to pay that back and by the way

[00:55:35] nobody's running on it from either party you're not seeing anybody being like you know the

[00:55:40] government's the largest predatory lender in the world you know the colleges it's a huge

[00:55:45] wealth transfer from young people to colleges and their administrators like we need to fix the system

[00:55:50] so that our young people not only get good educations but have the opportunity to then go out into the

[00:55:57] world and create wealth and be in a better position instead of college making them poorer

[00:56:01] so again where i'm cynical is i don't think government's going to solve that problem because

[00:56:05] because if you if you even say kids shouldn't go to college which which i wrote a column on

[00:56:10] in the financial times in 2005 and i got so much hate mail is ridiculous now it's more of a conversation

[00:56:16] but it's still people are pretty much against that idea government's going to push back but

[00:56:23] you know college tuitions have risen faster than inflation for the past 70 years in a row every

[00:56:28] single year and like you say you're borrowing six figures to make a five figure income

[00:56:35] that can't be sustainable from a free enterprise point of view like at some point

[00:56:39] all of these new public school teachers will say hey don't do what i did and they're going to be educating

[00:56:44] the kids hopefully better how long is that going to take you would think that that would have happened

[00:56:48] at this point instead they're saying forgive our debt instead of saying you know they want the

[00:56:54] for free ride not understanding that they're still going to pay for it and everyone else is

[00:56:57] going to pay for it and that's become the shift in the system is that government and the fed

[00:57:02] creating these problems and then they're look people are been trained to look to them to be the

[00:57:07] one who's going to create the solution and you're right they're not the ones we need to stand up

[00:57:12] and we need to educate people we need to push back against this is the only way it's going to change

[00:57:18] yeah and you make an interesting point like the the the government now and this just just came

[00:57:23] up in the supreme court the other day the government obviously wants to give student debt

[00:57:27] relief and i and i really feel for the people who have 100 which is because it's they made a mistake

[00:57:33] before they were ready to to assess what that risk was and it was they were preyed upon by the

[00:57:39] government the 17 and 18 year olds preyed upon by the government nationalizing most of student life

[00:57:45] right so there's there's there's got to be some consequences somehow for the government in this

[00:57:51] which is unfortunately all of us can't really happen that way and but you know i don't i don't

[00:57:59] know i mean well i mean one thing they could they could do two things right i mean one is that they

[00:58:04] could change the interest situation right they had basically free capital for a long time why are

[00:58:10] they earning a bit a bigger interest rates you know they could they can change the interest

[00:58:14] because obviously that's a big piece of what's killing people but really they need to get out

[00:58:18] of the lending we need an underwriting process we need to bring back bankruptcy option which you

[00:58:23] can't have if you don't have the underwriting process because it's not baked in there you need the

[00:58:28] colleges to have some skin in the game i mean like it just needs to be revised i agree like

[00:58:34] there's no reason why if i was a college president i'm going to raise the tuition as much as i

[00:58:38] can because the government guarantees all the money i get the money no matter what

[00:58:42] but here's the thing now the problem is because there's the hint of student loan debt relief

[00:58:48] i'm more willing to take out a loan for my kid because maybe i'll never have to pay it

[00:58:53] because there's going to be debt relief so that kid's going to keep the system going

[00:58:56] or hazard even the width in the air exactly it's the moral hazard baked into the system

[00:59:01] and uh yeah so it's a question of at some point this like you said becomes unsustainable

[00:59:07] it all blows up so the question is what happens then at that point like there has to be a

[00:59:12] reset because we can't just keep pushing in this story like something eventually you're

[00:59:17] like oh we're not at the edge of the cliff i'll just go a little farther uh we're not at the edge

[00:59:20] of the cliff i'll go a little farther eventually you're going to go over the clip and then okay

[00:59:24] all bets are off at that point maybe when there's a uh the next generation assumes the presidency

[00:59:31] like there's instead of you know 70 and 80 year olds on both parties running for president

[00:59:36] maybe when 40 year olds i i don't know so here's what i would say so here's what i would

[00:59:41] say about this is human nature is human nature people act as their their best self-interest

[00:59:47] nobody would want to be a politician unless they're a narcissistic sociopath like the three people who

[00:59:53] are good aren't going to outweigh the the narcissistic sociopath so we need to as individuals be able to

[00:59:58] push back against that and then also you know a lot of it this is look at what the elite people

[01:00:05] are doing instead of what they're saying you know when they say oh you know don't own a house

[01:00:10] and they're loading up on mansions or oh you know you don't need this watch what they're doing

[01:00:16] and put a lot more weight on that and just prepare yourself in your community that if something

[01:00:22] were to shift in the global financial order tomorrow like what is it that you're going to do

[01:00:28] and i do think you know the the idea of america is so important that eventually we will have people

[01:00:35] who will stand up it may be really ugly in the process i hope not but we need to be prepared

[01:00:42] to work through that and to you know make set yourself up you'll kind of during that interim period

[01:00:49] well carol i hope you're right and i hope it's not so painful uh because i agree the american

[01:00:55] dream as distorted as some have made it out to be whether you're left or you're right or whatever

[01:01:01] the american dream is very real it's created incredible innovation throughout particularly

[01:01:06] this past generation and and the innovations only getting greater and faster with again in

[01:01:12] every technological sector and i for one hope that continues and i know you do as well

[01:01:18] but you're right things have to correct itself somehow we'll see how that happens but

[01:01:25] cow or author of you will own nothing great book it describes all the history of all these

[01:01:30] different trends it describes what's going to happen next it describes solutions i really hope

[01:01:36] people read it it's really important you will own nothing by carol roth carol once again thanks for

[01:01:42] coming on the podcast and i hope you come on again yeah i would love to it's such an interesting

[01:01:47] and thoughtful conversation and just appreciate us being able to explore these ideas that i think

[01:01:51] are going to be really important you know for the decades to come so we're very much welcome

[01:01:56] another conversation thank you